Major broadcasting company Audacy announced its decision to file for Chapter 11 bankruptcy reorganization Sunday, Variety reported.
The move aims to significantly reduce the company’s financial burden, cutting down its debt by approximately 80%, according to Variety. Holding the title of the second-largest radio broadcaster in the U.S. after iHeart Media, Audacy operates 235 radio stations across 48 markets. Its prominent stations include Los Angeles’s KROQ and KNX, New York’s sports-talk flagship, WFAN, Atlanta’s V-103 and Chicago’s Newsradio 780 WBBM, among others.
This strategic restructuring is expected to trim down the company’s funded debt from around $1.9 billion to $350 million, the outlet noted. The Philadelphia-headquartered firm filed the prepackaged bankruptcy proceedings in the U.S. Bankruptcy Court for the Southern District of Texas. In this arrangement, debtholders are set to receive equity in the reorganized company. A court hearing to approve the bankruptcy plan is anticipated in February, with Audacy hoping to complete the process post-FCC regulatory approval, according to the outlet.
Largest U.S. radio company Audacy files for bankruptcy protection https://t.co/p9oqL0pyRT
— CNBC (@CNBC) January 7, 2024
“While our transformation has enhanced 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 reduction of several billion dollars in cumulative radio ad spending,” David Field, Audacy’s chairman, president and CEO said in a statement, according to Variety. (RELATED: Massive Chinese Wealth Management Firm Files For Bankruptcy Amid Real Estate Crisis)
“These market factors have severely impacted our financial condition and necessitated our balance sheet restructuring. With our scaled leadership position, our uniquely differentiated premium audio content and a robust capital structure, we believe Audacy will emerge well positioned to continue its innovation and growth in the dynamic audio business,” Field added.