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What Music Companies Have Enough Cash to Last the Pandemic?

Making it through the pandemic requires more than sound strategy -- it also takes deep pockets.

Just about everyone expects the music industry to come back. The question is when — and whether companies in it have enough cash and open credit, or liquidity, to last until then.

So far, so good, at least for the big, publicly listed companies. Since March, those that depend mostly on recorded music have done fine — “We’re forecasted to be free cash flow positive for the year,” says Spotify CFO Paul Vogel — while others have had to cut costs or raise money, or both. None of these companies are in serious danger of running low on cash; the realistic worst-case scenario is that they’ll be forced to raise more money on worse terms, meaning paying higher interest payments or giving an investor equity or control.


Live Nation, which has been hit worse than most music companies, sold $1.2 billion of debt in May, which gave it $1.9 billion of liquidity as of Sept. 30, according to its filings. The company now burns $110 million a month on operations, even with its venues empty. That’s not likely to change substantially until mid-2021, although the company should begin taking in more money before then as tickets go on sale. “We’re confident we have the liquidity we need to get through this,” says company president Joe Berchtold. (Moody’s, which rates debt and downgraded Live Nation’s liquidity on Nov. 24, says the concert giant will spend $1 billion between Oct. 1 and Sept. 30, 2021.) Madison Square Garden Entertainment, which faces some of the same problems, is burning through money at a much slower rate, and it took out a $650 million loan for additional liquidity on Nov. 12.

Outside of the live business, the music company in the toughest position may be radio giant iHeartMedia, which faces an advertising market battered by the pandemic. The company, which recently restructured its debt, has $879 million of liquidity, as well as positive free cash flow — although in the most recent quarter that amounted to $14.3 million, down from $151.5 million a year earlier.

What Music Companies Have Enough Cash

UPDATE: This article was updated Dec. 3 at 5:10 EST to correct the reference to iHeartRadio’s positive free cash flow, it had previously stated this as positive cash flow from operations. 

This article originally appeared in the Dec. 5, 2020, issue of Billboard.

UPDATE: This article was updated at 5:50 p.m. EST on Dec. 4 to correct Madison Square Garden Entertainment’s loan, which was originally stated at $650,000.