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Getting your Trinity Audio player ready...
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By Benyamin Davidsons
Audacy, the radio and podcast company which owns multiple radio stations including New York’s 1010 WINS, has filed for Chapter 11 bankruptcy protection in Texas. As reported by Crain’s NY, the filing was made Sunday, after making a deal with creditors which would hand debtors ownership of the company in return for slashing $1.6 billion of debt.
Audacy, launched in 2010 and based in Philadelphia, is a national company boasting over 235 local radio stations across the United States. The broadcaster, which had been named Radio.com till 2021, said in a statement that its publicly traded shares would be wiped out in the deal. Per Crain’s, if the deal is approved by the Houston judge, the company’s outstanding bonds and loans currently worth roughly $1.9 billion, would be reduced to around $350 million. A “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,” Audacy Chairman and CEO David J. Field said in a statement. “These market factors have severely impacted our financial condition and necessitated our balance sheet restructuring.” The company said that the deal was approved by a “supermajority” of its creditors, enabling the company to file a so-called prepackaged bankruptcy, which may likely help to speed up the proceedings in court.
Per Crain’s, Audacy said it is optimistic that the stations will run as usual, without any operational impact from the restructuring. Some of the company’s existing lenders committed to provide $57 million of debtor-in-possession financing, which would assist to keep operations funded during the restructuring process, the company said. The company also added that trade and other unsecured creditors are not expected to be hurt.
In the federal bankruptcy court petition filed on Jan. 7 in the Southern District of Texas, Audacy, along with 47 affiliated companies, listed a total debt of $2.66 billion and company assets of $2.79 billion. The company is being represented by law firm Porter Hedges, LLP. The Chapter 11 petition lists between 5,000 and 10,000 creditors, per BankrupcyObserver.com.
The broadcasting company had first been launched in 2010 as Radio.com, under CBS Radio, in order to serve as a central website to stream all of CBS’s then 130 radio stations. In 2017, Entercom acquired CBS Radio, along with Radio.com. As per Wikipedia, by 2021 Entercom rebranded the entire company, including itself and Radio.com, as Audacy. Of late, Audacy has been struggling with weakened advertising revenue, S&P Global Ratings said in a May note. S& P had lowered Audacy Inc’s credit rating in May, and more recently in November to ‘D’ from ‘CCC-’, after reporting that the company failed to make “interest payments on its senior secured first-lien revolving credit facility and term loan both due 2024, senior secured second-lien notes due 2027, or senior secured second-lien notes due 2029”. The rating company had said in November that it views the missed interest payments as entering into default. S&P Global ratings wrote in its latest November report that it expects to altogether withdraw its rating on the company by the New Year. “We do not expect that the company will complete the interest payments in the stated grace periods to preserve its financial flexibility. Audacy has been discussing strategies to manage its liabilities with its lenders, which we believe will lead to a comprehensive debt restructuring or bankruptcy filing,” the credit researcher said.
