Citadel Broadcasting, the third-largest U.S. radio broadcasting company, filed for Chapter 11 bankruptcy protection on Sunday in an effort to restructure its hefty debt load.
In documents filed in U.S. Bankruptcy Court for the Southern District of New York, Las Vegas-based Citadel listed total assets of $1.4 billion and total debt of $2.46 billion as of Oct. 31.
Citadel owns and operates 224 radio stations and produces news and talk radio programing for 4,000 station affiliates and 8,500 program affiliates nationwide. Its Indiana holdings include WWKI-FM 100.5 in Kokomo and Muncie stations WMDH-FM 102.5 and WMDH-AM 1550.
Much of Citadel's debt burden stems from its $2.7 billion purchase of ABC Radio from Walt Disney Co. in 2007. Like other radio companies, Citadel also has been hurt by declines in advertising revenue.
The company said it has reached an agreement with more than 60 percent of its senior secured lenders that would wipe out about $1.4 billion of debt by converting it to a new term loan and issuing shares in the reorganized Citadel.
Among the company’s largest unsecured creditors: JPMorgan Chase, whose claim was listed in the filing as "unknown," Wilmington Trust with a $49.2 million claim and Walt Disney with an $11.2 million claim.
Citadel plans to file a pre-negotiated reorganization plan within 45 days and hopes to emerge from bankruptcy in less than 180 days.
The filing is a sign that challenges remain for the radio industry, including Indianapolis-based Emmis Communications Corp. Emmis and many other broadcasters have been weighed down by heavy debt, falling advertising revenue and the perception that radio is a bygone medium.
Emmis' fiscal second quarter revenue was $68 million, down 27 percent from the same period a year ago.
Still, Wells Fargo analyst Marci Ryvicker, who follows Emmis, wrote in an October report that third-quarter revenue was improving.
“Comments from Emmis management confirm what we have been hearing from other large and small market groups—trends continue to improve month to month,” Ryvicker wrote.