Audacy Admits 'Tough Knocks' Have Created Uncertainty

A soft advertising market has smacked Audacy Inc., and the Philadelphia radio giant’s stock price is trading substantially below $1 per share, lower than during the early weeks of the pandemic, reports The Philly Inquirer.

Audacy executives declined to comment, but they acknowledge that the business — which recovered from steep financial losses in 2020, 2019 and 2018 — has taken a new blow amid uncertainty about a recession.

“We’ve all had some tough knocks,” Richard J. Schmaeling, the chief financial officer, told analysts last month in a conference call. “But we think we can muscle our way through what looks to be a slowdown.”

According to The Inquirer story, insiders say the Philly-based company has positioned itself to rebound with a national radio network, podcasts, streaming, and sports betting. Audacy, the former Entercom Communications Corp., is one of the nation’s largest radio networks.

The New York Stock Exchange has told Audacy last month that it could be delisted because its stock price had fallen below $1 for at least a month. Audacy could do a reverse stock split to boost the share price. In a reverse split, a company reduces the number of outstanding shares, leading an investor to own fewer shares but at a higher stock price.

Audacy’s woes can be blamed on the fragmenting media landscape that has devastated other legacy media platforms such as newspapers. Its acquisition of CBS Radio for $4 billion in early 2017, bringing KYW and other big-city stations into its portfolio, also hasn’t gone smoothly. That year was also the last time the company earned net income.

Since 2018, based on its regulatory filings, Audacy has lost $1 billion in net income, though the company dramatically improved its finances as the shock of the pandemic wore off, losing only $3.6 million in 2021. Audacy had revenues of $1.2 billion in 2021 and long-term debt of $2.2 billion.

The company has a staff of 3,585 full-time employees and 1,295 part-time employees.

Audacy had a strong first quarter in 2022 with revenues jumping 14%. But second-quarter revenue rose only 5%, weighed down by a slowing economy and weaker advertising by mortgage lenders — which face higher interest rates — and auto dealers. The company says that auto industry advertising is $60 million a year below pre-pandemic levels.