On his company’s quarterly earnings call held Monday morning, Urban One revealed that the multimedia company superserving African Americans had drawn millions from its asset-backed credit facility.
It turns out that, on March 17, another media company with a deep radio broadcasting component tapped in to its credit line — a move that could be replicated across all radio and TV companies as the coronavirus pandemic ravages income sources and programming options.
As RBR+TVBR reported Friday, Urban One President/CEO Alfred Liggins III revealed that the company has drawn $27.5 million from its asset-backed credit facility — an action the company says is in line with what many other companies have done.
While Liggins’ statement was fresh news that tapping into credit facilities would be something seen across the media industry, it was the first publicly stated cash infusion for a radio station owner.
It turns that Townsquare Media has done so do — and it’s borrowings are much larger.
On March 17, the company known for its “local first” approach via local digital and programmatic solutions tied to its small- and medium-sized market radio stations borrowed $50 million under the revolving credit facility portion of its credit agreement dated April 1, 2015 with administrative agent Royal Bank of Canada (RBC).
This is the entire amount available under the revolving credit facility portion of the “Senior Secured Credit Facility.
The terms are favorable to Townsquare Media, led by CEO Bill Wilson: The company may repay the amount borrowed at any time without penalty.
The revolving credit facility will mature on April 1, 2022 — or October 1, 2021, in the event that by that date Townsquare’s term loans have not been extended by at least six months.
Upon receipt of the full proceeds from the revolving credit facility, Townsquare totaled up $132.7 million in cash and cash equivalents on its balance sheet.
Townsquare disclosed the $50 million infusion from its credit facility on Friday via an SEC filing, and it came one day after it held its Q4 and year-end 2019 earnings call.
On the call, Wilson noted that the impact Townsquare has seen in the month of March “has been significant” in its Live Events segment. All remaining March live events were canceled earlier in the month, and Townsquare expects to have to cancel many Q2 events, too.
The impact to Townsquare’s advertising segment “has been less severe to-date.”
But, coronavirus pandemic worries are evolving by the hour. And, starting last week, many clients who promote live events as well as sporting events and other related businesses opted to cancel or pause their advertising campaigns for the month of March, Wilson noted.
“This is an evolving situation, which we know will have a negative impact to our business, and we will make the necessary plans and adjustments,” Wilson said. “The extent of that impact is uncertain at this time. What I can say with certainty and confidence is that, overall, we remain very confident and optimistic about the long-term demand for our products and marketing and advertising solutions.”
Townsquare Media’s stock price has been battered by COVID-19 worries and is presently at an all-time low, with a March 20 closing price of $3.95. This surpasses a Christmas Eve 2018 downturn for media stocks that pushed TSQ into the low $4 range.
The last seven weeks have been the most frustrating for Townsquare, as shares on February 3 reached a 52-week high of $10.25.
