Audacy emerges from bankruptcy as a private company
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Audacy
Radio and podcast giant Audacy has emerged from Chapter 11 bankruptcy protection following the approval of a transfer of its radio station licenses from the Federal Communications Commission (FCC).
Why it matters: The firm, which was delisted from the New York Stock Exchange in May, leaves bankruptcy as a private company with a significantly reduced debt load, CEO David Field told Axios.
By the numbers: Audacy's debt is reduced by about 80% to $350 million, putting the company in a position to pursue its growth strategy without being slowed down by its debt.
- At the end of 2023, Audacy's debt-to-equity leverage was 20x, but it is now 2.7x. Field expects Audacy's leverage to be reduced further as the firm continues to pay down debt.
Catch up quick: Audacy filed for Chapter 11 bankruptcy protection last January after a brutal few months of trading on the NYSE driven by an advertising downturn for traditional media companies.
- The company agreed to a prepackaged debt deal to restructure its balance sheet by eliminating its equity shares and transferring control of the company to a lender group with a new board.
- A judge approved that debt restructuring plan in February, but the company couldn't officially emerge from bankruptcy until the FCC approved the transition of its radio licenses over to a different ownership group Monday.
Of note: The company's business and consumer products weren't impacted by the restructuring.
- Audacy's adjusted earnings grew 128% for the first half of 2024 to $40.7 million, up from $17.9 million in the first half of 2023.
- It has retained the same management team throughout the process.
Zoom in: The debt restructuring will allow the company to grow faster and capitalize on new growth opportunities, Field said.
- Field sees investments in new content, especially around sports, as Audacy's biggest differentiator.
- He noted improvements to the company's streaming platform, including more content discovery tools, and the growth of its podcast business as other strategic advantages in the audio space.
Flashback: Audacy, formerly called Entercom, grew its digital streaming business through acquisitions in the podcast and digital ad tech space.
- It rebranded in 2021 to establish itself as a modern audio company, not just a radio giant.
Zoom out: Radio still reaches more Americans weekly than any other medium, per Nielsen. But markets haven't been kind to legacy media businesses as they battle advertising slowdowns while trying to build new digital products, as evidenced by Audacy and its peers.
- Cumulus Media filed for Chapter 11 bankruptcy in November 2017 and re-emerged from bankruptcy the following June.
- iHeartMedia, the parent company of iHeartRadio Inc., filed for Chapter 11 bankruptcy in 2018 and returned to the public markets in 2019.
What to watch: For now, Field said there are no plans for the company to return to the public markets. The company's board is ultimately responsible for a decision to re-list.
