Audacy Stock Trading Halted

[TheBigA]

How much debt would be wiped out if Audacy sold the land the towers were on, rather than the stations?

They already have:

Audacy Plans To Sell More Non-Core Assets After Closing $17M Tower Sale.

The trend of radio companies selling off their radio towers to raise cash returned in earnest this month when Audacy sold a parcel of towers for $17 million. On its

www.insideradio.com

They're looking into selling the tower land of their legacy AM stations in Chicago and New York. There are two towers on a private island in NYC that could bring a lot of money. But even then, it's a fraction of the $2 billion. Take a look at Cumulus & iHeart. They sold all of their tower land, and it only netted a fraction of the debt. And as the previous poster said, it leads to diminished signals for the stations and increased expense for the relocation. Not to mention the time involved. It took years for WNSH to move from a rented tower in West Orange to another rented tower in the Meadowlands.

 

[davideduardo]

They already have:

Audacy Plans To Sell More Non-Core Assets After Closing $17M Tower Sale.

The trend of radio companies selling off their radio towers to raise cash returned in earnest this month when Audacy sold a parcel of towers for $17 million. On its

www.insideradio.com

They're looking into selling the tower land of their legacy AM stations in Chicago and New York. There are two towers on a private island in NYC that could bring a lot of money. But even then, it's a fraction of the $2 billion. Take a look at Cumulus & iHeart. They sold all of their tower land, and it only netted a fraction of the debt. And as the previous poster said, it leads to diminished signals for the stations and increased expense for the relocation. Not to mention the time involved. It took years for WNSH to move from a rented tower in West Orange to another rented tower in the Meadowlands.

And the alternative of selling to a tower company and leasing back has been pretty much done in every case that is worth anything.

 

[Kelly A]

And the alternative of selling to a tower company and leasing back has been pretty much done in every case that is worth anything.

And in that case, you move from a capital asset to an operational expense. Quick sugar high from a relatively small cash infusion, but depending on the potential for tower tenants, you eliminate a source of non-traditional revenue for the long haul.
Many groups who have done tower sales and lease-back have regretted doing so five years later.

 

[radiofan2023]

Could they sell space on their towers to cell companies in their big markets or not?

 

[TheBigA]

Could they sell space on their towers to cell companies in their big markets or not?

They can and do. The issue is that creates a need for someone to handle that relationship. It's often easier to hand that to an outside tower company that already has those relationships. Facilities management is not always seen as core to these radio companies.

 

[RadioGuy1864]

And in that case, you move from a capital asset to an operational expense. Quick sugar high from a relatively small cash infusion, but depending on the potential for tower tenants, you eliminate a source of non-traditional revenue for the long haul.
Many groups who have done tower sales and lease-back have regretted doing so five years later.

It depends on the land valuation. Sometimes you hit a home run like Family Radio did in NYC with WFME (ex WQXR). The land value far exceeded the valuation of the station.

 

[TheBigA]

It depends on the land valuation. Sometimes you hit a home run like Family Radio did in NYC with WFME (ex WQXR). The land value far exceeded the valuation of the station.

Or Cumulus with WMAL in DC and KABC in LA. Those two towers alone raised $150 million for the company. The tower site for WFAN & WCBS is potentially as valuable. They just need another $1.85 billion.

 

[davideduardo]

Or Cumulus with WMAL in DC and KABC in LA. Those two towers alone raised $150 million for the company. The tower site for WFAN & WCBS is potentially as valuable. They just need another $1.85 billion.

Again, unless you plan to turn in the station license, you have to find a site to move to and then rebuild the station. For directional AMs, finding a site that can conform to the directional pattern is hard. Then, in most big markets you have NIMBY issues and very stringent zoning and permit challenges to overcome. There are some stations that have wanted to move where it has taken years to get all the new permits.

 

[TheBigA]

Again, unless you plan to turn in the station license, you have to find a site to move to and then rebuild the station

That may be what's holding up the two Audacy sales. The big one is that private island in NYC. There are very few relocation options for WFAN and WCBS. I think they'd love to sell and lease the space, but the potential buyers don't like sharing a private island with two huge towers.

 

[davideduardo]

That may be what's holding up the two Audacy sales. The big one is that private island in NYC. There are very few relocation options for WFAN and WCBS. I think they'd love to sell and lease the space, but the potential buyers don't like sharing a private island with two huge towers.

And the cost of moving the two diplexed AMs to a new site is likely greater than the value of that island. If you look at the surrounding non-island neighborhood, it is not terribly upscale. It also has considerable maintenance costs for the bridge and breakwaters if I'm not mistaken.

 

[Kelly A]

One must realize too that not all towers are created equal, or with the same valuation. AM towers are essentially useless for other radio tenants, but depending on the location, the land may have value to developers. FM/TV towers built with enough capacity for other services like land mobile, or cell/PCS have income value over time due to average five to ten year leases. Once the capacity is reached, there's likely no room for expansion.

 

[TheBigA]

And the cost of moving the two diplexed AMs to a new site is likely greater than the value of that island.

Some of this may also be related to the dismantling of the CBS engineering crew in NYC that I mentioned earlier. The antenna move for WNSH/WXBK was a bit complicated, but the hard part had been done by Cumulus before the sale. It should not have taken four years to move that antenna to the Meadowlands. And it probably cost them a lot of money. It's harder to do work in NYC when your corporate headquarters is someplace else.

 

[davideduardo]

Some of this may also be related to the dismantling of the CBS engineering crew in NYC that I mentioned earlier. The antenna move for WNSH/WXBK was a bit complicated, but the hard part had been done by Cumulus before the sale. It should not have taken four years to move that antenna to the Meadowlands. And it probably cost them a lot of money. It's harder to do work in NYC when your corporate headquarters is someplace else.

And any modification of a tower... or a new tower, takes enormous permit work.

Example: In Miami, the WQBA move to the very "front door" of the Everglades at The Trail and Krome Avenue took over 5 years and required 13 different ´permits, ranging from zoning to the Bureau of Land Management and the EPA.

 

[TheBigA]

And any modification of a tower... or a new tower, takes enormous permit work.

I think Cumulus did that work. The FCC had approved the move more than two years before it happened.

I think it was all corporate foot-dragging, which is not surprising.

 

[Kelly A]

I think Cumulus did that work. The FCC had approved the move more than two years before it happened.

I think it was all corporate foot-dragging, which is not surprising.

Yeah but delaying means a tight construction schedule, considering the drop dead period for a CP is three years, with no chance of an extension. Hanging around for two years after the CP was issued, doesn't leave much headroom for construction delays.

 

[TheBigA]

Yeah but delaying means a tight construction schedule, considering the drop dead period for a CP is three years, with no chance of an extension. Hanging around for two years after the CP was issued, doesn't leave much headroom for construction delays.

The move ultimately took place in October 2022.

WXBK Completes Move Closer To New York

The signal of Audacy Classic Hip Hop "94.7 The Block" WXBK Newark NJ should be somewhat stronger in the eastern

radioinsight.com

Audacy didn't benefit from selling the West Orange property, because it was owned by WFME. They have since moved the antenna for their AM station to that location.

 

[Deleted User]

How much debt would be wiped out if Audacy sold the land the towers were on, rather than the stations?

they already offloaded a bunch of their tower sites to American Tower IIRC,

 

[TheBigA]

they already offloaded a bunch of their tower sites to American Tower IIRC,

Posted earlier:

Audacy Plans To Sell More Non-Core Assets After Closing $17M Tower Sale.

The trend of radio companies selling off their radio towers to raise cash returned in earnest this month when Audacy sold a parcel of towers for $17 million. On its

www.insideradio.com

The problem with selling some of these "non-strategic assets" is that it mostly leaves them with ad-supported assets.

That's why they're hurting so badly now. The ad market is very weak, so they continue to lose money there.

What they need is another revenue stream, based on subscription revenue or something unrelated to advertising.

 

[boombox4]

Podcasting allows anyone to be a broadcaster. No Talent Required. Most of these "Pods" are vanity exercises that nobody hears or sees. Very few former Radio folks who have been RIF'ed can monetize them...

Everything is content. Not all content, obviously, is equal in quality.

It's not just radio that sees the issue you mentioned -- you see the same thing in book publishing, journalism, the music industry (anyone with decent mics and ProTools can be a recorded artist now), and other forms of content.

When the 'gatekeepers' are removed, it democratizes the media in question, but it doesn't necessarily follow that the content that the democratization gives the public is going to have the same quality.

 

[TheBigA]

More possible sales on the horizon:

With Deals In Boston And Phoenix Imminent, Audacy Says It’s Still Talking To Lenders.

Audacy says it remains in compliance with the agreements it has signed with lenders, but looking ahead to the coming year radio’s second-biggest group remains doubtful that it will be

www.insideradio.com

Audacy says that it is going to make a pair of sales in Boston and Phoenix of long-held assets. The company did not disclose what it is selling, but said it includes land, buildings, and equipment. Instead, it simply said it expects the deal to close within a year.

The Phoenix cluster was on the block when it was owned by CBS Radio. They only own three stations there. Boston is a different story.