Bain Capital and Thomas H. Lee Partners Complete $26.7 Billion Clear Channel Leveraged Buyout - Creating Debt Crisis

On July 24, 2008, Bain Capital and Thomas H. Lee Partners completed a historic $26.7 billion leveraged buyout of Clear Channel Communications, the nation’s largest radio broadcaster with over 1,200 stations. The transaction, led by Bain Capital (founded by Mitt Romney in 1984), loaded the company with approximately $20 billion in debt—more than doubling its previous $8 billion debt burden—and exemplified how private equity uses financial engineering to extract wealth while destroying viable companies and consolidating media power.

The deal closed just months after the 2008 financial crisis began, during which Clear Channel’s share price collapsed. The buyout was financed with leverage of approximately 9 times iHeartMedia’s pre-tax cash flow, far exceeding the 6 times leverage limit that Obama would later impose on leveraged buyouts in 2013. Bain and Thomas H. Lee had to sue six underwriting banks in March 2008 when the banks attempted to back out as the deal’s value plummeted, ultimately reaching a settlement in May 2008.

The leveraged buyout transformed a profitable radio empire into a debt-laden company that would eventually file for bankruptcy. Clear Channel (renamed iHeartMedia in 2014) owned over 850 radio stations nationwide, including Rush Limbaugh’s largest contract worth $400 million over 8 years, giving the private equity firms control over the nation’s dominant conservative talk radio infrastructure. This concentration of media power in the hands of debt-focused financial engineers prioritized profit extraction over journalism, public service broadcasting, and democratic discourse.

By 2017, annual interest payments on the leveraged buyout debt had grown to $1.4 billion—money that could have supported local news operations, diverse programming, and journalist salaries instead flowed to bondholders and creditors. The debt burden forced iHeartMedia to file for Chapter 11 bankruptcy in March 2018, restructuring over $20 billion in debt and wiping out Bain Capital and Thomas H. Lee’s equity positions. However, the private equity firms still reportedly broke even because they had purchased the debt at ultra-low pre-recession prices and maintained a 10% ownership stake after bankruptcy.

The Clear Channel leveraged buyout demonstrated how private equity and media consolidation work synergistically to undermine democracy. By loading profitable media companies with unsustainable debt, private equity firms extract maximum short-term value while destroying the long-term viability of journalism institutions. The consolidation of over 1,200 radio stations under debt-driven ownership meant that conservative talk radio—already dominant after the 1987 Fairness Doctrine repeal—became even more entrenched as local stations cut staff, eliminated local programming, and relied on nationally syndicated conservative hosts to minimize costs while servicing massive debt loads.

This financial engineering of media infrastructure represents regulatory and market capture: private equity firms exploit deregulated media ownership rules (enabled by the 1996 Telecommunications Act) to create monopolistic media empires, then use leveraged buyouts to extract wealth while leaving communities with gutted local news operations, reduced programming diversity, and radio waves dominated by coordinated conservative messaging. The Bain Capital-Clear Channel deal stands as a textbook case of how financial predation and media consolidation combine to weaken democratic institutions and concentrate both economic and political power.