Radio conglomerate Audacy is preparing to file bankruptcy within the next few weeks, according to a recent Wall Street Journal report.
The Philadelphia-based radio company owns hundreds of stations across the United States, but it is grappling with nearly $2 billion in debt. Meanwhile, advertising across all spectrums has declined—contributing to a decline in revenue. Audacy reported a $234.3 million loss in Q3 2023, skipping a debt payment in September. Another SEC filing reveals Audacy delayed debt repayment of $18.9 million that was due in December 2023.
“Audacy’s third quarter net revenues declined 5.6%, in-line with our quarterly guidance as ad market conditions have remained challenging, particularly on national business,” Audacy CEO David Field told investors during its Q3 2023 financial report. Now it appears the company has quietly been working on a bankruptcy plan.
According to new reporting by the Wall Street Journal, Audacy has negotiated its bankruptcy plan with its lenders, who are expected to assume ownership after a company restructure. Audacy owns 230 radio stations across the United States, but its financial health has been in question since its 2017 merger with CBS Radio when a considerable portion of debt was assumed as part of that deal.
It’s unclear whether David Field will remain CEO of Audacy after the company emerges from bankruptcy proceedings. It’s also murky whether Audacy will be able to retain talent amid belt-tightening with the bankruptcy underway. Equity research analyst Craig Huber says the CBS Radio merger is why Audacy is struggling today.
“The ill-advised merger with CBS Radio in late 2017, which added around $1.5 billion in debt, became the undoing of the company,” Huber told RadioWorld. Restructuring adviser PJT partners and lawyers from Latham & Watkins are reported to be helping the company. Senior lenders are working with Gibson Dunn & Crutcher, while a second group of lien bondholders has partnered with Akin Gump Strauss Hauer & Feld.