Assets Held for Sale and Discontinued Operations

6 Months Ended

Jun. 30, 2020

Discontinued Operations and Disposal Groups [Abstract]

Assets Held for Sale and Discontinued Operations

Assets Held for Sale and Discontinued Operations

Stitcher

During the second quarter of 2020, our Board of Directors approved the sale of our Stitcher podcasting business. On July 10, 2020, we signed a definitive agreement to sell the business for $325 million, with $265 million of cash upfront; earnout of up to $30 million based on 2020 financial results and paid in 2021; and earnout of up to $30 million based on 2021 financial results and paid in 2022. The transaction is expected to close in the third quarter of 2020 upon satisfaction of normal and customary closing conditions and regulatory approval.

Beginning in the second quarter of 2020, we have classified Stitcher as held for sale in our condensed consolidated balance sheets and reported its results as discontinued operations in our condensed consolidated statements of operations for all periods presented.

Operating results of our discontinued Stitcher operations were as follows:

	Three Months Ended  June 30,				Six Months Ended  June 30,
(in thousands)	2020		2019		2020		2019
Operating revenues	$	16,568	$	17,067	$	33,696	$	32,171
Total costs and expenses	(22,261)		(22,591)		(45,063)		(42,344)
Depreciation and amortization of intangible assets	(587)		(705)		(1,157)		(1,491)
Other, net	(106)		—		(106)		—
Loss from discontinued operations before income taxes	(6,386)		(6,229)		(12,630)		(11,664)
Provision (benefit) for income taxes	(1,855)		(65)		(3,488)		(2,006)
Net loss from discontinued operations	$	(4,531)	$	(6,164)	$	(9,142)	$	(9,658)

The following table presents a summary of the Stitcher assets held for sale included in our condensed consolidated balance sheets.

(in thousands)	As of  June 30,  2020		As of  December 31,  2019
Assets:
Total current assets	$	28,865	$	34,793
Investments	159		178
Property and equipment	5,488		5,526
Goodwill and intangible assets	47,507		48,292
Operating lease right-of-use assets	10,041		10,448
Other assets	3,975		2,029
Total assets included in the disposal group	96,035		101,266
Liabilities:
Total current liabilities	9,917		10,175
Other liabilities	9,165		12,552
Total liabilities included in the disposal group	19,082		22,727
Net assets included in the disposal group	$	76,953	$	78,539

WPIX

When we acquired the Nexstar-Tribune television stations in 2019, we granted Nexstar the option to repurchase WPIX, the CW-affiliated station in New York City. The option was exercisable from March 31, 2020, through the end of 2021, and was assignable by Nexstar to a third party. In July 2020, Nexstar assigned their option to repurchase WPIX to Mission Broadcasting, and Mission immediately exercised the option. The option price is $75 million plus accrued interest, to be calculated on the period between September 19, 2019, the purchase date of WPIX, and the option sale closing date. Pending FCC approval, the transaction is expected to close later in 2020. WPIX assets and liabilities will be classified as held for sale beginning in the third quarter of 2020.