(Source-PhillyVoice)
Philadelphia-based radio giant Audacy has initiated bankruptcy proceedings, citing a significant downturn in advertising revenue. The company, known for its extensive podcast and radio operations and having acquired CBS Radio, filed a Chapter 11 petition in the U.S. Bankruptcy Court for the Southern District of Texas. This move follows a restructuring agreement with the majority of its debtholders, aimed at reducing approximately 80% of its nearly $2 billion debt load.
Audacy Restructuring will Help?
The restructuring, expected to bring Audacy’s debt down to $350 million, is anticipated to fortify the company’s foundation for sustained growth, with minimal impact on operations, trade, or other unsecured creditors. Company Chairman, President, and CEO David J. Field acknowledged the challenging environment faced by the company due to a substantial decline of “several billion dollars in cumulative radio ad spending” over recent years. Despite these challenges, Field expressed confidence in Audacy’s future, emphasizing its leadership position, premium audio content, and resilient capital structure.
As part of the restructuring agreement revealed on Sunday, debtholders will receive equity in the company. Audacy, one of the largest radio companies in the U.S., found itself burdened by substantial debt and confronted with a slowdown in advertising revenue. The company aims to emerge from the restructuring in a more favorable financial position, having delisted from the New York Stock Exchange in November 2023.
Discussions with Lenders:
Field, in a statement, highlighted Audacy’s transformative efforts and its competitive position but acknowledged the impact of sustained macroeconomic challenges, leading to a significant reduction in radio ad spending over the past four years. The company had been engaged in “constructive conversations” with lenders to address its financial challenges, as indicated in its 2023 third-quarter earnings release. Earlier SEC filings in May pointed to adverse macroeconomic conditions, such as high inflation and heightened competition for advertisers, affecting Audacy’s revenue forecasts.
Despite Audacy’s delisting from the stock exchange and the bankruptcy filing, the company assured that the restructuring would not adversely affect advertisers, partners, or employees. The 1968-founded radio conglomerate operates in numerous U.S. radio markets and remains optimistic about its ability to innovate and grow in the dynamic audio business post-restructuring.
As Audacy navigates this critical phase, its emphasis on scaled leadership, premium audio content, and a robust capital structure positions it to weather the storm and emerge resilient. The outcome of these restructuring efforts will likely shape Audacy’s trajectory and influence the future landscape of the dynamic audio business.
