What Does Audacy’s Delisting Mean For Radio?

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The waves have started to settle since it was announced that the New York Stock Exchange has initiated delisting for Audacy for share price non-compliance. To gauge any impact on the industry, Radio Ink discussed the delisting, potential forecast shifting, and advertiser trust with Brian Wieser of the strategic advisory firm Madison and Wall.

Radio Ink: We’ve had a few days since the delisting, and radio stocks are seeming to hold steady. Do you think this could still have any implications for radio company stocks?

Brian Wieser: It’s a broader issue than that. You know, there are certain rules that exchanges have for stocks that trade on those exchanges. It’s not specific to radio. I think a lot of companies in traditional media sectors have been out of favor for a whole bunch of reasons.

Their prospects for growth are pretty limited. Many of them have significant debt loads, which means there’s limited equity value. So maybe that’s the two things common to a lot of companies in the media sector – the limited growth expectations paired with a lot of debt. It makes it likely that you get low equity values, even if enterprise values don’t change as much. But it’s not like any one company can take actions to attempt to deal with the situation if they think it’s important to remain publicly listed.

On the other hand, some say it’s not worth being publicly listed. There are all sorts of compliance costs that are extra and it doesn’t necessarily make a lot of sense. There are many pros to being publicly listed like having a currency for stock-based transactions, being able to use stock easily for compensating employees, and making sure that if there were a transformative transaction everyone involved knows what the whole fair value is so there’s less friction in those transactions. So there are lots of advantages but there are lots of costs.

Radio Ink: Most of the Q1 earnings calls we’ve seen talk about the economic headwinds and their effect on decreasing national ad spend has been decreasing. Does Audacy’s delisting run the risk of any erosion of trust by advertisers?

Brian Wieser: Well, no, I don’t agree with that narrative at all. Actual data says otherwise. It doesn’t mean there aren’t individual media artists that are getting hit. But the largest advertisers have been increasing their spending. And when I rolled up at least the largest 70% of all advertising, I get 3 plus percent growth in the first quarter. That’s a global figure, but the US wasn’t that different.

Radio Ink: There will always be the Procter & Gambles of the world that do consistently tout radio’s ROI and that’s very positive, but companies and buyers are looking to avoid any more adverse conditions right now.

Brian Wieser: Unfortunately for a lot of radio, I don’t think most advertisers really think much about them. And that’s a bigger problem, right? P&G is an example of an advertiser who does. But although P&G is a leader in many respects as a marketer that the rest of the industry looks up to, there are a lot of fronts where the rest of the industry just doesn’t do what P&G does.

Take the amount of in-house and P&G does. There’s no one at their scale that’s doing what they do and frankly, no one else who wants to. P&G does its own thing, and the rest of the industry notices it, but it doesn’t mean they follow.

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