PHILADELPHIA — 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, effective immediately.
The No. 2 radio station owner in the country has over the past several years spent tens of millions of dollars buying podcasting companies and originating audio series, said company head David Field.
“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.
"We have transformed into a fundamentally different and dramatically enhanced organization and so it is time to embrace a new name and brand identity,” said Field, chairman, president and chief executive officer of the public company.
Entercom operates some of Philly’s most well-known radio stations, including WIP and KYW. Entercom’s portfolio includes CBS Radio, RADIO.com, Cadence13 and Pineapple Street Studios for podcasts.
Boasting 170 million monthly listeners, Entercom has struggled to retain investor interest. Three years ago, the stock traded at roughly $10 a share; On Tuesday, the share price opened at $5.12, and rose to $5.27 before falling back to $5.04 by mid afternoon.
Skeptics point out that Entercom’s share price didn’t move much on the news, because “much of this transition was already priced into the market,” said Temple University professor of marketing Subodha Kumar.
“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 ten years.”
The pandemic took a toll: Revenues for the fourth quarter 2020 totaled $319.5 million, down 23% compared to the fourth quarter 2019.
For the year, total revenues totaled $1.1 billion, versus $1.5 billion in 2019. Advertising totaled $705 million versus $1.1 billion in 2019. Its events business, 7% of fourth quarter 2019 revenues, almost totally dropped off, down 98% from a year earlier due to COVID-19.
Digital revenues were the major bright spot: totaling $58.8 million, up 23% compared to the fourth quarter 2019, and up for the year as well, to $189 million, versus $146 million the year earlier, propelled by strong audience growth in streaming and podcasting.
For the year, however, Entercom posted a loss — 13 cents a share in 2020 — versus a profit of $1 a share in 2019.
Other bright spots: Entercom this 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, he said.
Field said 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 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, 2021.
Audacy also formed a partnership with BetMGM, the online sportsbook, added “The Rich Eisen Show” and a NFL “Mock Draft” podcast hosted by Locked On and Audacy draft experts and personalities. Audacy has 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 managing money for student housing developer David Adelman.
“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 April 9.
Along with the name Entercom, effective today, the company will get rid of the RADIO.COM brand and change its direct-to-consumer platform to the name Audacy. Cadence13, Pineapple Street Studios, BetQL and Podcorn retain their own brand names.
