Oct 4, 2022 - Economy

Scoop: Audacy hires bankers to explore sale of Cadence13

Illustration of a microphone on top of a stack of dollars.

Illustration: Gabriella Turrisi/Axios

Audacy, the publicly traded radio and digital audio company, has hired bankers as it looks to sell Cadence13, one of its two podcast studios, three sources familiar with the process told Axios.

Why it matters: Offloading the studio could help alleviate some of the company's debt as it faces financial challenges.

  • The company's share price closed at an all-time low Friday at 39 cents.
  • Audacy risks being delisted by the New York Stock Exchange if its share price doesn't increase in the next six months.

Catch up quick: Audacy, which was previously called Entercom, became one of the largest radio companies in the country after merging with CBS Radio in 2017.

  • The company has since made several acquisitions to grow its digital business in areas like podcasts and sports betting.
  • In addition to Cadence13, Audacy acquired Pineapple Street Studios, another podcast studio, in 2019 for around $18 million. It purchased Podcorn, a podcast monetization platform, in 2021.

Details: The company has hired Evolution Media Capital, a boutique investment firm that focuses on deals in sports, media and entertainment, to help shop the deal.

  • Sources say the company has pitched the studio to most of the major audio giants.
  • While some partners have expressed interest in buying both Cadence13 and Pineapple Street Studios together, sources say Audacy has no plans to sell its other podcast assets.

What they're saying: "We don't comment on rumors of this nature," said an Audacy spokesperson in response to a request for comment about the sale process.

  • "We remain absolutely committed to the growth of our podcasting business, as demonstrated by the investments we've made in our studios, content and talent."

By the numbers: Audacy, then Entercom, paid $9.7 million for a 45% stake in Cadence13 in 2017. The company, which was then called DGital Media, renamed itself Cadence13 after the deal.

  • In 2019, Entercom bought the remaining 55% stake in Cadence13 in a deal reportedly valuing the company at nearly $50 million.
  • Today, the company is hoping to sell the studio for at least double its value in that 2019 deal.

Be smart: The sale reflects a shift in Audacy's podcast strategy toward producing shows based on its own intellectual property from its radio networks, rather than bidding on premium podcasts to distribute, which is Cadence13's specialty.

  • Audacy CEO David Field noted on the company's last earnings call that Audacy's podcast growth is being driven by podcasts adjacent to its local sports and news radio networks, and he highlighted the success of the company's own in-house sports podcast studio, 2400Sports, which it launched last year.

The big picture: Podcast studios have become hot assets amid the audio streaming wars, so it makes sense that Audacy would look to sell Cadence13 now.

  • SiriusXM acquired Conan O'Brien's media company, Team Coco, for a reported $150 million earlier this year.
  • Vox Media bought Criminal Productions and Cafe Studios in 2021.
  • Spotify acquired Gimlet and Parcast in 2019 and then The Ringer in 2020.
  • Amazon acquired Wondery in 2020, reportedly for $300 million.
  • The New York Times acquired Serial Productions in 2020.
  • iHeartMedia bought Stuff Media, the publisher of HowStuffWorks, in 2018.
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