Field’s Ironic Words on iHeart’s 2018 Bankruptcy

EDITOR’S NOTE:  Audacy took exception to my recent article that emphasized the irony of David Field’s own words that were critical of iHeart and Cumulus when they filed for bankruptcy.

I also pointed out how Audacy, and then Entercom, were better for not making the same mistakes as their two biggest competitors. Audacy further took exception with my bankruptcy prediction, which I continue to stand by.

Audacy also complained that the article was behind the paywall. I have therefore decided to make the entire article available for everyone to see — his words, the claims, the context, the irony and a link to Field’s entire memo to staff that he asked them to circulate in 2018 so today everyone can decide for themselves:

In David Field's Own Words

On March 19, 2018, Audacy CEO David Field wrote a commentary for his employees on the iHeart bankruptcy – it included references to the Cumulus bankruptcy and what got his two biggest competitors into trouble but by his standard he has also confirmed Audacy’s bankruptcy.

The facts:  Field thought he was setting the record straight (“Since there seems to be a considerable amount of misinformation and inaccurate speculation floating around, I thought it would be constructive to share some facts and thoughts to help clarify the situation.” and invited everyone to share his reporting with “friends, colleagues, partners, and customers”.)

  • The memo which you can read here, is a premonition of things to come as Audacy heads into bankruptcy next year.
  • Several years ago, using his two competitors as examples of mismanagement, Field has now checked off all the same boxes that apply to his company now.

Why iHeart & Cumulus went bankrupt

  • Field: “First, iHeart and Cumulus went bankrupt because years ago prior management teams made ill-advised decisions to place too much debt on their companies.  Period, full stop”.
  • “We did not make the mistake of overleveraging ourselves and yet we still emerged as one of Radio’s two largest companies with the scale, brands and capabilities to compete to win”.
  • Audacy is overleveraged with almost $1.8 billion in debt that can barely be covered by quarterly earnings making it what Wall Street calls a “zombie company” existing to pay debt and not grow which explains their 54 cent stock price, delisting threat and baked in expectation of bankruptcy next year.

Famous last words:  Audacy will have the strongest balance sheet

  • Field: “And even after our competitors come out of bankruptcy, we will still have the industry’s strongest balance sheet, providing us with the financial strength to build and grow and invest and play offense for the years ahead.”
  • The truth: The value destruction he’s overseen has already dwarfed Cumulus CEO Berner’s disaster.
  • Approximately $2.5 billion of equity value destroyed since the CBS merger.
  • The debt value destruction is well over $500 million putting the total over $3 billion. 

Tell advertisers about iHeart’s problems  

  • “Let’s make sure we get the word out so that our advertisers, partners, and other key influencers understand the facts and don’t come away with any false perceptions.”
  • Advertisers and others are already getting the message that Audacy was no different from other radio groups that got in trouble and filed for bankruptcy making his words appear like arrogance when reflected on.

My deadly honest POV

  • I get the feeling that Field doesn’t play well with others – Audacy is his company and every decision has been his which means the low stock price, botched CBS Radio merger, out of control debt and the need to file bankruptcy is all on him.
  • A responsible board of directors would have replaced management - now they’re going to ride it over the cliff to Chapter 11. 

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Jerry Del Colliano is a professor at NYU Steinhardt Department of Music and Performing Arts Professions Music Business Program.  His background includes Clinical Professor of Music Industry at the University of Southern California, TV, radio, program management, publishing and digital media.

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Previously: Audacy Weighs More LayoffsSaga Cashing Out Field’s Ironic Words on iHeart’s 2018 BankruptcyAudacy’s Lenders to Become the New OwnersUnexpected Drama at Saga Audacy’s Pre-Layoff Raises RevealedSaga After Ed Christian …  Audacy Rethinks its 5% Layoff PromiseiHeart’s Plan to Take 100% Local Buys …  Larkin’s Audacy Cuts …   

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Journalism is printing what someone else does not want printed.  Everything else is just public relations --  George Orwell