ACQUISITIONS AND DISPOSITIONS

12 Months Ended

Dec. 31, 2024

Asset Acquisition [Abstract]

ACQUISITIONS AND DISPOSITIONS

11. ACQUISITIONS AND DISPOSITIONS

On April 11, 2023, the Company entered into a definitive asset purchase agreement with Cox Media Group (“CMG”) to purchase CMG's Houston radio cluster ("the CMG Acquisition"). Under the terms of the agreement, the Company agreed to acquire 93Q Country KKBQ-FM, classic rock station The Eagle 106.9 & 107.5 KHPT-FM and KGLK-FM, and Country Legends 97.1 KTHT-FM. The transaction price was approximately $27.5 million. The acquisition was completed on August 1, 2023.

As part of the Federal Communication Commission (“FCC”) approval of and the closing conditions of the CMG Acquisition, the Company was required to divest KTHT-FM and KROI-FM. On June 7, 2023, the Company entered into a definitive asset purchase agreement with Educational Media Foundation (“EMF”) to sell KTHT-FM, and all its assets, for approximately $3.1 million (“the KTHT Divestiture”). Immediately prior to the closing of the CMG Acquisition on August 1, 2023, the KTHT-FM assets were transferred directly into an irrevocable trust until sale to EMF was finalized. On November 1, 2023, after the approval by the FCC, the KTHT Divestiture was completed.

The Company accounted for the CMG Acquisition as an acquisition of assets and, as such, allocated the purchase price, including transaction costs directly related to the asset acquisition, to the assets acquired and liabilities assumed based on their relative fair values with no goodwill recognized. The Company’s allocation of the purchase price to the assets acquired in the CMG Acquisition, exclusive of those amounts allocated to KTHT-FM, consisted of approximately $23.4 million to radio broadcasting licenses, $0.3 million to towers and antennas, $0.5 million to transmitters, $0.1 million to studios, $0.1 million to fixed assets.

To determine the fair value of the FCC licenses, the Company utilized the income approach which values a license by calculating the value of a hypothetical start-up company that initially has no assets except the asset to be valued (the FCC license).

In anticipation of the FCC divestiture requirement and the CMG Acquisition, the Company agreed to sell its KROI-FM radio broadcasting license along with the associated station assets from the Radio Market reporting unit to an unrelated third party for approximately $7.5 million. At the time of closing of the CMG Acquisition, the identified assets and liabilities of KROI-FM had a combined carrying value of approximately $9.9 million and $2.4 million, respectively. The major category of the assets included radio broadcasting licenses in the amount of approximately $7.3 million (net of approximately $16.8 million in impairment of goodwill and intangible assets, on the consolidated statement of operations for the year ended December 31, 2023). On August 1, 2023, immediately prior to the closing of the CMG Acquisition, the identified assets and liabilities were transferred to the irrevocable trust and removed from the Company’s consolidated balance sheets as part of customary closing terms. The transaction closed on December 20, 2024.

On September 18, 2024, the Company entered into an amended and restated time brokerage agreement (“TBA”) with La Mega Media, Inc. and Lazo Media, LLC (collectively “La Mega”). Pursuant to the TBA, on November 1, 2024, the Company began to broadcast programs produced, owned, or acquired by the Company on La Mega’s Columbus, Ohio radio station, WVKO-FM. Under the TBA, the Company pays a monthly fee as well as certain operating costs of WVKO-FM, and, in exchange, the Company retains all revenues from the sale of the advertising within the programming the Company provides. The term of the TBA is through October 31, 2027 and the Company has an option to acquire the station exercisable through December 31, 2026. The Company accounted for the LaMega transaction as an asset acquisition and allocated the transaction price of approximately $0.8 million to the assets acquired based on their relative fair values with no goodwill recognized. The Company’s allocation of the purchase price to the assets acquired consisted of approximately $0.7 million in FCC licenses and approximately $0.1 million in fixed assets. As of December 31, 2024, the Company has an outstanding obligation of approximately $0.6 million related to this acquisition.