(RepublicanDaily.org) – Audacy, the second largest radio company in the U.S. has filed for Chapter 11 bankruptcy.
The move was made in a bid to reduce its debt, which over the years has ballooned to roughly $1.9 million. Filing for Chapter 11 is expected to make its financial obligations more manageable, and cut its debt down by as much as 80%, bringing the company’s debt to $350 million.
While Audacy is now a “scaled multi-platform audio content and entertainment company,” according to its CEO, David Field, he said that challenges brought about by global events in recent years have brought the company to its knees.
Field said that there has been a “perfect storm” of “macroeconomic challenges” over the last four years, especially when it comes to the “traditional advertising market,” with many companies significantly slashing their advertising budget for radio ads. The Audacy CEO said that as a result of the shift, the company’s financial condition and balance sheet took a severe beating, which in turn necessitates the bankruptcy filing.
Despite the Chapter 11, the company said that it does not expect its operations (employees included), trade, or other unsecured creditors to be impacted by the move. Field also expressed optimism that in the long-term, Audacy will be “well-positioned” to continue efforts to grow and innovate in the industry. The Philadelphia-based radio conglomerate, which currently owns hundreds of audio stations in the U.S. and was founded in 1968, also delisted itself from the New York Stock Exchange in November last year.
The bankruptcy petition was filed in the Southern District of Texas’s U.S. Bankruptcy Court following an agreement Audacy entered into with its debtholders that allows the company to implement restructuring initiatives. Under the agreement, debtholders will receive equity in the company. A hearing to discuss and consider the approval of the petition will be held in February.
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