Reports That The FCC Has Approved Audacy Reorganization Are Premature.

[Thunderstorm]

From Inside Radio:

The url was too long to post. So I copy and paste the article from Inside Radio/ If not allowed, please removed.

There is no confirmation from the Federal Communications Commission, but the New York Post reports the Commission has enough votes to approve Audacy’s proposed bankruptcy reorganization with a 3-2 party-line vote. If accurate, it would pave the way for Audacy to wrap up the Chapter 11 process that began in January. The FCC says Audacy’s application remains pending. “No decision is final until the Commission releases it, which we have not,” a spokesperson tells Inside Radio.

Under the plan approved by a federal judge in February, Audacy’s business will remain intact and it will see $1.6 billion in debt wiped out. The deal also allows Audacy to emerge from the process with access to new loans and financing.

While radio bankruptcies rarely get much media attention, Audacy’s did after word of the involvement of progressive billionaire George Soros became known. Under the plan, his Soros Fund Management will provide approximately $415 million of Audacy’s debt, which would make his Soros Fund the largest stakeholder of the second-largest radio company in the U.S. when it emerges from Chapter 11 reorganization.

According to bankruptcy court filings, Soros has assumed anywhere from 40% to more than half of the estimated $745 million of senior debt, out of the $1.9 billion owed by Audacy. That debt will be converted into an equity stake in the company post-bankruptcy. It means that Soros would be a major shareholder, but he wouldn’t become “the owner” of Audacy as some critics have complained. And no station licenses would be held by Soros or his fund.

To get through the bankruptcy process as quickly as it could, Audacy set up the transaction in a way that would allow the restructuring to be completed and maintain short-term compliance with the foreign ownership limits until it secures approval from the FCC to have indirect foreign ownership of more than 25% — a process that can take up to a year to complete. Audacy’s alternative plan is to use special warrants that will not convert to equity until the government signs off.

But critics call that a “Soros shortcut” and have asked the FCC to reject Audacy’s plan that will allow it to go forward with its reorganization while the government’s review of the Soros-backed offshore fund’s involvement is reviewed. If the FCC were to agree, it would sideline Audacy’s proposed restructuring.

Insiders say Audacy isn’t looking for a new shortcut or a fast-track process, and that a full foreign ownership review will still take place after Audacy emerges from bankruptcy. They point out it is similar to the structure that has been used in several other Chapter 11 reorganizations in radio during the past several years, including iHeartMedia in 2019, Cumulus Media in 2018, LBI Media in 2019, and Alpha Media in 2021.

It’s not the first time that conservative groups have cried foul over a Soros-backed media investment. Soros is part of the group backing Latino Media Network, and its $60 million deal to buy 18 radio stations in ten cities from TelevisaUnivision drew a lot of attention in conservative circles when it was announced. But the FCC ultimately allowed the sale to go forward.

Audacy declined to comment on the report.

[MWmetalhead]

The FCC officially approved the plan on a 3-2 vote on September 18. However, the official notice of such approval was not published until this morning.

[MrTaterSalad]

How many more budget cuts, if any, can we expect from Exitcom as a result of this? Will budget cuts and layoffs be apart of their bankruptcy and reorganization? Is more syndication, national programming, and voice tracking possible? Will Doug Karsch become the new morning show host on WOMC, WYCD, ALT 98.7 to keep costs down?

[MWmetalhead]

Any future budget cuts will not be the result of plan of reorganization implementation.

All the plan does is extinguish pre-bankruptcy equity interests, grant equity in the reorganized company to the prior creditors, and reduce the company's debt load by over 80 percent.

With debt service being greatly reduced, the company should have improved ability to invest in the business (if it so chooses), not less ability.

[TC Talks]

The FCC officially approved the plan on a 3-2 vote on September 18. However, the official notice of such approval was not published until this morning.

So NY Post did get the story right...

[MWmetalhead]

They did!

[MrTaterSalad]

Any future budget cuts will not be the result of plan of reorganization implementation.

All the plan does is extinguish pre-bankruptcy equity interests, grant equity in the reorganized company to the prior creditors, and reduce the company's debt load by over 80 percent.

With debt service being greatly reduced, the company should have improved ability to invest in the business (if it so chooses), not less ability.

If they have the chance to reinvest in the business is there any chance that they get rid of some of the syndicated programming they've gone to over the last few years? Could we see a return of more live and local DJs on their stations or is that simply wishful thinking?

[Newsman123]

No. They now need to keep costs low to prove a profit to the new owners, and make them money on their investment. They just covered a billion in debt. Like TV News, the future is less people, more taped programming, single hosts etc.

[Newsman123]

How many more budget cuts, if any, can we expect from Exitcom as a result of this? Will budget cuts and layoffs be apart of their bankruptcy and reorganization? Is more syndication, national programming, and voice tracking possible? Will Doug Karsch become the new morning show host on WOMC, WYCD, ALT 98.7 to keep costs down?

Huh?

No.

WOMC has 3 hosts and ratings are up. WYCD is doing great, and ALT is doing better than they expected with their hosts and programming. WWJ is seeing big success, and has buried WJR. No programming changes. They are thrilled with local performance.

[MrTaterSalad]

How many more budget cuts, if any, can we expect from Exitcom as a result of this? Will budget cuts and layoffs be apart of their bankruptcy and reorganization? Is more syndication, national programming, and voice tracking possible? Will Doug Karsch become the new morning show host on WOMC, WYCD, ALT 98.7 to keep costs down?

Huh?

No.

WOMC has 3 hosts and ratings are up. WYCD is doing great, and ALT is doing better than they expected with their hosts and programming. WWJ is seeing big success, and has buried WJR. No programming changes. They are thrilled with local performance.

The Doug Karsch bit at the end was a joke that Audacy is so cheap they'd voicetrack everything possible and make Doug pull duty on all four shifts if he wants to keep his job. Before the CBS Radio and Exitcom merger to become Audacy, CBS Radio clearly preferred live and local radio. There were very few shifts on CBS radio stations, and none of them here in the Detroit market, that were syndicated or voicetracked. CBS Radio CEO Dan Mason clearly seemed to respect his on-air talent, the business, and ensuring his stations were live and local.

Audacy CEO David Field is the exact opposite of Dan Mason. He's completely changed things and gotten rid of a lot of live and local talent at Audacy stations. Field is a skinflint and like many of his radio counterparts, is running things as cheaply as possible. Hundreds of positions have been eliminated and good, talented on-air hosts have been laid off. Almost all their stations have some voicetracking and syndicated programming on their major dayparts. Quality, live and local programming be damned, as Field seems only to care about the bottom line and not the people behind the mic, nor his local radio listeners.