Audacy and Lower Merion reach $1.4 million settlement in unpaid taxes claim

Embattled broadcaster Audacy has agreed to pay Lower Merion Township $1.4 million as part of a settlement in a dispute over alleged unpaid taxes dating back to when the company was based in Bala Cynwyd.

The settlement comes amid Audacy’s ongoing Chapter 11 bankruptcy proceedings, for which the company filed in January. As part of that case, Lower Merion was identified as an unsecured creditor, contending in filings that Audacy owed it nearly $12 million in unpaid taxes from a several-year period when it did business in the township. Formerly known as Entercom, Audacy left Bala Cynwyd for Philadelphia in 2019.

Lower Merion primarily pointed to the time period between 2012 and 2016, alleging that two branches of the larger Entercom Communications parent company — Entercom Radio and Entercom Inc. — owed $4 million in local taxes and $7.7 million in business taxes, including interest. Entercom Radio owned smaller subsidiaries that operated radio stations outside the township, while Entercom Inc. served as the company’s financer, Audacy wrote in an objection to the township’s claims.

In its filing, Audacy said that Entercom Radio’s bank accounts were not located in Lower Merion, and had “no income allocable to business conducted in the Township.” Entercom Inc., the company added, “did not have a physical presence or employees in the Township,” and was primarily based in Delaware.

John Darden, a township business tax compliance specialist, argued in a separate filing that Entercom Radio’s executives were based in Lower Merion, and the company received dividends from Entercom Inc. that were taxable under Lower Merion’s tax code. He said Entercom Inc.’s “primary operations, and thus revenue generated” were in Bala Cynwyd, subjecting it to local taxes.

The township, court documents indicate, had issued audit assessments against Entercom in 2018 and 2019, instigating a similar case in the Montgomery County Court of Common Pleas. But as part of the settlement reached last week, both parties agreed to “dismiss any and all actions against each other relating to tax assessments,” and made “no admission or concession of liability.”

Audacy declined to comment. An attorney for Lower Merion said they were not authorized to discuss the case.

Audacy’s January bankruptcy filing came as the company grappled with almost $2 billion in debt during a substantial advertising slump. A reorganization plan was approved in February, with an investment fund owned by progressive philanthropist George Soros set to become its largest shareholder. Soros’ fund acquired roughly $415 million of Audacy’s debt, court filings indicate. That development prompted concern from some conservative pundits, as Soros is known to support progressive causes and back Democratic candidates.

Final approval by the Federal Communications Commission is expected to take months. If approved, Audacy would emerge from bankruptcy reportedly shedding more than $1.6 billion in debt.