The FCC has approved iHeartMedia’s petition to increase its foreign ownership beyond the 25% limit.
iHeartMedia petitioned the FCC in February to allow for foreign investors to own up to 100% of its equity and voting interests, and specific approval for certain foreign investors that seek to directly or indirectly hold more than 10% of the company’s equity, and/or hold equity interests that will cause them to be deemed to hold more than 10% of iHeart’s voting rights. iHeart stated that changes in its ownership structure that are an outgrowth of its bankruptcy reorganization from the issuing of new common stock and becoming publicly traded will potentially cause foreign ownership to exceed the 25% statutory benchmark. The company states that it seeks approval for two foreign investment firms that will hold more than 5% of iHeart’s voting or 10% of iHeart’s equity interests. The Ireland based PIMCO Group, which is controlled by the German based controlled by Allianz SE seeks to hold up to a 19.99% voting interest and a 32.99% equity interest in iHeart. The Bermuda based Invesco and affiliated entities up to a 19.99% voting and equity interest in iHeart after previously getting temporary approval from the FCC last summer to own 9.4% of iHeart’s Class A Common Stock.
The FCC granted the petition with conditions after input from the Department of Justice and other federal agencies. The company must “(1) designate and maintain a Security Officer who is a United States citizen residing in the United States; (2) abide by the terms in the LOA regarding the protection of personally identifiable information and geolocation data; (3) provide DOJ notice of any material changes to its business; and (4) provide an annual report to DOJ regarding the company’s compliance with the LOA. The LOA contains the specific terms of these commitments and undertakings.”
In granting the petition the FCC wrote, “Specifically, we find that grant of the Petition is likely to: (1) enable iHeart to be in a stronger financial condition post-bankruptcy and provide the company greater flexibility to access foreign investment capital, thereby allowing iHeart to better compete with other media companies, enhance its programming, and better serve the public interest;38 and (2) potentially encourage reciprocal investment opportunities for U.S. companies in foreign markets.”
The FCC granted a similar petition from Cumulus Media in 2019.
