Soros Takeover of Audacy Gets Greenlight, Now What?

The Federal Communications Commission on Monday approved the transfer of Audacy's business licenses to a group of creditors that includes a firm led by far-left billionaire George Soros.

The Philadelphia Business Journal reports the FCC ruling clears the way for the Philadelphia-based audio content provider and radio station operator to emerge from bankruptcy. Audacy filed for Chapter 11 protection in U.S. Bankruptcy Court for the Southern District of Texas in January, and the court approved a reorganization plan in February that gives control of the company to its debtholders.

In conjunction with the completion of its restructuring, Audacy is expected to become a private company

Jessica Rosenworcel, the chairwoman of the Federal Communications Commission, said in a statement announcing the decision that the process used by the agency to facilitate the license transfers to "the new Audacy" is identical to those of previous media bankruptcy proceedings including iHeart Media in 2019, Cumulus Media in 2018 and Windstream Holdings in 2020.

Audacy was seeking a waiver to an FCC rule that puts a 25% limit on foreign ownership in order to maintain compliance in the short-term and avoid the need for other federal agencies to immediately review waiver requests for national security, law enforcement, foreign policy or trade policy concerns. Without the waiver, Audacy's emergence from bankruptcy would have been delayed significantly.

An Audacy spokesperson said the company now expects to emerge from bankruptcy "over the next couple of days."

The company's court-approved reorganization plan will hand control of Audacy over to a group of lenders headlined by Soros-led investment firm Laurel Tree Opportunities Corp., along with MBX Commercial, in exchange for canceling about $1.6 billion of the almost $2 billion in debt the company had at the time of its bankruptcy filing. Soros Fund Management acquired roughly $415 million of Audacy's debt during the Chapter 11 process, making it the largest post-bankruptcy stakeholder in the company.

The U.S. House of Representatives Committee on Oversight and Accountability has opened an investigation into the FCC for allegedly "bypassing standard processes and procedures in an unprecedented way" to give Soros, who has long been one of the Democratic Party's biggest donors, control over Audacy's more than 200 local radio stations ahead of the presidential election, Reps. Nicholas Langworthy (R-NY) and James Comer (R-Ky.) said in a letter to Rosenworcel last week. Comer, the committee's chairman, and Langworthy claim Soros Fund Management has "sought to consolidate control over the airwaves."

The FCC voted 3-2 along party lines on the decision to approve the assignment of Audacy's licenses to the new ownership. In their dissenting statements, FCC commissioners Brendan Carr and Nathan Simington argued that the decision constitutes an exception to previous standards of review and disregards concerns about foreign ownership.

Audacy cut more than 3% of its workforce in the first five months of the year as part of a strategy to cut costs in advance of its emergence from bankruptcy protection. The new owners could look to enact further cost-cutting measures once the Chapter 11 process is complete, including additional workforce reductions or the sale of some radio stations.

Audacy will continue to be led by David J. Field, its current President and CEO, and its existing management team. Field will also serve on the Company’s new Board of Directors.

“We are pleased to have successfully achieved all of our restructuring goals, emerging with an outstanding balance sheet, delivering industry-leading growth, serving our listeners and advertisers with excellence and honoring our commitments to employees and partners,” said David J. Field, President and CEO, Audacy. 

“Today, Audacy embarks on our next chapter, capitalizing on our position as a scaled, multi-platform audio leader, differentiated by our exclusive, premium audio content, including our unrivaled leadership in sports audio, powered by our industry-leading financial strength and focused on accelerating our innovation and digital transformation. We are maximizing a broad set of opportunities to further accelerate our growth for the benefit of Audacy and all of its stakeholders.”

Audacy will continue to focus on sports radio and podcasts, buoyed by assets acquired in a merger with CBS Radio in 2017, as well as podcasting more generally and its Audacy app for streaming on demand.

“We now have the industry’s strongest balance sheet,” he said.

Audacy owns and operates over 200 radio stations across the country as well as a large podcasting operation.