Citadel Broadcasting on ropes

The owner of four Charleston radio stations, including the venerable talk-show outlet WTMA, sought bankruptcy protection this weekend in an effort to cut its debt load by more than $1 billion amid a slump in advertising sales.

Las Vegas-based Citadel Broadcasting Corp., the third-biggest radio broadcaster in the county, said its day-to-day operations will not be affected by Sunday's filing in New York.

"Our business will continue as usual and the company will work to emerge from the restructuring process as quickly as possible," Farid Suleman, Citadel's chief executive officer, said in a statement.

The company has 4,200 employees and owns and operates 224 radio stations, including KABC-AM in Los Angeles, WLS-AM in Chicago, WABC-AM and WPLJ-FM in New York and KGO-AM in San Francisco. Citadel's WABC is home to several syndicated hosts, including Don Imus, Rush Limbaugh, Joe Scarborough and Mark Levin.

Elsewhere in South Carolina, the company operates five other stations, all in Columbia.

Citadel listed total assets at Oct. 30 of $1.4 billion and debt of $2.46 billion. The company said in a statement it has reached an agreement with more than 60 percent of its lenders on a deal that would slash its liabilities by about $1.4 billion. Creditors would get control of the company, and shares of Citadel likely would be rendered worthless.

The broadcaster said it can tap $36 million it has in the bank as well as cash flow from operations, "which will be more than sufficient to fund operations during the restructuring process."

In court documents filed Sunday, Citadel chief financial officer Randy Taylor cited a "chokehold" on ad sales as one reason for the bankruptcy. The company painted a gloomy picture of the radio industry, estimating that total revenue from U.S. radio ads in the United States will skid 19 percent this year to $14.1 billion.

"Citadel, like many radio, television and newspaper companies, has seen its revenue and profitability decline due to the downturn in advertising spending by companies particularly in the auto, banking and restaurant sector," Taylor said.

The recession-induced sales slump was compounded by the company's crippling debt load, much of it tied to the $2.7 billion acquisition of ABC Radio from Walt Disney Co. in 2007. At the same time, some listeners have abandoned the so-called terrestrial radio format for prerecorded music and the commercial-free satellite radio offerings of Sirius XM.

Citadel had disclosed in recent filings with the Securities and Exchange Commission that it likely was to be declared in default of its loan terms on Jan. 15. The broadcaster had been contemplating a bankruptcy reorganization for months.

"Recognizing all of this, Citadel determined that a expeditious balance sheet restructuring was key to its future success," Taylor said.

The company said its board approved the filing on Dec. 18.

Citadel Communications Corp., a predecessor of Citadel Broadcasting, entered the Charleston market in 1999 after buying eight local stations. That company went private in a $2 billion leveraged buyout in 2001 and went public again under its current name in 2003. Along the way, Citadel shed four of its Charleston properties

Jim Beard, general manager of the company's North Charleston-based operations, did not respond to requests for comment Monday.

Among Citadel's local stations are WTMA-AM 1250, nicknamed the "Big Talker," which marked its 70th anniversary in June. It also owns urban contemporary outlet Z93 JAMZ, one of the highest-rated radio stations in the area.

The Associated Press contributed to this report. Contact John McDermott at 937-5572 or jmcdermott@postandcourier.com.