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Audacy to Declare Bankruptcy

S

Santa fe

Audacy kicks off 2024 by announcing it will go into Chapter 11 bankruptcy with its lenders eventually taking ownership.
This means more jobs lost, program quality declining and listeners losing favorite stations as assets are sold off.
The FCC mantra during its deregulation process was "Let the marketplace rule". Well it is, and showing itself to be a brutal and unforgiving ruler.
We don't need companies run by accountants but by a new generation of broadcasters who are in tune with today's tech and today's audience and know how to reach that audience.
 
Santa fe said:
Audacy kicks off 2024 by announcing it will go into Chapter 11 bankruptcy with a new coalition of lenders eventually taking ownership.
This means more jobs lost, program quality declining and listeners losing favorite stations as assets are sold off.
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Audacy didn't announce anything. There was a WSJ article quoting sources. I'm not sure how anything will change in terms of staffing or programming. They've been laying off staff for years already.

radioinsight.com

Report: Audacy To File For Bankruptcy Within Weeks

The Wall Street Journal is reporting that Audacy has reached an agreement with its senior lenders for a prepackaged Chapter
radioinsight.com radioinsight.com

I doubt much will change at all. They'll restructure debt. That's a good thing. The old debt was unrealistic.

Audacy's David Field is a second generation broadcaster. The "new generation of broadcasters" doesn't exist. That's a contradiction. The new generation is all about digital, not towers & transmitters. The future won't be like the past.
 
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CassChopper96 said:
Do you think the company will sell of a whole bunch of its radio stations
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No.

They may sell a few markets where their cluster is not big enough or effective, but the biggest intangible asset they have is in owning clusters that sell together with they resultant synergy of combined numbers.

The only possible value of the company comes from its well performing clusters. The biggest value to the debtors is in the ongoing operation, which is profitable.

Outsiders have to understand that the issue here is debt. They have more debt to service than the profits from operations will be able to service. The debtors don't want to "write off" (a horribly misunderstood term) Audacy. They want to capture whatever they can from it, and get some return on the loans. They already "spent" the money in granting the loans. It is likely that the best return on that "spent" money is from capturing as much of the operating profit as they can, and that comes from capturing the profits, not from liquidation which does create a huge "write off" (there we have it again).
 
Nathan Obral said:
Honestly, people need refreshers on how bankruptcy court actually works. Far too often chapters 7 and 11 get mixed up...
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Business bankruptcy is a far more complex concept than personal bankruptcy.

I majored in Business Administration at a moderately good 4-year college, and don't fully understand the nuances and procedures, so it is understandable that people who don't have at least an MBA in finance don't get it.

It seems that a lot of people equate this situation with a broadcaster with the foreclosure on a home loan: the bank takes possession and sells the house to someone else to recover all or part of the principal. In the case of a business bankruptcy, the operator may continue to run the enterprise while forfeiting all or part of their equity.... or they may be kicked out totally. And the lender may continue to operate the station group as a subsidiary or look for a buyer. There are more doors than "Let's Make a Deal".
 
No company is the same when it exits a bankruptcy proceeding as when it entered. A Chapter 11 allows a company to keep functioning while a way to pay off its debts is arranged. That reorganizaton plan can range anywhere from cosmetic tweaks to interest rates and payment schedules, often unnoticed by its customers and employees, to complete overhauls of the firm's ownership, management, staff and product. It all depends on how the parties craft the restructuring agreement. But it is more than a bump in the road and often reflects fundamental problems with the firm or the industry it is in or both.
 
Santa fe said:
It all depends on how the parties craft the restructuring agreement. But it is more than a bump in the road and often reflects fundamental problems with the firm or the industry it is in or both.
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The big difference between this situation and the other radio bankruptcies is that the Field family owns more than 25% of the stock in the company. A lot of it was bought with actual money, not just as a bonus. So they have actual skin in this fight. In a bankruptcy, the stock gets wiped out. David's father started this company, and ran it profitably for 50 years. How would you like to be his son? Any son already knows the conversation when that son loses the family jewels. It's not a fun conversation.
 
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I believe that, locally, we will see some stations sell to religious groups for a fast buck. Prime candidates: WNWV (Prime FM for a religious group since it does not really fit into Rubber City's portfolio; WKNR (WKRK is, by far, the go-to sports station); WARF in Akron. WDLW/WOBL (reportedly-- according to insiders -- the person that bought it from the Wilbers back in 2022 is running it as his personal toy, doing the afternoon show on WDLW himself, playing his favorite songs whether they fit the format or not. Hardly a plan for success); Just my 2 cents.
 
radiofollower said:
I believe that, locally, we will see some stations sell to religious groups for a fast buck. Prime candidates: WNWV (Prime FM for a religious group since it does not really fit into Rubber City's portfolio; WKNR (WKRK is, by far, the go-to sports station); WARF in Akron.
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One thing I'm keeping my eyes on is Salem and their financial situation. They've been bailing out of a few markets and WFHM might be much more attractive to an EMF than WNWV.

WKNR still has the Browns co-flagship rights along with WKRK and airs a bunch of team-produced shows WKRK would never air, so that station should be safe. WARF is a make-believe Cleveland station so they're in better shape than if they were still marketed as an Akron station.
radiofollower said:
WDLW/WOBL (reportedly-- according to insiders -- the person that bought it from the Wilbers back in 2022 is running it as his personal toy, doing the afternoon show on WDLW himself, playing his favorite songs whether they fit the format or not. Hardly a plan for success); Just my 2 cents.
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WDLW and WOBL feel more destined for outright closure. If WEOL couldn't maintain local programming or local newscasts even with a technically superior signal by comparison, how can those two with poor ownership and management?
 
Nathan Obral said:
One thing I'm keeping my eyes on is Salem and their financial situation. They've been bailing out of a few markets and WFHM might be much more attractive to an EMF than WNWV.
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Agreed, I could see EMF going after like WNWV for something like Air1 ONLY if they had an established K-Love license in the market and that would mean a signal such as WFHM going to them first. But would Salem exit Cleveland? not 100% sure of that - I would suspect they would exit some place like Columbus, OH first where they have only a Class A FM, Daytimer AM and two translators. But hey it's 2024 anything is possible!
 
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