Photo Credit: Luther Yonel
iHeartMedia denies reports that the company is trying to sell its podcast unit, following its share price declining by 65% within the last week.
On Wednesday, iHeartMedia quickly denied the rumors that the company is considering the sale of its podcast business as a means to raise cash and increase its stock price. Bloomberg reported earlier in the day that iHeartMedia was in talks with investment bank Moelis & Co. and others to possibly sell part or all of its podcast unit. The company is the largest owner of radio stations in the U.S., and its podcast business is one of the largest networks.
“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,” said an iHeart spokesperson.
Bloomberg’s report followed iHeartMedia’s share price declining by 65% over the past five days. As soon as rumors of a sale began circulating, iHeart’s share prices spiked 16% that afternoon.
Despite the decline in its share price, iHeart has continued to make substantial money in the podcasting business. They reported $174 million in revenue for the past quarter, an increase of 24.6% compared to the year prior. According to the latest Edison research, the iHeartPodcast network was ranked third by weekly reach in the nation.
However, iHeart’s overall business did not meet expectations in other areas, including adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), which fell 17% from last year to $170.5 million.
The company is facing “ongoing industry and macroeconomic revenue headwinds,” according to CEO Bob Pittman, including lower than expected political advertising revenue for radio and delayed advertising spend until after the election.
Next year, iHeart plans to divide its podcasting business into its own stand-alone reporting segment, removing it from the Digital Audio Group. This is expected to make it easier for investors to “fully value all four of our segments and our entire company,” said Pittman.
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