Why Did George Soros Buy Radio Stations?

Earlier this year, billionaire investor and political donor George Soros drew a great deal of attention for suddenly acquiring about 200 radio stations in 40 national market from Audacy, a legacy broadcasting network.

Unsurprisingly, Soros faced both regulatory hurdles and political backlash for buying up so many broadcast stations at once.

Why is George Soros buying radio stations, and what could his decision say about the future of this media format?

Understanding the Audacy Deal

When Soros acquired Audacy’s family of radio stations, the company was in very poor financial health. Audacy had filed for Chapter 11 bankruptcy in January, mostly due to its extremely high debt leverage. Audacy had about $1.9 billion in debt, an amount that is has gradually reduced to a much more manageable $350 million as it has restructured itself as a private company.

The debt reduction effort is where Soros first got involved. Soros Fund Management picked up about $400 million of the company’s debt, making it the largest lender. This gave the fund an outsized number of shares in the restructured company and paved the way for the acquisition of the radio stations by Soros.

The loan, however, wasn’t the end of Soros’ involvement in Audacy’s restructuring. Eventually, the billionaire investor’s Fund for Policy Reform acquired the broadcasting rights for the company’s radio stations when its assets were split up. The Fund for Policy Reform is a non-profit organization funded by Soros and makes up part of his larger Open Society Foundations network of non-profit groups.

Soros’ Political Backlash

As with practically anything else involving George Soros, the deal to acquire a large number of radio stations was met with significant political backlash.

In order to acquire so much of Audacy’s senior debt, Soros Fund Management had to go through FCC regulators. The FCC cleared the acquisition in a party-line vote that only narrowly saw Soros win approval. When that vote cleared, Republicans in the House Committee on Oversight and Accountability opened an investigation into the FCC’s handling of the case.

Much of the backlash the decision drew was tied to a “shortcut” that Soros’ organization was able to use to to get approval for the purchase. Although a deviation from its usual review procedure, the FCC fast-tracked the sale of Audacy and allowed Soros to gain control of the stations on an accelerated timeline.

Closely connected to this was the timing of the purchase. The acquisition was finalized only a handful of weeks before the US presidential election in November. Under a Republican administration, it’s likely that Soros’ group would have faced much harder regulatory scrutiny and possibly been denied the broadcasting licenses. As such, the fast-tracked approval process has been seen as the FCC allowing Soros to squeeze the deal through at the last minute when he otherwise wouldn’t have been able to do so.

So, Why Did Soros Buy Up the Radio Stations?

George Soros bought up radio stations because it’s one of the few legacy media formats that isn’t struggling under the weight of technological changes. Across all age groups, radio consistently reaches 90% or more of Americans. Between free availability in every car and truck to its easy adaptability to new technologies such as internet streaming, radio broadcasting remains an extremely relevant form of media that likely has a long-term moat around it.

While it isn’t a true legacy broadcaster, a similar investment thesis shows up in Warren Buffett’s acquisition of a 32 percent stake in SiriusXM earlier this year. SiriusXM is the default internet radio provider for cars and trucks sold in North America and offers its apps through a variety of smart devices. Like Buffett, Soros has likely calculated that acquiring radio assets is a good long-term media investment with minimal downside.

As such, Audacy’s portfolio of stations could be a good asset for Soros’ nonprofit to hold as a mechanism for funding itself. Audacy is already looking healthier coming out of its privatization, with adjusted earnings having more than doubled in the first half of 2024. If the radio stations can turn around and achieve greater profitability, Soros may very well gain a good source of ongoing cash flow for his philanthropic efforts.

Will the Radio Stations Prove Influential?

On the other side of the equation is the significant reach that some 200 radio stations nationwide would give the Fund for Policy Reform. As an advocacy group for left-of-center policies in the United Stated, the FPR could benefit from owning a media arm with substantial reach. The radio stations may, in theory, be used to run political ads or programs that align with the fund’s stances on various policy issues.

The Fund for Policy Reform has been active in pursuing reformed drug and criminal justice policies. Earlier in its history, the fund was more focused on environmental issues, but it has gradually shifted away from those issues over the years and now makes grants to left-leaning political organizations to pursue more targeted activist efforts.

As an organization controlled by George Soros, the fund is also open to the criticisms Soros himself has invited over the years as an opponent of traditional free-market capitalism. In 1997, Soros became a lightning rod for controversy when he ran an article titled The Capitalist Threat in The Atlantic magazine. Over the years, his critiques of the laissez-faire capitalism that has driven much of America’s historical economic success have made Soros and any organization associated with him a target for staunch criticism from conservative-leaning politicians and economic thinkers.

With that said, George Soros is first and foremost a shrewd investor. While there is likely a rationale from political activism for his purchase, the financial benefits of buying Audacy’s portfolio almost certainly came first. Soros and Buffett both investing in forms of radio at around the same time also likely signals that this form of legacy media may very well be undervalued and worth looking at for the long run.

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