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Audacy Filed For Bankruptcy
- Thread starter exdjted
- Start date
Are you talking number of shares? I don't have that figure. It might be buried in the filings somewhere. I mentioned the percentage allocations early today and will recap that info below:
The prepetition 1st lien lenders will get 75 percent of pre-diluted common shares in the New Co.
The prepetition 2nd lien lenders will get 15 percent of the pre-diluted common shares in the New Co. They will also receive stock warrants that will only be exercisable if total equity valuation climbs to at least $771 million within the first four years following exit from BK (your guess is as good as mine in terms of how that monetary value was determined), subject to Black-Scholes protection.
Certain DIP Lenders will get 10 percent of the pre-diluted common shares in the New Co.
The common shares as a whole are projected to be worth $250 million to $450 million in Reorganized Audacy. Thus, the shares allocated to the prepetition 1st lien lenders will have an estimated value of $187.5 million to $337.5 million (mid point = $262.5 million).
The total prepetition 1st lien claims are about $883 million. Those lenders will receive ~$218 million of 1st lien, 2nd out term loans + the equity (with estimated value range of $187.5 million to $337.5 million) noted in the prior paragraph.
The total prepetition 2nd lien claims are about $1.04 billion. Those lenders will receive opening equity with an estimated value range of $37.5 million to $67.5 million plus the warrants mentioned in my earlier post.
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The creditors took more than a haircut on this deal, more like they got their heads shaved bald.
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I feel bad for the djs in this sceneario. It's the company's fault for the way they control their stations, but I also blame listeners as they also want a particular station to stay a certain way from 30 years ago that isn't financially viable for the future.
so p much, corporate control of content, listeners being whiny
so p much, corporate control of content, listeners being whiny
So they will get shares in a company, and the value of those shares will be set by the open market, and traded in the open market.
We've already watched the shares of this very company drop to pennies. I'm not sure I'd want my equity to be set by the market.
I was with you, but then you lost me... could you elaborate?
Poorer but wiser. With the stock at 9 cents a share, they got scalped...
Good Lord.
The individual stations are still making money in spite of advertising headwinds. Right now anyway, everyone still gets a paycheck.
No need to feel bad for DJ's.
This has nothing to do with programming, djs or station operations.
The Pandemic, the move to streaming and our inflation/recession environment caused the ad market to decline, particularly for traditional media. Audacy could not pay its loans, and that results in bankruptcy.
The station group is rather well run, in fact.
Nobody is wiser as the perfect storm of a pandemic (with no cure after 4 years), the increasing speed of adoption of streaming and recessionary inflation was in nobody's "best to worst" model.
Wheels are turning (article not paywalled for me): Houston Federal Bankruptcy Judge OKs Audacy ‘First Day’ Motions | Radio & Television Business Report
Given existing ownership caps in all markets, not sure how there would be less competition.
Oh, I don't think that's going to happen. There was this other big nationwide radio company that teetered on the edge of bankruptcy for years. Eventually they did file for bankruptcy protection, got bought up by a venture capital firm, changed their name, had annual waves of layoffs, and they're still around. Oddly enough, they survived the "perfect storm" that Field is blaming for all of Audacy's woes. Survived it quite well, in fact. Hmm...
Anyway, carry on, folks. Radio is just as strong as ever!
I’m not sure why people keep bringing station sales in to this, I keep seeing it all over on individual state/market boards. Why would Audacy sell off assets that make them money? Why? Why is this even a question?
iHeart, I believe, sold most of their very small market clusters before their bankruptcy and it was actually years before I believe… in the Clear Channel days. Cumulus sold stations when they had a favorable deal after their bankruptcy. Both of those companies sold stations that were not in markets favorable to their business model. Audacy’s stations are primarily in large to medium sized markets. There’s no dead weight to chop off, there’s no reason to go selling stuff at fire sale prices.
iHeart, I believe, sold most of their very small market clusters before their bankruptcy and it was actually years before I believe… in the Clear Channel days. Cumulus sold stations when they had a favorable deal after their bankruptcy. Both of those companies sold stations that were not in markets favorable to their business model. Audacy’s stations are primarily in large to medium sized markets. There’s no dead weight to chop off, there’s no reason to go selling stuff at fire sale prices.
Allow me to translate uninformed:
* Some here see Audacy as some sort of evil greedy giant corporation, and would revel in their stations being sold off to local Ma and Pa owners. Of course, that would never happen...
* Some here believe the only way Audacy could pay their obligations is to sell everything. Never mind that nobody is able or willing to buy over two hundred stations. Can't cloud the issue with facts.
* Some here don't understand business, let alone the process of reorganization through Chapter 11, or the difference between Chapter 7 and 11.
* Many people here don't understand sales, formats, or demographics. Everything is music to their liking and 6+ ratings.
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