One of radio’s largest companies has filed for Chapter 11 bankruptcy. In an announcement made Sunday, Audacy confirmed last week’s report that it is entering into a prepackaged restructured agreement with the majority of its debtholders. The move is designed to help the company deleverage its balance sheet and position itself for long-term growth.
The restructuring between Audacy and its debtholders is expected to help the company eliminate approximately $1.6 billion of funded debt. That will ease the company’s financial strain from $1.9 billion to approximately $350 million. In the company’s press release, Audacy said it didn’t expect the restructuring to affect advertisers, partners, or employees. Audacy was delisted from the New York Stock Exchange in November 2023.
“Over the past few years, we have strategically transformed Audacy into a leading, scaled multi-platform audio content and entertainment company through our acquisition of CBS Radio and by building leading complementary positions in podcasting, audio networks, live events, digital marketing solutions, and our direct-to-consumer streaming platform,” said David J. Field, Chairman, President and CEO of Audacy.
Field continued, “While our transformation has enhanced our competitive position, the perfect storm of sustained macroeconomic challenges over the past four years facing the traditional advertising market has led to a sharp reduction of several billion dollars in cumulative radio ad spending. These market factors have severely impacted our financial condition and necessitated our balance sheet restructuring. With our scaled leadership position, our uniquely differentiated premium audio content, and a robust capital structure, we believe Audacy will emerge well positioned to continue its innovation and growth in the dynamic audio business.”
The decision to pursue bankruptcy means that the radio industry’s three largest companies have all filed for Chapter 11. Cumulus Media went first in 2017. iHeartmedia was next in 2018. Insiders say the decision to eliminate debt could serve Audacy well, and allow the company to make greater investments. Whereas others believe it could open the door to larger changes up top.
A recent report by media writer Jerry DelColliano suggested that lenders will take on a heavier role, raising questions about David Field’s future and Audacy’s board. DelColliano also hinted at former CBS Radio CEO Dan Mason returning to help the company. Whether that comes to fruition or not only time will tell.
