Audacy, the second-largest radio company in the country, announced Sunday that it is filing for bankruptcy protection. The news comes as radio continues to be challenged in the streaming era, with radio listenership dropping precipitously since the beginning of the COVID-19 pandemic and advertising declining across platforms.
The radio and streaming network plans an official reorganization. In an agreement approved by a supermajority of its creditors, the company’s debt will be reduced from $1.9 billion to approximately $350 million, according to a release from the company. In exchange, those holding Audacy’s debt will receive equity in the revamped Audacy.
The company, formerly known as Entercom, also acquired CBS Radio in recent years.
In the announcement, Audacy chairman, president and CEO David J. Field touted the company’s growth through acquisition and expansions in “podcasting, audio networks, live events, digital marketing solutions and our direct-to-consumer streaming platform.”
He pointed to the larger economy as the reason for the bankruptcy filing.
“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,” Field stated. “These market factors have severely impacted our financial condition and necessitated our balance sheet restructuring.”
According to Audacy, it expects the court to hold a hearing on approving the plan in February and aims to come out of bankruptcy after the FCC approves.
“We believe Audacy will emerge well positioned to continue its innovation and growth in the dynamic audio business,” Field said.
“The Company does not expect any operational impact from the restructuring, and trade and other unsecured creditors will not be impaired,” the release from Audacy states.
