Likely, no immediate impact on local stations operations , but obvious indication the company’s in big trouble
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Audacy just filed Chapter 11 Bankruptcy
- Thread starter BostonRadioListener
- Start date
Actually, now that they've knocked their debt down by 80%, I'd suggest they're no longer in big trouble.
The "big trouble" was leading up to this. Now it's done, so they just move forward from here.
We can now begin speculating on why the investment banks took such a big haircut.
My guess is that they looked at the liquidation value of Audacy (both as a whole and in bits-and-pieces) and decided that 20% of the debt was better than an alternative of even less... and far more predictable.
Plus they're betting that Field can rebuild the company to where it was 5 years ago.
I expect to see they've arranged a bonus structure that rewards him if it happens.
Correct. THAT is THE key question to ask. The answer Imo is company has little ongoing value or ability to generate cash to fund its debt.
It generates a LOT of cash. Just not enough to fund the debt. So now the goalposts have moved, and things are more in range.
We'll probably never know, but part of me wonders if Joe will get more involved in decision-making, at least through the reorganization process. The thing about Joe is; that he's old school, well, because he's old. But besides that, he's one of those old grizzled business guys who knows where to pinch pennies and how to overturn sofa cushions for spare change. If Joe convinced David to lock things down as he did back in the Entercom days, lenders might see more progress and be willing to cut those two more slack. Running an antiquated traditional media company is what Joe knows.
On the surface, it would appear that the lenders were impressed with the fact that the Field family have a lot of heritage in the company, but the reorganization play, posted in the other thread, doesn't show a place for Joe in the new company. That's based on what we see right now, but things could change.
Certainly, I'm not privy to Joe's condition, or whether he's in any position to provide guidance. For as much as many on this site like to portray David as incompetent, he's smart enough to know that his father built the business that's in trouble today. Sometimes going back to the oracle for advice is warranted. Realizing the industry is a lot different than the Entercom days, getting back to the old-fashioned financial basics and prudence can't hurt.
Sure. Take away our need to pay back what we borrow and pretty much everyone would be doing great. That sure does change the goalposts lol.
Like any business arrangement, both parties have agreed to this new arrangement, and it will be overseen by a judge, so apparently there are no hard feelings from the lenders. Any of us can declare bankruptcy if we choose.
Absolutely true..any of us can go bankrupt, yes.
Why would they "dump" any program element that produces ratings and revenue?
It is very clear that this is a finance issue, not a radio station operational issue. The stations are profitable. As BigA said earlier, just not enough to pay the huge former loans.
The Sox broadcasting rights cost a fortune. Ratings aren’t very good. I think it’s very clear they’d NEVER have done that deal if they knew they were getting a last place team 3 out of 4 years. They‘re Stuck with it for now…
The issue is not ratings or the team's standing... it is sales revenue. Sports generates dollars that no other radio format can produce. Part of this is due to sports marketing budgets of some advertisers which are not part of the regular "radio budget"... if there even is one. And the other part is that sports sells based on image much more than ratings.
What we've seen in the Diamond Sports bankruptcy is a company doesn't have to completely dump a sports deal if it's bad. They can use the bankruptcy to bring the team back to the table and redo the deal in a more favorable way.
The suits at CBS decided in 2016 to bail on radio and hoped a village idiot would bite on taking over and they found him in Philadelphia.
This is not going to end well
In October 2021, the Red Sox and Audacy announced a broadcast rights extension to keep the games on WEEI — the team’s flagship station since 1995 — through 2028. But Audacy’s financial situation could result in the Red Sox taking over the rights after the 2024 season.
This is not going to end well
Just who will call Red Sox games on radio alongside Joe Castiglione this season?
Just who will call Red Sox games on radio alongside Joe Castiglione this season? Chad Finn has the latest. Read more on Boston.com.
www.boston.com
In October 2021, the Red Sox and Audacy announced a broadcast rights extension to keep the games on WEEI — the team’s flagship station since 1995 — through 2028. But Audacy’s financial situation could result in the Red Sox taking over the rights after the 2024 season.
Correct. That’s all part of the halo effect of sports. It positively affects revenues in all day parts and builds ratings and image. That said—Audacy doesn’t do this deal if they know what they know now AND see the impact the Sox deal has had in recent years in every aspect you accurately mention. The price paid for value received hasn’t been what it WAS. Not by a long shot.
And that's a whole different issue that's going to affect broadcast sports rights going forward. Stations and networks are pushing back at leagues and teams about the unbridled escalation of rights fees. Teams and leagues felt they could rely on jacking it to the broadcasters and networks to make up for escalating player salaries, but given a changing ad market, that assumption is proving to be unsustainable.