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Audacy Stock Trading Halted
- Thread starter JJSPC
- Start date
It's a great thing they got rid of their HD2's, though. That probably saved the company. [sarcasm button off]
In seriousness, it's sad what's happening with them financially. They have some great stations. They have been pushing the streaming thing. I guess streaming isn't working out as planned? Probably because of costs.
In seriousness, it's sad what's happening with them financially. They have some great stations. They have been pushing the streaming thing. I guess streaming isn't working out as planned? Probably because of costs.
For whatever reason; they were simply behind their peers in streaming. Pretty sure I know what the delay was caused by, but will keep that to myself.
Ineptitude might be a good word. Wasn't the whole point of acquiring (merging) CBS to be prosperous? More stations = more revenue. Instead, the debt has crushed them. Investors are tougher to fool because they know growth is a pipe dream. Mr. Field will keep providing "Talking Points" about the bright future, but it rings hollow. The Captain of the Titanic paid a steep price for Hubris also...
Clearly they were too late to ditch the name Radio.com for their streaming platform.
On a more serious note, the pandemic took a bad situation and made it basically impossible.
Entercom's projected net revenues for the merged companies at the time of the acquisition:
2018: $1.79 billion 2019: $1.83 billion 2020: $1.90 billion 2021: $1.94 billion 2022: N/A
Entercom/Audacy actual net revenues by year:
2018: $1.46 billion 2019: $1.49 billion 2020: $1.06 billion 2021: $1.22 billion 2022: $1.25 billion
And yearly net losses:
2018: $362 million 2019: $420 million 2020: $242 million 2021: $3 million 2022: $141 million
Take a look at the first row and the second row and you can see something was rotten in Denmark from day 1. If they had been making these $1.9 billion revenues from the beginning, they could have afforded the acquisition no problem. But they never approached their own projections.
But you can also see a big drop in 2020, and an incomplete comeback. Radio spot sales fell 30% in 2020. If not for the pandemic, the company might have been able to maneuver its way into the black.
But a company can only lose money in consecutive years for so long until the money spigot runs dry.
Keep in mind that the CBS deal followed their purchase of Lincoln Financial, along with some trades to acquire Jerry Lee's station in Philadelphia. They were already in the hold for about $150 million.
The one thing all of the radio-only companies didn't have experience with was unraveling the radio stations from the larger TV operations. There were economies of scale built into those radio-TV clusters, in terms of real estate, physical plant & engineering, and marketing. The radio stations are a lot more expensive to operate once they're on their own. Citadel witnessed that first hand in the purchase of ABC radio. The merger wasn't really fully synergized until after the Cumulus bankruptcy, ten years later. Who knows how long it will take for this one to work out. The pockets are never deep enough.
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Susquehanna was bought by Cumulus, not Entercom. And Jerry Lee was a single station operation. Whole different ball game.
Yes I corrected that to Lincoln Financial.
You ain't kidding. I learned this the hard way in the early 2000s, by buying Tribune stock. Two separate times. Mister Supremely Confident Investor here thought, "I used to work in the media. I understand that business. This looks like a good stock". I got out in time to break even and after the second time swore off all media stocks ever again.
That might vary by location.
In Detroit, none of the radio stations shared any real estate with the TV duopoly, there was no management shared, there were no transmitter sites shared, and I'm pretty sure the sales teams were mutually exclusive, too, with the potential exception of digital.
The only noticeable synergy was the cbsdetroit.com website, which the TV stations, WWJ Newsradio and 97-1 The Ticket shared.
In Chicago, I've never heard CBS2 newscasters or forecasters on WBBM Newsradio and vice versa.
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...
Golly, gee. First time I agree with you! The landscape is so cluttered with mediocre or worse podcasts that it is hard to find the standout ones.
There are some pretty popular podcasts like My Favorite Murder and Doughboys that are done by non broadcasters. Those two podcasts do national live show tours and sell out theaters. They do better than Adam Carolla, who does live shows of his podcast and doesn’t consistently sell out. It’s about the content more than whether or not the hosts are pros or not.
I'm not of the same culture as a lot of the "very American" podcasts so many that are very popular leave me totally cold... just like Seinfeld which I did not understand or "get" at all!
That's the view if you look at these stations as individual independent operations, which is how Entercom views its stations. Philadelphia was different from what you describe in Detroit. There was a lot of sharing of resources between radio & TV, and ultimately led radio to signing a new content deal with NBC-owned WCAU:
The interaction between the stations and the national CBS News Radio was costly to both operations in terms of staffing and content. CBS News Radio partly drew on content created by the local stations (in addition to its own reporters), and that relationship changed.
CBS also had a centralized technology division, based in NY, that provided technological support and R&D to the stations. They were involved in the creation of Radio.com, the creation of other digital services, and even (historically) in the early development of what later became HD Radio. All of that was dismantled by Entercom, which required them to then buy outside podcasting companies. It also led them to make bad decisions about the streaming platform.
There was a centralized programming leadership, based around the old CBS Radio Network. That would have been helpful when Audacy began looking into starting national programming in the country and alternative formats. But it had been dismantled, and they had to start from scratch. That cost them about two years and millions of dollars.
CBS Radio also had access to the deeper pockets of the CBS Corporation. CBS Radio by itself had been losing money in the years leading up to the sale. That's why Moonves was so anxious to sell it. It was a drain on the profitability of the other divisions. So when it was sold, the sale greatly benefited CBS Corporation. But it saddled Entercom with $2 billion in debt, and no deep pockets or other revenue streams other than advertising revenue from its stations. Once that advertising revenue hit a bad stretch, there were years of deep losses, leading to the current crisis.
That's why I say there were a lot of hidden costs that go beyond individual markets that made CBS Radio mor powerful than it is now.
There was also the prestige felt by advertisers of being owned by CBS. The moment they knew that the stations were not longer under the same ownership, that intangible element of "quality" disappeared.
The prestige came from heritage, but it also came from the financial power and independence of a much larger company. That much larger company protected the radio stations from financial struggles. You can see it every time a radio division was sold. Previously, when radio hit a bad stretch, which they often did, they could borrow money internally. That's much cheaper and less public than going to lenders or investors. When CBS Radio was losing money, we didn't see its CEO renegotiating its debt with outside lenders. Now we do.
How much debt would be wiped out if Audacy sold the land the towers were on, rather than the stations?
In most cases, very little. And if sold, it is for development and that means the expense of relocating.
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