The home of The Breakfast Club is NOT breaking up the family. iHeartMedia moved fast this week to shut down a report that it was looking to sell off its podcast business — the division that brings in more money than almost anything else the company does right now.
THE REPORT
On Wednesday, Bloomberg reported that iHeartMedia has held preliminary talks with investment bank Moelis & Co. and potential investors about selling part — or potentially ALL — of its podcast business, in an effort to raise cash and boost its struggling stock price. Bloomberg noted the talks were at an early stage and could end without any deal.
THE DENIAL
iHeart didn’t let it sit. A spokesperson fired back the same day:
“While we don’t generally comment on rumors or speculation, I can tell you that we have no plan to sell our podcasting business. iHeart has built the number one podcast publisher in America, with unmatched scale, premium talent, and strong financial performance. Podcasting is a core strategic growth engine for our company, and we continue to invest in expanding its reach and potential, including through video podcasting.”
WHY EVERYBODY IS WATCHING THE MONEY
The report landed in the middle of a brutal week for iHeart’s stock, which fell about 65% in five days after Monday’s third-quarter earnings — dropping from over $2 a share to as low as 61 cents — then jumped when the sale report hit.
And here’s the twist: podcasting is the BRIGHT spot. The numbers from the quarter:
- Podcast revenue: $174 MILLION, up 24.6% from a year ago — about 17% of the whole company’s revenue
- Companywide revenue: about $1 billion, up 3.3%
- Adjusted earnings (EBITDA): $170.5 million, DOWN 17% — missing Wall Street’s forecasts
- CEO Bob Pittman blamed “ongoing industry and macroeconomic revenue headwinds”
The company also announced that starting next year, podcasting will be reported as its own stand-alone business segment, split off from the Digital Audio Group — a move meant to show investors exactly how valuable it is.
WHAT IT MEANS FOR THE BREAKFAST CLUB
The iHeartPodcast network is the #1 podcast publisher in America and #3 in weekly reach according to Edison Research — home to The Breakfast Club with Charlamagne Tha God, DJ Envy and Jess Hilarious, plus Stuff You Should Know, Las Culturistas and hundreds more. A sale would have shaken up the biggest shows in the culture. For now, the company says that’s not happening — it’s investing MORE, including pushing further into video podcasts.
Do YOU believe the denial — or is a sale coming anyway? Tell us in the comments 👇🏾
Sources: Bloomberg (sale talks report); iHeartMedia statement; Digital Music News; Radio Insight. Photo: Charlamagne Tha God at the MTV Movie Awards (CC BY 3.0, via Wikimedia Commons).
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