iHeartMedia Announces Plan to Cut Costs by $250 Million in 2020 Due to Economic Impact of Coronavirus

The massive media conglomerate iHeartMedia, the owner of iHeartRadio and the largest owner of radio stations across the United States, has announced its plans to cut costs by $250 million this year, due to economic difficulties caused the coronavirus pandemic. The company will also institute a hiring freeze and staff furloughs alongside reductions in salaries for top executives and marketing spending.

The company reiterated this point during a meeting with investors, where they highlighted a cost-savings target of $200m for the 12 calendar months of this year. This is in addition to the $50m in annual calendar-year savings they have projected as a result of their “modernization initiatives” in February. These initiatives saw hundreds of employees, including as many as 50 on-air DJs “dislocated (according to iHeartMedia)” from their jobs as a result of the company’s investment into AI-driven programming.

The company had operating costs of $3.18 billion last year, with a total revenue of $3.68 billion. Despite this latest reduction in spending, these new measures are expected to only partially offset the total revenue declines the company expects to face as a result of COVID-19’s impact on their advertising.

“To provide visible and aligned leadership through this downturn, our senior management team and other employees voluntarily agreed to take meaningful reductions in compensation,” Bob Pittman, iHeart’s Chairman and Chief Executive Officer stated. “We want our shareholders to know that we have taken immediate and proactive steps to weather this crisis, and we expect to emerge even stronger given our sufficient liquidity, the continued strength of consumer listening, and our diversified multiple platforms, including digital and especially podcasting.”

This isn’t the first time that the company has faced troubles financially, back in 2017 the company faced massive debt issues after severe financial losses. iHeartMedia isn’t alone when it comes to financial setbacks caused by COVID-19, LiveNation saw their stock drop by 50 percent in the wake of the outbreak, while the Paradigm Talent Agency was forced to lay-off many of its workers.