iHeartMedia files for Chapter 11 bankruptcy protection to reduce debt by $10 billion

"iHeartMedia believes that its cash on hand, together with cash generated from ongoing operations, will be sufficient to fund and support the business during the Chapter 11 proceedings," the press release said.

Many of its debtors will receive new secured debt from its equity stock holders, who will end up with nothing. Those debt holders will receive about 94 percent of the reorganized iHeartMedia and nearly 90 percent of its Clear Channel Outdoor Holdings billboard company.

iHeartMedia's leveraged buyout by two private equity firms (Bain Capital and Thomas H. Lee Partners) in 2008 was a particularly ill-timed purchase given the fact the economy cratered that year. The company changed its name from Clear Channel in 2014 to reflect the iHeart brand name, especially in hosting events such as its concerts featuring big-name artists.

Its most recent full-year annual revenue in 2016 was $6.27 billion with a loss of $296 million. Over five years, its net losses have exceeded $2.8 billion. It lost $248 million alone in the third quarter of 2017. 

Cumulus, in comparison, was weighed down by $2.3 billion in debt and announced a restructuring plan to cut that down by more than $1 billion. Its revenues in 2016 were $1.14 billion with a net loss of $537 million.

Cumulus is America's second-largest radio company with almost 450 radio stations including Q100, Rock 100.5, Kicks 101.5 and Talk 106.7. IHeartMedia is No. 1 with nearly 850 radio stations and syndicated radio programs led by Ryan Seacrest and talk-show hosts Rush Limbaugh and Sean Hannity.

The terrestrial radio business has been losing steam for years thanks to streaming services and other digital options. iHeart has aggressively jumped into the digital field but its app lags far behind Pandora and Spotify.