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What: iHeart Media has filed for bankruptcy along with some of its units.
Why it matters: The company reached an agreement with holders of more than US $10 billion of its outstanding debt for a balance sheet restructuring.

IHeartMedia Inc has filed for Chapter 11 bankruptcy as the largest U.S. radio station owner reached an in-principle agreement with creditors to restructure its overwhelming debt load.

The company, which traces its roots to the 1972 purchase of KEEZ-FM in San Antonio, Texas, where it is currently headquartered, filed for bankruptcy along with some of its units and said it reached the agreement with holders of more than $10 billion of its outstanding debt for a balance sheet restructuring, which would reduce its debt by more than $10 billion.

“The agreement is a significant accomplishment, as it allows us to definitively address the more than $20 billion in debt that has burdened our capital structure,”  said CEO Bob Pittman.

IHeartMedia, which has struggled with $20 billion of debt and falling revenue at its 858 radio stations, said cash on hand and cash generated from ongoing operations will be sufficient to fund the business during the bankruptcy process.

The filing comes after John Malone’s Liberty Media proposed on Feb. 26 a deal to buy a 40 percent stake in a restructured iHeartMedia for $1.16 billion, uniting the company with Liberty’s Sirius XM Holdings satellite radio service.

Clear Channel Outdoor, a subsidiary of iHeartMedia and one of the world’s largest billboard companies, and its units did not commence Chapter 11 proceedings.

IHeartMedia skipped a $106 million interest payment on Feb. 1, triggering a 30-day grace period during which the company has tried to hammer out a deal with it bondholders.

The company disclosed on Monday it was still exchanging proposals with its creditors, but had yet to reach an agreement.

Its most recent proposal would have given holders of secured loans, who are owed nearly $13 billion, about $5.6 billion in new debt and 94 percent of the equity in a reorganized iHeartMedia. These creditors also would have received iHeartMedia’s 89.5 percent stake in Clear Channel Outdoor Holdings.

Bain Capital and Thomas H. Lee Partners control 68 percent of the voting stock of iHeartMedia, according to the company’s most recent annual report.

The private equity firms led a $17.9 billion leveraged buyout of what was then Clear Channel Communications Inc in 2008, just as the buyout boom was fading and as the signs of the financial crisis began to emerge.

Shares of iHeartMedia lost three-quarters of their value in the second half of 2015 and have never recovered since then. On Monday, the pink sheet stock closed at 48 cents.

[Information by CNBC]

What: Electronics retailer RadioShack has filed for bankruptcy nearly 94 years after  opening its first store. The retailer agreed with Telco Sprint to cobrand 2,400 of its approximately 4,000 stores. The wireless company will cobrand stores, with Sprint being the primary brand on storefronts and in marketing materials and RadioShack continuing as a “store within a store” concept in up to 1,750 of those.
Why it matters: The move may help Sprint to catch up with competitors T-Mobile, Verizon and AT&T and reach a larger base of Hispanic customers.

descarga (1)Electronics retailer RadioShack filed for bankruptcy, after nearly 94 years of having opened its first store.

The retailer has made a deal with Sprint to sell up to 2,400 of its approximately 4,000 stores.The wireless company will cobrand stores, with Sprint being the primary brand on storefronts and in marketing materials and RadioShack continuing as a “store within a store” concept in up to 1,750 of those.

According to RadioShack, its remaining stores are expected to close.The company’s franchise locations, as well as stores in Mexico and Asia, are not included in the deal.

This move will help Sprint’s aggressive Hispanic marketing ambitions by extending their physical footprint to thousands of Radio Shack stores.

“Today we are the carrier with the smaller amount of stores, we are lacking 500 or 600 stores less than T-Mobile and we’re like 3000 stores less than Verizon,” Sprint CEO Marcelo Claure told analysts on an earnings call on Thursday when asked about RadioShack.

“Sprint and RadioShack expect to benefit from operational efficiencies and by cross-marketing to each other’s customers,” Claure said in a statement.

RadioShack’s bankruptcy announcement is no surprise. The company’s marketing budget has declined in recent years. It spent US $78 million on U.S. measured media in 2013, down from US $88 million a year earlier, according to Kantar Media. Losses have increased and in its latest quarter sales plunged 16% from a year ago.The bankruptcy filing also, comes at a time when many electronics competitors such as Circuit City and Nobody Beats The Wiz died years ago or  Apple have risen  and consumers’ transition to wireless devices.

RadioShack’s losses have increased and in its latest quarter sales plunged 16% from a year ago.

Extra Point for Sprint

KmYyjCQ__reasonably_smallFor Sprint, this a major opportunity to go against Verizon and AT&T, carriers with much larger subscriber numbers and retail locations. The carrier plans to add “at least 500 stores this year. Sprint employees will sell mobile devices and plans on all Sprint brands including Boost and Virgin Mobile.

What are the implications for the Hispanic marketing, particularly on how Telco’s pursue the coveted Hispanic consumer?  “From my point of view this move will help Sprint’s aggressive Hispanic marketing ambitions by extending their physical footprint to thousands of Radio Shack stores.  This move gives them increased awareness and distribution including in Hispanic neighborhoods, but most importantly puts more Sprint employees, many of which will be Hispanic, face to face with potential customers,”Lee Vann, CEO of Captura Group tells Portada.

Read our recent interview with Sprint’s Hispanic Marketing Manager Kymber Umaña.

Sprint’s third quarter results showed revenues of US$9 billion and an operating loss of US$2.5 billion. Sprint added 30,000 branded postpaid customers, an increase after several quarters of consistent subscriber loss.

Austin based LatinWorks had been RadioShack’s Hispanic agency. Sprint’s retail agency is Leo Burnett. Sprint is one of the nation’s largest advertisers, spending US$1.6 billion in the U.S. in 2013, according to Kantar Media.