No matter where you're listening to the radio, from New York to Seattle or Sacramento to Atlanta, chances are you've heard an Audacy-owned station or a station that's part of the Audacy station network.
Once known as Entercom, it changed its name to Audacy in 2021, touting its position as “a large-scale, multi-platform audio content and entertainment company.”
Among its largest holdings are KROQ and KRTH101 in Los Angeles and two major New York stations: 1010 WINS and sports station WFAN.
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But the radio business has changed in recent years and not for the better. Streaming is seriously harming radio. Advertising revenue has been falling and Audacy overexpanded, taking on nearly $2 billion in debt it couldn't pay.
Its stock price was so low that the New York Stock Exchange delisted it in November. The shares now trade on what is known as the Nasdaq Pink Sheets, using the symbol AUDA.
On Sunday morning, the company announced that it filed for Chapter 11 bankruptcy in the United States Bankruptcy Court in Houston, Texas. The move will not affect daily operations, according to the statement, but will eliminate the position of existing shareholders.
The company had indicated that the measure was coming.
Bondholders will own the company, and debt will be reduced from $1.9 billion to $350 million. Some creditors will add $57 million in news financing. Existing shareholders' shares are expected to be cancelled.
A perfect storm of macroeconomic challenges
In a statement, CEO David Field described the cause of the Chapter 11 filing: “…The perfect storm of sustained macroeconomic challenges over the past four years facing the traditional advertising market has led to a sharp decline of several thousand of millions of dollars in accumulated radio. advertising spending.”
The company reported a loss in the third quarter of 2023. of $234 million, or $49.64 per share, primarily due to write-downs. It also showed negative $83 million in funds from operations for the first nine months of 2023.
Shares closed Friday at 20 cents, up a cent from Thursday. The stock had reached $68 in 2000 and was at $16.15 in early 2017.
Shares soared from 6 cents to $2.15 in July 2023 on hopes that the company could do a reverse split, where 1 share would be replaced with 20, boosting the nominal price. However, the idea failed.
Meanwhile, the stock market enjoyed a banner year with the Standard & Poor's 500 Index. (^EN) – Get a free report up to 24.2%.
The company was founded as Entercom Communications in 1968 by Joseph Field, father of David Field. It purchased CBS Radio and its 117 stations in 2017.
