Audacy completes its financial restructuring and now plans to go private

By CNN Newsource

Published September 30, 2024 2:21 PM

By Liam Reilly, CNN

(CNN) — Radio network Audacy on Monday shared that it completed its financial restructuring, successfully reducing its approximately $1.9 billion of funded debt by 80%, to $350 million.

The Philadelphia-based company has seen bottom-line growth, which it said has been accomplished via gains in revenue shares, increased digital revenue growth, audience share gains and expense reductions.

Audacy will continue to be led by its current president and chief executive, David Field, as well as its existing management team.

“Today, Audacy embarks on our next chapter, capitalizing on our position as a scaled, multi-platform audio leader, differentiated by our exclusive, premium audio content, including our unrivaled leadership in sports audio, powered by our industry-leading financial strength and focused on accelerating our innovation and digital transformation,” Field said in a statement.

Audacy shared that it expects to become a private company.

Audacy’s restructuring comes after the FCC’s commissioners approved the assignment of licenses held by the radio giant to a new, post-bankruptcy version of the company on September 18, allowing the radio giant to temporarily bypass the commission’s review.

The radio giant had filed when it disclosed it was entering a restructuring agreement to reduce debt. In February, Bloomberg reported the Soros Fund Management picked up over $400 million of the radio company’s debt, making it the largest contributor among a group of lenders looking to exchange loans for stock.

Audacy’s announcement also comes months after the radio giant approached the FCC in March, requesting a full foreign-ownership review while also asking the commission to delay its review, an FCC spokesperson said. In its request, the radio giant emphasized that it believed about 22% of a new, post-bankruptcy Audacy would be foreign-owned, requesting a review out of an abundance of caution.

Per US broadcast ownership rules, the FCC sets the limit on the number of radio and TV stations an entity can own. The commission is also required to review foreign investments in radio station licenses and has a 25% benchmark for such investments from foreign individuals, governments, and corporations. Foreign investors can acquire up to 100% of a US broadcaster or radio station, but such requests must similarly be approved by the FCC and are not approved if the commission deems foreign ownership goes against the public interest.

Notably, Soros Fund Management, which was created by the Hungarian-born US investor in 1970, is a privately held investment firm chaired by the billionaire. Attacks on Soros have increased in recent years, just as antisemitic attacks have also risen, many of which stem from right-wing influencers, who vocally champion the international strongmen Soros opposes. Soros, who publicly donates to Democratic candidates and liberal causes, is also the founder and major contributor of the Open Society Foundations, which aims to work for justice, democratic governance and human rights.

Soros Fund Management and Open Society Foundations did not respond to CNN’s request for comment.

In mid-September, the Rupert Murdoch-owned New York Post reported that the FCC had “fast-tracked” Soros’ “acquisition of radio stations that reach more than 165 million Americans,” emphasizing that Soros’ “purchase of more than 200 radio stations in 40 markets just weeks before the presidential election.” The story also alleged that the move by the FCC marked “the first time in modern history such a deal has been approved by the full Commission without first running the national security review process.”

The licenses in question were transferred, not to Soros, but to a post-bankruptcy Audacy of which Soros would be a majority shareholder and not the owner, the FCC clarified. Calling this move a “shortcut” or a “fast-track” process is also false, an FCC spokesperson said, since the license transfer process is identical to one used under Ajit Pai, the former FCC chair appointed by former President Donald Trump, both in 2018 with Cumulus Media and in 2019 with iHeartMedia, as well as many others. Audacy is the second largest radio company in the United States behind iHeartMedia and ahead of Cumulus.

It’s important “to make the distinction that it’s not George Soros purchasing all of these radio stations, it’s a company that he’s affiliated with,” a person familiar with the deal told CNN, noting that Soros “is a major shareholder of this company” but that “he is not personally purchasing this company or these radio stations themselves.”

“This has gotten ugly,” the person told CNN, saying the FCC has received numerous “dangerously false” allegations that it’s favoring the transaction because of Soros, adding that it’s a “lie” to say the FCC bypassed its review in a new way.

The FCC has fended off accusations of politicking from the right since April, when Rep. Chip Roy, a Republican from Texas, published a letter alleging the commission was looking to “fast-track” Soros’ “acquisition” of the company.

“This transaction, which affects radio stations that reach millions of listeners across the U.S., including in Texas’ 21st congressional district, should — at minimum — be subject to rigorous FCC oversight to ensure U.S. radio stations are not subject to undue influence,” Roy wrote in a letter.

In July, Sen. Ted Cruz joined the chorus of conservative voices calling for a review, saying the “takeover” merited a full FCC vote.

Typically, the FCC’s media desk offers a temporary waiver for bankruptcy and conducts its review afterward. But FCC chair Jessica Rosenworcel ultimately approved a full commission vote in August.

“Because of the scrutiny, the chairwoman added an extra step here,” allowing all the commissions to weigh in, an FCC spokesperson said.

Elon Musk’s X has also been awash with antisemitic hate over Soros’ involvement, some of which has also been directed at the FCC and Rosenworcel.

“What about the Soros move to fast track his bid to acquire over 200 radio licenses??? A far left progressive self hating Jew wanting to control the airwaves,” one user posted on Wednesday. “Sounds like communism to me and YOU’RE allowing it. Our eyes are open and we’re watching you.”

“Soros is a cut-out for the Rothschilds,” another user posted on Tuesday.

“George soros and the chain person of the fcc that is fast tracking this is Jessica Rosenworcel, who both just happen to be Jewish,” yet another user shared on Tuesday. “Is this now easy to figure out that she’s running this thru so quickly.”

It’s now up to the new, post-bankruptcy Audacy to file paperwork with the FCC to take ownership over the stations in question, an FCC spokesperson told CNN.

Audacy, an internet radio conglomerate, operates hundreds of music, news and sports radio stations. The company, founded in 1968 as Entercom Communications, merged with CBS Radio in 2017, before rebranding as Audacy in 2021.

This story has been updated with more context and developments.