Audacy, a radio network based in Philadelphia, recently completed its financial restructuring, reducing its funded debt by 80% to $350 million. This restructuring has resulted in bottom-line growth for the company, driven by revenue share increases, digital revenue growth, audience share gains, and expense reductions. The company will continue to be led by its current president and chief executive, David Field, and its existing management team as it focuses on leveraging its position as a multi-platform audio leader and accelerating innovation and digital transformation.
However, Audacy’s journey to financial stability has not been without obstacles. The company filed for Chapter 11 bankruptcy in January and is now heading to court after the Federal Communications Commission agreed to conduct a foreign-ownership review with a new, post-bankruptcy version of Audacy. This review is necessary due to concerns over foreign investment in US broadcast ownership, particularly in radio station licenses. The FCC sets limits on the number of radio and TV stations an entity can own, and foreign investments over 25% of a broadcaster or radio station are subject to review.
The involvement of Soros Fund Management, chaired by billionaire investor George Soros, has sparked controversy and fearmongering among some conservative voices. The FCC’s approval of the transfer of licenses to a post-bankruptcy Audacy, with Soros as a majority shareholder, has been criticized as a “fast-track” process. Despite these allegations, the FCC clarified that this process is not unique and has been used for other radio companies in the past. Audacy aims to address the concerns raised and proceed with ownership transfer to emerge from bankruptcy in the coming days.
The FCC has faced accusations of playing politics and favoritism in its handling of Audacy’s bankruptcy and foreign-ownership review. Conservative figures like Rep. Chip Roy and Sen. Ted Cruz have demanded rigorous oversight of the process to prevent any undue influence on US radio stations. FCC chair Jessica Rosenworcel added an extra step by allowing all commissioners to weigh in on the decision, highlighting the scrutiny and attention the case has received from different stakeholders.
Following the approval of license transfers to the new version of Audacy, the company will need to file paperwork with the FCC to take ownership of the stations in question. This will trigger a 30-day window for a full foreign-ownership review, which typically takes between six months and a year. Given the complexity and significance of the process, the FCC usually grants waivers to companies going through bankruptcy to avoid costly delays. Audacy is expected to emerge from bankruptcy in the near future, subject to the completion of the ownership transfer and regulatory review.
