Broadcast Licenses, Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2024

Broadcast Licenses, Goodwill and Other Intangible Assets

Broadcast Licenses, Goodwill and Other Intangible Assets

4.    Broadcast Licenses, Goodwill and Other Intangible Assets

We evaluate our FCC licenses for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. We operate our broadcast licenses in each market as a single asset and determine the fair value by relying on a discounted cash flow approach assuming a start-up scenario in which the only

assets held by an investor are broadcast licenses. The fair value calculation contains assumptions incorporating variables that are based on past experiences and judgments about future operating performance using industry normalized information for an average station within a market. These variables include, but are not limited to: (1) the forecasted growth rate of each radio market, including population, household income, retail sales and other expenditures that would influence advertising expenditures; (2) the estimated available advertising revenue within the market and the related market share and profit margin of an average station within a market; (3) estimated capital start-up costs and losses incurred during the early years; (4) risk-adjusted discount rate; (5) the likely media competition within the market area; and (6) terminal values. If the carrying amount of FCC licenses is greater than their estimated fair value in a given market, the carrying amount of FCC licenses in that market is reduced to its estimated fair value.

We also evaluate goodwill for impairment annually, or more frequently if certain circumstances are present. The Company has one reporting unit for purposes of goodwill impairment testing. In 2024, the income approach was used and it is based upon a discounted cash flow analysis incorporating significant assumptions such as projected revenues including a projected long-term growth rate, projected operating margins, projected general and administrative expenses, and a discount rate appropriate for the industry. In 2023, we utilized the market approach. Under each approach, if the fair value of our reporting unit is less than the carrying amount, the Company will recognize an impairment charge for the amount by which the carrying amount exceeds our reporting unit’s fair value. The loss recognized will not exceed the total amount of goodwill allocated to our reporting unit.

We evaluate 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. Amortizable intangible assets are included in other intangibles, deferred costs and investments in the consolidated balance sheets.

Broadcast Licenses

We have recorded the changes to broadcast licenses for the years ended December 31, 2024 and 2023 as follows:

	Total
	(in thousands)
Balance at January 1, 2023	$	90,307
Disposals		(67)
Balance at December 31, 2023	$	90,240
Acquisitions		2,150
Disposals		(893)
Balance at December 31, 2024	$	91,497

2024 Impairment Test

We completed our impairment annual impairment test of broadcast licenses during the fourth quarter of 2024 and determined that the fair value of the broadcast licenses was greater than the carrying value recorded for each of our markets and, accordingly, no impairment was recorded.

The following table reflects certain key estimates and assumptions used in the impairment tests during the fourth quarter ended 2024 and the fourth quarter of 2023. The ranges for operating profit margin and market long-term revenue growth rates vary by market. In general, when comparing between 2024 and 2023: (1) the market specific operating profit margin range remained relatively consistent; (2) the market long-term revenue growth rates decreased slightly; (3)

the discount rate decreased from 2023; and (4) current year revenue projections decreased with amounts previously projected for 2024.

	Fourth		Fourth
	Quarter		Quarter
	2024		2023
Discount rates	9.0	%	10	%
Operating profit margin ranges	17.8% - 36.4	%	17.8% - 36.4	%
Market long-term revenue growth rates	0.5% - 1.5	%	1.0% - 2.0	%

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

2023 Impairment Test

During the fourth quarter of 2023, we completed our annual impairment test of broadcast and determined that the fair value of the broadcast licenses was greater than the carrying value recorded for each of our markets and, accordingly, no impairment was recorded.

Goodwill

During the fourth quarter of 2024 and 2023, the Company performed its annual impairment test of goodwill in accordance with ASC 350 and determined that the fair value was in excess of its carrying value and, accordingly, no impairment was recorded.

The following table reflects certain key estimates and assumptions used in the impairment tests during the fourth quarter ended 2024:

Discount rate	9.0	%
Operating profit margin ranges	19.7% - 27.0	%
Long-term revenue growth rate	1.2	%

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

We have recorded the changes to goodwill for each of the years ended December 31, 2024 and 2023 as follows:

	Total
	(in thousands)
Balance at January 1, 2023	$	19,236
Acquisitions		—
Balance at December 31, 2023	$	19,236
Acquisitions		76
Disposals		(83)
Balance at December 31, 2024	$	19,229

Other Intangible Assets

We have recorded amortizable intangible assets at December 31, 2024 as follows:

	Gross
	Carrying		Accumulated		Net
	Amount		Amortization		Amount
	(In thousands)
Non-competition agreements	$	3,861	$	3,861	$	—
Favorable lease agreements		5,965		5,679		286
Customer relationships		5,560		4,860		700
Other intangibles		2,001		1,857		144
Total amortizable intangible assets	$	17,387	$	16,257	$	1,130

We have recorded amortizable intangible assets at December 31, 2023 as follows:

	Gross
	Carrying		Accumulated		Net
	Amount		Amortization		Amount
	(In thousands)
Non-competition agreements	$	3,861	$	3,861	$	—
Favorable lease agreements		5,965		5,652		313
Customer relationships		4,660		4,660		—
Other intangibles		1,844		1,811		33
Total amortizable intangible assets	$	16,330	$	15,984	$	346

Aggregate amortization expense for these intangible assets for the years ended years ended December 31, 2024 and 2023, was $270,000 and $42,000, respectively. Our estimated annual amortization expense for the years ending December 31, 2025, 2026, 2027, 2028 and 2029 is $389,000, $388,000, $133,000, $31,000 and $26,000, respectively.