Radio and audio giant iHeartMedia has begun to cut senior management pay and furloughed “non-essential” staff as it eyes around $250 million in cost savings this year amid the coronavirus pandemic.
The news comes as entertainment companies have been looking to preserve cash and reduce expenses, in some cases also via layoffs, to manage the uncertain fallout from the virus crisis.
“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, iHeart’s chairman and CEO, in a statement.
John Malone’s Liberty Media, via audio entertainment giant SiriusXM, owns a 4.8 percent stake in iHeartMedia. The measures taken include reducing compensation for “senior management and other employees,” furloughing other staff considered “non-essential,” suspending new hiring, travel and entertainment expenses and cutting discretionary expenses.
iHeartMedia on March 26 first withdrew its 2020 financial guidance and said it had shored up its liquidity by $350 million by tapping into a revolving credit facility to boost its financial flexibility. “iHeartMedia believes that the major actions announced today – in combination with the company’s highly resilient capital structure — will substantially expand the company’s financial flexibility, provide sufficient liquidity to operate effectively even in an extended period of economic weakness, and position the company for a solid growth trajectory when advertising demand returns to normal levels,” the radio giant added.
An advertising recession has cut national, local and network revenues, iHeartMedia reported, while political advertising revenue in 2020 is “expected to remain consistent with prior election years,” and increase in the second half of the year.
The company is also looking to offset reduced traditional radio station revenues with podcasting and digital revenues.
This article was originally published by The Hollywood Reporter.