Audacy Has Deals For Assets, Bankruptcy Looms..Again

Audacy said it has deals in place to sell assets in Boston and Phoenix as the Philadelphia-based audio content provider continues negotiations with its creditors to restructure $1.9 billion in debt and gain financial breathing room. If those talks fail, the company said a bankruptcy filing could be on the horizon, reports the Philly Business Journal.

In a Monday filing with the Securities and Exchange Commission, Audacy linked its declining advertising revenue to macroeconomic issues such as inflation. It noted that things are “to a large extent, outside our control” since lenders hold most of the cards with any potential restructuring, but the company gave a hint as to what direction it could go if it cannot reach such an agreement.

“If we are unable or elect not to complete any such transactions, we may pursue a process to restructure our indebtedness under the protection of a bankruptcy court,” Audacy said in the SEC filing.

While Audacy negotiates with lenders, the value of the assets underwriting that debt has declined. It said its routine impairment assessment of the value of its radio licenses shows an impairment loss of $124.8 million, which the company attributed to softness in the adverting market.

Despite that, Audacy said it reached agreements on a pair of asset sales in the second quarter in Boston and Phoenix. It did not say what exactly it is selling, though it noted that it included land/land improvements, buildings, equipment and radio broadcasting licenses. In total, the sale would be for just under $2.5 million and is slated to close within a year’s time.

📻Audacy's Boston assets include popular sports talk station WEEI (93.7 FM, 850 AM), adult contemporary station Magic 106.7 (WMJX-FM), hot adult contemporary station Mix 104.1 WWBX-FM and adult hits station Big 103.3 WBGB-FM.

📻In Phoenix, Audacy owns contemporary hits station Live 101.5 (KALV-FM), country station 107.9 (KMLE-FM) and classic hits station 94.5 KOOL-FM.

Audacy has already sold a number of assets, including some radio towers, in an effort to realize savings. The company sold a pair of radio stations to Educational Media Foundation earlier this year for $15.5 million.

On Friday, Audacy reported a net loss of $125.8 million for the second quarter, compared to a $773,000 loss in the same period of 2022. Operating loss for the quarter was $135.3 million, compared to operating income of $23.3 million in 2Q 2022. Adjusted EBITDA for the quarter was $14.4 million, down from $38.5 million in the same period last year.

Audacy reported that net revenues declined 6.6% from the second quarter of 2022, falling from $319.4 million to $298.5 million. Revenue from local spot advertising fell by 3.7% while national spot ad revenue fell by 16.6%. Digital revenues were down by 4%.

For the third quarter, Audacy said total revenues are pacing down 4%, with local spot pacing down 1% and national spot pacing down 22%. Digital revenues are pacing up 7% or sequentially 11 percentage points better than the second quarter.

Audacy chose not to hold a second quarter earnings call with analysts.  The company has more than 220 radio stations across the country.