The radio and podcast business could be in for a major shakeup, as multiple outlets are reporting that iHeartMedia and SiriusXM could soon merge.
The news first came from Bloomberg, which reported that the two companies were exploring a merger, perhaps through SiriusXM owner Liberty Media purchasing iHeartMedia. A subsequent report from The Wrap suggested the deal could instead come together through entertainment mogul Irving Azoff, who could seek to acquire both companies and merge them.
As both reports emphasized, the deal would see the two former radio juggernauts come together at a time when the radio business is steadily losing ground to podcasts and streaming. Both SiriusXM and iHeartMedia have recently invested heavily in podcasts to keep up with audience demand. And while iHeart is the largest podcast publisher, its core radio business is shrinking. By merging, the two could likely shore up their existing radio businesses while scaling up podcast and digital video production.
Liberty Media sought to buy a significant stake in iHeartMedia in 2018 as it navigated bankruptcy, and is already known to own some of iHeartMedia’s debt.
In recent years, both SiriusXM and iHeartMedia signed lucrative deals with top podcast hosts. The Breakfast Club‘s Charlamagne tha God reportedly inked a five-year pact worth $200 million last December with iHeart, which also produces sports shows for the NFL and the iHeart Women’s Sports Network. SiriusXM landed both Smartless and Conan O’Brien’s shows in massive deals; its sports portfolio includes Katie Nolan’s Casuals as well as partnerships with Stephen A. Smith, Chris Russo, Colin Cowherd, Dale Earnhardt Jr., and The Fantasy Footballers.
The industry is scaling up as audiences flock to video shows, while Netflix has aggressively entered the market to license video episodes of top shows. Netflix has a deal with iHeartMedia that includes The Breakfast Club and the NFL podcast from Cowherd’s The Volume, among others. SiriusXM has thus far largely used its podcast deals as an extension of its satellite radio business, but has begun to embrace video as well.
While a merger would inevitably allow for layoffs and reduced costs, the big question for a potential joint company’s podcast business would be whether it could actually scale up production or sales to a degree that would allow it to compete with the top production houses in the industry, particularly given the financial challenges both companies have faced.
About Brendon Kleen
Brendon is a Media Commentary staff writer at Awful Announcing. He has also covered basketball and sports business at Front Office Sports, SB Nation, Uproxx and more.