KYW and WIP’s parent company, Audacy, has lost $1 billion since 2018. Execs say it can survive.
“We’ve all had some tough knocks,” the chief finanicial officer of one of the nation's largest radio networks recently told analysts. Stock in the company, Audacy Inc., has fallen below $1 a share.
A soft advertising market has smacked KYW owner Audacy Inc., and the Philadelphia radio giant’s stock price is trading substantially below $1 per share, lower than during the early weeks of the pandemic.
Audacy executives declined to comment for this article. But they acknowledge that the business — which recovered from steep financial losses in 2020, 2019 and 2018 — has taken a new blow amid uncertainty about a recession.
“We’ve all had some tough knocks,” Richard J. Schmaeling, the chief financial officer, told analysts last month in a conference call. “But we think we can muscle our way through what looks to be a slowdown.”
Insiders say the company has positioned itself to rebound with a national radio network, podcasts, streaming, and sports betting. Audacy, the former Entercom Communications Corp., is one of the nation’s largest radio networks.
The New York Stock Exchange has told Audacy, based at 2400 Market St., that it could be delisted because its stock price had fallen below $1 for at least a month. Audacy could do a reverse stock split to boost the share price. In a reverse split, a company reduces the number of outstanding shares, leading an investor to own fewer shares but at a higher stock price.
Earlier this year, the mall-operator Pennsylvania Real Estate Investment Trust (PREIT) — which owns several shopping centers in the area, including Willow Grove Park Mall, Plymouth Meeting Mall, and Cherry Hill Mall — did a reverse split for the same reason. Its stock now trades at about $4.40 a share.
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Audacy shares closed Tuesday at $0.46, down 7.34%.
Audacy’s woes can be blamed on the fragmenting media landscape that has devastated other legacy media platforms such as newspapers. Its acquisition of CBS Radio for $4 billion in early 2017, bringing KYW and other big-city stations into its portfolio, also hasn’t gone smoothly. That year was also the last time the company earned net income.
Since 2018, based on its regulatory filings, Audacy has lost $1 billion in net income, though the company dramatically improved its finances as the shock of the pandemic wore off, losing only $3.6 million in 2021. Audacy had revenues of $1.2 billion in 2021 and long-term debt of $2.2 billion.
The company has a staff of 3,585 full-time employees and 1,295 part-time employees. In addition to KYW, Audacy owns the Philadelphia radio stations 1201 WPHT, 94 WIP, B101 and Big 98.1.
Audacy had a strong first quarter in 2022 with revenues jumping 14%. But second-quarter revenue rose only 5%, weighed down by a slowing economy and weaker advertising by mortgage lenders — which face higher interest rates — and auto dealers. The company says that auto industry advertising is $60 million a year below pre-pandemic levels.
David Field, the chief executive officer and chairman, said last month that “we are excited by our future growth potential across our scaled, multi-platform businesses, capitalizing on a number of important recent developments.”
Entercom was founded by Field’s father, Joseph, in the late 1960s. The father-and-son now own about one-third of the common stock.