Audacy, the radio platform that owns a network of more than 200 stations across the United States, announced Sunday that it will file for Chapter 11 bankruptcy.
“Over the past several years, we have strategically transformed Audacy into a leading multi-platform audio content and entertainment company through the acquisition of CBS Radio and building leading complementary positions in podcasting, audio networking, live events, digital marketing and our direct-to-consumer streaming platform,” David J. Field, president and CEO of Audacy, said in a statement.
“While our transformation has improved our competitive position, the perfect storm of sustained macroeconomic challenges over the past four years facing the traditional advertising market has led to a sharp multi-billion dollar reduction in cumulative radio advertising spending.” .
The company files for bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas. Filing for Chapter 11 will allow the organization to reduce its debt by approximately 80%, from $1.9 billion to $350 million. No operational impacts are expected from the filing, Audacy clarified in his statement.
“These market factors have severely affected our financial condition and have required the restructuring of our balance sheet,” the company said in explaining its recent financial problems. “With our leadership position at scale, our exceptionally differentiated premium audio content and a strong capital structure, we believe Audacy will emerge well positioned to continue its innovation and growth in the dynamic audio business.”
Chapter 11 bankruptcy is often called “reorganization” because it allows incorporated businesses to reorganize their finances and obtain court approval of a debt repayment plan, according to the Internal Revenue Service. A key component to successfully filing for Chapter 11 is that a business must not continue to incur debt. “As part of their reorganization, businesses must ensure that they are able to meet all financial obligations in the future, including federal income and payroll taxes,” the IRS notes on its website.
Audacy, which is the second largest radio station in the US, behind only iHeartMedia, owns several of the most notable radio stations in Los Angeles, including KROQ, KRTH101, KNX, KTWV (94.7 the Wave) and KCBS (93.1 Jack FM). The company also operates New York City’s prominent breaking news AM station, 1010 WINS, and the Big Apple sports radio station, WFAN, the first 24-hour sports station.
