What just happened? Radio and podcast giant Audacy has filed for Chapter 11 bankruptcy protection in Texas to reduce the company's debt. The news comes six months after it awarded top executives $3.2 million in retention bonuses, claiming they were needed to ensure Audacy's long-term growth.
Audacy's restructuring agreement will allow its total debt load to be reduced by 80% from around $1.9 billion to $350 million, once approved by a judge in Houston. The Philadelphia-based broadcaster said its publicly traded shares would be wiped out in the deal. The majority of creditors, of which there are between 5,000 and 10,000 listed, have approved the restructuring package.
Founded in 1968, Audacy operates 227 radio stations and produces podcasts from some of the industry's biggest names, but the decline of radio advertising has hit it hard. Audacy President and Chief Executive Officer David J. Field said a "perfect storm of sustained macroeconomic challenges over the past four years facing the traditional advertising market has led to a sharp reduction of several billion dollars in cumulative radio ad spending."
"These market factors have severely impacted our financial condition and necessitated our balance sheet restructuring," Field added.
One of Audacy's podcasts
While Field highlights the economic challenges Audacy has faced over the last four years, the company still found enough money to pay its executives millions of dollars in bonuses back in June 2023. Field himself received $1 million, EVP/Strategic Initiatives and CFO Richard Schmaeling was handed $850,000, and EVP/General Counsel and Secretary Andrew Sutor IV was given $600,000. Audacy said the bonuses ensured the right team stayed in place.
Following the bankruptcy protection filing, Field told Audacy employees that the restructuring deal should not impact daily operations and there should be no interruptions to anyone getting paid. Some of the 227 radio stations Audacy operates include New York's WFAN and WINS, Los Angeles' KROQ and KCBS, and WBBM and WSCR in Chicago. Its podcasts include David Spade and Dana Carvey's Fly on the Wall.
Broadcast radio has struggled in recent years in the face of other media. The industry has had to endure falling listener numbers, less ad money, and rising costs. Back in June, we heard about one Portland station introducing an AI DJ that sounds and acts just like one of the company's human DJs, Ashley. It was claimed that the technology wasn't the first step in replacing salary-demanding humans, but it's hard to imagine this being anything other than a cost-cutting measure.
Masthead: Magda Ehlers
