WFAN parent Audacy files for bankruptcy

For the last while, there have been plenty of discussions about the financials of Audacy, the radio and podcast company formerly known as Entercom that owns everything from 227 radio stations nationwide (more than anyone else, and including prominent New York sports radio station WFAN) to podcasting studios like Cadence13 and Pineapple Street Media, distribution platforms such as the Audacy app and Radio.com, and more. And that included significant talk that the company might wind up in Chapter 11 bankruptcy. Well, they officially filed for that Sunday:

Largest U.S. radio company Audacy files for bankruptcy protection https://t.co/p9oqL0pyRT

— CNBC (@CNBC) January 7, 2024

Here’s more on that from that CNBC piece by Annie Nova:

The restructuring agreement will allow Audacy to slash its total debt load by 80% to about $350 million from around $1.9 billion, the company said.

“Over the past few years, we have strategically transformed Audacy into a leading, scaled multi-platform audio content and entertainment company,” David Field, CEO of Audacy, said in a statement.

However, Field added, “the perfect storm” over the past four years of macroeconomic challenges “facing the traditional advertising market” led to a sharp reduction in radio ad spending.

“These market factors have severely impacted our financial condition and necessitated our balance sheet restructuring,” Field said.

As Bruce Haring notes at Deadline, this is “not expected to have any immediate impact on day-to-day operations.” There’s already a prepackaged bankruptcy restructuring plan negotiated with lenders, as per Alexander Gladstone of The Wall Street Journal. And this is about transferring control (and equity) to lenders rather than dramatic operations cuts, at least for now. And this does at least provide some closure to the bankruptcy speculation that had been floating around Audacy for quite some time.

However, it’s worth noting that the Sinclair/Diamond Sports regional sports network bankruptcy was initially billed as a simple equity transfer in many reports, and it wound up being much more, leading to missed payments to teams, defaults on rights deals, and teams choosing to go elsewhere. Nothing that dramatic has yet been floated with Audacy, but there already have been discussions of selling off some of the company’s operations, including perhaps Cadence13 (home of Stephen A. Smith’s podcast and many other notable sports podcasts). So we’ll see what happens. If this is just a shift in who holds Audacy equity and there aren’t major operations changes, that’s one thing, but changes in operations certainly can’t be ruled out, especially when going into a formal Chapter 11 process.

[CNBC; Audacy logo from AdWeek]