Report: Audacy Expected To File For Bankruptcy Soon

Audacy is preparing to file for bankruptcy within weeks after declining advertising revenue made the radio network unable to service its nearly $2 billion debt load, according to The Wall Street Journal citing people familiar with the matter. 

Philadelphia-based Audacy has reached an agreement with its senior lenders for a prepackaged bankruptcy plan, the people said. The lenders will provide financing for the proceedings and are expected to own the company following the restructuring, they said.

Audacy’s revenue has decreased while net losses have widened due to lower advertising spending in the radio sector. The company last year raised doubt over its ability to continue as a going concern. It said its current revenue forecasts for 2024 indicated it will have difficulty satisfying its debt obligations.

In October, Audacy missed interest payments on its senior loans and obtained consent from its lenders to provide a grace period as they worked on restructuring negotiations. 

Senior lenders are working with the law firm Gibson Dunn & Crutcher, while a group of second lien bondholders has engaged law firm Akin Gump Strauss Hauer & Feld. Audacy has been working with restructuring adviser PJT Partners and lawyers from Latham & Watkins.

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Audacy executives havew attributed the financial woes to decreased advertising demand and macroeconomic issues created by inflation, but the nation’s second-largest radio station owner was also grappling with almost $2 billion in debt and a stock price below the $1 listing requirement from the New York Stock Exchange.

Audacy operates hundreds of radio stations that broadcast music, news, and sports, and provides streaming services through its mobile app. Founded in 1968 as Entercom Communications, the company merged with CBS Radio in 2017. It operated as Radio.com following the CBS merger before rebranding as Audacy in 2021.