Radio broadcaster Audacy files for Chapter 11 bankruptcy
Jan 7, 2024, 7:05 PM | Updated: 8:29 pm
(Brendan McDermid, Reuters)
(CNN) — Audacy, the struggling multi-platform audio content company, has begun prepackaged Chapter 11 bankruptcy proceedings in US Bankruptcy Court for the Southern District of Texas, the company announced Sunday.
The internet radio conglomerate — among the biggest radio companies in the country — was saddled with substantial debt and faced slowed-down advertising revenue. Audacy said it is entering into a restructuring agreement to reduce its debt from about $1.9 billion to $350 million.
“While our transformation has enhanced our competitive position, the perfect storm of sustained macroeconomic challenges over the past four years facing the traditional advertising market has led to a sharp reduction of several billion dollars in cumulative radio ad spending,” said David Field, chairman, president and CEO of Audacy, in a statement.
“With our scaled leadership position, our uniquely differentiated premium audio content and a robust capital structure, we believe Audacy will emerge well positioned to continue its innovation and growth in the dynamic audio business,” he said.
Audacy, which was delisted from the New York Stock Exchange in November 2023, said it does not expect the restructuring to have an impact on advertisers, partners and employees.
Field said in the company’s 2023 third-quarter earnings release that Audacy was in “constructive conversations” with its lenders to stay afloat. In a May SEC filing, Audacy also pointed to “current macroeconomic conditions” hurting their forecasted revenue, such as high inflation and increased competition for advertisers.
In a May SEC filing, Audacy said its revenue forecast over the next year wouldn’t be enough to fulfill its debt obligations.
The company had a grace period for interest payments due in October 2023. At the time, Audacy said it was going to use the extension to strategize a plan with lenders for its business operations.
Founded in 1968, Philadelphia-based Audacy operates in hundreds of US radio markets.