Macroeconomic turndown hampers advertising revenue
A primary source of revenue for iHeartMedia is the sale of advertising on the company’s radio stations and national, local and virtual events. The organization notes that periods of economic uncertainty and slowing economic activity often translate into a decline in advertising revenue on account of lower consumer and business spending. Accordingly, revenue, profit margin, cash flow and liquidity all suffered as demand for advertising suffered tremendously amid a reduction in corporate ad budgets amid the COVID-19 (coronavirus) pandemic. Total company revenue declined 20.0% to $2.9 billion in 2020.
COVID|Competition|Structural|M&AIn response to volatile demand in the wake of the first COVID-19 surge, the company undertook a comprehensive cost reduction program, aimed at shoring up labor and supply costs.
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