CBS-FM started the whole 'play what we want' before Jack-FM.
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Audacy Bankruptcy Imminent
- Thread starter Barry
- Start date
That explains a lot. As soon as Dan left, it really felt like CBS Radio was going through the motions.
Really? How would you come to that conclusion?
It was part of the GE buyout of RCA. GE was run by Jack Welch who believed you should only own things that are either #1 or #2 in their industry. NBC radio was lower than that, especially in NYC. At that time, several legacy companies were getting out of radio, including GE and National Life, owner of WSM.
I feel Audacy is in the same situation legacy media companies like Paramount and Warner Bros Discovery is in. Audacy has some very profitable radio stations and radio is not having the same ratings declines as linear tv is experiencing but paying off debts is very difficult and investors don’t see radio as a growing industry
Yes and no. Audacy didn't exactly help their cause when David Field chased all the CBS-era management out the door, but other external forces like the pandemic didn't help.
CBS wanted out of Radio
I was more referencing David Smith having largely purged their newly purchased stations of their CBS-era management, which @TheBigA has previously cited.
Wasn't NBC Radio a distant third compared to ABC and CBS? (Amway had already given up and sold Mutual off to Westwood One.) A few other things also doomed RCA, most notably the Selectavision disaster and the lack of any leadership of the David Sarnoff mold...
The CBS operation was rather stagnant and at the edge of a significant loss in the case of the news and talk stations. It's management was not prepared for new media and the changes in demographics.
Just look at the aging of the demos of many of the stations in the years moving up to the Reverse Morris Trust merger.
All of the ancient radio network based station groups did not react well to consolidation in the early to mid 90's. They did not adequately build on the base they had in the major markets and were swamped by the new consolidators who had both a cluster based sales and cluster based programming attitude.
RCA's disintegration came from some of the policies instituted before the "departure" of Sarnoff. Sarnoff's problem was he was very authoritarian and it was hard to dissuade hie from his personal beliefs and policies. The Russian in him was surprisingly like today's Putin mentality, in fact... only he could not shoot the dissidents.
Welch just finished off the bad decisions.
Audacy has officially filed for bankruptcy:
radioinsight.com
Audacy Agrees To Restructuring With Debt Holders; Files For Chapter 11 Bankruptcy Protection - RadioInsight
Audacy has reached agreement with its debt-holders on a prepackaged restructuring and filed for Chapter 11 bankruptcy protection. As part of the restructuring, Audacy expects to drop its debt from approximately $1.9 billion down to $350 million. The company is expecting the bankruptcy court to...
radioinsight.com
Having been on the front line when dealing with two past bankruptcies (with two radio groups), I can tell you that it was not a pleasant experience when dealing face to face with contractors and vendors (after the filing) who weren't sure when they would be paid, and if and when, how much they'd be paid. As CE, I maintained longstanding honest relationships with my local tower service vendor, electricians, HVAC company, broadcast supply vendors, and so on, and they were not many times willing to do business with us for quite some time after the filing. I'm not sure this is the norm for most others, but it didn't make my life easy - that's for sure, especially when you're trying to keep radio stations on the air. It was almost like (in my case) the owners knew all along that they would soon be filing for Chapter 11 bankruptcy, and made an effort to get a tower quickly painted, and some other expensive niceties...quickly, while they're sitting in some office miles away, not physically facing these vendors. Yuk. I became the face of their bankruptcy.
In this case, it wasn't a big secret. They warned in their SEC filings about it, they discuss it at their earnings calls. My policy is the minute I have any doubt, all services are for cash only. I don't extend credit to companies that say publicly they have doubts about their future as a "going concern." If they're saying that to the SEC, it's serious. Waiting for the announcement is too late. By then, you're just another person standing in line. But yes it's tough for the small businesses who don't have safety nets and still have to pay the people who do the work.
Does this mean cbsfm will have a tighter playlist and/or less DJs?
All money would be on neither option happening.
I guess I am referring to digital stations (like Big 615) that have got at least some interest with advertiser/sponsors, and are at an increasingly popular place where young demos hang out for music. Along the same lines, I am thinking Mr. Karmazin is looking ahead of an upcoming horizon - FM radio is not necessary for Sportsradio success - a presence on digital apps where the people will be listening will work well for a lot less money.
Regarding the bankruptcy, (full disclosure, I haven't read the news on it yet,) how will any creditors get paid if what is owed is now 'only' $350 million? What happened to the other 1.5 billion? If Audacy operations are going to just continue as normal and some creditors are just going to be hung out to dry, how can a bankruptcy judge think that is fair?
There aren't any comparable numbers for Big615, so we don't know if it's a place where "young demos hang out." We know Garth Brooks is 61 years old, so he's not necessarily who young demos want to hear. Storme Warren, the host of Big 615, is in his 50s. So when you say "younger demos," you must mean under 65. Just because someone is streaming doesn't mean they're young.
As I said, Audacy owns it's own streaming platform. But there isn't a Nielsen for streaming platforms. We just know when AM & FM stations show up on a streaming platform. But Nielsen doesn't say which one.
They get ownership equity in the new company.
One, Audacy said that this move will have no impact on day to day operations. That's because this is all about the acquisition-caused debt, not the stations themselves.
And one does not "save money" playing fewer songs more often. I assume you are referring to music rights payments, and those are based on the station and the market, not on how many different songs you play.
If you play 300 songs each one time in a day or 40 songs between 4 and 12 times a day, you pay the same rights fees.
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