David Field is stepping down as Audacy CEO

[MarkW]

Many of us thought there was a good probability this day would arrive as soon as Audacy officially exited Bankruptcy.

Since a move wasn't announced as soon as Audacy emerged from BK, I was beginning to think Field's job might be safe. Turns out I was wrong.

I wonder who will permanently replace him? I am unfamiliar with the interim CEO, Kelli Turner.

David Field To Step Down As Audacy President/CEO

Audacy President/CEO David Field is stepping down with Audacy board member Kelli Turner named interim President/CEO. Field will continue to

radioinsight.com

 

[TheBigA]

Since a move wasn't announced as soon as Audacy emerged from BK, I was beginning to think Field's job might be safe. Turns out I was wrong.

I'm sure his job was safe, but it wasn't the job he had before. He was an owner before. Now he's an employee. Which would you prefer?

Bob Pittman and Mary Berner stayed at their companies after bankruptcy. But their roles in those companies changed. They answer to the lenders who now own the equity in the companies. That's a very different situation.

A lot of what happens next depends on the FCC. They want to reopen the bankruptcy decision. If they find a way to force out the Soros fund, that could push the company into liquidation.

 

[mets18]

I'm sure his job was safe, but it wasn't the job he had before. He was an owner before. Now he's an employee. Which would you prefer?

Bob Pittman and Mary Berner stayed at their companies after bankruptcy. But their roles in those companies changed. They answer to the lenders who now own the equity in the companies. That's a very different situation.

A lot of what happens next depends on the FCC. They want to reopen the bankruptcy decision. If they find a way to force out the Soros fund, that could push the company into liquidation.

I'm curious as to why his job would have been safe. He oversaw a company that drove into a ditch. Who is going to hire him?

 

[TheBigA]

I'm curious as to why his job would have been safe. He oversaw a company that drove into a ditch. Who is going to hire him?

Once again, he was an owner, not an employee. Owners don't get hired. He & his family owned 30% of the company. They shared in the profits, and they shared in the loss. Everything he did was done in conjunction with the rest of the company. I say his job was safe because the other CEOs of bankrupt radio companies are still there. Who knows this company better than him? No one.

Anyone they hire to replace him won't be an owner, but an employee. That person will do what the lenders want to get them their money back. That may mean firing staff and going to a more centralized, national system similar to iHeart. Or it may involve moving resources from radio to other digital platforms like Cumulus. Or both. The future won't be like the past.

 

[RadioGuy1864]

A lot of what happens next depends on the FCC. They want to reopen the bankruptcy decision. If they find a way to force out the Soros fund, that could push the company into liquidation.

Pure speculation, but if that were to happen, could David Field possibly put a group together to buyback the some of the stations, perhaps the "core" Entercom group?

 

[secondchoice]

I'm curious as to why his job would have been safe. He oversaw a company that drove into a ditch. Who is going to hire him?

First off there will be no "big" radio companies as we know them. There will be no real "Broadcasting CEO" positions. There will be "caretakers"with the title of CEO that will dismantle and strip any value out of the company for the debt holders.

BTW I am not a fan of David Fields but he got caught in the revenue slow down. Maybe the private equity folks will realize that leveraging radio properties is bad business.

IMHO: The only long term answer is a lowering of station prices to where they can be bought without debt or the owner finances it. Depending on who you quote the business still has a 25 to 35 percent* after cash expenses profit margin if it is a viable station. Unfortunately some stations will not survive

*Market size matters greatly.

 

[TheBigA]

Pure speculation, but if that were to happen, could David Field possibly put a group together to buyback the some of the stations, perhaps the "core" Entercom group?

That's what people thought Lew Dickey would do. He raised some money and didn't buy radio stations. I think Field will do the same.

IMHO: The only long term answer is a lowering of station prices to where they can be bought without debt or the owner finances it.

Buying stations is easy. The expense is in running them. Radio stations cost too much to run. Local radio is based on strong local advertisers, and they don't exist anymore. Local advertisers prefer cheaper means to get the word out. That's bad for the local radio business model. If a buyer can't afford the price of admission (the cost of buying a station), he definitely won't be the kind of person who hires local staff. Radio needs people with deep pockets who don't expect a quick return on investment. Because owning radio is for the long term.

 

[secondchoice]

Radio needs people with deep pockets who don't expect a quick return on investment. Because owning radio is for the long term.

Am I correct to assumethat "deep pockets" means the debt repayment is not an issue to the continuing operation?

Everyone has a "number" for rate of return on investment. I have rental property that I always keep above 18% on my investment or replacement cost. That's what I call a "real asset". Radio is basically a geographic specific license from the FCC and equipment to broadcast. (AM can have land but that's another issue). There might be a tower involved and hopefully there are tenants that cover insurance and expenses. Except for the license and equipment there is no "real" asset.

IMHO anyone who buys a station with a less than 25% EBDITA better not have much debt unless there is a killer construction permit or they are really confident in their programming and sales ability.

 

[TheBigA]

Am I correct to assume that "deep pockets" means the debt repayment is not an issue to the continuing operation?

We're talking about Audacy. The Soros fund that bought $400 million of Audacy debt didn't finance that money. That was cash on hand.

That's the kind of money you want to see. Not someone using the installment plan. Because to hire staff, you need to be able to pay salary and benefits on a regular basis without interruption. Because Audacy is now private, they don't have to worry about quarterly figures anymore. They don't have to impress Wall Street investors. That's a good way to run radio now.

 

[davideduardo]

I'm curious as to why his job would have been safe. He oversaw a company that drove into a ditch. Who is going to hire him?

Keep in mind that essentially all radio operations, from "Ma & Pa" local single facilities to groups with over 100 stations all went through the 2008 depression, the rise of streaming, the introduction of the PPM, the Pandemic, the move away from retail (radio's money bin for decades) to online and other factors such as accelerated inflation.

Nobody is happy in radio. But some are unhappier than others.

 

[TheBigA]

Nobody is happy in radio. But some are unhappier than others.

I agree. People blame Field for what happened, and admittedly, he made some mistakes. But the fact of the matter is that anybody who bought CBS Radio at the time he did was going to end up in the exact same ditch.

 

[TheBigA]

I am unfamiliar with the interim CEO, Kelli Turner.

Me too, so I looked it up. She was previously the CFO of Sun Capital Partners. She had been on the Audacy board for four months, so I gather she's one of the creditors. Previously she was CEO with the song licensing company SESAC. No radio experience.

https://www.crunchbase.com/person/kelli-turner

 

[Mark Roberts]

No radio experience.

That could be a good thing: an outside perspective not tainted by dogma could be a help to the company.

 

[tbolt909]

I agree. People blame Field for what happened, and admittedly, he made some mistakes. But the fact of the matter is that anybody who bought CBS Radio at the time he did was going to end up in the exact same ditch.

The biggest mistake was doing the merge with CBS. I'm pretty sure that getting those stations created their massive debt.

Yeah, I'm sure that going from Owner to Employee was a big factor. As an Employee, the pressure to get results is much higher. Owning the Castle comes with more perks and power...

 

[tbolt909]

That could be a good thing: an outside perspective not tainted by dogma could be a help to the company.

You don't need any skills, credentials or wisdom to be President either. That doesn't mean it's a good idea. If she's a creditor, she just wants her money back...

 

[Mark Roberts]

You don't need any skills, credentials or wisdom to be President either. That doesn't mean it's a good idea. If she's a creditor, she just wants her money back...

The lenders are going to want to get their money back, plus interest, somehow. That either means an exit strategy or running it as an operating business. An exit strategy implies either having other willing lenders or having willing buyers. And the probability of either is....?

 

[TheBigA]

The lenders are going to want to get their money back, plus interest, somehow. That either means an exit strategy or running it as an operating business. An exit strategy implies either having other willing lenders or having willing buyers. And the probability of either is....?

Whoever made the deal with Soros was pretty smart, because he provided $400 million in debt-free cash. Unfortunately he also brought some baggage.

 

[PTBoardOp93]

That's what people thought Lew Dickey would do. He raised some money and didn't buy radio stations. I think Field will do the same.

Mr. Dickey owns a couple stations in the Atlanta metro. But yeah, there was lots of speculation he would spend a lot of money on radio, and he didn't.

Me too, so I looked it up. She was previously the CFO of Sun Capital Partners.

That's not a great sign. Sun Capital isn't a company I'd wish to be employed by.

 

[Weiserguy]

That could be a good thing: an outside perspective not tainted by dogma could be a help to the company.

Maybe, but also a risk for a chain as heavily into all-news as Audacy has been.

The lenders are going to want to get their money back, plus interest, somehow. That either means an exit strategy or running it as an operating business. An exit strategy implies either having other willing lenders or having willing buyers. And the probability of either is....?

Don't look now, but some of those AM stations might be ripe for harvesting the land under the towers, at the cost of killing them off the air. As a fer'instance, that little island off the coast of the Bronx that houses WCBS (uh, 'scuse me, WHSQ) and WFAN. I don't know how many Audacy AMs still own their towers and the land they sit on, but I could see where it becomes a wrestle to see whether selling land generates a better ROI than continuing ongoing operations, and if so, bye-bye Ancient Modulation station and all its dedicated headcount.

 

[TheBigA]

Don't look now, but some of those AM stations might be ripe for harvesting the land under the towers,

Like all the other radio companies, Audacy has been doing that already. They combined their two AM tower sites in Chicago. They've announced other tower site sales in Boston and Buffalo. The island in NYC has been considered, but the issue there would be access for a buyer. I seem to remember a tower site sale in LA a few years ago. So that process began before the bankruptcy.