Audacy this week announced two tower site sales that raised $56 million to make its bottom line a bit more robust. Company executives acknowledge that they are stalking more deals to sell pieces of property in the next 90 days.
Radio industry observers and analysts say Audacy is balancing a delicate situation. It has a lot of debt, over $1.8 billion. It is close to having its stock delisted by the New York Stock Exchange. And it’s losing money just as the economy is close to tipping to recession territory.
The company sold a 36-acre tower site in Las Vegas for $40 million and a tower site in Houston for $15.6 million cash. The news came as Audacy reported sagging revenue in the third quarter.
To facilitate the Las Vegas sale, Audacy announced it entered into an asset exchange agreement with Beasley Media Group to swap its KXTE(FM) in Las Vegas for Beasley’s KDWN(FM) and an FM translator.
On the quarterly call with analysts Tuesday, after Audacy announced a 3.8% revenue decline in Q3 with a $141 million operating loss, Craig Huber with Huber Research Partners asked Audacy executives about the possible magnitude of future real estate sales it hopes to complete yet this year.
CFO Rich Schmaeling described a “pretty good pipeline of additional sales” but wouldn’t speculate about the ultimate proceeds from the sales if completed.
“By the time we talk to you 90 days from now, I think we’re going to be in a position to give you better guidance about one, hopefully perhaps one or two sales that have been completed and the outlook for what’s left to do. And so at this point in time, we’re not going to speculate, but more to come,” Schmaeling said on the investor call.
Over time other large radio broadcasters have sold off real estate assets to unlock the value of their tower assets and generate cash. Industry experts say selling wireless infrastructure is a way for broadcasters to monetize holdings and give them additional cash to invest or perhaps in some cases keep lenders at bay.
Radio World has previously reported on large real estate deals by broadcast groups like Townsquare Media, Cox Media Group, iHeartMedia and Beasley.
For example, Vertical Bridge, which owns and manages wireless infrastructure, purchased Cumulus Media’s tower portfolio in 2020 for $213 million, according to Cumulus’ filings with the U.S. Securities and Exchange Commission.
Doug Ferber, a longtime industry observer said the radio industry is selling off such infrastructure because the towers often sit on property that is more valuable than the broadcast entity itself.
“Audacy is probably under some pressure to make the bank happy. Other broadcast groups have done it. But it’s a short-term fix. Radio station owners use to say they would never sell off their towers, so it’s most likely a sign of financial struggles,” he said.
Ferber says of most radio broadcast properties: “If it’s out there and it has value, and if the broadcaster can live without it, it can probably be sold.”