An investment fund founded by billionaire George Soros is set to become the largest individual shareholder of troubled radio broadcaster Audacy.
This week, Audacy disclosed to a federal court overseeing its Chapter 11 bankruptcy case that Soros Fund Management acquired around $400 million worth of debt and plans to swap those loans for stock in the radio company.
“The decision by our existing and new debt-holders to become equity holders in Audacy represents a significant vote of confidence in our company and the future of the radio and audio business,” a spokesperson for Audacy said in a statement.
The investment marks the latest move involving Soros Fund acquiring some or all of a distressed media company. Last year, Soros Fund helped bring Vice Media out of bankruptcy after taking a position in that company. It also acquired a minority stake in Crooked Media, a progressive media company that produces podcasts like the politically-oriented “Pod Save America.”
Bloomberg Law News was the first to report on Soros Fund’s plans to acquire a sizable amount of Audacy’s stock.
After being kicked off the NASDAQ for failing to bring its per-share price above $1 last year, Audacy filed for Chapter 11 bankruptcy protection in January as it sought to address more than $1.9 billion in debt. The case was intended to help Audacy reduce its debt load to a more-manageable $350 million, according to court filings.
In a statement, Audacy CEO David Field praised Audacy for transforming itself into a “leading, scaled multi-platform audio content and entertainment company,” but said continuing weakness in the radio advertising market “have severely impacted our financial condition and necessitated our balance sheet restructuring.”
Audacy owns more than 230 radio stations in nearly five dozen radio media markets across the country, including stations in New York City, Los Angeles, San Francisco, Chicago, Philadelphia, Sacramento, Denver and Boston. It also owns several podcast production firms, including Pineapple Street Media and Cadence13.
Formerly known as Entercom, Audacy’s debt load increased significantly after the company acquired the radio assets of CBS Corporation (now part of Paramount Global). The merger was seen as a way to stave off competition from premium audio experiences like Apple Music, Spotify and SiriusXM.
While many of those digital services are going through pains of their own, they pale in comparison to the traditional radio industry, which failed to fully realize the potential of digital and streaming platforms until it was too late.
