Philadelphia-based radio and podcast company Audacy Inc., which owns stations such as WBBM and WXRT in Chicago, has filed for Chapter 11 bankruptcy protection in Texas. The move comes after the company reached an agreement with creditors to transfer ownership to them in exchange for reducing its debt by $1.6 billion.
Audacy stated that its publicly traded shares would be eliminated as part of the deal, pending approval from a judge in Houston. If approved, the restructuring would bring down the company’s outstanding bonds and loans to approximately $350 million, down from $1.9 billion.
Audacy President and CEO David J. Field attributed the bankruptcy filing to a “perfect storm of sustained macroeconomic challenges” over the past four years, resulting in a significant reduction in radio ad spending. He emphasized that these challenges had severely impacted the company’s financial condition, necessitating a balance sheet restructuring.
The restructuring agreement, which received approval from a “supermajority” of creditors, allows Audacy to file a prepackaged bankruptcy, potentially expediting court proceedings. The company assured that the operational aspects of its business would not be affected by the restructuring, and trade and other unsecured creditors would not face impairment.
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In the bankruptcy petition filed in the Southern District of Texas, Audacy listed a total debt of $2.66 billion and assets of $2.79 billion. Some existing lenders have committed to providing $57 million of debtor-in-possession financing to support operations during the restructuring process.
Audacy has faced challenges due to weak advertising revenue for broadcast radio, according to a credit rating downgrade by S&P Global Ratings in May. Alongside WBBM and WXRT, Audacy operates several other stations in the Chicago market, including 670 The Score, B96, 104.3 Jams, U.S. 99, and Channel Q.
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