Audacy, the largest radio company in the US, files for Chapter 11 bankruptcy protection

Audacy, the parent company of WEEI and more than 200 other radio stations across the US, has filed for Chapter 11 bankruptcy protection on Thursday, January 8, 2024. The company, formerly known as Entercom, has been struggling with a debt of more than $20 billion that it accumulated after a leveraged buyout in 2008 by private-equity firms Bain Capital and Thomas H. Lee Partners.

Chapter 11 bankruptcy is a legal process that allows a company to restructure its debt and operations while continuing to operate under the supervision of a court. Audacy has reached an agreement with its creditors to reduce its debt by more than $10 billion and to extend the maturity of its loans. The company said that it expects to emerge from bankruptcy in the second quarter of 2024.

Audacy, the largest radio company in the US, files for Chapter 11 bankruptcy protection
Audacy, the largest radio company in the US, files for Chapter 11 bankruptcy protection

Audacy’s CEO and chairman Bob Pittman said in a statement that the bankruptcy filing is a “significant accomplishment” that will allow the company to “definitively address” its debt and to “focus on growing our business and serving our listeners and customers”. He added that the company has “ample liquidity” to support its operations and that it will continue to invest in its digital platforms, podcasts, events, and content.

How will the bankruptcy affect Audacy’s radio stations and listeners?

Audacy said that its radio stations, which include WEEI, KROQ, WFAN, and KYW, will continue to broadcast as usual and that its popular iHeartRadio streaming app, which has 270 million monthly listeners, will remain available on various devices. The company also said that it will continue to host its events, such as the iHeartRadio Music Awards, the iHeartCountry Festival, and the iHeartRadio Music Festival.

Audacy’s radio stations are among the most listened to in the US, reaching more than 170 million listeners per month. The company also owns Clear Channel Outdoor, one of the largest billboard advertising companies in the country, which is not part of the bankruptcy proceeding.

What are the challenges and opportunities for Audacy in the radio industry?

The radio industry has been facing declining advertising revenue and increasing competition from music streaming services, such as Spotify and Pandora, and from other media platforms, such as podcasts and social media. According to a report by PwC, the US radio advertising market is expected to shrink by 4.6% in 2024, while the global music streaming market is expected to grow by 18.8%.

However, Audacy has been trying to adapt to the changing media landscape by expanding its digital offerings, such as podcasts, smart speakers, and online video. The company has acquired several podcast companies, such as Cadence13, Pineapple Street Studios, and Podcorn, and has partnered with celebrities, such as Will Ferrell, Demi Lovato, and Paris Hilton, to produce exclusive podcasts. The company has also launched Audacy Originals, a series of original audio content, and Audacy Live, a platform for live and virtual events.

Audacy hopes that by reducing its debt and improving its financial flexibility, it will be able to capitalize on its strengths and opportunities in the radio and digital media markets. The company said that it has a “strong and loyal fan base”, a “diverse and compelling content portfolio”, and a “robust distribution network” that will enable it to “create value for our stakeholders”.

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