Annual report pursuant to Section 13 and 15(d)

Segment Data

v3.22.4
Segment Data
 12 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
Segment Data
NOTE 19. SEGMENT DATA

FASB ASC Topic 280,
Segment Reporting
, requires companies to provide certain information about their operating segments. We have
three
operating segments: (1) Broadcast, (2) Digital Media, and (3) Publishing,
 
which also qualify as reportable segments. Our operating segments reflect how our chief operating decision makers, which we define as a collective group of senior executives, assess the performance of each operating segment and determine the appropriate allocations of resources to each segment. We continually review our operating segment classifications to align with operational changes in our business and may make changes as necessary.
We measure and evaluate our operating segments based on operating income and operating expenses that do not include allocations of costs related to corporate functions, such as accounting and finance, human resources, legal, tax and treasury, which are reported as unallocated corporate expenses in our consolidated statements of operations included in this annual report. We also exclude costs such as amortization, depreciation, taxes, and interest expense.
Segment performance, as we define it, is not necessarily comparable to other similarly titled captions of other companies.
Broadcast
Our foundational business is radio broadcasting, which includes the ownership and operation of radio stations in large metropolitan markets. Our broadcasting segment includes our national networks and national sales firms. National companies often prefer to advertise across the United States as an efficient and cost-effective way to reach their target audiences. Our national platform under which we offer radio airtime, digital campaigns, and other advertisements can benefit national companies by reaching audiences throughout the United States.

Salem Radio Network
TM
(“SRN
TM
”), based in Dallas, Texas, develops, produces, and syndicates a broad range of programming specifically targeted to Christian and family-themed talk stations, music stations and News Talk stations. SRN
TM
delivers programming via satellite to approximately 3,200 affiliated radio stations throughout the United States, including several of our Salem-owned stations. SRN
TM
operates five divisions, SRN
TM
Talk, SRN
TM
News, SRN
TM
Websites, SRN
TM
Satellite Services and Salem Music Network that includes Today’s Christian Music (“TCM”) and Singing News
®
Radio.

Salem Media Representatives (“SMR”) is our national advertising sales firm with offices in 9 U.S. cities. SMR specializes in placing national advertising on Christian and talk formatted radio stations as well as other commercial radio station formats. SMR sells commercial airtime to national advertisers on our radio stations and through our networks, as well as for independent radio station affiliates. SMR also contracts with independent radio stations to create custom advertising campaigns for national advertisers to reach multiple markets.

Salem Surround, our national multimedia advertising agency with locations in 29 markets across the United States, offers a comprehensive suite of digital marketing services to develop and execute audience-based marketing strategies for clients on both the national and local level. Salem Surround specializes in digital marketing services for each of our radio stations and websites as well as providing a full-service multimedia marketing strategy for each of our clients.

Salem Podcast Network (“SPN), is a highly specialized platform for conservative, political, news, and family-oriented podcasts. SPN reaches over 13 million downloads per month, and regularly ranks amount the top 100 most downloaded news and political podcasts according to the Apple Podcast Rankings.

SalemNOW is our online destination to a watch variety of
on-demand.
SalemNOW is dedicated exclusive conservative and faith-based films consisting of box office hits, acclaimed documentaries, music festivals, interviews with top Christian artists, events with our conservative talk show hosts and may other videos. SalemNOW can be found on mobile apps, and streaming services such as Roku, Apple TV, Amazon Fire Stick and select smart TVs.

Salem News Channel (“SNC”) is a conservative news, opinion
and
 commentary television network hosted by a number of engaging, compelling and respected conservative media personalities. SNC’s mission is to serve the media needs of audiences interested in political news and opinion content with a Judeo, Christian world vision and seeks to become the leading provider of conservative news and option content for the rapidly growing OTT television and multi-screen digital audience.
Digital Media
Our digital media-based businesses provide Christian, conservative, investing content, audio and video streaming, and other resources digitally through the web. Salem Web Network (“SWN”) websites include Christian content websites; BibleStudyTools.com, Crosswalk.com
®
, Christianity.com, iBelieve.com, GodTube
®
.com, OnePlace
®
.com, GodUpdates.com, CrossCards
™
.com, ChristianHeadlines.com, and LightSource.com, and our conservative opinion websites; collectively known as Townhall Media, include Townhall.com
®
, HotAir
™
.com, Twitchy
®
.com, RedState
®
.com, BearingArms.com, ConservativeRadio.com and pjmedia.com. We also publish digital newsletters through Eagle Financial Publications, which provide market analysis and
non-individualized
investment strategies from financial commentators on a subscription basis.
Our church product websites, including SermonSearch
™
.com, ChurchStaffing.com, WorshipHouseMedia.com, SermonSpice
™
.com, WorshipHouseKids.com, Preaching.com, ChristianJobs.com, ShiftWorship.com, JourneyBoxMedia.com, Playbackmedia.com, and HyperPixelsMedia.com, offer a variety of digital resources including videos, song tracks, sermon archives and job listings to pastors and Church leaders.
Our web content is accessible through all of our radio station websites that feature content of interest to local audiences throughout the United States.
Publishing
Our publishing operating segment includes two businesses: (1) Regnery
®
Publishing and Salem Books, traditional book publishers that have published dozens of bestselling books by leading conservative and Christian authors and personalities and (2) Salem Author Services, a self-publishing service for authors through Xulon Press and Mill City Press.
 
The table below presents financial information for each operating segment as of December 31, 2022, and 2021 based on the composition of our operating segments:
  
Broadcast
 
 
Digital
Media

Publishing
 
 
Unallocated
Corporate
Expenses
 
 
Consolidated
 

  
(Dollars in thousands)
 
Year Ended December 31, 2022
 
Net revenue
   
$
205,315
 
  
$
41,661
 
  
$
19,990
 
   $
—  
    
$
266,966
 
Operating expenses
   
 
163,992
 
  
 
33,750
 
  
 
22,142
 
  
 
18,557
 
  
 
238,441
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Net operating income (loss) before legal settlement, debt modification costs, depreciation, amortization, change in the estimated fair value of contingent
earn-out
consideration, impairments, and net (gain) loss on the disposition of assets
   
$
41,323
 
  
$
7,911
 
  
$
(2,152
) 
  
$
(18,557
) 
  
$
28,525
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Legal settlement
   
 
4,776
 
  
 
—  
 
  
 
—  
 
  
 
—  
 
  
 
4,776
 
Debt modification costs
   
 
—  
 
  
 
—  
 
  
 
—  
 
  
 
255
 
  
 
255
 
Depreciation
   
 
6,222
 
  
 
3,775
 
  
 
315
 
  
 
1,027
 
  
 
11,339
 
Amortization
   
 
15
 
  
 
1,257
 
  
 
—  
 
  
 
—  
 
  
 
1,272
 
Change in the estimated fair value of contingent
earn-out
consideration
   
 
—  
 
  
 
(5
) 
  
 
—  
 
  
 
—  
 
  
 
(5
) 
Impairment of indefinite-lived long-term assets other than goodwill
   
 
13,985
 
  
 
—  
 
  
 
—  
 
  
 
—  
 
  
 
13,985
 
Impairment of goodwill
   
 
127
 
  
 
—  
 
  
 
—  
 
  
 
—  
 
  
 
127
 
Net (gain) loss on the disposition of assets
   
 
(8,406
) 
  
 
—  
 
  
 
—  
 
  
 
30
 
  
 
(8,376
) 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Net operating income (loss)
   
$
24,604
 
  
$
2,884
 
  
$
(2,467
) 
  
$
(19,869
) 
  
$
5,152
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
 
    
Broadcast
    
Digital
Media
    
Publishing
    
Unallocated
Corporate
Expenses
    
Consolidated
  
    
(Dollars in thousands)
  
Year Ended December 31, 2021
 
Net revenue
    $ 191,443     $ 42,164     $ 24,640     $ —       $ 258,247  
Operating expenses
      145,720       33,797       23,220       17,483       220,220  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Net operating income (loss) before depreciation, amortization, debt modification costs and net (gain) loss on the disposition of assets
    $ 45,723     $ 8,367     $ 1,420     $ (17,483 )    $ 38,027  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Debt modification costs
      —         —         —         2,526       2,526  
Depreciation
      6,186       3,557       210       980       10,933  
Amortization
      17       1,541       337       —         1,895  
Net (gain) loss on the disposition of assets
      (23,212 )      (83 )      (306 )      26       (23,575 ) 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Operating income (loss)
    $ 62,732     $ 3,352     $ 1,179     $ (21,015 )    $ 46,248  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
 
    
Broadcast
     
Digital
Media
     
Publishing
     
Corporate
     
Consolidated
  
    
(Dollars in thousands)
  
As of December 31, 2022
                                    
Inventories, net
    $ —        $ —       
$
1,513
 
   
$
—  
 
   
$
1,513
 
Property and equipment, net
   
 
63,634
 
   
 
7,751
 
   
 
546
 
   
 
9,365
 
   
 
81,296
 
Broadcast licenses
   
 
303,774
 
      —          —          —       
 
303,774
 
Goodwill
   
 
2,623
 
   
 
20,016
 
   
 
1,446
 
      —       
 
24,085
 
Amortizable
intangible
assets, net
   
 
213
 
   
 
1,637
 
   
 
299
 
  
   —       
 
2,149
 
 
    
Broadcast
     
Digital
Media
     
Publishing
     
Corporate
     
Consolidated
  
    
(Dollars in thousands)
  
As of December 31, 2021
                                    
Inventories, net
    $ —        $ —        $ 960      $ —        $ 960  
Property and equipment, net
      61,694        8,447        746        8,452        79,339  
Broadcast licenses
      320,008        —          —          —          320,008  
Goodwill
      2,750        19,790        1,446        —          23,986  
Amortizable intangible assets, net
      229        2,215        —          —          2,444