Audacy Files for Bankruptcy and Restructures

In a major step toward reviving its financial health, Audacy, the leading, scaled multi-platform audio content and entertainment company, has successfully negotiated a prepackaged restructuring plan with its debt holders. In a win-win situation, the company has filed for Chapter 11 bankruptcy protection to facilitate the implementation of the agreed-upon plan.

The restructuring move aims to substantially reduce the company’s debt, curbing it from around $1.9 billion to a more manageable $350 million. Audacy anticipates the bankruptcy court to schedule a confirmation hearing in February, paving the way for the company to step out from Chapter 11 following approval from the Federal Communications Commission (FCC).

Despite the restructuring, Audacy reassures all stakeholders — from trade partners to unsecured creditors — that normal business operations will continue. Its common stocks, currently traded over-the-counter, will persist through the Chapter 11 process until the restructuring is successfully completed.

Audacy’s financial filings reveal assets worth approximately $2.79 billion and debt roughly amounting to $2.66 billion. In the proposed structure, two of its lenders, WSFS Bank of Wilmington DE and Deutsche Bank Trust Company Americas, are poised to become shareholders in return for their secured claims. Audacy also lists multiple companies as unsecured creditors, with Katz Media Group heading the list with a claim of approximately $9.8 million.

David Field, who holds the triple role as Audacy’s chairman, CEO, and president, affirmed that the restructuring was a necessary step to navigate the adverse impacts of macroeconomic challenges on traditional advertising markets. The struggles faced by the advertising industry have drastically reduced radio ad spending and consequently disrupted Audacy’s financial health. Field, however, remains optimistic about the future, envisioning Audacy emerging stronger from these challenging times, armed with robust capital structure and premium audio content.

In a memo to employees, Field emphasized the positive implications of this restructuring. His optimistic outlook highlighted that this strategic decision would improve Audacy’s financial and competitive standing, setting a strong foundation for the company’s future growth. Field ensured that the restructuring would be a straightforward process due to the unanimous support from their debt holders.

He further contextualized the decision by outlining the series of events that led to this announcement, including the acquisition of CBS Radio, the strategic digital transformation, and the adverse market conditions. Despite these challenges, Field maintains that the company is stronger than ever in serving its listeners and customers and is well-positioned to compete in the dynamic audio business.

The restructuring process, Field assured, will be business as usual with no disruption to wages or benefits as the company focuses on serving its listeners, customers, and partners. In the end, Audacy hopes to emerge as a stronger, debt-free entity prepared to seize compelling growth opportunities in the coming years.