The company disclosed more than six months ago that meeting the deadline was unlikely; now, Spanish Broadcasting System is operating under a 30-day creditor standstill after failing to repay $310 million in debt, which came due on March 1.
Holders representing a majority of the outstanding 9.750% Senior Secured Notes have agreed to forbear from legal action while both sides negotiate toward a consensual resolution, which could include new financing, extended terms, or a restructured debt arrangement.
The financial pressure had been building through 2025.
In its second-quarter earnings disclosure, SBS stated it did not have sufficient cash on hand to repay the notes and had no firm commitment for refinancing in place, resulting in a going concern warning. Second-quarter net revenue fell to $34.44 million from $40.01 million a year earlier, and the company posted a net loss of $4.44 million against a $346,000 loss in Q2 2024. A $2.925 million non-cash impairment charge compounded the damage.
Cost-cutting showed results by the third quarter. SBS more than doubled Q3 net income to $1.39 million from $547,000 a year earlier as operating expenses fell to $24.2 million from $27.07 million. A $2.83 million gain from the completed Mega TV sale helped lift the bottom line even as revenue continued sliding, dropping to $31.26 million from $35.76 million.
With the forbearance update, SBS cautioned that no assurance exists that any deal will be reached before the standstill expires. The company operates 16 radio stations in New York, Florida, California, Illinois, and Puerto Rico and runs AIRE Radio Networks.
SBS is navigating its debt crisis against a backdrop of broader financial strain across US radio.
Days after the SBS forbearance agreement, Cumulus Media filed for Chapter 11 bankruptcy protection in a prepackaged restructuring backed by a majority of its secured lenders designed to eliminate roughly $592 million in debt. Beasley Media Group, meanwhile, invoked a 30-day grace period in February on approximately $10.2 million in interest payments due February 1 across two tranches of senior secured notes. No update on Beasley’s debt status has been reported since.
