Liberty Media, the Colorado-based cable giant that has come to dominate the music business over the past decade, will be able to potentially expand its share of top broadcaster iHeartMedia after the Justice Department approved the company’s bid Wednesday.
Liberty, which owns most of SiriusXM and Pandora and 33 percent of Live Nation, can reportedly expand its stake from 5% to 50%, giving it a huge influence over more than 850 AM and FM stations, from New York City’s Z100 to Los Angeles’ Alt 98.7.
“This deal is on an even larger scale than the Ticketmaster and Live Nation deal,” Steven Madoff, a music-business attorney, said earlier this year, referring to the merger that allowed one promoter to take over much of the live-music business a decade ago.
Broadcast companies have struggled through an advertising downturn throughout the pandemic, and iHeart’s shares are down about 50% this year — the company laid off hundreds of employees in January, then furloughed others in May, as well as cutting salaries for top executives, including chairman and CEO Bob Pittman. But that likely makes iHeart a bargain for Liberty, whose chairman, John Malone, has a history of striking during downturns; if Liberty makes the move, it will own a huge chunk of terrestrial and satellite radio and one of the biggest streaming companies to go with its interest in the world’s biggest concert promoter.
Liberty also has a reputation for turning around troubled companies, including once-reeling SiriusXM and, to an extent, the highly leveraged Live Nation. iHeart restructured its debt last year from more than $16 billion to $5.75 billion, although Pittman insists its core business is healthy and growing, especially given the popularity of the company’s iHeartRadio app. Liberty’s CEO, Greg Maffei, attempted to expand its iHeart stake in 2018, during the broadcaster’s bankruptcy proceeding.
“We didn’t get it done, but you’ll be pragmatic and opportunistic about ‘maybe it’ll get done in the future,'” Maffei told Billboard last year.
Many antitrust activists and music-industry executives have been skeptical of this potential purchase, worrying it will concentrate too much broadcast power into one large company’s hands. In an April open letter to Makan Delrahim, the assistant attorney general, activist groups such as the Artist Rights Alliance said Liberty’s potential acquisition of iHeart was a “massively overreaching effort to monopolize music radio in this country.”
Reps for Liberty and the Justice Department did not respond to inquiries, so it’s unclear when the purchase might take place. An iHeart spokesperson would not answer questions other than confirming the Justice Department has approved Liberty’s bid.