As the radio and financial industries begin to digest the pre-packaged Chapter 11 bankruptcy filed by Audacy on Sunday, I have continuously been noted about the similarities between this filing and the 2017 filing by Cumulus Media.
Upon Cumulus’ exit from Chapter 11 protection they lowered their debt balance from $2.34 billion to $1.30 billion, while divesting additional assets has brought it down even further to $675.8 million as of September 30, 2023. Audacy’s filing is seeking to drop theirs from $1.9 billion down to $350 million through the restructuring.
Looking back at the timeline of Cumulus’s Chapter 11 also gives an idea of what we can expect over the coming weeks and months at Audacy.
Cumulus would file for Chapter 11 protection on November 29, 2017 and exit bankruptcy on June 4, 2018. Audacy is expecting a quicker process as a super-majority of their debt-holders have already agreed to the financial terms, but any legal challenges from creditors or stockholders could delay that timetable.
In the first part of 2018, Cumulus would restructure and/or seek to reject contracts. This would lead to Don Imus retiring from mornings at WABC New York months ahead of his intent, multiple tower site and office leases, the broadcast rights to the Chicago Bulls and Chicago White Sox and Cumulus ripping up its deal with Merlin Media to purchase 97.9 WLUP and 101.1 WKQX Chicago before renegotiating to purchase only the latter. Audacy has already begin this process as their filing notes of restructured contracts with Nielsen and the New York Mets.
The one major difference between Cumulus and Audacy may be in leadership. Cumulus brought in Mary Berner as CEO in September 2015 to help guide the company into the restructuring that eventually culminated in the bankruptcy filing, whereas David Field has led Entercom/Audacy for decades.
That may change upon the exit from bankruptcy protection. An amendment to Field’s employment filed with the Securities & Exchanges Commission today states that if Field has not agreed to a new employment agreement within 120 days of the Chapter 11 Effective Date (1/7/2024), Field may terminate his employment by providing written notice within the 120th and 150th day, but will continue in his role for 150 days or until a successor is is appointed. But the company may also terminate his employment at any time “in which case Executive shall assist with transition as reasonably requested.” The other members of Audacy’s senior management team of EVP/COO Susan Larkin, EVP/CFO Richard Schmaeling, Chief Digital Officer/President J.D. Crowley, and EVP/General Counsel Andrew Sutor agreed to amended bonus and severance structures.
Cumulus also was required to divest four stations as it lost its grandfathered status. That will not happen with Audacy as those were lost during the merger with CBS Radio.
