Audacy files for Chapter 11

Move was expected; no immediate effects 

With all the headlines focused lately on linear TV’s decline, there is another traditional communications medium who is also struggling, though it doesn’t generate the exact number of headlines. 

Audacy – who owns and operates more than 200 radio stations in the U.S., including several in the Chicago area, officially filed for Chapter 11 bankruptcy Sunday.

“To be clear, this is a positive step forward for Audacy,” CEO David Field said in an internal memo. “But the duration and severity of the perfect storm has necessitated the actions we are announcing today. These actions are strictly to address our balance sheet issues and do not reflect on the strength of our business and its future,” obviously referring to Cumulus and iHeartMedia’s previous bankruptcies.

The company blamed “financial headwinds” including lingering fallout from the pandemic; listeners exiting terrestrial radio for podcasts and streaming; and debt from the purchase of CBS Radio in 2017 when the company was named Entercom. A court hearing on the reorganization takes place next month. 

Audacy has $1.9 billion in debt; it would be reduced to around $350 million in the reorganization, which would convert long-term loans to equity. $1.4 billion of the debt came from its purchase of CBS Radio from the then-CBS Corp.; in 2019, CBS re-merged with Viacom and was renamed Paramount Global in 2022. In the bankruptcy petition, Audacy listed $2,788,943,000 in assets and $2,662,320,000 in debt.

The Philadelphia-based company owns seven radio stations in its Chicago cluster: All-news WBBM-AM/WCFS-FM; Sports Talk WSCR-AM (670 The core); Adult Album Alternative WXRT-FM; Classic Rhythmic Hits/Top 40 WBBM-FM (B96); Country WUSN-FM (US 99); and Classic Hip-Hop WBMX-FM (104.3 Jams). 

According to court filings, Audacy’s revenue in 2022 was down 16 percent from what it earned in 2019. In 2022, Newsradio WBBM was Chicago’s top biller, ranking ninth overall in the U.S., but lost $2 million in revenue. 

In terms of performance, Audacy attracted 20.9 percent of Chicago listenership overall in October 2023, the last full book before the annual WLIT Christmas format steamroller skewed ratings. WBBM is the top station in the cluster while 670 The Score dominated rival ESPN 1000 in the sports talk race, according to a separate three-month ratings survey released by Nielsen, despite the loss of Bears football to the Good Karma Brands station.

But Audacy’s music stations have lagged. Ratings for WXRT declined for the last few months as the station is adjusting to the departures of Richard Mline and Lin Brehmer, who died last year.  US99’s ratings are OK while despite decent ratings, 104.3 Jams must compete in a crowded urban radio environment. The future of B96 has been in question for years as the former Top 40 powerhouse is Chicago’s lowest-rated full-market FM station. All three of the latter stations mentioned reduced live and local radio personalities in the last few years and depended more on regionally syndicated voice-tracking. The loss of listeners to Spotify, YouTube Music, Sirius/XM, and other paid subscription music services is taking its toll not only on Audacy but all radio groups. 

It is too early to tell what impact the bankruptcy would have on Audacy’s on-air product, but you can expect layoffs, the shredding of unprofitable contracts; and perhaps a format change at either B96 or 104.3 Jams. In the short term, operations are expected to run normally. 

While a recent CNBC article pointed out radio’s continued resilience, radio is still adjusting to a new media world not unlike what linear television is currently going through. The Audacy bankruptcy – like the one with Bally Sports parent Diamond Sports, makes it abundantly clear.