Philly-based radio giant Audacy expected to file for bankruptcy

The company, which owns SportsRadio 94WIP and KYW Newsradio, has been hampered by the debt it added in its 2017 merger with CBS Radio

Audacy, the Philadelphia-based radio company, is expected to file for bankruptcy due to significant unpaid debt and declining advertising revenue.
Source/Audacy

Facing nearly $2 billion in debt and declining ad revenue, Philadelphia-based radio company Audacy is expected to file for Chapter 11 bankruptcy in the coming weeks, the Wall Street Journal reported.

Audacy owns 230 radio stations in the U.S., including SportsRadio 94WIP, KYW Newsradio and 98.1 WOGL, among others. The company's financial health has been in peril since it merged with CBS Radio in 2017, taking on considerable debt as part of the deal.

Audacy reportedly has reached an agreement with its senior lenders on a prepackaged bankruptcy plan that will transfer ownership to the lenders once the process is completed. The Wall Street Journal had reported last July that Audacy had begun negotiations with creditors to restructure its debt.

Filings with the U.S. Securities and Exchange Commission show Audacy skipped $18.9 million in debt repayment in December and had requested extensions for a series of payments during the fall. RadioWorld reported the company has about $624 million in debt obligations due in November.

In its third quarter report, Audacy said it had a net revenue loss of $234.3 million.

"Audacy's third quarter net revenues declined 5.6%, in-line with our quarterly guidance as ad market conditions have remained challenging, particularly on national business," Audacy CEO David Field said in November.

It's unclear whether Field will remain Audacy's CEO after the bankruptcy proceedings.

The pending bankruptcy isn't expected to immediately affect programming at Audacy-owned stations, but a financial tightening could affect their abilities to attract and retain talent.

The company was founded in Philadelphia in 1968 as Entercom Communications. It rebranded as Audacy in 2021 and overhauled digital content distribution at the former Radio.com. Audacy's radio stations have an array of formats, including music, news and sports. 

Equity research analyst Craig Huber, of Huber Research Partners, told RadioWorld that the merger with CBS Radio played a major role in Audacy's struggles.

"The ill-advised merger with CBS Radio in late 2017, which added around $1.5 billion in debt, became the undoing of the company," Huber said.

Much of the revenue that drives radio stations comes from local business advertising, which slowed significantly during the COVID-19 pandemic and remained weakened due to inflation and other economic pressures. Although industry analysts expect growth in digital ad revenue, traditional radio advertising is projected to decline further — but at a slowing rate — in the years ahead.

Audacy is working with restructuring adviser PJT Partners and lawyers from Latham & Watkins as its bankruptcy takes shapes, according to The Wall Street Journal. The senior lenders are working with the law firm Gibson Dunn & Crutcher and a group of second lien bondholders is partnering with law firm Akin Gump Strauss Hauer & Feld.