“Over the past few years, we have strategically transformed Audacy into a leading, scaled multi-platform audio content and entertainment company through our acquisition of CBS Radio and by building leading complementary positions in podcasting, audio networks, live events, digital marketing solutions and our direct-to-consumer streaming platform,” David J. Field, Audacy‘s chairman, president and chief executive, said in a statement.
“While our transformation has enhanced our competitive position, the 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.”
The company is filing for bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas. The declaration of Chapter 11 will allow the organization to reduce its debt by roughly 80% from $1.9 billion down to $350 million. No operational impacts are expected from the filing, Audacy clarified in its statement.
“These market factors have severely impacted our financial condition and necessitated our balance sheet restructuring,” the company stated in explaining its recent financial woes. “With our scaled leadership position, our uniquely differentiated premium audio content and a robust capital structure, we believe Audacy will emerge well positioned to continue its innovation and growth in the dynamic audio business.”
Chapter 11 bankruptcy is often called “reorganization” because its allows for incorporated businesses to reorganize their finances and get a debt repayment plan approved by a court, according to the Internal Revenue Service. A key component to successfully file for Chapter 11 is that a business must not continue to incur debt. “As part of their reorganization, businesses must ensure that they are capable of meeting all financial obligations going forward, including federal income and payroll taxes,” the IRS notes on its website.
Audacy — which is the second-largest radio broadcaster in the U.S., behind only iHeartMedia — owns several of L.A.’s most notable radio stations, including KROQ, KRTH101, KNX, KTWV (94.7 the Wave) and KCBS (93.1 Jack FM). The company also operates New York City’s prominent breaking news AM station 1010 WINS and the Big Apple’s sports radio station WFAN, the country’s first around-the-clock sports station.