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Note 11 - Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Text Block]

11.

Goodwill and Intangible Assets

Several years ago, our Raycom Sports subsidiary sublicensed certain Atlantic Coast Conference (“ACC”) football and basketball games from ESPN to Fox Sports that were assumed by Diamond Sports Group, LLC (“Diamond”) upon its acquisition of Fox Sports. In March 2023, Diamond sought bankruptcy protection. On July 7, 2023, the bankruptcy court granted the request of Diamond (supported by us) for the early rejection, and therefore the termination, of the ACC sports rights agreements. On July 13, 2023, The CW Network (“CW”) announced that it had entered into an agreement with Raycom Sports for a similar package of sports rights related to the ACC games that had been included in the now-terminated agreement with Diamond. Concurrently, Raycom Sports and ESPN modified their license agreement to correspond with the terms of The CW sublicense agreement. The new agreements mitigate a portion of the losses caused by Diamond’s rejection of its ACC sports rights agreement with Raycom Sports. As a result of the bankruptcy filings and these new July 2023 agreements, our production companies segment recorded a non-cash charge of $43 million, for impairment of goodwill and other intangible assets.

A summary of changes in our goodwill and other intangible assets, on a net basis, for the nine-months ended September 30, 2023 is as follows (in millions):

	Net Balance at		Acquisitions									Net Balance at
	December 31,		And									September 30,
	2022		Adjustments, Net			Impairments			Amortization			2023

Broadcast licenses	$	5,331	$	(11	)	$	-		$	-		$	5,320
Goodwill		2,663		(4	)		(16	)		-			2,643
Finite-lived intangible assets		636		-			(27	)		(147	)		462
Total intangible assets net of accumulated amortization	$	8,630	$	(15	)	$	(43	)	$	(147	)	$	8,425

A summary of the changes in our goodwill, on a gross basis, for the nine-months ended September 30, 2023, is as follows (in millions):

	As of			Acquisitions						As of
	December 31,			And						September 30,
	2022			Adjustments, Net			Impairments			2023

Goodwill, gross	$	2,762		$	(4	)	$	-		$	2,758
Accumulated goodwill impairment		(99	)		-			(16	)		(115	)
Goodwill, net	$	2,663		$	(4	)	$	(16	)	$	2,643

As of September 30, 2023 and December 31, 2022, our intangible assets and related accumulated amortization consisted of the following (in millions):

	As of September 30, 2023							As of December 31, 2022
			Accumulated							Accumulated
	Gross		Amortization			Net		Gross		Amortization			Net
Intangible assets not currently subject to amortization:
Broadcast licenses	$	5,374	$	(54	)	$	5,320	$	5,385	$	(54	)	$	5,331
Goodwill		2,643		-			2,643		2,663		-			2,663
	$	8,017	$	(54	)	$	7,963	$	8,048	$	(54	)	$	7,994

Intangible assets subject to amortization:
Network affiliation agreements	$	216	$	(116	)	$	100	$	218	$	(88	)	$	130
Other finite lived intangible assets		992		(630	)		362		1,055		(549	)		506
	$	1,208	$	(746	)	$	462	$	1,273	$	(637	)	$	636

Total intangibles	$	9,225	$	(800	)	$	8,425	$	9,321	$	(691	)	$	8,630

Amortization expense for the nine-month periods ended September 30, 2023 and 2022 was $147 million and $156 million, respectively. Based on the intangible assets subject to amortization as of September 30, 2023, we expect that amortization expense for the remainder of 2023 would be approximately $47 million, and, for the succeeding five years, amortization expense will be approximately as follows: 2024, $125 million; 2025, $113 million; 2026, $83 million; 2027, $47 million; and 2028, $13 million. If and when acquisitions and dispositions occur in the future, actual amounts may vary materially from these estimates.