Audacy Files For Bankruptcy Chapter 11 Protection After High Revenue Drop
The massive American podcast and radio company Audacy revealed on Sunday that it had filed for Chapter 11 bankruptcy protection, following years of falling ad expenditure. One of the biggest radio companies in the country, Audacy, released a statement announcing its file. It said that it has struck a restructuring support agreement with a supermajority of its debtholders, which will result in an 80% reduction in debt, from $1.9 billion to $350 million.
After merging with CBS Radio in 2017, Audacy—formerly known as Entercom—became a multi-platform company. However, while this strengthened their position, President and CEO David Fieldman stated on Sunday that a “perfect storm of sustained macroeconomic challenges over the past four years” had hit the traditional advertising market, resulting in “a sharp reduction of several billion dollars in cumulative radio ad spending.”
With the anticipation that a court hearing to assess its approval will take place in February, the corporation and a few of its subsidiaries filed for Chapter 11 proceedings in a Texas court on Sunday along with their plan of reorganization.
The statement follows Audacity’s September report, which showed that net revenue for the third quarter fell 5.6% from the same period the previous year, with predictions that the fourth quarter would see a high single-digit reduction.