Audacy has fought off bankruptcy so far amid a significant downturn. But if things don’t turn around soon for WFAN’s parent company, some fear it could be goodnight da lights.
From Philadelphia Business Journal:
CEO David Field believes Audacy’s short-term pain will result in long-term gain.
In light of another quarter of sagging revenue and tepid ad sales, at least one analyst who tracks Audacy believes the audio content provider might not survive the next year unless it significantly cut costs.
Craig Huber of Huber Research Partners made that declaration one day after the Philadelphia-based company reported fourth quarter earnings on Wednesday. Audacy’s stock closed down more than 5% at 14 cents per share after the earnings became public, putting the price at about half of the 29 cents per share it was worth when the company reported third quarter earnings in November.
There was a report in late August that Audacy would declare bankruptcy after a wave of layoffs nationally. The company — which also owns WCBS, WINS and other local radio stations — adamantly denied that report and made a vague threat about legal action. But things have gotten significantly worse since. Audacy’s stock was trading at 52 cents then; it’s now down to 14 cents. The company has been out of New York Stock Exchange compliance for some time (a stock needs to be at $1 for 30 straight days) and could get delisted, although it has not happened yet.
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The big issue is the company’s debt — over $2 billion, according to PBJ. Audacy’s narrative is you have to spend money to make money and it has made strategic investments in growth areas. Huber argues it needs to slash costs ASAP, and drastically, if it wants to avoid a complete collapse.
This party of the report really stood out:
Audacy has a number of sports play-by-play agreements that Field (the company CEO) described as “margin killers.” For example, he said Audacy elected not to renew the Chicago Bears play-by-play agreement this year, which will save the company between $2 million and $3 million. He expects the company “to be really disciplined going forward on some of those contracts.”
It seems unfathomable Audacy would dump the Yankees, Mets and Giants from its portfolio. And the Rutgers football and men’s basketball deal is affordable content that fills dead spots on the schedule. But the Nets? The mostly stream-only NHL team deals? Those could be ripe for chopping. Especially because WFAN is unlikely to make any major on-air personnel changes as it boatraces ESPN Radio New York.
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James Kratch can be reached at [email protected]om. Follow him on Twitter @jameskratch.