As expected, Audacy has filed for bankruptcy after a significant restructuring agreement with its debtholders. The company filed for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court for the Southern District of Texas on Sunday morning.
The proposed Plan of Reorganization, which incorporates the RSA’s terms, is subject to Court approval. The restructuring plan has the support of a supermajority of debtholders, who have committed to voting in favor of the Plan.
The company has secured $57 million in debtor-in-possession financing to support ongoing operations during the Chapter 11 process. This includes a new term loan and an increase in the accounts receivables financing facility. Audacy common stock will continue to trade over-the-counter under the symbol “AUDA” during the Chapter 11 process, but these shares are expected to be canceled without distribution as part of the restructuring.
Audacy has also filed customary “First Day Motions” to ensure business operations continue as usual during the restructuring process. This includes a commitment to its advertisers, vendors, partners, and employees, with the current leadership team remaining in place.
In a statement, Audacy President and CEO David Field discusses Audacy’s changes of acquiring CBS Radio, podcast production companies, audio networks, and a digital audio and advertising shift, adding, “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.”
I expect Salem Media Group to follow suit. Both companies stretched themselves way too thin and beyond their means in their pursuit of monetizing podcasts and non-radio assets linked to their brands. The pandemic simply blew the hole wide open.
“…we believe Audacy will emerge well positioned to continue its innovation and growth in the dynamic audio business.”
In other words, “we’re looking forward to selling this pile to some other dupe after the bankruptcy process finishes up, then riding off into the sunset, happy to have gotten away with zero consequences, just like every other major radio corporation in the consolidation era.”
Perhaps the least surprising headline we’ll read all year. Only question is who’s next.
Salem
Beasley
Get rid of the radio groups and give it back to the local groups! It’s time to become live and local again!
How could this possibly happen??
I keep reading in these fine publications every year that radio revenue is projected to be higher and that things are great!
Why file In Texas?
Why keep the same folks driving the clown car? Those that made mistakes are in place, while the axe will swing, killing those who had nothing to do with this F’ing train wreck.
Dear Old Liar:
Familiarize yourself with the bankruptcy laws in Texas vs anywhere else and you’ll understand why they chose Texas.
The stations have plenty of fine and talented people. I hope it works out well for them in the end. Technolgy is great, but it does,in some cases, cost people’s livelihood.
The bad news is that Audacy is bankrupt. The worse news is that the same management team remains. Bring back ownership caps.
What an embarrassment for my former profession and passion.
They not only killed their own company but greatly contributed to the branding of the Radio medium – which could still be so cool, if it only was! Corporate greed at its worst. Radio doesn’t have the same excuses print did. Audio has never been more relevant. Radio just decided not to be. instead of being a live, local, real time community, Radio chased things it wasn’t good at. Oh well. A still existing need not being met by the medium best suited to meet it.
PERFECTLY SAID
Hi, CO-inventor/founder of DG Systems here. Our current Company Synchronicity.co has ways but besides needing more “means”, getting people to listen and change isn’t easy. Our plan to help Stations to cheaply add more live & local is just languishing on the shelf. Actively searching for interested, large concerns!