Audacy, the parent of podcast studios Cadence13, Pineapple Street and 2400 Sports, says its business overall remains challenged by a tougher ad market but its podcast business was a bright spot during the first quarter. Podcast revenue grew 14% during the quarter, excluding the impact of the loss of Crooked Media’s business which it had a year ago. When that is factored in, Audacy says podcast revenue was down during the first quarter.
In March, Audacy shook up its podcast management structure when it put Jenna Weiss-Berman, the cofounder of Audacy-owned Pineapple Street Studios, into a leadership role across its entire podcasting business. CEO David Field said Wednesday that the move should allow Audacy to unearth “significant synergies” and “enhanced business practices” that he said they expect to yield “meaningfully higher future profitability” from its podcast investment.
“Last year, we began to shift our strategic focus to more profitable areas of the business. And we are now starting to realize the benefits of that transition,” Field said. “For example, in first quarter, we grew the number of listeners to our locally-produced podcasts, the most profitable part of our business, by 26%.” During a conference call with analysts, he pointed out that Audacy has also expanded its partnership work with HBO, and has announced new projects with actress and comedian Amy Poehler, the WNBA, and Flea of the Red Hot Chili Peppers.
Overall, Audacy reported its first quarter revenue declined 5.7% from a year ago to $275.3 million. That included a two percent decline in digital revenue overall, which totaled $56.9 million during the quarter. Audacy’s earnings plunged 86% to $3.5 million as the company posted an operating loss for the quarter of $12.2 million.
“This is of course a challenging time for our company as we battled through the difficult ad market headwinds impacting companies all across the media landscape,“ Field said.
Audacy has been looking at spinning off some of its assets to raise capital and cover its debt expenses. It already sold a group of radio towers for $17 million, and it has a pending $15.5 million sale of a couple radio stations in Buffalo and Memphis. There has also been some speculation that it might spin-off its Cadence13 podcast studio. While executives offered no specifics, CFO Richard Schmaeling told analysts that they have more deals in the pipeline that could raise as much as $10 million.
Field said that they will also look to save money by reducing their exposure to some podcast content deals that he described as “meaningfully underwater” in terms of their financial impact. He said that second quarter business conditions “remain quite challenging” with its revenue currently on track to be down seven percent compared to a year ago and expect to close the quarter down in the mid- to high-single digits for the quarter. There are some bright spots though, as Field noted that auto advertising is up 13% year-to-year and a handful of major national and local advertisers who have been dark since the start of the pandemic have recently bought ads.
“We fully recognize that in these uncertain times, it is hard to look beyond current circumstances,” Field said. “But we remain excited about numerous growth opportunities across the company, notably including our various digital businesses.”
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