Quarterly report pursuant to Section 13 or 15(d)

Segment Data

v3.23.3
Segment Data
 9 Months Ended
Sep. 30, 2023
Segment Reporting [Abstract]  
Segment Data
NOTE 15. 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 condensed consolidated statements of operations included in this quarterly report on Form
10-Q.
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 3,100 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”).
Salem Media Representatives (“SMR”) is our national advertising sales firm with offices in 15 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 amongst 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 many 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 September 30, 2023 and 2022 based on the composition of our operating segments:
 
    
Broadcast
    
Digital
Media
    
Publishing
    
Unallocated
Corporate
Expenses
    
Consolidated
  
                                          
    
(Dollars in thousands)
  
Three Months Ended September 30, 2023
                                         
Net revenue
   
$
48,966
 
  
$
9,965
 
  
$
4,566
 
   $ —     
$
63,497
 
Operating expenses
   
 
42,171
 
  
 
8,496
 
  
 
5,939
 
  
 
4,514
 
  
 
61,120
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Net operating income (loss) before depreciation, amortization, impairments, and
net (gain) loss on the disposition of assets
   
$
6,795
 
  
$
1,469
 
  
$
(1,373
) 
  
$
(4,514
) 
  
$
2,377
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Depreciation
   
 
1,594
 
  
 
990
 
  
 
60
 
  
 
172
 
  
 
2,816
 
Amortization
      —     
 
536
 
  
 
25
 
     —     
 
561
 
Change in the estimated fair value of contingent
earn-out
consideration
      —     
 
(100
) 
     —        —     
 
(100
) 
Impairment of indefinite-lived long-term assets other than goodwill
   
 
35,113
 
     —        —        —     
 
35,113
 
Impairment of goodwill
      —     
 
423
 
  
 
310
 
     —     
 
733
 
Net (gain) loss on the disposition of assets
   
 
(456
) 
     —        —        —     
 
(456
) 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Net operating income (loss)
   
$
(29,456
) 
  
$
(380
) 
  
$
(1,768
) 
  
$
(4,686
) 
  
$
(36,290
) 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Three Months Ended September 30, 2022
                                         
Net revenue
    $ 51,136     $ 10,189     $ 5,537     $ —      $ 66,862  
Operating expenses
      41,178       8,333       6,542       4,840       60,893  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Net operating income (loss) before legal settlement, debt modification costs, depreciation, amortization, impairments, and net (gain) loss on the disposition of assets
    $ 9,958     $ 1,856     $ (1,005 )    $ (4,840 )    $ 5,969  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Legal settlement
      3,825       —        —        —        3,825  
Debt modification costs
      —        —        —        2       2  
Depreciation
      1,483       927       76       251       2,737  
Amortization
      4       293       —        —        297  
Impairment of indefinite-lived long-term assets other than goodwill
      7,725       —        —        —        7,725  
Impairment of goodwill
      —        —        —        —        —   
Net (gain) loss on the disposition of assets
      166       1       —        —        167  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Net operating income (loss)
    $ (3,245 )    $ 635     $ (1,081 )    $ (5,093 )    $ (8,784 ) 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
 
  
Broadcast
 
 
Digital
Media
 
 
Publishing
 
 
Unallocated
Corporate
Expenses
 
 
Consolidated
 
  
 
 
 
 
 
  
(Dollars in thousands)
 
Nine Months Ended September 30, 2023
  
 
 
 
 
Net revenue
  
$
146,986
 
 
$
31,335
 
 
$
14,439
 
 
$
—  
 
 
$
192,760
 
Operating expenses
  
 
128,498
 
 
 
26,516
 
 
 
17,341
 
 
 
14,165
 
 
 
186,520
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net operating income (loss) before depreciation, amortization, change in the
estimated fair value of contingent
earn-out
consideration, impairments, and net
(gain) loss on the disposition of assets
  
$
18,488
 
 
$
4,819
 
 
$
(2,902
) 
 
$
(14,165
) 
 
$
6,240
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation
  
 
4,779
 
 
 
3,022
 
 
 
183
 
 
 
556
 
 
 
8,540
 
Amortization
  
 
2
 
 
 
1,674
 
 
 
75
 
 
 
—  
 
 
 
1,751
 
Change in the estimated fair value of contingent
earn-out
consideration
  
 
—  
 
 
 
(102
) 
 
 
—  
 
 
 
—  
 
 
 
(102
) 
Impairment of indefinite-lived long-term assets other than goodwill
  
 
38,376
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
38,376
 
Impairment of goodwill
  
 
—  
 
 
 
2,270
 
 
 
310
 
 
 
—  
 
 
 
2,580
 
Net (gain) loss on the disposition of assets
  
 
(336
) 
 
 
—  
 
 
 
—  
 
 
 
2
 
 
 
(334
) 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net operating income (loss)
  
$
(24,333
) 
 
$
(2,045
) 
 
$
(3,470
) 
 
$
(14,723
) 
 
$
(44,571
) 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2022
  
 
 
 
 
Net revenue
  
$
152,020
 
 
$
31,293
 
 
$
14,840
 
 
$
—  
 
 
$
198,153
 
Operating expenses
  
 
120,837
 
 
 
25,079
 
 
 
16,441
 
 
 
14,431
 
 
 
176,788
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net operating income (loss) before legal settlement, debt modification costs, depreciation, amortization, impairments, and net (gain) loss on the disposition of assets
  
$
31,183
 
 
$
6,214
 
 
$
(1,601
) 
 
$
(14,431
) 
 
$
21,365
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Legal settlement
  
 
4,776
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
4,776
 
Debt modification costs
  
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
250
 
 
 
250
 
Depreciation
  
 
4,669
 
 
 
2,847
 
 
 
245
 
 
 
776
 
 
 
8,537
 
Amortization
  
 
12
 
 
 
951
 
 
 
—  
 
 
 
—  
 
 
 
963
 
Change in the estimated fair value of contingent
earn-out
consideration
  
 
—  
 
 
 
(5
) 
 
 
—  
 
 
 
—  
 
 
 
(5
) 
Impairment of indefinite-lived long-term assets other than goodwill
  
 
11,660
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
11,660
 
Impairment of goodwill
  
 
127
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
127
 
Net (gain) loss on the disposition of assets
  
 
(8,491
) 
 
 
—  
 
 
 
—  
 
 
 
30
 
 
 
(8,461
) 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net operating income (loss)
  
$
 18,430
 
 
$
2,421
 
 
$
(1,846
) 
 
$
(15,487
) 
 
$
3,518
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
Broadcast
     
Digital
Media
     
Publishing
     
Unallocated
Corporate
     
Consolidated
  
                                              
    
(Dollars in thousands)
  
As of September 30, 2023
                                             
Inventories, net
    $ —       $ —      
$
1,383
 
  
$
— 
 
  
$
1,383
 
Property and equipment, net
   
 
65,607
 
   
 
4,952
 
   
 
432
 
   
 
9,086
 
   
 
80,077
 
Broadcast licenses
   
 
260,193
 
      —         —         —      
 
260,193
 
Goodwill
   
 
2,702
 
   
 
18,927
 
   
 
1,137
 
      —      
 
22,766
 
Amortizable intangible assets, net
      —      
 
4,051
 
     
224
 
  
 
— 
 
  
 
4,275
 
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