GOODWILL, RADIO BROADCASTING LICENSES AND OTHER INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2023

GOODWILL, RADIO BROADCASTING LICENSES AND OTHER INTANGIBLE ASSETS

GOODWILL, RADIO BROADCASTING LICENSES AND OTHER INTANGIBLE ASSETS

6. GOODWILL, RADIO BROADCASTING LICENSES AND OTHER INTANGIBLE ASSETS:

Impairment Assessment

In accordance with ASC 350, the Company does not amortize its radio broadcasting licenses or goodwill. Instead, the Company performs a test for impairment annually across all reporting units and radio broadcasting licenses, or on an interim basis when events or changes in circumstances or other conditions suggest impairment may have occurred. For broadcasting licenses, the combined broadcasting licenses in each of the 13 radio markets represent a unit of accounting. For goodwill, the Company’s individual radio markets within the radio broadcasting segment and each of the other three business segments represent a reporting unit. Other intangible assets, except for unamortized brand names, continue to be amortized on a straight-line basis over their useful lives. The Company evaluates amortizable intangible assets for recoverability when circumstances indicate impairment may have occurred, using an undiscounted cash flow methodology. If the future undiscounted cash flows for the intangible asset are less than net book value, then the net book value is reduced to the estimated fair value.

The Company performs an annual impairment assessment as of October 1 of each year. The Company identified interim triggering events during the current year which led to performing impairment assessments including the most recent interim impairment test performed as of December 31, 2023.

For the years ended December 31, 2023 and 2022, the Company recorded impairment losses against radio broadcasting licenses and goodwill collectively, of approximately $129.3 million and $40.7 million, respectively, which are included within the impairment of goodwill, intangible assets, and long-lived assets in the consolidated statements of operations.

Broadcasting Licenses

The Company’s total broadcasting licenses carrying value is approximately $375.3 million as of December 31, 2023.  

The table below presents the changes in the Company’s radio broadcasting licenses during 2023 and 2022:

	Total
	(In thousands)
Balance at January 1, 2022	$	501,420
Acquisitions		23,642
Disposals		(3,200)
Impairment charges		(33,443)
Balance at December 31, 2022	$	488,419
Acquisitions		23,431
Disposals		(7,276)
Impairment charges		(129,278)
Balance at December 31, 2023	$	375,296

The Company’s licenses expire at various dates through August 1, 2030. The FCC grants radio broadcast station licenses for specific periods of time and, upon application, may renew them for additional terms. A station may continue to operate beyond the expiration date of its license if a timely filed license renewal application is pending. Under the Communications Act, radio broadcast station licenses may be granted for a maximum term of eight years. The FCC may grant the license renewal application with or without conditions, including renewal for a term less than the maximum otherwise permitted. Historically, the Company’s licenses have been renewed for a full eight-year terms without any conditions or sanctions; however, there can be no assurance that the licenses of each of the Company’s stations will be renewed for a full term without conditions or sanctions.

During the three months ended March 31, 2023, the Company recognized an impairment loss of $16.8 million associated with the sale of the KROI-FM radio broadcasting license as discussed in Note 4 – Acquisitions and Dispositions of the Company’s consolidated financial statements.

During the three months ended June 30, 2023, the Company performed an interim quantitative impairment assessment for broadcasting licenses in eight radio markets and recognized an impairment loss of approximately $22.1 million associated with broadcasting licenses in five radio markets. The primary factor leading to the impairments was a decline in the projected gross market revenues.

During the three months ended September 30, 2023, the Company performed an interim quantitative impairment assessment for broadcasting licenses in all radio markets and recognized an impairment loss of approximately $85.4 million associated with broadcasting licenses in 10 radio markets. The primary factor leading to the impairments was a decline in the projected gross market revenues and an increase in the discount rate.

As of October 1, 2023, the Company performed a quantitative assessment for broadcasting licenses in all radio markets as part of the annual impairment assessment, resulting in no impairment losses.

During the three months ended December 31, 2023, the Company performed an interim quantitative assessment for broadcasting licenses in all radio markets and recognized an impairment loss of approximately $5.0 million associated with broadcasting licenses in three radio markets. The primary factor leading to the impairments was a decline in the projected gross market revenues and margins.

When evaluating the Company’s radio broadcasting licenses for impairment, the assessment is done at the unit of accounting level. In the Company’s case, each unit of accounting is a cluster of radio stations in one of the Company’s geographical markets. Broadcasting license fair values are based on the discounted future cash flows of the applicable unit of accounting assuming an initial hypothetical start-up operation which possesses FCC licenses as the only asset. Over

time, it is assumed the operation acquires other tangible assets such as advertising and programming contracts, employment agreements and going concern value, and matures into an average performing operation in a specific radio market.  

The Company’s methodology for valuing broadcasting licenses has been consistent for all periods presented. Below are some of the key assumptions used in the income approach for estimating the broadcasting license fair values for the annual impairment assessment performed and interim impairment assessment where an impairment charge was recorded as a result of quantitative assessments since January 1, 2022. 

Radio Broadcasting	December 31,			October 1,			September 30,			June 30,			March 31,			October 1,			September 30,			June 30,
Licenses	2023			2023			2023			2023 (a)			2023			2022			2022 (a)			2022 (a)
Impairment charge (in millions)	$	5.0		$	—		$	85.4		$	22.1		$	16.8	(*)	$	7.4		$	15.5		$	10.6	(*)
Discount rate		9.5 – 10.0	%		10.0	%		10.0	%		9.5	%		(**)			9.5	%		9.5	%		9.5	%
Revenue growth rate range		(2.3) % – 0.8	%		(1.7) % – 0.0	%		(1.7) % – 0.0	%		0.3 % – 1.4	%		(**)			0.0 % – 1.7	%		0.3 % – 1.6	%		0.7 % – 2.4	%
Terminal growth rate range		(0.5)	%		(0.5)	%		(0.5)	%		0.3 % – 0.8	%		(**)			0.3 % – 0.8	%		0.3 % – 0.8	%		0.7 % – 1.0	%
Mature market share range		5.2 % – 30.0	%		5.3 % – 29.5	%		5.3 % – 29.5	%		0.9 % – 28.8	%		(**)			6.8 % – 27.6	%		6.8 % – 27.6	%		6.9 % – 25.6	%
Operating profit margin range		17.0 % – 31.9	%		17.0 % – 33.5	%		17.0 % – 33.5	%		18.8 % – 34.6	%		(**)			27.2 % – 34.6	%		28.3 % – 36.1	%		28.3 % – 36.1	%

(a) Key assumptions presented on the table for these periods relate to certain markets that were quantitatively assessed as part of the interim impairment assessments.

(*) Includes an impairment charge whereby the license fair value is based on estimated asset sale consideration.

(**) As fair value is based on estimated asset sale consideration, key assumptions under the income approach are not applicable.

If actual market conditions are less favorable than those estimated by the Company or if events occur or circumstances change that would reduce the fair value of the Company’s broadcast licenses below the carrying value, the Company may be required to recognize additional impairment charges in future periods. Such a charge could have a material effect on the Company’s consolidated financial statements. The Company will continue to monitor potential triggering events and perform the appropriate analysis when deemed necessary.

Goodwill

The Company’s total goodwill carrying value is approximately $216.6 million as of December 31, 2023. The table below presents the changes in the Company’s goodwill carrying values for its four reportable segments during 2023 and 2022:

	Radio		Reach				Cable
	Broadcasting		Media		Digital		Television
	Segment		Segment		Segment		Segment		Total
	(In thousands)
As of December 31, 2021
Gross goodwill	$	154,530	$	30,468	$	27,567	$	165,044	$	377,609
Accumulated impairment losses		(117,748)		(16,114)		(20,345)		—		(154,207)
Net goodwill at December 31, 2021	$	36,782	$	14,354	$	7,222	$	165,044	$	223,402
Additions		437		—		—		—		437
Impairments		(7,240)		—		—		—		(7,240)
As of December 31, 2022
Gross goodwill	$	154,967	$	30,468	$	27,567	$	165,044	$	378,046
Accumulated impairment losses		(124,988)		(16,114)		(20,345)		—		(161,447)
Net goodwill at December 31, 2022	$	29,979	$	14,354	$	7,222	$	165,044	$	216,599
Additions		—		—		—		—		—
Impairments		—		—		—		—		—
As of December 31, 2023
Gross goodwill	$	154,967	$	30,468	$	27,567	$	165,044	$	378,046
Accumulated impairment losses		(124,988)		(16,114)		(20,345)		—		(161,447)
Net goodwill at December 31, 2023	$	29,979	$	14,354	$	7,222	$	165,044	$	216,599

The Company performed an annual impairment assessment as of October 1, 2023 for all reporting units and an interim impairment assessment as of December 31, 2023 for certain of its reporting units to determine whether they were impaired. The key assumptions used in the discounted cash flow analysis for goodwill include revenue and projected revenue growth rates by market, operating profit margins, terminal growth rate, and discount rate. Based on the assessments, there was no impairment in goodwill for the year ended December 31, 2023.

During the three months ended June 30, 2022, the Company recognized an impairment loss of approximately $4.3 million associated with goodwill in the Atlanta reporting unit. During the three months ended December 31, 2022, the

Company recognized an impairment loss of approximately $2.9 million associated with goodwill in the Philadelphia reporting unit.

Intangible Assets Excluding Goodwill and Radio Broadcasting Licenses

Other intangible assets, excluding goodwill, radio broadcasting licenses and the unamortized brand name, are being amortized on a straight-line basis over various periods. Other intangible assets consist of the following:

														Remaining
														Weighted-
														Average
	As of December 31,												Period of	Period of
	2023						2022						Amortization	Amortization
	(In thousands)
	Gross Carrying		Accumulated		Net		Gross Carrying		Accumulated		Net
	Amount		Amortization		Amount		Amount		Amortization		Amount
Trade names	$	68	$	(62)	$	6	$	17,431	$	(17,418)	$	13	1‑5 Years	0.9 Years
Intellectual property		6,503		(6,503)		—		6,878		(6,878)		—	4‑10 Years	0.0 Years
Advertiser agreements		47,687		(47,687)		—		46,669		(45,728)		941	1‑12 Years	0.0 Years
Brand names		4,159		(3,637)		522		4,413		(3,732)		681	10 Years	3.8 Years
Brand names - unamortized		39,690		—		39,690		39,690		—		39,690	Indefinite	—
Launch assets, net of current portion		22,798		(14,091)		8,707		22,791		(9,104)		13,687	Contract length	2.9 Years
Other intangibles		234		(55)		179		849		(668)		181	1‑15 Years	6.6 Years
Total other intangible assets	$	121,139	$	(72,035)	$	49,104	$	138,721	$	(83,528)	$	55,193		3.5 Years

Amortization expense of intangible assets for each of the years ended December 31, 2023 and 2022 was approximately $1.1 million and $3.7 million, respectively.

The following table presents the Company’s estimate of amortization expense for the years 2024 through 2028 for intangible assets as of December 31, 2023:

	(In thousands)
2024	$	281
2025		139
2026		135
2027		80
2028		48

The table above excludes launch asset amortization as it is recorded as a reduction to revenue. Actual amortization expense may vary as a result of future acquisitions and dispositions.