The Federal Communications Commission (FCC) has approved the pre-packaged bankruptcy plan for Audacy to complete the Chapter 11 bankruptcy process.
The company will now have a 57% controlling interest in the company held by Laure Tree Opportunities, which is funded by billionaire George Soros. Additionally, 5-Hour Energy founder Manoj Bhargava — who tried to take over Cumulus Media earlier this year — will own a 9.5% stake in the company via his MBX Commercial Finance company.
Audacy said it will continue to be led by David Field, its current President and CEO, and its existing management team. Field will also serve on the Company’s new Board of Directors. A note in the company release says, “In conjunction with the completion of its restructuring, Audacy is expected to become a private company.”
As part of the restructuring, Audacy was given a temporary waiver to exceed the limit on foreign investment, which is currently set at 25%. Additionally, it was given another waiver to keep all of its current licenses in Kansas City, Missouri, where it currently holds four AM signals and 5 FM stations.
In a company release, Field said, “We are pleased to have successfully achieved all of our restructuring goals, emerging with an outstanding balance sheet, delivering industry-leading growth, serving our listeners and advertisers with excellence and honoring our commitments to employees and partners. Today, Audacy embarks on our next chapter, capitalizing on our position as a scaled, multi-platform audio leader, differentiated by our exclusive, premium audio content, including our unrivaled leadership in sports audio, powered by our industry-leading financial strength and focused on accelerating our innovation and digital transformation. We are maximizing a broad set of opportunities to further accelerate our growth for the benefit of Audacy and all of its stakeholders.”
The decision was not a unanimous one, as Commissioners Brendan Carr and Nathan Simington lobbied against the ratification.
“The FCC’s decision today rests on several additional errors that warrant reversal on appeal. For one, the decision cannot be squared with the agency’s current approach to transaction reviews,” said Carr. “For instance, in the Standard General-TEGNA proceeding, the agency found that it could not approve the requested license transfers because the applicants in that case failed to persuade the agency that they would not layoff or cut newsroom and other jobs. Under Goose v. Gander, the FCC must ding these Applicants for the same reason.18 Indeed, the Applicants in this case have made no jobs showing or commitment at all. If job losses are relevant to the FCC’s transaction review analysis, then the agency cannot approve this takeover.”
Simington went as far as to say he was not given the opportunity to review the transaction.
However, FCC Chair Jessica Rosenworcel argued against the idea that the commission was quickening the process for the company for political purposes because of the involvement of Soros.
“In this decision, we approve the assignment of licenses held by Audacy, which has been under the control of a bankruptcy court, to the new Audacy, so that the company can emerge from bankruptcy proceedings. The process we use to facilitate this license transfer is identical to the one recently used by the agency in the bankruptcy proceedings of Cumulus Media in 2018, iHeart Media in 2019, Liberman Television in 2019, Fusion Connect in 2019, Windstream Holdings in 2020, America-CV Station Group in 2021, and Alpha Media in 2021,” said Rosenworcel.
“To suggest otherwise is cynical and wrong, as this precedent clearly demonstrates. Our practice here and in these prior cases is designed to facilitate the prompt and orderly emergence from bankruptcy of a company that is a licensee under the Communications Act.”
Audacy has 220 local radio brands in 45 of the largest U.S. markets.
