Audacy’s bankruptcy reorganization continues to come under scrutiny on Capitol Hill. Lawmakers are asking the Federal Communications Commission to turn over documents and communications related to its deliberations of whether to approve Audacy’s proposal that, if approved, would pave the way for the company to exit Chapter 11.
House Committee on Oversight and Accountability Chairman James Comer (R-KY) and Rep. Nick Langworthy (R-NY) have launched an investigation into what they say is “unprecedented action” to expedite a required review of foreign ownership holdings by bypassing its standard procedures and processes.
“The FCC appears to be bypassing standard processes and procedures in an unprecedented way to benefit a Democrat megadonor acquiring a major equity stake in hundreds of local radio stations across the country,” the lawmakers write in a letter to the FCC. The House Oversight Committee is seeking the documents and communications to decide whether legislation is necessary to guard against what Comer and Langworthy believe is the potential politicization of the FCC’s mission.
At issue is the plan approved by a federal judge in February, which will allow Audacy’s business to remain intact and its $1.6 billion in debt wiped out. The deal also allows Audacy to emerge from the process with access to new loans and financing, including from progressive billionaire George Soros. Under the plan, his Soros Fund Management will provide approximately $415 million of Audacy’s debt, which would make his Soros Fund the largest stakeholder of the second-largest radio company in the U.S. when it emerges from Chapter 11 reorganization.
To get through the bankruptcy process as quickly as possible, Audacy set up the transaction in a way that would allow the restructuring to be completed and maintain short-term compliance with the foreign ownership limits until it secures approval from the FCC to have indirect foreign ownership of more than 25% — a process that can take up to a year to complete. Audacy’s alternative plan is to use special warrants that will not convert to equity until the government signs off. But conservative critics call that a “Soros shortcut” and have asked the FCC to reject Audacy’s plan.
“Despite the unprecedented nature of this action, the FCC majority has apparently decided to approve licenses on an accelerated timeframe for a company in which George Soros has a major ownership stake,” write Comer and Langworthy. “By all appearances, the FCC majority isn’t just expediting, but is bypassing an established process to do a favor for George Soros and facilitate his influence over hundreds of radio stations before the November election.”
The House Oversight Committee is asking the FCC to turn over all documents related to the Audacy decision-making, including any documents containing the terms “George Soros” or “Soros Fund Management.”
‘Not Normal Process’
During a House Oversight Committee hearing last week, Commissioner Brendan Carr voiced similar concerns about how the FCC approached its decision in the Audacy deal.
“The FCC is not following its normal process for reviewing a transaction,” Carr said. “We have established over a number of years one way in which you can get approval from the FCC when you have an excess of 25 percent foreign ownership, which this transaction does. It seems to me that the FCC is poised to create, for the first time, an entirely new shortcut.”
The FCC has called reports that Audacy’s proposed bankruptcy reorganization has been cleared with a 3-2 party-line vote premature. “No decision is final until the Commission releases it, which we have not,” a spokesperson said last week. But the order will reportedly be released in the coming days.
Audacy has said nothing about the political fight it now finds itself caught up in, but in earlier comments with the FCC it said that investor interest “represents a significant vote of confidence in our company and the future of the radio and audio business.”
Supporters also point out the proposed structure of the Audacy reorganization is the same structure the FCC has used in several other Chapter 11 reorganizations in radio during the past several years, including iHeartMedia in 2019, Cumulus Media in 2018, LBI Media in 2019, and Alpha Media in 2021.
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