FCC approves controversial Audacy bankruptcy deal

Audacy to go private 

The FCC approved a controversial Audacy bankruptcy plan in a politically divided three-to-two vote in which Soros Fund Management becomes the biggest shareholder in the company with a 57 percent stake through the Laurel Tree Opportunities Corporation. 

As a result, Audacy – who filed for Chapter 11 bankruptcy last year, will go private and David Field will remain the company’s CEO. 

Audacy owns 220 stations in the U.S., including in the biggest markets including New York, Los Angeles, San Francisco, Boston, Philadelphia, and Chicago, where Audacy owns seven stations: WBBM Newsradio (WBBM-AM/WCFS-FM); sports talker 670 The Score (WSCR-AM); adult album alternative  93XRT (WXRT-FM); Top 40 B96 (WBBM-FM); Country US 99 (WUSN-FM); and Classic Hip-Hop 104.3 Jams (WBMX-FM). 

This deal is controversial because the hedge fund is headed by George Soros, a philanthropist who contributes to progressive causes. Soros has contributed to numerous Democratic politicians, including Cook County State’s Attorney Kim Foxx, who is not seeking another term in office. Soros is an enema to conservatives and the GOP at large. 

Critics accuse the three Democratic commissioners of the FCC of rubber-stamping the transaction, accusing them of using a “Soros Shortcut”, i.e. allowing them to go through the bankruptcy process without waiting for the government to approve due to foreign ownership, which could take up to a year. Audacy gets a temporary waiver to exceed 25 percent regarding foreign ownership, as the company is converting some of its holdings to Class B Common Stock, capping foreign ownership at 22.5 percent. Foreign entities are not allowed to own more than a 25 percent stake in any TV or radio station in the U.S. 

With Soros taking over, $1.6 billion of debt on Audacy’s books is wiped out. 

FCC Chairwoman Jessica Rosenworcel defended the approval, stating that Audacy’s reorganization approval process is similar to that of other radio companies emerging from bankruptcy, such as iHeartMedia, Alpha Media, and Cumulus.

Several right-wing organizations tried to block the approval process, including the Media Research Council, a conservative group headed by Brent Bozell, who also created the Parents Television Council in 1995 to tackle sex and violence in media and rose to prominence in the mid-2000s due to the 2004 Super Bowl Halftime Show. 

FCC’s Republican commissioners, Brendan Carr and Nathan Singelton, dissented. Both deny Soros is the issue (so they say), but the way the approval process went, including failure to ask for public comments. Carr also raised the issue of the FCC rejecting the Standard General-Tegna deal because the new combined entity couldn’t guarantee the potential loss of jobs. The FCC did not require Audacy to meet the same job protection criteria.

The approval of Soros taking control of Audacy doesn’t mean the controversy is over. The GOP-controlled House Committee on Oversight and Accountability is launching an investigation into why the FCC bypassed normal procedures to benefit a political rival of theirs. 

The party-line vote is the latest in a long line of ideological splits at the FCC dating back to the George W. Bush administration. In 2008, the Sirius/XM satellite radio merger fell among party lines, as did approval of Nexstar’s purchase of Tribune Media in 2019 and numerous issues during President Obama’s time in office, especially under Tom Wheeler’s leadership. 

No changes are expected either on-air or behind the scenes at the company’s radio stations, so those hoping to see Dan Bernstein at The Score or the B96 morning team get canned are out of luck.