iHeart Cost Cuts

[PTBoardOp94]

Lance Reports: iHeartMedia Implements Cost Savings Plan - RadioInsight

IMO cutting 401k contributions is a bridge too far.

 

[Deleted User]

how much do you think an employee actually gets from a 401K employer contribution?

A few percent at best, do say it is 4% on a 100K salary it is $4000

Everybody that has a 401K or 403B available to them should be maxing it out, regardless of employer contribution or match, but if there is a employer match you put as much money as you can in to the max match as that is pretty much free money.

You can't continue to fund a employee retirement plan if you are unable to pay the operational costs and debt service and you lose the company.

 

[TheBigA]

IMO cutting 401k contributions is a bridge too far.

Be happy the contribution isn't in stock. Companies aren't required to contribute to 401Ks, and this is standard business practice.

The fact is that iHeart is being hit by the exact same advertising depression that has hit Beasley, Sirius, and even NPR. It's also causing problems at Audacy, as David Field pointed out on Wednesday. This is not strictly an iHeart problem. There are likely lots of other radio companies seeing the same thing.

 

[davideduardo]

how much do you think an employee actually gets from a 401K employer contribution?

A few percent at best, do say it is 4% on a 100K salary it is $4000

There is a limit on how much an employee can contribute each year to a 401-K.

For 2023, 401(k) contribution limits for individuals are $22,500, or $30,000 if you're 50 or older.

The match by the employer and employee cannot exceed $61,000 in 2022 or $66,000 in 2023. Most employers only match the first certain amount, such as $10,000. Or the limit the match to a percent of total (gross) salaried income.

401(k) Contribution Limits For 2023

A workplace 401(k) plan helps you save a substantial amount each year for retirement, but there are annual limits on contributions by you and your employer. Whether you choose a traditional 401(k) for the upfront tax break or a Roth 401(k) for tax-free income in retirement (or both), the contributio

www.forbes.com

Everybody that has a 401K or 403B available to them should be maxing it out, regardless of employer contribution or match, but if there is a employer match you put as much money as you can in to the max match as that is pretty much free money.

"Maxing it out" depends on the offerings of the company that provides the service to your employer. Some are excellent, but there are a few that lag the markets significantly and/or offer only a narrow assortment of bad choices.

 

[Larry]

I think most enployees would rather see a reduction or elimination of the 401k match than a reduction in salary.

 

[davideduardo]

I think most enployees would rather see a reduction or elimination of the 401k match than a reduction in salary.

Depends on the income level. Because a 401k is tax deferred, there is an advantage for those making higher income levels of getting as much as possible in the retirement plan.

 

[MarkW]

Time will tell if the "temporary" qualifier used by Bob and Rich in describing the advertising spending environment to justify the suspension of 401K matching and non-backfilling of job vacancies (other than mission critical roles - which is obviously a term subject to interpretation) proves to be accurate.

I definitely agree it is not an iHM-only issue, but I'd be curious to know if digital-focused companies are being affected the same way as old school media companies (print, TV and radio).

The fact 40 percent of iHM's debt load is floating rate in nature should not be overlooked. Their interest expense this year is likely to be significantly heftier than 2022. I think that in & of itself is a big reason for these cost cuts despite no mention in the memo sent to employees.

Doing away with the 401K match at a time when (a) many mutual funds are arguably "on sale" and (b) inflation is a significant issue for many household budgets is akin to kicking sand in the face of employees. True, other options may be even more unappealing.

 

[TheBigA]

I'd be curious to know if digital-focused companies are being affected the same way as old school media companies (print, TV and radio).

SiriusXM is one of those companies, and they just announced an 8% reduction. Amazon has been making cuts for the past 6 months, and they just announced a freeze on expansion.

 

[PTBoardOp94]

how much do you think an employee actually gets from a 401K employer contribution?

I know it is bigger than zero, which is why it matters.

You can't continue to fund a employee retirement plan if you are unable to pay the operational costs and debt service and you lose the company.

I don't personally care much whether Bob Pittman loses his company. But the 401(k) plan cost the company a shade over 1 day's worth of its total expenses in 2022. Whether iHeart goes under on February 28th or 29th of some future year is totally irrelevant.

Be happy the contribution isn't in stock. Companies aren't required to contribute to 401Ks, and this is standard business practice.

IMO: Any employee receiving stock in their employer as part of their compensation package should sell it immediately.

I think most enployees would rather see a reduction or elimination of the 401k match than a reduction in salary.

I'd rather see furloughs. When an employee is furloughed, they have time to look for a better job, and in some states periods of furlough are eligible for unemployment insurance.

 

[TheBigA]

I don't personally care much whether Bob Pittman loses his company.

Keep in mind that Bob Pittman already "lost" the company during bankruptcy. I can't remember the exact amount, but I know the authorized lenders own at least 80% of the company, and Bob works for them under contract. I think this may be the last year of that contract. You can assume everything he says has been approved by them.

I'd rather see furloughs. When an employee is furloughed, they have time to look for a better job, and in some states periods of furlough are eligible for unemployment insurance.

They also continue to receive medical insurance. But there are limits on the length of a furlough, and it's hard to guess how long this current economy will last.

 

[Kelly A]

Be happy the contribution isn't in stock. Companies aren't required to contribute to 401Ks, and this is standard business practice.

Amen! A good friend of mine was a long-tenured captain for Continental Airlines flying international routes. His entire retirement/401K was tied up in Continental stock shares. Four years before mandatory retirement, Continental merges with United, and all those earned shares didn't transfer over to United shares. His retirement went essentially 'poof!'. To add insult to injury, all the Continental captains lost their tenure plus his international routes, having to start over as United first officers.

The fact is that iHeart is being hit by the exact same advertising depression that has hit Beasley, Sirius, and even NPR. It's also causing problems at Audacy, as David Field pointed out on Wednesday. This is not strictly an iHeart problem. There are likely lots of other radio companies seeing the same thing.

Exactly. Meta announced plans for another round of downsizing, by 10,000 additional employees. None of this is unique to radio.

 

[Deleted User]

How is SXM doing someone asked?

Besides the massive layoff about 2 weeks ago?

Ask Nik Carter how it feels to be on the beach after SXM sent him packing.

Nik is a great talent, and was at one point a frequent contributor to this website in one of its former incarnation, dealing with a know nothing who went after Nik at every opportunity, and Nik responded with facts and class at every turn.

 

[MarkW]

A good friend of mine was a long-tenured captain for Continental Airlines flying international routes. His entire retirement/401K was tied up in Continental stock shares. Four years before mandatory retirement, Continental merges with United, and all those earned shares didn't transfer over to United shares.

I wonder what Continental's vesting schedule looked like. It's hard to believe a long-tenured employee would have no vested shares. That was a draconian vesting schedule on Continental's part, if true.

Indeed, it is not unusual for unvested shares to be cancelled in situations like that one.