In a recent development, radio and podcast titan Audacy Inc AUDA has applied for Chapter 11 bankruptcy protection. This move comes in the wake of a notable slump in the company’s advertising revenues.
What Happened: The Philadelphia-based broadcasting firm unveiled an extensive restructuring plan on Sunday. The initiative aims to cut down about 80% of its massive $1.9 billion in debt, bringing it to approximately $350 million, as per a report by MarketWatch.
David J. Field, Audacy’s Chief Executive, attributed the company’s financial struggles to “prolonged macroeconomic challenges over the past four years.” According to Field, these market conditions called for the balance-sheet restructuring.
Having acquired a large portion of its debt post its merger with CBS Radio in 2017, Audacy has secured approval from a supermajority of creditors for its reorganization scheme. This consent allows the company to proceed with a prepackaged bankruptcy process aimed at speeding up the proceedings.
The broadcasting behemoth, owner of numerous radio stations across the U.S., plans to maintain regular operations during the bankruptcy process. The company expects its bankruptcy plan to undergo court review in February.
Audacy’s shares, delisted from the New York Stock Exchange in November, are currently traded over the counter. The company’s stock value has plummeted by a staggering 97% over the last year, closing Friday at a mere 19 cents.
Why It Matters: The bankruptcy filing comes just months after Audacy reported its third-quarter financial results in November 2023. The company’s performance during this quarter could have been an early indicator of the challenges it was set to face. Despite a seemingly strong balance sheet, the underlying issues have now necessitated a significant restructuring plan. For investors and stakeholders, this development underscores the volatile nature of the advertising market and its direct impact on media companies like Audacy.
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