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Note 10 - Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2020

Goodwill and Intangible Assets Disclosure [Text Block]

10. Goodwill and Intangible Assets

As of March 31, 2020 and December 31, 2019, our intangible assets and related accumulated amortization consisted of the following (in millions):

	As of March 31, 2020							As of December 31, 2019
			Accumulated							Accumulated
	Gross		Amortization			Net		Gross		Amortization			Net
Intangible assets not currently subject to amortization:
Broadcast licenses	$	3,627	$	(54	)	$	3,573	$	3,627	$	(54	)	$	3,573
Goodwill		1,446		-			1,446		1,446		-			1,446
	$	5,073	$	(54	)	$	5,019	$	5,073	$	(54	)	$	5,019

Intangible assets subject to amortization:
Network affiliation agreements	$	56	$	(20	)	$	36	$	56	$	(17	)	$	39
Other finite-lived intangible assets		615		(217	)		398		615		(194	)		421
	$	671	$	(237	)	$	434	$	671	$	(211	)	$	460

Total intangibles	$	5,744	$	(291	)	$	5,453	$	5,744	$	(265	)	$	5,479

Amortization expense for the three-months ended March 31, 2020 and 2019 was $26 million and $29 million, respectively. Based on the current amount of intangible assets subject to amortization, we expect that amortization expense for the remainder of 2020 will be approximately $77 million, and, for the succeeding five years, amortization expense will be approximately as follows: 2021, $98 million; 2022, $94 million; 2023, $88 million; 2024, $24 million; and 2025, $15 million. If and when acquisitions and dispositions occur in the future, actual amounts may vary from these estimates.

Impairment of goodwill and broadcast licenses. Our intangible assets are primarily comprised of broadcast licenses. We perform impairment testing of our indefinite-lived intangible assets annually as of December 31 each year and on an interim basis if events or circumstances indicate that such assets may be impaired. During the three-months ended March 31, 2020, COVID-19 and measures to prevent its spread began to affect our businesses in a number of ways. We have experienced a disruption in creation of content that we broadcast on our television stations and of events and programs we produce at our production companies, including the cancellation of certain sports events and the shutting down of production of certain television content. The ultimate impact of these disruptions, including the extent of their adverse impact on our financial and operational results, will be effected by various factors, including the length of time that such disruptions continue which will, in turn, depend on the currently unknown duration of the COVID-19 pandemic and the impact of governmental regulations that might be imposed in response to the pandemic. Our businesses could also be impacted should the disruptions from COVID-19 lead to changes in advertising customers and consumer behavior. There are certain limitations on our ability to mitigate the adverse financial impact of these items, including the fixed costs of our businesses. COVID-19 also makes it more challenging for management to estimate future performance of our businesses, particularly over the near to medium term. As of the date of this report, we concluded that the uncertainties surrounding this event are a triggering event that requires us to evaluate whether or not it is more likely than not that the value of our goodwill and other intangible assets are impaired. Based upon our analysis of both qualitative and quantitative factors, we have concluded that such assets are not impaired as of the date of this report. We will continue to evaluate both the subjective and objective criteria that may cause us to re-evaluate this conclusion in the future.