Company: IHETW
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001400891-25-000009
Chunk: 59

Company: iHeartMedia, Inc.
Filing Date: 2025-02-27
Form: 10-K
Item: Item 1A
Chunk 59
---
 operations and financial performance.

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. Currently, Congress does not require that broadcasters pay royalties associated with the public performance of sound recordings for over-the-air transmissions. From time to time, however, Congress considers legislation that could change this. 

Moreover, it is possible that our licensing 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 rate-setting processes, or administrative and court decisions. For example, we are involved in negotiations with one or more performing rights organizations 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. Furthermore, there is no guarantee that applicable direct licenses will be renewed in the future or that such licenses will be available on the same economic terms associated with the current licenses.

In addition, the rates for the royalties that we pay to SoundExchange for certain types of digital music transmissions are the subject of a pending rate-setting proceeding before the Copyright Royalty Board that will determine statutory rates and terms for the public performance and ephemeral reproduction of sound recordings by various non-interactive webcasters, including us, for the period from January 1, 2026 to December 31, 2030. The outcome of this proceeding may result in an increase to our licensing costs.

From time-to-time, SoundExchange and various record labels and other music licensors notify us that certain calendar years are subject to routine audits of the royalty payments that we make to them in connection with our various uses of music. The results of such audits could result in us having to make higher royalty payments for the subject years.  

Increased royalty rates could significantly increase our expenses, which could adversely affect our business and results of operations. Various other regulatory matters relating to our business are now, or may become, the subject of court litigation, and we cannot predict the outcome of any such litigation or its impact on our business.

Compliance with ever evolving regulations, third-party restrictions, and consumer concerns or litigation regarding data privacy and data protection involves significant expenditure and resources, and any failure by us or our vendors to comply may result in significant liability