Fair Value Measurement Disclosures

12 Months Ended

Dec. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurement Disclosures

(18) Fair Value Measurement Disclosures

(a) Fair Value of Financial Instruments

Cash and cash equivalents, receivables, as well as accounts payable and accrued expenses, and other current liabilities, as reflected in the consolidated financial statements, approximate fair value because of the short-term maturity of these instruments. The estimated fair value of our other long-term debt instruments, approximate their carrying amounts as the interest rates approximate our current borrowing rate for similar debt instruments of comparable maturity, or have variable interest rates.

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

The fair value of the Notes is estimated using market quotes from a major financial institution taking into consideration the most recent activity and are considered Level 2 measurements within the fair value hierarchy.  The fair value of the Series B cumulative exchangeable redeemable preferred stock was based upon a weighted average analysis using the Black-Scholes method, an income approach, and the yield method resulting in a Level 3 classification.  The Black-Scholes method utilized an estimate of the fair value of the SBS equity, volatility, an estimate of the time to liquidity, and a risk free rate in the determination of the SBS preferred fair value.  Key assumptions for the income and yield methods included the expected yield on preferred stock, accrued dividends, the principal amount of the Series B preferred stock, and an estimate of the time to liquidity.  A discount for lack of marketability of the preferred stock was also utilized in the analysis. The fair value of the Series B cumulative exchangeable redeemable preferred stock may be impacted by the Company’s ability to monetize certain non-core assets to generate cash proceeds which we could use to repay, refinance and/or restructure our short term obligations, as well as its ability to be able to successfully recapitalize its balance sheet.

The estimated fair values of our financial instruments are as follows (in millions):

		December 31,
		2016				2015
	Fair Value	Carrying		Fair		Carrying		Fair
Description	Hierarchy	Amount		Value		Amount		Value
12.5% senior secured notes due 2017	Level 2	$	275.0		275.5	$	275.0		281.2
10 3/4% Series B cumulative exchangeable redeemable    preferred stock	Level 3		155.8		60.5		146.1		60.1
Promissory note payable, included in other long-term debt	Level 3		4.6		4.7		4.9		4.2

The fair value estimates of these financial instruments were based upon either: (a) market quotes from a major financial institution taking into consideration the most recent market activity, or (b) a discounted cash flow analysis taking into consideration current rates. The Notes traded at approximately 100.19% at year- end 2016 and were trading at 100.04% on March 31, 2017; however, there can be no guarantees that the Notes will continue trading above their carrying amount.

From time to time, certain assets or liabilities may be recorded at fair value on a non-recurring basis.  

During the third quarter 2015, the Company determined there was an impairment of its San Francisco market FCC Broadcasting license. A non-cash impairment loss of $0.9 million was recorded to reduce the carrying value of this license to its fair value (Level 3 non-recurring fair value measure).  Key assumptions used in the discounted cash flow method used to arrive at the fair value were: 1.5% revenue growth rate, 3.9% market revenue shares at maturity, 33.4% operating income margin at maturity, and a 10.0% discount rate. At December 31, 2015 the fair value of this license exceeded its carrying value  There were no FCC Broadcasting license impairments in 2016..

(b) Fair Value of Derivative Instruments

The following tables represent required quantitative disclosures regarding fair values of our derivative instruments (in thousands).

			Fair value measurements at December 31, 2016
			Liabilities
Description	December 31, 2016 carrying value and balance sheet location of derivative instruments		Quoted prices in active markets for identical instruments (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivative designated as a cash flow    hedging instrument:
Interest rate swap liability	$	17		—		17		—

			Fair value measurements at December 31, 2015
			Liabilities
Description	December 31, 2015 carrying value  and balance sheet location of derivative instruments		Quoted prices in active markets for identical instruments (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivative designated as a cash flow    hedging instrument:
Interest rate swap liability	$	220		—		220		—

The interest rate swap fair value is derived from the present value of the difference in cash flows based on the forward-looking LIBOR yield curve rates, as compared to our fixed rate applied to the hedged amount through the term of the agreement, less adjustments for credit risk.  The current period gain was offset by an intra-period allocation of the income tax expense of $85 thousand between continuing operations and other comprehensive income.

	December 31,
Interest rate swap:	2016		2015
Gain recognized in other comprehensive loss (effective portion)	$	118		188