Aiming to become a bigger player in podcasts and sports betting, Philadelphia-based radio giant Entercom Communications Corp. (NYSE: ETM) on Tuesday changed its brand name to Audacy.
The No. 2 radio station owner in the country has over the last several years spent tens of millions of dollars buying podcasting companies and originating audio series, CEO David Field said.
“Our name no longer fits,” Field said in an interview. “Entercom reflected radio only. We’ve outgrown it. It’s broader than that, and it also didn’t fit our aspirations.”
Audacy is now a multi-platform audio content and entertainment organization with radio broadcasting, podcasting, digital marketing, live entertainment, music, sports and news. With its acquisitions, the company is now America’s No. 3 podcaster behind NPR and iHeart, he said. The name change is effective immediately.
“We have transformed into a fundamentally different and dramatically enhanced organization and so it is time to embrace a new name and brand identity,” Field said.
The public company operates some of Philly’s most well-known radio stations, including WIP and KYW. Its portfolio includes CBS Radio, RADIO.com, Cadence13 and Pineapple Street Studios for podcasts.
Boasting 170 million monthly listeners, Audacy has struggled to retain investor interest. Three years ago, the stock traded at roughly $10 a share; on Tuesday, the price closed at $5.07.
Skeptics pointed out that the name change had little impact on share prices because “much of this transition was already priced into the market,” said Subodha Kumar, a Temple University professor of marketing.
“The shift to platforms for audio is happening at other media companies, as well; they all have to embrace the change,” Kumar said.
The company’s debt load still lingers as a concern, he added. “This news doesn’t take away all the problems. It’s part of a bigger change in audio, which is advertising dollars shifting over to social media. I expect that trend will continue over the next five to 10 years.”
The pandemic took a toll: Revenues for the latest fourth quarter totaled $319.5 million, down 23% compared with the same period a year earlier.
For 2020, total revenues totaled $1.1 billion, versus $1.5 billion in 2019. Advertising totaled $705 million versus $1.1 billion in 2019. The company’s events businessalmost completely dropped off, down 98% from a year earlier due to COVID-19.
Digital revenues were the major bright spot, totaling $58.8 million for the quarter, a 23% climb year-over-year , and up for the year, as well, to $189 million from $146 million a year earlier, propelled by strong audience growth in streaming and podcasting.
For the year, however, Audacy posted a loss — 13 cents a share in 2020 — versus a profit of $1 a share in 2019.
Other bright spots: Audacythis month took advantage of low interest rates and refinanced $540 million worth of debt at a maturity of eight years at 6.75%. Total corporate debt equals about $1.6 billion net of cash, Field said.
Field added that he’s positioning the company with new partnerships, including an exclusive podcast with singer, actress and influencer Demi Lovato, and audio partnerships with HBO, Netflix, Nike and others.
The parent company acquired Podcorn, a self-serve platform for podcast sponsorships and QL Gaming Group for sports betting data. Another deal includes a six-year partnership with FanDuel to give listeners gambling odds, insight, and promotion and to co-produce content.
Financially, the changes won’t have an immediate impact, said Field.
Along with most other advertising-driven firms, the company’s fortunes were hurt by the pandemic. But there are “green shoots” in the ad market, Field said.
“Our national business has improved significantly from the bottom of the pandemic. We think we’ll be getting back to normal very quickly.”
In Philly, “our local business is behind. One data point: On the last earnings call, 42% of our local advertisers were not advertising in December 2020. Our radio business is very much a get-people-going-somewhere business,” such as live events and concerts.
“A lot of them are in hibernation. In our markets in Southern California, however, we’re seeing theme park ads for the first time.”
The company on Tuesday also announced that it will offer Pineapple Street Studio’s original docuseries: award-winning documentarian Nina Gilden Seavey’s My Fugitive, with all episodes available today on the app, and Stay Away from Matthew Magill, from reporter and Pineapple Street producer Eric Mennel, launching April 13.
Audacy also formed a partnership with BetMGM, the online sportsbook, added The Rich Eisen Show and an NFL Mock Draft podcast hosted by Locked On and Audacy draft experts and personalities. Audacy produces content including American sports icon and analyst Boomer Esiason and radio personality and Emmy-award winner Big Tigger.
Sports wagers are among the nation’s fastest-growing industries.
“We have said sports-betting revenues would be up 50% in 2021 at around $30 million,” versus last year. Field said he sees that figure growing to $100 million over “the next few years.”
Former Entercom executive Marc Rayfield said of the corporate brand change to Audacy: “I would have done the same thing. Audio is growing, but radio is not.”
“It makes sense, the company still owns massive brands now being distributed in ways they weren’t before. For instance, with the diminishing success of AM radio meant that KYW had to move to FM radio. That has a longer shelf life,” said Rayfield, who left to work as managing director at Darco Capital, a privately run investment firm owned by student housing developer David Adelman. Rayfield manages and oversees Darco’s investments.
“How does it help their bottom line? It’s unclear at this moment,” Rayfield said. “What they’re trying to do is become multi-platform distribution network, and not be seen as just a linear group of radio stations.”
The company’s ticker symbol will change from ETM to AUD effective on Friday, April 9.