iHeart Shares Cost-Saving Initiatives
• iHeartMedia, Inc. on Tuesday announced a list of proactive initiatives in response to the currently weak economic environment resulting from coronavirus pandemic and also provided an update on the status of its business.
Some bullet-points: In addition to the in-year expected savings of approximately $50 million related to the modernization initiatives announced in February, the Company has also initiated an additional $200 million in operating expense savings for 2020 driven by: 1) Reductions in compensation for senior management and other employees; 2) Furloughing of certain employees that are non-essential at this time; 3) Suspension of new employee hiring, travel and entertainment expenses and 401(k) matching program; 4) Major reduction of consultant fees and other discretionary expenses. Total direct operating expense savings in 2020 are expected to be approximately $250 million.
“We moved quickly to respond to the economic downturn resulting from the COVID-19 pandemic in order to mitigate some of the business impact and to better position ourselves to take advantage of an eventual recovery when normalized demand returns,” said Bob Pittman, iHeartMedia Chairman & CEO. “To provide visible and aligned leadership through this downturn, our senior management team and other employees voluntarily agreed to take meaningful reductions in compensation. 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… As we navigate the unprecedented challenges posed by this crisis, we remain confident in our business and focused on the health and safety of our employees.” The complete statement is posted online at investors.iheartmedia.com.
