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Audacy CEO blames pandemic for continued financial struggles

Net revenue during its first financial quarter was down nearly 6 percent.

Net revenue during its first financial quarter was down nearly 6 percent.

The Audacy streaming radio app appears on a smartphone. (Photo by Focal Foto, Creative Commons; Graphic by The Desk)
The Audacy streaming radio app appears on a smartphone. (Photo by Focal Foto, Creative Commons; Graphic by The Desk)

Audacy saw its net revenue decrease by 6 percent during its first financial quarter of the year, a sign that the media giant continues to grapple with the effects of a soft ad market that has impacted both its traditional broadcast and emerging digital products alike.

This week, Audacy said it took in $259.6 million in net revenue during the first three months of the year, a 5.7 percent decline compared to the first quarter (Q1) of 2022. The company lost $12.2 million during Q1 2023 as operating expenses climbed to $217.8 million; by comparison, Audacy logged an $8.5 million profit during the same quarter last year.


Fast Facts

Revenue

Audacy reported overall revenue of $259.6 million during the three-month period that ended March 31, 2023, down from $275.3 million logged during Q1 2022, representing a 5.7 percent decline in total revenue. Station expenses climbed to $233.2 million during Q1 2023, up 3.2 percent from the $225.9 million reported last year.

  • Net Revenue: $259.6 million (-5.7%)
  • Spot, local & national: $159.3 million (-8.9%)
  • Political Ads: $846,000 (-32%)
  • Digital, includes podcasts: $56.9 million (-1.9%)
  • Sponsorships & Events: $12.4 million (+20%)
  • Other: $11.1 million (+3.7%)

Expenses

Station expenses climbed to $233.2 million during Q1 2023, up 3.2 percent from the $225.9 million reported last year. Operating income swung to a loss of $12.2 million, more than erasing Audacy’s profit of $8.5 million during the same quarter in 2022. Shareholder earnings dipped to -$0.25, up from -$0.08 per share reported last year.

  • Station Expenses: $233.2 million (+3.2%)
  • Corporate Expenses: $24.1 million (+0.4%)
  • Depreciation & Amortization: $17.4 million (+28%)
  • Impairment Loss: $5.05 million (+232%)
  • Restructuring: $2.4 million (+170%)
  • Operating Loss: $12.2 million (+243%)
  • Net Loss: $35.9 million (+226%)

In a statement that accompanied Audacy’s quarterly earnings report on Wednesday, the company’s president and CEO David J. Field said local broadcasters outperformed its national advertising sales amid macroeconomic challenges that have seen companies pull back on their marketing budgets due to higher inflation and fears of a recession.

“Notwithstanding the difficult economic headwinds, we remain steadfastly focused on delivering significantly higher future levels of adjusted [earnings before interest, tax, depreciation and amortization, or EBITDA], capitalizing on our multiple growth drivers and our differentiated premium competitive position in the dynamic audio market,” Field affirmed, adding that the company was seeing gains in its auto business and “making progress on each of our drivers, including our podcasting and digital marketing solutions businesses, our reinvented streaming audio platform, our emerging ad tech and ad products, and our enhanced national enterprise business development efforts.”

To that end, Field said Audacy was boosting its podcast portfolio with new shows, including a 30-episode deal with Amy Poehler’s Paper Kite Productions for a scripted comedy series.

On a conference call with investors, Field said Audacy has maintained its lead among broadcast properties following its 2017 purchase of CBS Radio, and that its digital efforts remain strong. That said, he said the ongoing coronavirus health pandemic that began three years ago was mostly to blame for the company’s continued financial woes.

“It is unfortunate, but of course, the unanticipated reality that we have pursued our transformative work in the midst of a global pandemic, sustained supply chain disruption and an extended ad recession,” Field said. “This has obviously placed stress on the company’s finances, exacerbated by the business’ high degree of operating leverage. And yet, notwithstanding the financial challenges, the fundamental inherent value proposition of Audacy and our ability to serve listeners and customers remains intact and distinctive, and we continue to play offense, investing in people, platforms, technology, content, capabilities and growth initiatives to better serve listeners and customers and enable a brighter future.”

Audacy has played a bit of defense, too, selling off various physical and virtual properties in an attempt to generate cash and reverse its bad fortune on the stock market, where the company’s shares have traded below $1 since last July.

In March, Audacy reached a deal to sell six of its broadcast transmission towers and their associated property to a tower management company for $17 million. Later that month, the company extended an online auction for its Radio.com that was launched late last year; Audacy is hoping to get at least $2.5 million for the lucrative domain, which was acquired as part of its purchase of CBS Radio. The auction is slated to end in June.

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 11 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.
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