Last week I posted about iHeartMedia’s chapter 11 bankruptcy in which it was attempting to wipe out $10 billion worth of its $20 billion debt so it could carry on operations. Although various music companies are owned just a small portion of that amount, its still a significant $38 million, and that’s money that’s not making its way into artists and songwriters pockets. If you look at the bankruptcy filing, here’s who you’ll find is owned some dough:
- SoundExchange $6.4m
- ASCAP $1.4m
- BMI $1.4m
- Universal Music Group $1.3m
- Warner Music Group $3.9m
- Global Music Rights $2m
- Nielsen (which provides the Billboard charts and other data services) $20.8m
- Spotify $2m
Most of these are listed as unliquidated debt, meaning that the exact value hasn’t been determined yet, which is what happens when royalties are involved and continue to mount as the bankruptcy reorganization goes along (which can take up to 2 years). The big question will be if any of these debts will be renegotiated.
That said, this portion of iHeartMedia’s debt is very small compared to the rest, and since the content coming from the record labels and publishers is the lifeblood of any content distribution system, you’d think that these clients would be the last ones that you’d want to upset, not to mention the uproar that would come from the music community should that happen (assuming they’re watching closely enough).
iHeartMedia’s story is all about financial engineering gone bad, which is fair enough when you’re playing with Wall Street money. Things are different when it comes to playing with the livelihoods of small content creators though. It’s tough enough as it is to even make a long-term living in the music business without having media conglomerates treating it only as an asset that’s merely a piece of the corporate puzzle.
Let’s hope that the above iHeartMedia debtors stick to their guns and get paid the full amount owed.