Now What? Audacy Faces A Tough Road Ahead

Unable to fend off a toxic mix of sagging advertising revenue and nearly $2 billion in debt, audio content provider Audacy has reportedly reached a deal with its senior lenders to file a prepackaged bankruptcy plan in the coming weeks.

The Wall Street Journal, citing anonymous sources familiar with the matter, reported late Tuesday that the lenders will provide financing for the Chapter 11 proceedings and are expected to own the company following the restructuring.

The Philadelphia Business Journal reports Philadelphia-based Audacy declined to comment on the report Wednesday.

A bankruptcy filing has been expected, as Audacy spent the second half of 2023 negotiating with its creditors to refinance $1.9 billion in debt. It skipped a debt payment in late September and sought and received several extensions, the latest delaying the repayment of $18.9 million in debt from December into early 2024.

David Field

If lenders do take ownership of the company, they could make changes to Audacy’s board and management that reach as high as Chairman and CEO David Field, according to veteran bankruptcy lawyer Robert Lapowsky of Stevens & Lee.

Lapowsky said existing shareholders will also likely be eliminated without getting anything in return if lenders take control. Longtime Audacy shareholders would be unable to recoup severe losses suffered in recent years as the company’s stock price has declined from $17 a share when its acquisition of CBS Radio was announced in February 2017 to 19 cents as of Wednesday afternoon.

Lapowsky said senior lenders will usually agree to a compromise such as restructuring debt at a lower amount. Because the WSJ report indicates that lenders will provide financing during the bankruptcy, Lapowsky said it leads him to believe it will take longer than a few days for Audacy to emerge from Chapter 11.

Audacy made major plays in the podcasting space by acquiring producer Pineapple Street Media in 2019 along with the 55% of Cadence13 that it didn’t already own. It followed those deals by acquiring sports-betting technology and analytics firm QL Gaming Group for $32 million and podcasting ad-tech platform Podcorn.

As of the end of its fiscal third quarter on Sept. 30, Audacy said it had $57.4 million in cash or cash equivalents. While Audacy has enough cash to cover the debt due in the coming months, it still has more debt to pay down — including $926.4 million set to mature this year.

Audacy, then called Entercom, was formed in 1968 by Joseph Field, who passed the company down to his son, David Field. While based in Bala Cynwyd, Audacy did not own radio stations in Philadelphia or many other large markets until it paid $1.5 billion in 2017 to acquire CBS Radio. The deal added almost $1.4 billion in debt to Audacy’s $439 million.

As for what’s next, Rayfield said Audacy will most likely try to cut costs by renegotiating leases and selling assets such as some of its 220 radio stations across the country. But selling those assets could prove difficult, as the value of radio stations is declining along with ad revenue and listenership.