Assets Held for Sale and Discontinued Operations

9 Months Ended

Sep. 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 closed on October 16, 2020.

Beginning in the second quarter of 2020, Stitcher was classified as discontinued operations in our condensed consolidated financial statements for all periods presented.

Operating results of our discontinued Stitcher operations were as follows:

	Three Months Ended  September 30,				Nine Months Ended  September 30,
(in thousands)	2020		2019		2020		2019
Operating revenues	$	19,956	$	18,937	$	53,652	$	51,108
Total costs and expenses	(27,043)		(23,414)		(72,106)		(65,758)
Depreciation and amortization of intangible assets	—		(580)		(1,157)		(2,071)
Other, net	(33)		—		(139)		—
Loss from discontinued operations before income taxes	(7,120)		(5,057)		(19,750)		(16,721)
Benefit for income taxes	(1,665)		(628)		(5,153)		(2,634)
Net loss from discontinued operations	$	(5,455)	$	(4,429)	$	(14,597)	$	(14,087)

The following table presents a summary of the Stitcher net assets classified as discontinued operations.

(in thousands)	As of  September 30,  2020		As of  December 31,  2019
Assets:
Total current assets	$	33,263	$	34,793
Investments	125		178
Property and equipment	5,488		5,526
Goodwill and intangible assets	47,507		48,292
Operating lease right-of-use assets	9,579		10,448
Other assets	6,549		2,029
Total assets of discontinued operations	102,511		101,266
Liabilities:
Total current liabilities	10,912		10,175
Other liabilities	8,796		12,552
Total liabilities of discontinued operations	19,708		22,727
Net assets of discontinued operations	$	82,803	$	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. The transaction will close upon satisfaction of normal customary closing conditions and regulatory approval. Beginning in the third quarter of 2020, WPIX assets and liabilities were classified as held for sale in our condensed consolidated balance sheets.

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

(in thousands)	As of  September 30,  2020
Assets:
Property and equipment	$	16,721
Goodwill	24,997
Other intangible assets	37,120
Operating lease right-of-use assets	71,071
Other assets	5,714
Total assets held for sale	155,623
Liabilities:
Total current liabilities	6,326
Operating lease liabilities	72,231
Other liabilities	1,056
Total liabilities held for sale	79,613
Net assets held for sale	$	76,010