Audacy Facing Divestitures In Kansas City and Greenville-Spartanburg

As Audacy seeks approval from the Federal Communications Commission (FCC) to exit Chapter 11 bankruptcy, the broadcaster faces the need to divest at least one station. 

Due to the restructuring, Audacy will lose its grandfathered status in the market, necessitating the cut of one FM station in its Greenville-Spartanburg portfolio to meet regulatory standards. Currently, Audacy holds seven stations in the market, of which five are FMs—one over the legal limit. The station being cut loose has already been decided: Magic 106.3 (WSPA). Formerly under the WYRD-FM call letters, this station has been with Audacy since 1999 following Entercom’s acquisition of 41 stations from Sinclair Broadcast Group. 

With the FCC’s blessing, WSPA will be moved to “The Greenville Divestiture Trust,” managed by media brokerage firm Kalil & Co.’s Kalil Holding Group LLC. The initial transfer will cost Audacy $10,000, with an ongoing $1,000 monthly fee to Kalil & Co. until WSPA finds a new owner.

Meanwhile, Audacy faces challenges in deciding which station to let go of in Kansas City. 

The organization currently operates nine radio stations, including one on an expanded band AM frequency, under a specific waiver from the FCC. Audacy is seeking a waiver to continue operating all stations in the market. Despite its new majority Attributable Shareholder, Laurel Tree Opportunities Corporation, and the indirect controlling parent, George Soros’ Fund for Policy Reform, Audacy will likely divest only in these markets.

 Here are some other key points in the bankruotsy proceedings:

• Financial Reorganization: Audacy has been dealing with significant debt since its 2017 acquisition of CBS Radio, which added $1.5 billion in new debt. As part of the Chapter 11 reorganization, senior debt holders swapped their debt for an ownership stake in the company.
• Ownership Changes: The new ownership group, including banks that significantly reduced Audacy’s debt from $1.9 billion down to $350 million, will take control of the board. This group will likely install a new board of directors, potentially by Audacy’s annual shareholders meeting in May.
• CEO’s Future: The fate of current CEO David Field remains uncertain. Analysts believe the chances of him retaining his position are “extremely low.” The new management team could be led by someone with expertise in both digital and broadcast media.
• Cost-Cutting Measures: Trimming expenses will be a priority for the new leadership. Expect major cost-cutting efforts, including potential headcount reductions.