What changed in this filing

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Item 1A. Risk Factors

2021-02-25 compared with 2020-02-27 · 134 added, 91 removed, 189 unchanged (54% of the section changed)

Risks Related to Our Business

The COVID-19 pandemic has adversely impacted, and is expected to continue to adversely impact, our business, results of operations and financial position.

In December 2019, a strain of novel coronavirus disease, COVID-19, was identified in Wuhan, China.

This virus has been declared a pandemic and has spread around the world, including throughout the United States.

The outbreak and government measures taken in response have also had a significant impact, both direct and indirect, on our businesses and the economy generally, as supply chains have been disrupted;

facilities and production have been suspended;

and demand for many goods and services has fallen.

In response to the spread of COVID-19, including shelter-in-place and stay-at-home orders, we implemented a work-from-home policy that remains in place for most of our employees and have restricted on-site activities.

As a result of the COVID-19 pandemic, we have experienced and may continue to experience disruptions that have adversely impacted our business, results of operations and financial position.

The extent of future disruptions will depend on numerous evolving factors, which are highly uncertain, rapidly changing and cannot be predicted, and could result in significantly more severe impacts in the future, including:

• reduced ad budgets and spend, order cancellations and increased competition for advertising revenue;

• the effect of the outbreak on our customers and other business partners and vendors;

• changes in how we conduct operations, including our events;

• increased competition with alternative media platforms and technologies;

• the inability of customers to pay amounts owed to the Company, or delays in collections of such amounts;

• additional goodwill or other impairment charges;

• limitations on our employee resources, including because of work-from-home, stay-at-home and shelter-in-place orders from federal or state governments, employee furloughs, or sickness of employees or their families;

• diversion of management resources to focus on mitigating the impacts of the COVID-19 pandemic;

• reduced capital expenditures;

• impacts from prolonged remote work arrangements, including increased cybersecurity risks.

These disruptions have negatively impacted our revenue, results of operations and financial position for the year ended December 31, 2020 and we expect these disruptions to continue to have a negative impact in 2021.

The COVID-19 pandemic continues to evolve.

The extent to which the outbreak continues to impact our business, liquidity and financial results will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the duration of the pandemic, stay-at-home and shelter-in-place orders, travel restrictions and social distancing throughout the United States, the duration and extent of business closures or business disruptions, the timing of a vaccine becoming widely available and the effectiveness of actions taken to contain and treat the disease.

If we or our customers continue to experience prolonged shutdowns or other business disruptions beyond current expectations, our ability to conduct our business in the manner and within planned timelines could be materially and adversely impacted, and our business, liquidity and financial results will be adversely affected.

Additionally, concerns over the economic impact of the COVID-19 pandemic caused extreme volatility in financial and other capital markets, which has adversely affected our stock price and credit rating and could impact our ability to access the capital markets in the future.

Our results have been in the past, and could be in the future, adversely affected by economic uncertainty or deteriorations in economic conditions.

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Periods of a slowing economy or recession, or periods of economic uncertainty, may be accompanied by a decrease in advertising.

For example, the global economic downturn that began in 2008 resulted in a decline in advertising and marketing by our customers, which resulted in a decline in advertising revenues across our businesses.

Global economic activity has declined as a result of COVID-19, which has significantly reduced our advertising revenues.

This reduction in advertising revenues had an adverse effect on our revenue, profit margins, cash flow and liquidity.

If economic uncertainty increases or economic conditions deteriorate again, global economic conditions may once again adversely impact our revenue, profit margins, cash flow and liquidity.

If economic uncertainty continues or increases or economic conditions deteriorate, including due to the ongoing effect of the COVID-19 pandemic, global economic conditions may continue to adversely impact our revenue, profit margins, cash flow and liquidity.

Furthermore, because a significant portion of our revenue is derived from local advertisers, our ability to generate revenues in specific markets is directly affected by local and regional conditions, and unfavorable regional economic conditions also may adversely impact our results.

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We operate in a highly competitive industry, and we may not be able to maintain or increase our current audience ratings and advertising revenues.

Our business competes for audiences and advertising revenues with other radio businesses, as well as with other media, such as streaming audio services, satellite radio, podcasts, other Internet-based services, television, live entertainment, newspapers, magazines and direct mail, within their respective markets.

Our business competes for audiences and advertising revenues with other radio businesses, as well as with other media, such as streaming audio services, satellite radio, podcasts, other Internet-based streaming music services, television, live entertainment, newspapers, magazines and direct mail, within their respective markets.

Audience ratings and market shares are subject to change for various reasons, including through consolidation of our competitors through processes such as mergers and acquisitions, which could have the effect of reducing our revenues in a specific market.

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Alternative media platforms and technologies may continue to increase competition with our broadcasting operations.

Our terrestrial radio broadcasting operations face increasing competition from alternative media platforms and technologies, such as broadband wireless, satellite radio, audio broadcasting by cable television systems, podcasts and Internet-based streaming music services, as well as consumer products, such as portable digital audio players and other mobile devices, smart phones and tablets, gaming consoles, in-home entertainment and enhanced automotive platforms.

Our terrestrial radio broadcasting operations face increasing competition from alternative media platforms and technologies, such as broadband wireless, satellite radio, audio broadcasting by cable television systems, other podcast streaming services, Internet-based streaming music services, as well as consumer products, such as portable digital audio players and other mobile devices, smart phones and tablets, gaming consoles, in-home entertainment and enhanced automotive platforms.

These technologies and alternative media platforms, including those used by us, compete with our broadcast radio stations for audience share and advertising revenues.

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We employ or independently contract with many on-air personalities and hosts of syndicated radio programs, podcasts and other audio platforms, with significant loyal audiences in their respective markets.

Although we have entered into long-term agreements with some of our key on-air talent and program hosts to protect our interests in those relationships, we can give no assurance that all or any of these persons will remain with us, will be able to continue to perform their duties or will retain their audiences.

Competition for these individuals is intense and many of these individuals are under no legal obligation to remain with us.

Our competitors may choose to extend offers to any of these individuals on terms which we may be unwilling to meet.

Furthermore, the popularity and audience loyalty of our key on-air talent and program hosts is highly sensitive to rapidly changing public tastes.

Furthermore, the popularity and audience loyalty of our key on-air talent and program hosts is

highly sensitive to rapidly changing public tastes.

A loss of such popularity or audience loyalty is beyond our control and could have a material adverse effect on our ability to attract local and/or national advertisers and on our revenue and/or ratings, and could result in increased expenses.

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We also believe that maintaining and enhancing our brand is critical to growing our user base, advertiser relationships and partnerships.

The iHeartRadio master brand ties together our radio stations, digital platforms, social, podcasts and live events in a unified manner that reflects the quality and compelling nature of our listener experiences.

The iHeartRadio master brand ties together our radio stations, digital platforms, social, podcasts and events in a unified manner that reflects the quality and compelling nature of our listener experiences.

Maintaining and enhancing our brand depends on many factors, including factors that are not entirely within our control.

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• unfavorable fluctuations in operating costs, which we may be unwilling or unable to pass through to our customers;

our inability to successfully adopt or our being late in adopting technological changes and innovations that offer more attractive advertising or listening alternatives than what we offer, which could result in

• our inability to successfully adopt or our being late in adopting technological changes and innovations that offer more attractive advertising or listening alternatives than what we offer, which could result in a loss of advertising customers or lower advertising rates, which could have a material adverse effect on our operating results and financial performance;

• a loss of advertising customers or lower advertising rates, which could have a material adverse effect on our operating results and financial performance;

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• unfavorable changes in labor conditions, which may impair our ability to operate or require us to spend more to retain and attract key employees.

Acquisitions, dispositions and other strategic transactions could pose risks.

We frequently evaluate strategic opportunities both within and outside our existing lines of business.

We expect from time to time to pursue acquisitions of certain businesses as well as strategic dispositions.

These acquisitions or dispositions could be material.

Acquisitions or dispositions involve numerous risks, including:

• our acquisitions may prove unprofitable and fail to generate anticipated cash flows:

• to successfully manage our business, we may need to:

• recruit additional senior management as we cannot be assured that senior management of acquired businesses will continue to work for us and we cannot be certain that our recruiting efforts will succeed, and

• expand corporate infrastructure to facilitate the integration of our operations with those of acquired businesses, because failure to do so may cause us to lose the benefits of any expansion that we decide to undertake by leading to disruptions in our ongoing businesses or by distracting our management;

• we may enter into markets and geographic areas where we have limited or no experience;

• we may encounter difficulties in the integration of new management teams, operations and systems;

• our management’s attention may be diverted from other business concerns;

• our dispositions may negatively impact revenues from our national, regional and other sales networks;

• our dispositions may make it difficult to generate cash flows from operations sufficient to meet our anticipated cash requirements, including debt service requirements.

Acquisitions and dispositions of media and entertainment businesses may require antitrust review by U.S.

federal antitrust agencies and may require review by foreign antitrust agencies under the antitrust laws of foreign jurisdictions, including our proposed acquisition of Triton.

We can give no assurances that the Department of Justice (“DOJ”), the U.S.

Federal Trade Commission (“FTC”) or foreign antitrust agencies will not seek to bar us from acquiring or disposing of media and entertainment businesses or impose stringent undertakings on our business as a condition to the completion of an acquisition in any market where we already have a significant position.

Further, radio acquisitions are subject to FCC approval.

Such transactions must comply with the Communications Act and FCC regulatory requirements and policies.

The FCC’s media ownership rules remain subject to ongoing agency and court proceedings.

Future changes could restrict our ability to dispose of or acquire new radio assets or businesses.

See “Business-Regulation of our Business.”

If our security measures are breached, we could lose valuable information, suffer disruptions to our business, and incur expenses and liabilities including damages to our relationships with listeners, consumers, business partners, employees and advertisers.

We may be unable to anticipate or prevent unauthorized access.

Our websites and digital platforms are vulnerable to software bugs, computer viruses, internet worms, break-ins, phishing attacks, attempts to overload servers with denial-of-service, or other attacks and similar disruptions from unauthorized use of our and third-party computer systems, any of which could lead to system interruptions, delays, or shutdowns, causing loss of critical data or the unauthorized access to personal data.

A security breach could occur due to the actions of outside parties, employee error, malfeasance or a combination of these or other actions.

Though it is difficult to determine what, if any, harm may directly result from any specific interruption or attack, any failure to maintain performance, reliability, security, and availability of our services and technical infrastructure to the satisfaction of our listeners may harm our reputation and our ability to retain existing listeners and attract new listeners.

We cannot assure you that the systems and processes that we have designed to protect our data and our listeners’ data, to prevent data loss and to prevent or detect security breaches will provide absolute security, and we may incur significant costs in protecting against or remediating cyber-attacks.

If an actual or perceived breach of our security occurs, we may face regulatory or civil liability, lose competitively sensitive business information or suffer disruptions to our business operations, information processes and internal controls.

In addition, the public perception of the effectiveness of our security measures or services could be harmed, we could lose listeners, consumers, business partners and advertisers.

In the event of a security breach, we could suffer financial exposure in connection with penalties, remediation efforts, investigations and legal proceedings and changes in our security and system protection measures.

In the event an E.U.

regulator were to determine we had not adequately complied with E.U.

General Data Protection Regulation (“GDPR”) standards, we may (i) incur regulatory financial penalties or (ii) be required to notify European Data Protection Authorities, within strict time periods, about any personal data breaches, unless the personal data breach is unlikely to result in a risk to the rights and freedoms of the affected individuals.

We may also be required to notify the affected individuals of the personal data breach where there is a high risk to their rights and freedoms.

If we suffer a personal data breach, we could be fined up to EUR 20 million or 4% of worldwide annual turnover of the preceding financial year, whichever is greater.

Any data breach by service providers that are acting as data processors (i.e., processing personal data on our behalf) could also mean that we are subject to these fines and have to comply with the notification obligations set out above.

We have engaged in restructuring activities in the past, and may need to implement further restructurings in the future and our restructuring efforts may not be successful or generate expected cost savings.

We actively seek to adapt our cost structure to the changing economics of the industry.

For example, in the first quarter of 2020, we announced our modernization initiatives, which will take advantage of the significant investments we have made in new technologies to build an operating infrastructure that provides better quality and newer products and delivers new cost efficiencies.

In addition, in response to the COVID-19 pandemic, we have taken steps to significantly reduce our capital and operating expenditures.

There can be no assurance that we will be successful in upgrading our systems and processes effectively or on the timetable and at the costs contemplated, or that we will achieve the expected long-term cost savings.

We may be required to implement further restructuring activities, make additions or other changes to our management or workforce based on other cost reduction measures or changes in the markets and industry in which we compete.

Restructuring activities can create unanticipated consequences and negative impacts on the business, and we cannot be sure that any ongoing or future restructuring efforts will be successful or generate expected cost savings.

Risks Related to our Indebtedness

Our substantial indebtedness may adversely affect our financial health and operating flexibility.

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The London Inter-bank Offered Rate (“LIBOR”) and certain other interest “benchmarks” may be subject to regulatory guidance and/or reform that could cause interest rates under our current or future debt agreements to perform differently than in the past or cause other unanticipated consequences.

The United Kingdom’s Financial Conduct Authority, which regulates LIBOR, has announced that it intends to stop encouraging or requiring banks to submit LIBOR rates after 2021, and it is unclear if LIBOR will cease to exist or if new methods of calculating LIBOR will evolve.

Regulators that oversee LIBOR have announced that they intend to stop encouraging or requiring banks to submit data used to compile certain LIBOR rates after 2021 and, in some cases, by mid-2023, and it is unclear if LIBOR will cease to exist or if new methods of calculating LIBOR will evolve.

If LIBOR ceases to exist or if the methods of calculating LIBOR change from their current form, interest rates on our debt obligations may be adversely affected.

Future acquisitions, dispositions and other strategic transactions could pose risks.

We frequently evaluate strategic opportunities both within and outside our existing lines of business.

We expect from time to time to pursue acquisitions of certain businesses as well as strategic dispositions.

These acquisitions or dispositions could be material.

Acquisitions or dispositions involve numerous risks, including:

our acquisitions may prove unprofitable and fail to generate anticipated cash flows:

to successfully manage our business, we may need to:

recruit additional senior management as we cannot be assured that senior management of acquired businesses will continue to work for us and we cannot be certain that our recruiting efforts will succeed, and

expand corporate infrastructure to facilitate the integration of our operations with those of acquired businesses, because failure to do so may cause us to lose the benefits of any expansion that we decide to undertake by leading to disruptions in our ongoing businesses or by distracting our management;

we may enter into markets and geographic areas where we have limited or no experience;

we may encounter difficulties in the integration of new management teams, operations and systems;

our management’s attention may be diverted from other business concerns;

our dispositions may negatively impact revenues from our national, regional and other sales networks;

our dispositions may make it difficult to generate cash flows from operations sufficient to meet our anticipated cash requirements, including debt service requirements.

Acquisitions and dispositions of media and entertainment businesses may require antitrust review by U.S.

federal antitrust agencies and may require review by foreign antitrust agencies under the antitrust laws of foreign jurisdictions.

We can give no assurances that the Department of Justice (“DOJ”), the U.S.

Further, radio acquisitions are subject to FCC approval.

Such transactions must comply with the Communications Act and FCC regulatory requirements and policies.

The FCC’s media ownership rules remain subject to ongoing agency and court proceedings.

Future changes could restrict our ability to dispose of or acquire new radio assets or businesses.

See “Business-Regulation of our Business.”

Regulatory, Legislative and Litigation Risks

Extensive current government regulation, and future regulation, may limit our radio broadcasting and other operations or adversely affect our business and financial results.

The domestic radio industry is heavily regulated by federal laws and regulations of several agencies, including the FCC.

For example, the FCC could impact our profitability by imposing large fines on us if, in response to pending or future complaints, it finds that we broadcast indecent programming or violated other FCC regulations.

The FCC’s enforcement priorities are subject to change, and we cannot predict whether the FCC may focus on other areas of legal compliance in the future.

For example, the FCC could impact our profitability by imposing large fines on us if, in response to pending or future complaints, it finds that we violated FCC regulations.

The FCC’s enforcement priorities are subject to change, and we cannot predict which areas of legal compliance the FCC will focus on in the future.

We have received, and may receive in the future, letters of inquiry and other notifications from the FCC concerning compliance with the Communications Act and FCC rules, and we cannot predict the outcome of any outstanding or future letters of inquiry and notifications from the FCC or the nature or extent of future FCC enforcement actions.

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In addition, Congress, the FCC and other regulatory agencies have considered, and may in the future consider and adopt, new laws, regulations and policies that could, directly or indirectly, have an adverse effect on our business operations and financial performance.

Legislation and certain ongoing litigation may require us to pay additional royalties, including to additional parties such as record labels or recording artists.

We currently pay royalties to song composers and publishers, including through BMI, ASCAP, SESAC and GMR.

Legislation and certain ongoing litigation and royalty audits may require us to pay additional royalties, including to additional parties such as record labels or recording artists.

We currently pay royalties to composers and music publishers, including through BMI, ASCAP, SESAC and GMR.

We also pay royalties to record companies and their representative, SoundExchange, for digital music transmissions.

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Moreover, it is possible that our license fees and negotiating costs associated with obtaining rights to use musical compositions and sound recordings in our programming could materially increase as a result of private negotiations, one or more regulatory rate-setting processes, or administrative and court decisions.

For example, we are involved in pending litigation and/or negotiations with ASCAP, BMI and SESAC related to royalty payments for the public performance of musical compositions, the outcome of which could cause us to owe increased royalty payments and adversely impact our business.

For example, we are involved in pending litigation, royalty audits and/or negotiations with ASCAP and BMI related to royalty payments for the public performance of musical compositions, the outcome of which could cause us to owe increased royalty payments and adversely impact our business.

We are also involved in a proceeding before the CRB to determine statutory rates and terms for the public performance and ephemeral reproduction of sound recordings by various non-interactive webcasters, including iHeart, for the period from January 1, 2021 to December 31, 2025.

The outcome of this proceeding may result in an increase to our licensing costs.

Also, in October 2018, legislation was signed into law that creates a public performance right under federal law for pre-February 15, 1972 recordings streamed online.

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We utilize personal, demographic and other information from and about our listeners, consumers, business partners and advertisers as they interact with us.

(1) our broadcast radio station websites and our iHeartRadio digital platform collect personal information as users register for our services, fill out their listener profiles, post comments, use our social networking features, participate in polls and contests and sign-up to receive email newsletters;

(1) our broadcast radio station websites and our iHeartRadio digital platform collect personal information as users use our services register for our services, fill out their listener profiles, post comments, use our social networking features, participate in polls and contests and sign-up to receive email newsletters;

(2) we use tracking technologies, such as “cookies,” to manage and track our listeners’ interactions with us so that we can deliver relevant music content and advertising;

(3) we collect credit card or debit card information from consumers, business partners and advertisers who use our services;

(3) we accept credit cards as a method of payment from consumers, business partners and advertisers;

however, the data collection related to processing such payments is handled by personal information compliant third-parties on our behalf;

and (4) we collect precise location data about certain of our platform users for analytics, attribution and advertising purposes.

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Many of these laws are still evolving, new laws may be enacted and any of these laws could be amended or interpreted by the courts or regulators in ways that could harm our business.

For example, our ongoing efforts to comply with the European Union (“E.U.”) General Data Protection Regulation (“GDPR”), effective as of May 2018, or the new California Consumer Privacy Act (“CCPA”) effective as of January 2020 entail substantial expenses, and is diverting resources from other initiatives and projects, and could limit the services we are able to offer.

For example, our ongoing efforts to comply with regulatory regimes such as the GDPR, effective as of May 2018, or the California Consumer Privacy Act (“CCPA”), effective as of January 2020, entails substantial expenses, diverts resources from other initiatives and projects, and could limit the services we are able to offer.

The CCPA provides for a private right of action for unauthorized access, theft or disclosure of personal information in certain situations with possible damage awards of $100 to $750 per consumer per incident, or actual damages, whichever is greater, and also permits class action lawsuits.

The California Attorney General may also impose penalties of up to $7,500 for each intentional violation of the CCPA.

Additionally, a new California ballot initiative, the California Privacy Rights Act (the “CPRA”) passed in California in November 2020.

The CPRA will impose additional data protection obligations on companies doing business in California, including additional consumer rights processes, limitations on data uses, new audit requirements for higher risk data, and opt outs for certain uses of sensitive data.

It will also create a new California data protection agency authorized to issue substantive regulations and could result in increased privacy and information security enforcement.

The majority of the provisions will go into effect on January 1, 2023, and additional compliance investment and potential business process changes may be required.

In addition, changes in consumer rights, expectations and demands regarding privacy and data protection could restrict our ability to collect, use, disclose and derive economic value from demographic and other information related to our listeners, consumers, business partners and advertisers, or to transfer employee data within the corporate group.

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Although we have implemented and are implementing policies and procedures designed to comply with these laws and regulations, any failure or perceived failure by us to comply with our policies or applicable regulatory requirements related to consumer protection, information security, data protection and privacy could result in a loss of confidence in us, damage to our brands, the loss of listeners, consumers, business partners and advertisers, as well as proceedings against us by governmental authorities or others, which could hinder our operations and adversely affect our business.

We may be unable to anticipate or prevent unauthorized access.

A security breach could occur due to the actions of outside parties, employee error, malfeasance or a combination of these or other actions.

In addition, the public perception of the effectiveness of our security measures or services could be harmed, we could lose listeners, consumers, business partners and advertisers.

In the event an EU regulator were to determine we had not adequately complied with GDPR standards, we may (i) incur regulatory financial penalties or (ii) be required to notify European Data Protection Authorities, within strict time periods, about any personal data breaches, unless the personal data breach is unlikely to result in a risk to the rights and freedoms of the affected individuals.

We may also be required to notify the affected individuals of the personal data breach where there is a high risk to their rights and freedoms.

If we suffer a personal data breach, we could be fined up to EUR 20 million or 4% of worldwide annual turnover of the preceding financial year, whichever is greater.

Environmental, health, safety and land use laws and regulations may limit or restrict some of our operations.

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Risks Related to our Recent Emergence from the Chapter 11 Cases

The ongoing effects of the Chapter 11 Cases following our emergence could adversely affect our business and relationships.

We have only recently emerged from bankruptcy.

Our ability to change the public perception relating to our recently consummated Chapter 11 Cases may have an impact on our ability to continue to attract our audience, which is critical to our ability to achieve long-term profitability, and a negative public perception of our business due to our recently consummated bankruptcy proceedings may have a materially adverse effect on our results of operations and financial condition, particularly because our ability to achieve long-term profitability depends on our ability to reach our audience.

Our actual financial results following our emergence from the Chapter 11 Cases are not comparable to our historical financial information.

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As a result of the Separation and Reorganization, we no longer include CCOH in our consolidated financial statements following the Effective Date.

In addition, we adopted fresh-start accounting and, as a result, at the Effective Date, our assets and liabilities were recorded at fair value, which resulted in values that are different than the values recorded in our historical financial statements.

In addition, we adopted fresh-start accounting and, as a result, at the Effective Date, our assets and liabilities were

recorded at fair value, which resulted in values that are different than the values recorded in our historical financial statements.

Accordingly, our financial condition and results of operations from and after the Effective Date are not comparable to the financial condition or results of operations reflected in our historical financial statements.

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The tax treatment of the transactions consummated in the Chapter 11 Cases, including the Separation and cancellation of existing indebtedness, is highly complex.

Although we have not yet filed the relevant income tax returns and we are continuing to update our analysis, we currently anticipate that the Separation resulted in the recognition of a loss for federal and most state income tax purposes (although we may recognize a gain in certain states) and, therefore, such transactions did not result in material cash tax liability.

The Separation resulted in the recognition of a loss for federal and most state income tax purposes and, therefore, such transactions did not result in material cash tax liability.

However, the Internal Revenue Service or other taxing authorities could assert in connection with a subsequent audit that additional cash tax liabilities may have arisen in connection with such transactions.

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For example, we will indemnify the Outdoor Group for liabilities to the extent such liabilities related to the business, assets and liabilities of iHeartMedia as well as liabilities relating to a breach of the Separation Agreement.

We will also indemnify the Outdoor

Group for 50% of certain tax liabilities imposed on the Outdoor Group in connection with the Separation on or prior to the third anniversary of the Separation in excess of $5.0 million, with our aggregate liability limited to $15.0 million, and will reimburse the Outdoor Group for one-third of potential costs relating to certain agreements between the Outdoor Group and third parties in excess of $10.0 million up to the first $35.0 million of such costs such that we will not bear more than $8.33 million of such costs.

We will also indemnify the Outdoor Group for 50% of certain tax liabilities imposed on the Outdoor Group in connection with the Separation on or prior to the third anniversary of the Separation in excess of $5.0 million, with our aggregate liability limited to $15.0 million, and will reimburse the Outdoor Group for one-third of potential costs relating to certain agreements between the Outdoor Group and third parties in excess of $10.0 million up to the first $35.0 million of such costs such that we will not bear more than $8.33 million of such costs.

However, third parties might seek to hold us responsible for liabilities that the Outdoor Group agreed to retain, and there can be no assurance that the Outdoor Group will be able to fully satisfy their respective indemnification obligations under these agreements.

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Risks Related to our Class A Common Stock

We have a significant number of outstanding warrants, which may cause significant dilution to our shareholders, adversely impact the market price of our Class A common stock and make it more difficult for us to raise funds through future equity offerings.

A majority of our equity was issued in the form of Special Warrants, which have no voting rights, and Class B common stock, which have only limited voting rights.

As of February 21, 2020 , we had 58,538,442 shares of Class A common stock, 6,901,987 shares of Class B common stock and 80,175,925 Special Warrants outstanding.

The Special Warrants are currently exercisable into Class A common stock or Class B common stock at an exercise price of $0.001 per share, and the Class B common stock is currently convertible into Class A common stock on a share-for-share basis, in each case subject to the Ownership Restrictions described in Item 1.

Business of this report.

Upon the exercise of any Special Warrants or the conversion of any shares of Class B common stock, your voting rights as a holder of Class A common stock will be proportionately diluted.

The issuance of shares of Class A common stock upon the exercise of warrants would dilute the percentage ownership interest of all holders of our Class A common stock and would increase the number of our publicly traded shares, which could depress the market price of our Class A common stock.

We do not intend to pay dividends on our Class A common stock for the foreseeable future.

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As a result, we must rely on dividends and other advances, distributions and transfers of funds from our subsidiaries to meet our obligations.

The ability of our subsidiaries to pay dividends or make other advances, distributions and transfers of funds will depend on their respective results of operations and may be restricted by, among other things, applicable laws limiting the amount of funds available for payment of dividends and certain restrictive covenants contained in the agreements of those subsidiaries.

The ability of our subsidiaries to pay dividends or make other advances, distributions and transfers of funds will depend on their respective results of operations and

may be restricted by, among other things, applicable laws limiting the amount of funds available for payment of dividends and certain restrictive covenants contained in the agreements of those subsidiaries.

The deterioration of income from, or other available assets of, our subsidiaries for any reason could limit or impair their ability to pay dividends or other distributions to us.

Conversion of shares of our Class B common stock and Special Warrants into our Class A common stock would cause significant dilution to our shareholders and may adversely impact the market price of our Class A common stock.

As of February 22, 2021, we had 110,923,534 shares of Class A common stock, 29,088,181 shares of Class B common stock and 6,201,453 Special Warrants outstanding.

Each Special Warrant is currently exercisable for one share of Class A common stock or Class B common stock and each share of Class B common stock is currently convertible into one share of Class A common stock, in each case subject to the Ownership Restrictions described in Part I, Item 1, “Business” of this report.

Upon the exercise of any Special Warrants or the conversion of any shares of Class B common stock, your voting rights as a holder of Class A common stock will be proportionately diluted.

The issuance of additional shares of Class A common stock would increase the number of our publicly traded shares, which could depress the market price of our Class A common stock.

Delaware law and certain provisions in our certificate of incorporation may prevent efforts by our stockholders to change the direction or management of our company.

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• advance notice for all stockholder proposals is required;

subject to the rights of holders of any outstanding shares of our preferred stock, for so long as our board remains classified our directors may only be removed for cause and upon the affirmative vote of holders of a majority of the

voting power of the outstanding shares of our Class A common stock;

• subject to the rights of holders of any outstanding shares of our preferred stock, for so long as our board remains classified our directors may only be removed for cause and upon the affirmative vote of holders of a majority of the voting power of the outstanding shares of our Class A common stock;

• for the first three years following the Effective Date, any amendment, alteration, rescission or repeal of the anti-takeover provisions of the charter, requires the affirmative vote of at least 66 2/3% in voting power of the outstanding shares of our stock entitled to vote generally in the election of directors.

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Under these provisions, a corporation may not, in general, engage in a business combination with any holder of 15% or more of its voting stock unless the holder has held the stock for three years or, among other exceptions, the board of directors has approved the business combination or the transaction by which the person became an interested stockholder.

In addition, we have adopted a stockholder rights plan that could make it more difficult for a third-party to acquire our Class A common stock, Class B common stock or Special Warrants without the approval of our Board.

These and other provisions in our certificate of incorporation, bylaws and Delaware law could make it more difficult for stockholders or potential acquirers to obtain control of our Board or initiate actions that are opposed by our Board, including actions to delay or impede a merger, tender offer or proxy contest involving our company.

The existence of these provisions could negatively affect the price of our common stock and limit opportunities for you to realize value in a corporate transaction.

Our certificate of incorporation designates the Court of Chancery of the State of Delaware, subject to certain exceptions, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our certificate of incorporation designates the Court of Chancery of the State of Delaware, subject to certain exceptions, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders and our bylaws designate the federal district courts of the United States as the exclusive forum for actions arising under the Securities Act of 1933, as amended, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our certificate of incorporation provides that the Court of Chancery of the State of Delaware, subject to certain exceptions, is the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (iii) any action asserting a claim against the company or any director or officer or employee of the company arising pursuant to any provision of the DGCL, our certificate of incorporation or our bylaws or (iv) any other action asserting a claim against us that is governed by the internal affairs doctrine.

Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our certificate of incorporation described above.

This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employee, which may discourage such lawsuits against us and our directors, officers and employees.

Alternatively, if a court were to find these provisions of our certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition.

Regulations imposed by the Communications Act and the FCC limit the amount of foreign individuals or entities that may invest in our capital stock.

The Communications Act and FCC regulations restrict foreign ownership or control of any entity licensed to provide broadcast and certain other communications services.

Among other prohibitions, foreign entities may not have direct or indirect ownership or voting rights of more than 25 percent in a corporation controlling the licensee of a radio broadcast station if the FCC finds that the public interest will be served by the refusal or revocation of such a license due to foreign ownership or voting rights exceeding that threshold.

The FCC has interpreted this provision to mean that it must make an affirmative public interest finding before a broadcast license may be held by a corporation that is more than 25 percent owned or controlled, directly or indirectly, by foreign persons or other non-U.S.

The FCC calculates foreign voting rights separately from equity ownership, and both must be at or below the 25 percent threshold unless the FCC has issued a declaratory ruling allowing foreign ownership or voting in excess of that threshold.

Warrants and other future interests typically are not taken into account in determining foreign ownership compliance.

To the extent that our aggregate foreign ownership or voting percentages would exceed 25 percent, any individual foreign holder of our common stock whose ownership or voting percentage would exceed 5 percent or 10 percent (with the applicable percentage determined pursuant to FCC rules) will additionally be required to obtain the FCC’s specific approval.

On July 25, 2019, we filed a PDR requesting FCC consent to exceed the 25 percent foreign ownership and voting benchmarks that currently apply to us, on which the FCC has requested public comment.

We cannot predict whether the FCC will issue a ruling granting the PDR, the amount of foreign equity and voting rights any such a ruling will allow us to have, or how long it will take to obtain such a ruling.

In addition, our bylaws provide that the federal district courts of the United States are the exclusive forum for any complaint raising a cause of action arising under the Securities Act of 1933, as amended.

These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employee, which may discourage such lawsuits against us and our directors, officers and employees.

Alternatively, if a court were to find these provisions of our certificate of incorporation or bylaws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition.

Regulations imposed by the Communications Act and the FCC limit the amount of foreign individuals or entities that may invest in our capital stock without FCC approval.

The Communications Act and FCC regulations prohibit foreign entities or individuals from indirectly (i.e., through a parent company) owning or voting more than 25 percent of the equity in a corporation controlling the licensee of a radio broadcast station unless the FCC determines greater indirect foreign ownership is in the public.

The FCC generally will not make such a determination absent favorable executive branch review.

The FCC calculates foreign voting rights separately from equity ownership, and both must be at or below the 25 percent threshold absent a foreign ownership declaratory ruling.

To the extent that our aggregate foreign ownership or voting percentages exceeds 25 percent, any individual foreign holder of our common stock whose ownership or voting percentage would exceed 5 percent or 10 percent (with the applicable percentage determined pursuant to FCC rules) will additionally be required to obtain the FCC’s specific approval.

On November 5, 2020, the FCC issued the Declaratory Ruling which authorizes us to have aggregate foreign ownership and voting percentages of up to 100 percent and specifically approves certain of our stockholders that are deemed to be foreign under FCC rules, subject to certain conditions.

Among those conditions is a requirement that we comply with the LOA that we entered into with the DOJ.

The Declaratory Ruling also requires us to take our Special Warrants into account in determining our foreign ownership compliance.

A direct or indirect owner of our securities that is deemed to be foreign under FCC rules could require us to take action under the Declaratory Ruling and the FCC’s foreign ownership rules if that owner acquires more than 5 percent, or more than 10 percent for certain “passive” investors, of our voting equity or total equity (including the Special Warrants on an as-exercised basis), without obtaining specific approval from the FCC through a new petition for declaratory ruling.

On February 5, 2021, Honeycomb filed a Schedule 13D with the SEC reporting ownership of more than 5% of our voting stock and equity.

Honeycomb acquired its interest without our knowledge or control, and we are fulfilling our obligations under the Declaratory Ruling and the FCC rules with respect to Honeycomb’s interest.

Direct or indirect ownership of our securities could result in the violation of the FCC’s media ownership rules by investors with “attributable interests” in other radio stations or in the same market as one or more of our broadcast stations.

Under the FCC’s media ownership rules, a direct or indirect owner of our securities could violate and/or cause us to

violate the FCC’s structural media ownership limitations if that person owns or acquires an “attributable” interest in other radio stations in the same market as one or more of our radio stations.

Under the FCC’s media ownership rules, a direct or indirect owner of our securities could violate and/or cause us to violate the FCC’s structural media ownership limitations if that person owns or acquires an “attributable” interest in other radio stations in the same market as one or more of our radio stations.

Under the FCC’s “attribution” policies the following relationships and interests generally are cognizable for purposes of the substantive media ownership restrictions:

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(3) any general partnership or limited liability company manager interest;

(4) any limited partnership interest or limited liability company member interest that is not “insulated,” pursuant to FCC-prescribed criteria, from material involvement in the management or operations of the media company;

(4) any limited partnership interest or limited liability company member interest that is not “insulated,” pursuant to FCC-prescribed criteria, from material involvement in the

management or operations of the media company;

(5) certain same-market time brokerage agreements;

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Our certificate of incorporation grants us broad authority to comply with FCC Regulations.

To the extent necessary to comply with the Communications Act, FCC rules and policies, and any FCC declaratory ruling related to our PDR, and in accordance with our certificate of incorporation, we may request information from any stockholder or proposed stockholder to determine whether such stockholder’s ownership of shares of capital stock may result in a violation of the Communications Act, FCC rules and policies, or any FCC declaratory ruling.

To the extent necessary to comply with the Communications Act, FCC rules and policies, and the Declaratory Ruling, and in accordance with our certificate of incorporation, we may request information from any stockholder or proposed stockholder to determine whether such stockholder’s ownership of shares of capital stock may result in a violation of the Communications Act, FCC rules and policies, or any FCC declaratory ruling.

We may further take the following actions, among others, to help ensure compliance with and to remedy any actual or potential violation of the Communications Act, FCC rules and policies, or any FCC declaratory ruling, or to prevent the loss or impairment of any of our FCC licenses:

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All statements other than statements of historical fact included in this report are forward-looking statements.

Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business.

Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, our acquisition of Triton, future performance and business.

You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts.

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• risks associated with weak or uncertain global economic conditions and their impact on the level of expenditures for advertising;

• the impact of the COVID-19 pandemic on our business, financial position and results of operations;

• intense competition including increased competition from alternative media platforms and technologies;

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• the impact of our substantial indebtedness;

the impact of future acquisitions, dispositions and other strategic transactions;

• the impact of acquisitions, dispositions and other strategic transactions;

• legislative or regulatory requirements;

the impact of legislation or ongoing litigation on music licensing and royalties;

• the impact of legislation, ongoing litigation or royalty audits on music licensing and royalties;

• regulations and consumer concerns regarding privacy and data protection, and breaches of information security measures;

• risks associated with our recent emergence from the Chapter 11 Cases;

risks related to our Class A common stock, including our significant number of outstanding warrants;

• risks related to our Class A common stock;

• regulations impacting our business and the ownership of our securities;

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors