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Table of Contents
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
 
FORM
10-K
 
 
 
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2021
OR
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER
000-26497
 
 
SALEM MEDIA GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 

 
DELAWARE
 
77-0121400
(STATE OR OTHER JURISDICTION OF
INCORPORATION
OR
ORGANIZATION)
 
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
   
6400 NORTH BELT LINE ROAD
IRVING, TEXAS
 
75063
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
  
(ZIP CODE)
REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE:
(469586-2280
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
 
Trading Symbol
 
Name of the Exchange on which registered
Class A Common Stock, $0.01 par value per share
 
SALM
 
The NASDAQ Global Market
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☐    No  ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.    Yes  ☐    No  ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.    
Yes
  ☒    No  ☐ 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T
(§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.)    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule
12b-2
of the Exchange Act.
 
Large accelerated filer     ☐   Accelerated filer   
Non-accelerated
filer
    ☒   Smaller Reporting Company   
        Emerging Growth Company   
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule
12b-2
of the Exchange Act).    Yes  ☐    No  
As of June 30, 2021, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’s common stock held by
non-affiliates
of the registrant was $37,389,107 based on the closing sale price as reported on the NASDAQ Global Market.
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
 
Class A
  
Outstanding at February 25, 2022
Common Stock, $0.01 par value per share    21,605,324 shares
   
Class B
  
Outstanding at February 25, 2022
Common Stock, $0.01 par value per share    5,553,696 shares
DOCUMENTS INCORPORATED BY REFERENCE
 
Document
  
Parts Into Which Incorporated
Proxy Statement for the Annual Meeting of Stockholders    Part III, Items 10, 11, 12, 13 and 14
 
 
 
 

Table of Contents
TABLE OF CONTENTS
 
 
  
 
  
PAGE
 
 
Item 1.
  
  
 
3
 
Item 1A.
  
  
 
25
 
Item 1B.
  
  
 
25
 
Item 2.
  
  
 
25
 
Item 3.
  
  
 
26
 
Item 4.
  
  
 
27
 
 
Item 5.
  
  
 
28
 
Item 6.
  
  
 
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Item 7.
  
  
 
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Item 7A.
  
  
 
62
 
Item 8.
  
  
 
63
 
Item 9.
  
  
 
124
 
Item 9A.
  
  
 
124
 
Item 9B.
  
  
 
125
 
Item 9C.
  
  
 
125
 
 
Item 10.
  
  
 
126
 
Item 11.
  
  
 
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CERTAIN DEFINITIONS
Unless the context requires otherwise, all references in this annual report to “Salem” or the “company,” including references to Salem by “we” “us” “our” and “its” refer to Salem Media Group, Inc. and our subsidiaries.
All metropolitan statistical area (“MSA”) rank information used in this annual report, excluding information concerning the Commonwealth of Puerto Rico, is from the Fall 2021 Radio Market Survey Schedule & Population Rankings published by Nielsen Audio (“Nielsen”). According to the Radio Market Survey, the population estimates are based upon the 2010 U.S. Bureau Census estimates updated and projected to January 1, 2022, by Nielsen.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Salem makes “forward-looking statements” from time to time in both written reports (including this annual report) and oral statements, within the meaning of federal and state securities laws. Disclosures that use words such as the company “believes,” “anticipates,” “estimates,” “expects,” “intends,” “will,” “may,” “intends,” “could,” “would,” “should,” “seeks,” “predicts,” or “plans” and similar expressions are intended to identify forward-looking statements, as defined under the Private Securities Litigation Reform Act of 1995.
You should not place undue reliance on these forward-looking statements, which reflect our expectations based upon data available to the company as of the date of this annual report. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from expectations. Except as required by law, the company undertakes no obligation to update or revise any forward-looking statements made in this annual report. Any such forward-looking statements, whether made in this annual report or elsewhere, should be considered in context with the various disclosures made by Salem about its business. These projections and other forward-looking statements fall under the safe harbors of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”).
 
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PART I
ITEM 1. BUSINESS.
Corporate Information
Our filings with the Securities and Exchange Commission (“SEC”) are available free of charge under the Investor Relations section of our website at
www.salemmedia.com
as soon as reasonably practical after electronically filed Any information found our website is not a part of or incorporated by reference into this or any report of Salem filed with or furnished to the SEC.
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 when evaluating the performance of our operating segments.
Business Strategy
We are fundamentally committed to programming and content emphasizing Christian values, family themes, and conservative news. Our commitment to these values means that we may choose not to switch to other formats or pursue potentially more profitable business opportunities in response to changes in audience preferences.
Our goal is to produce and deliver compelling content to audiences interested in Christian and family-themed programming and conservative news talk, to be considered the market leader in these segments for all audiences, programmers, and advertisers. Our integrated multimedia platform includes traditional media, such as radio broadcasting and book publishing, as well as emerging forms of media such as podcasts, websites, mobile applications, and digital publications. We pursue the ongoing expansion of our media platform as the marketplace evolves while aggressively managing operating costs and cash flows. Expansion opportunities include increasing the strength and reach of our broadcast signals, providing
state-of-the-art
broadcast and digital marketing services to our customers, creating and distributing content through the Salem Podcast Network (“SPN”), investing in and building websites, mobile and tablet applications, promoting our authors and
on-air
talent, and increasing the distribution and page views for our print and digital content. Our national presence in each of these mediums provides advertisers and programmers with a powerful and integrated platform to reach audiences throughout the United States without compromising the sense of community involvement and branding that we generate through local events and promotions.
Broadcasting
Our foundational business is the ownership and operation of radio stations in large metropolitan markets. We assemble market clusters, or multiple radio stations operating within the same geographic market, to achieve operational efficiencies. Several benefits are achievable when operating market clusters. First, we can offer advertisers and programmers access to multiple audiences by providing airtime on each radio station in that market. Second, we realize cost and operating efficiencies by consolidating sales, technical and administrative support, promotional functions, and other shared overhead costs, such as facilities and rent, when possible. Third, additional radio stations in existing markets allows us to leverage our
hands-on
knowledge of that market to increase our appeal to new audiences and advertisers.
 
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Our broadcasting segment creates and distributes programming content though our radio stations and our networks, including our national and local
on-air
hosts. Broadcasting also includes our media strategists, our national advertising sales firm, and Salem Surround, our multimedia advertising agency specializing in digital product offerings.
Digital Media
The Internet, smartphones and tablets continue to change the way in which content and advertisements are delivered to audiences. Continual advancements with online search engines, social media and mobile applications provide consumers with numerous methods to locate specific content and information online. Digital media allow us to effectively deliver our content and to provide strategic marketing services to our customers. Our editorial staff, including our
on-air
personalities, provide digital commentaries, programs, text, audio, and video content that we believe to be knowledge-based, credible and reliable. We make strategic decisions to invest in website development, mobile applications and tablet applications given the ongoing shift in consumer demand. We continually seek opportunities to diversify our digital traffic sources to avoid reliance on any one provider. We offer custom digital product offerings, including tools for metasearch, retargeting, website design, reputation management, online listing services, and social media marketing.
Publishing
We publish books and eBooks for audiences interested in Christian and family-themed content as well as conservative news and opinion. Our strategy to attract highly sought-after authors and high-profile Christian commentators expands our presence in the conservative and Christian media market and increases the likelihood of publishing books that appear on the best-seller lists.
Seasonality
Our results are subject to seasonal fluctuations. As is typical in the broadcasting industry, our second and fourth quarter advertising revenue typically exceeds our first and third quarter advertising revenue. Seasonal fluctuations in advertising revenue correspond with quarterly fluctuations in the retail industry. Additionally, we experience increased demand for political advertising during election even numbered years, over
non-election
odd numbered years. Political advertising revenue varies based on the number and type of candidates as well as the number and type of contested issues. We also experience fluctuations in quarter-over-quarter comparisons based on the date on which the Easter holiday is observed, as this holiday generates a higher volume of downloads from our church products websites.
Audience Growth
Our success depends on our ability to reach a growing audience. We seek audience growth opportunities by increasing the strength and number of our broadcast signals, increasing product offerings through digital marketing services, creating and distributing content through SPN, increasing the number of page-views through our digital media platforms, increasing book sales, and increasing the subscriber base for our digital content.
Our audience growth is also contingent upon the desirability of our content to our audience. We produce and provide content that we believe is both compelling and of high commercial value. We rely on a combination of research, market testing and our understanding of our audience to target promotions and events that create visibility and brand awareness in each of our local markets. For maximum results, we cross-promote our content on each of our media platforms. By maximizing our audience share, we achieve growth in ratings, growth in page views and growth in subscribers that we believe can be converted into revenue from programmers and advertisers that are interested in reaching our audience.
 
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Media Strategists
We have assembled an effective, highly trained sales staff that is responsible for converting our audience into revenue. Media strategists are trained to provide integrated marketing strategies that includes all of our media platforms and our full-service digital marketing agency. We operate a focused, sales-oriented culture that rewards selling efforts through a commission and bonus compensation structure. Our media strategists create custom advertising campaigns and provide comprehensive solutions to our clients. Campaigns may include specific geographic coverage areas, event sponsorships, special promotions,
e-mail
sponsorships, print advertisements, and various digital media elements, including banner advertisements, site retargeting, search engine marketing, tools for metasearch, website design, reputation management, online listing services, and social media marketing.
Significant Community Involvement
We expect our public image to reflect the lifestyle and viewpoints of the target demographic groups that we serve. We regularly collaborate with organizations that serve Christian, conservative, and family-themed audiences as well as sponsor and support events that are important to these groups. We believe that our ongoing active involvement and our strong relationships within Christian and conservative communities provide us with a unique competitive advantage that significantly improves the marketability of our media platform to advertisers and programmers targeting such communities. We produce and sponsor a number of local events that we believe are important in building our brand identity. Our sponsored events include listener rallies, speaking tours, pastor appreciation events and concerts such as our
Fishfest
®
concerts. Local events such as these connect us with our audience and enable us to create an enhanced awareness and name recognition in each of our markets. We believe that this brand awareness creates loyalty with our audience and increases our audience share and ratings over time.
Corporate Structure
Management of our operations is largely decentralized with operational vice presidents and general managers located throughout the United States. We believe that this decentralization encourages each general manager and vice president to apply innovative techniques for improving and growing their operations locally in ways that may become transferable to benefit other markets and operations.
Our broadcast operations vice presidents, some of whom are also station general managers, are experienced radio broadcasters with expertise in sales, programming, marketing, and production. Each of our broadcast operations vice presidents oversees several markets on a regional basis. Our digital and publishing operations vice presidents and general managers are also located throughout the United States at various locations in which we operate.
All our locations receive executive leadership and oversight from our corporate staff. Corporate staff members have experience and expertise in, among other things, accounting and finance, treasury, risk management, insurance, information technology, human resources, legal, engineering, real estate, strategic direction, and other support functions designed to provide resources to local management. Corporate staff also oversee the placement and rate negotiations for national block programming on our stations. Centralized oversight of national programming is necessary because many of our key programming partners purchase time in multiple radio markets.
Environmental Compliance
Our business activities as a media company and content provider have minimal environmental risks, however, we recognize the importance of protecting the environment. As the owner, lessee or operator of various real properties and facilities, we are subject to various federal, state, and local environmental laws and regulations. Historically, compliance with these laws and regulations has not had a material adverse effect on our business. There can be no assurance, however, that compliance with existing or new environmental laws and regulations will not require us to make significant expenditures of funds.
 
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Prior to our ownership or operation of our facilities, substances or waste that are, or might be considered, hazardous under applicable environmental laws may have been generated, used, stored, or disposed of at certain of those facilities. In addition, environmental conditions relating to the soil and groundwater at or under our facilities may be affected by the proximity of nearby properties that have generated, used, stored, or disposed of hazardous substances. As a result, it is possible that we could become subject to environmental liabilities in the future in connection with these facilities under applicable environmental laws and regulations. Although we believe that we are in substantial compliance with such environmental requirements and have not in the past been required to incur significant costs in connection therewith, there can be no assurance that our costs to comply with such requirements will not increase in the future or that we will not become subject to new governmental regulations, including those pertaining to potential climate change legislation that may impose additional restrictions or costs on us. We believe that none of our properties have any condition that is likely to have a material adverse effect on our consolidated financial position, results of operations or liquidity.
Human Capital
As of February 10, 2022, we employed 1,336 total employees of which 1,079 were full time and 257 were part time. These employees consisted of 906 in broadcasting, 161 in digital media, 92 in publishing, and 177 corporate employees. We consider our relations with our employees to be good and none of our employees are covered by collective bargaining agreements. The average tenure for all of our employees is 8 years.
We employ
on-air
personalities and may enter into employment agreements with these
on-air
personalities in order to protect our interests in these relationships. However,
on-air
talent may be lost to competitors for a variety of reasons. While we do not believe that the loss of any one of our
on-air
personalities would adversely affect our consolidated financial condition and results of operations, the loss of several key
on-air
personalities combined could adversely affect our business.
The loss of any of our senior management team could harm our ability to implement our business strategy and respond to the rapidly changing market conditions in which we operate. Our continued success depends on contributions from our employees and senior management team. Effective succession planning is also important for our long-term success. The Nominating and Governance committee of our Board of Directors (“Board”) discusses succession planning annually. Effective January 2, 2022, Edward G. Atsinger III, transitioned to the newly created role of Executive Chairman of the Board of Directors, David Santrella was appointed Chief Executive Officer and David Evans was appointed Chief Operating Officer. Stuart W. Epperson, Sr., resigned from the Board and was appointed to the position of Chairman Emeritus. Stuart W. Epperson, Jr. will join the Board, filling the vacancy created by Mr. Epperson, Sr.’s resignation.
Impact of the
COVID-19
Pandemic
The
COVID-19
global pandemic that began in March 2020 materially impacted our business. We experienced a rapid decline in revenue from advertising, programming, events, and book sales. Several advertisers reduced or ceased advertising spending due to the outbreak and
stay-at-home
orders that effectively shut many businesses down. The revenue decline impacted our broadcast segment, which derives substantial revenue from local advertisers who were particularly hard hit due to social distancing and government interventions, and our publishing segment, which derives revenue from book sales through retail stores and live events.
While we see progress being made in revenue returning to
pre-pandemic
levels, the
COVID-19
pandemic continues to create significant uncertainty and disruption in the economy. These uncertainties could materially impact significant accounting estimates related to, but not limited to, allowances for doubtful accounts, impairments, and
right-of-use assets.
As a result, many estimates and assumptions require increased judgment and carry a higher degree of variability and volatility. These estimates may change as new events occur and additional information emerges, and such changes are recognized or disclosed in our consolidated financial statements.
 
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During 2020 we implemented several measures to reduce costs and conserve cash to ensure that we had adequate cash to meet our debt servicing requirements, including:
 
   
limiting capital expenditures;
 
   
reducing discretionary spending, including travel and entertainment;
 
   
eliminating open positions and freezing new hires;
 
   
reducing staffing levels;
 
   
implementing temporary company-wide pay cuts of 5%, 7.5% or 10% depending on salary level;
 
   
furloughing certain employees;
 
   
temporarily suspending the company 401(k) match;
 
   
requesting rent concessions from landlords;
 
   
requesting discounts from vendors;
 
   
offering early payment discounts to certain customers in exchange for advance cash payments; and
 
   
suspending the payment of distributions on our common stock indefinitely.
As the economy began to show signs of recovery, we reversed several of these cost reduction initiatives during 2021. We continue to operate with lower staffing levels where appropriate, we have not declared or paid equity distributions on our common stock, and the company 401(k) match was not reinstated until January 2022.
The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020. The CARES Act provided emergency economic assistance for individuals and businesses impacted by the
COVID-19
pandemic, including opportunities for additional liquidity, loan guarantees, and other government programs. On December 27, 2020, Congress passed the Consolidated Appropriations Act (“CAA”) that included a second relief package, which, among other things, provides for an extension of the Payroll Support Program established by the CARES Act. We utilized certain benefits of the CARES Act and the CAA, including:
 
   
We deferred $3.3 million of employer FICA taxes from April 2020 through December 2020, of which 50% was paid in December 2021 and the remaining 50% is payable in December 2022;
 
   
A relaxation of interest expense deduction limitation for income tax purposes;
 
   
We received Paycheck Protection Program (“PPP”) loans of $11.2 million in total during the first quarter of 2021 through the Small Business Association (“SBA”) based on the eligibility as determined on a
per-location
basis; and
 
   
In July 2021, the SBA forgave all but $20,000 of the PPP loans, with the remaining PPP loan repaid in July 2021.
Recent Developments
During the year ended December 31, 2021, we completed or entered into the following transactions:
Debt Transactions
On September 10, 2021, we exchanged $112.8 million of the 6.75% Senior Secured Notes due 2024 (“2024 Notes”) for $114.7 million (reflecting a call premium of 1.688%) of newly issued 7.125% Senior Secured Notes due 2028 (“2028 Notes.”) Contemporaneously with the refinancing, we obtained commitments from the holders of the 2028 Notes to purchase up to $50 million in additional 2028 Notes (“Delayed Draw 2028 Notes,”) contingent upon satisfying certain performance benchmarks, the proceeds of which are to be used exclusively to repurchase or repay the remaining balance outstanding of the 2024 Notes.
 
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In addition to the exchange on September 10, 2021, we repurchased an additional $43.3 million in total of the 2024 Notes for $44.0 million in cash, recognizing a net loss of $1.0 million after adjusting for bond issuance costs through multiple transactions during the second half of 2021. These transactions are described in Note 11, Long-Term Debt in the notes to our Consolidated Financial Statements contained in Item 8 of this annual report.
We received $11.2 million in aggregate principal amount of PPP loans through the SBA during the first quarter of 2021 based on the eligibility of our radio stations and networks as determined on a
per-location
basis. The PPP loans were accounted for as debt in accordance with FASB ASC Topic 470. The loan balances and accrued interest were forgivable provided that the proceeds were used for eligible purposes, including payroll, benefits, rent and utilities within the covered period. We used the PPP loan proceeds according to the terms and filed timely applications for forgiveness. During July 2021, the SBA forgave all but $20,000 of the PPP loans resulting in a
pre-tax
gain on the forgiveness of $11.2 million. The remaining PPP loan was repaid in July 2021.
Equity Transactions
In April 2021, we filed a prospectus supplement to our shelf registration statement on Form
S-3
with the SEC covering the offering, issuance and sale of up to $15.0 million of our Class A Common Stock pursuant to an
at-the-market
facility, with B. Riley Securities, Inc. acting as sales agent. No Common Stock transactions have taken place under the facility.
Acquisitions
On July 2, 2021, we acquired the SeniorResource.com domain for $0.1 million in cash.
On July 1, 2021, we acquired the ShiftWorship.com domain and digital assets for $2.6 million in cash. The digital content library is operated within Salem Web Network’s church products division.
On June 1, 2021, we acquired radio stations
KDIA-AM
and
KDYA-AM
in San Francisco, California for $0.6 million in cash.
On April 28, 2021, we acquired the Centerline New Media domain and digital assets for $1.3 million in cash. The digital content library is operated within Salem Web Network’s church products division.
On March 8, 2021, we acquired the Triple Threat Trader newsletter. We paid no cash at the time of closing and assumed deferred subscription liabilities of $0.1 million. As part of the purchase agreement, we may pay up to an additional $11,000 in contingent
earn-out
consideration over the next two years based on the achievement of certain revenue benchmarks.
Divestitures
On November 30, 2021, sold approximately 77 acres of land in Tampa, Florida for $13.5 million in cash. The land was the transmitter site for
WTBN-AM
that will now be diplexed from our owned and operated
WGUL-AM
facility. We recognized a
pre-tax
gain on the sale of $12.9 million.
On July 27, 2021, we sold the Hilary Kramer Financial Newsletter and related assets for $0.2 million to be collected in quarterly installments over the
two-year
period ending September 30, 2023. We recognized a
pre-tax
gain on the sale of $0.1 million.
On July 23, 2021, we sold approximately 34 acres of land in Lewisville, Texas, for $12.1 million in cash. The land was being used for as the transmitter site for company owned radio station
KSKY-AM.
We retained a portion of the land in the southwest corner of the site to continue operating the radio station. We recognized a
pre-tax
gain on the sale of $10.5 million.
 
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On May 25, 2021, we sold Singing News Magazine and Singing News Radio for $0.1 million in cash. In addition to the assets sold, the buyer assumed deferred subscription liabilities of $0.4 million resulting in a
pre-tax
gain on the sale of $0.5 million.
On March 18, 2021, we sold radio station
WKAT-AM
and an FM translator in Miami, Florida for $3.5 million. We collected $3.2 million in cash upon closing and received a promissory note for $0.3 million due one year from the closing date. The buyer began operating the station under an LMA in November 2020. We recognized an estimated
pre-tax
loss of $1.4 million during the three-month period ended September 30, 2020, the date we entered into an Asset Purchase Agreement (“APA”) with the buyer, which reflected the sale price as compared to the carrying value of the assets to be sold, estimated closing costs, and the
write-off
of the remaining Miami assets as a result of exiting this market. We adjusted the
pre-tax
loss by $0.4 million to $1.8 million upon closing based on the actual closing costs incurred and a reconciliation of total station assets to the assets included in the sale.
Pending Transactions
On December 6, 2021, we entered into an APA to acquire radio station
WLCC-AM
and an FM translator in the Tampa, Florida market for $0.6 million of cash. The WLCC transmitter site will be used to broadcast radio station
WTBN-AM
due to the sale of land housing the
WTBN-AM
transmitter. We paid $0.1 million into an escrow account in December 2021 and closed on the acquisition on February 15, 2022.
On November 18, 2021, we entered an agreement to sell 4.5 acres of land in Phoenix, Arizona for $2.0 million in cash. We will relocate our transmitter equipment for
KXXT-AM
from the site within 90 days of closing, which took place on January 10, 2022.
On August 31, 2021, we entered an agreement to sell 9.3 acres of land in the Denver area for $8.2 million in cash. We expect to close this sale early in 2022 and plan to continue broadcasting both
KRKS-AM
and
KBJD-AM
from this site.
On June 2, 2021, we entered into an APA to acquire radio station
KKOL-AM
in Seattle, Washington for $0.5 million in cash. We paid $0.1 million in cash into an escrow account and we began operating the station under an LMA on June 7, 2021.
On February 5, 2020, we entered into an APA with Word Broadcasting to sell radio stations
WFIA-AM,
WFIA-FM
and
WGTK-AM
in Louisville, Kentucky for $4.0 million with credits applied from amounts previously paid, including a portion of the monthly fees paid under a TBA. Due to changes in debt markets, the transaction was not funded, and it is uncertain when, or if, the transaction will close. Word Broadcasting continues to program the stations under a TBA that began in January 2017.
Broadcasting
Our broadcasting segment includes the operating results of our radio stations, networks, and our national sales agencies including our full-service digital agency, Salem Surround. 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 print advertisements can benefit national companies by reaching audiences throughout the United States.
Radio Stations
We own and/or operate 101 radio stations in 35 markets, including 60 radio stations in 23 of the top 25 markets, consisting of 32 FM radio stations and 69 AM radio stations. We also program the Family Talk
®
Christian-themed talk format station on SiriusXM Channel 131. We are one of only three commercial radio broadcasters with radio stations in all the top 10 markets. We are the sixth largest commercial radio broadcaster in the United States as measured by number of radio stations overall and the third largest operator as measured by number of stations in the top 25 markets.
 
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We program our radio stations in three main formats: (1) Christian Teaching and Talk, (2) News Talk and (3) Contemporary Christian Music (“CCM”). Other radio station formats include Spanish language Christian Teaching and Talk, Business, Country, Urban, and Classic Hits.
Christian Teaching and Talk.
We currently program 39 of our radio stations in our foundational format, Christian Teaching and Talk, which is talk programming emphasizing Christian and family themes. Through this format, a listener can hear Bible teachings and sermons, as well as gain insight to questions related to daily life, such as raising children or religious legal rights in education and in the workplace. This format uses block programming time to offer a learning resource and a source of personal support for listeners. Listeners often contact our programmers to donate, ask questions and obtain materials on a subject matter or receive study guides based on what they have learned on the radio.
Block Programming.
We recognize revenue from the sale of blocks of airtime to program producers that typically consist of 12
1
/
2
, 25 or
50-minutes
of time. We sell blocks of airtime on our Christian Teaching and Talk format stations to a variety of national and local religious and charitable organizations that we believe create compelling radio programs. National programmers, such as established
non-profit
religious and educational organizations, typically purchase time on a Monday through Friday basis with supplemental programming blocks available for weekend release. Local programmers, such as community churches and organizations, typically purchase blocks for weekend releases. Historically, more than 95% of these national religious and charitable organizations renew their annual programming relationships with us. Based on our historical renewal rates, we believe that block programming provides a steady and consistent source of revenue and cash flows. Our top ten programmers have remained relatively constant and average more than 30 years
on-air
with us. Over the last five years, block-programming has generated 38% to 43% of our total net broadcast revenue.
Satellite Radio.
We program SiriusXM Channel 131, the exclusive Christian Teaching and Talk channel on SiriusXM, reaching the entire nation 24 hours a day, seven days a week.
News Talk.
We currently program 31 of our radio stations in a News Talk format. Our research shows that our News Talk format is highly complementary to our core Christian Teaching and Talk format. As programmed by Salem, both formats express conservative views and family values. Our News Talk format allows us to leverage syndicated talk programming produced by Salem Radio Network
TM
(“SRN
TM
”) to radio stations throughout the United States. Syndication of our programs allows us to reach audiences in markets in which we do not own or operate radio stations.
Contemporary Christian Music.
We currently program 12 of our radio stations in a Contemporary Christian Music (“CCM”) format, branded The FISH
®
in most markets. Through the CCM format, we bring listeners the words of inspirational recording artists, set to upbeat contemporary music. Our music format, branded “Safe for the Whole Family”, features sounds and lyrics that listeners of all ages can enjoy and appreciate.
The following table sets forth information about each of Salem’s stations, in order of market size:
 
Market (1)
 
MSA
Rank (2)
 
Station
Call Letters
 
Year
Acquired
  
Format
New York, NY
  1, 19 (3)  
WMCA-AM
  1989    Christian Teaching and Talk
   
WNYM-AM
  1994    News Talk
Los Angeles, CA
  2  
KKLA-FM
  1985    Christian Teaching and Talk
   
KRLA-AM
  1998    News Talk
   
KFSH-FM
  2000    Contemporary Christian Music
Chicago, IL
  3  
WYLL-AM
  2001    Christian Teaching and Talk
   
WIND-AM
  2005    News Talk
San Francisco, CA
  4, 37 (4)  
KFAX-AM
  1984    Christian Teaching and Talk
   
KDOW-AM
  2001    Business
   
KTRB-AM
  2018    News Talk
   
KDIA-AM
  2021    Christian Teaching and Talk
   
KDYA-AM
  2021    Other
 
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Market (1)
 
MSA
Rank (2)
 
Station
Call Letters
 
Year
Acquired
  
Format
Dallas-Fort Worth, TX
  5  
KLTY-FM
  1996    Contemporary Christian Music
       
KWRD-FM
  2000    Christian Teaching and Talk
       
KSKY-AM
  2000    News Talk
       
KTNO-AM
  2015    Spanish Language Christian Teaching and Talk
Houston-Galveston, TX
  6  
KNTH-AM
  1995    News Talk
       
KKHT-FM
  2005    Christian Teaching and Talk
Atlanta, GA
  7  
WNIV-AM
  2000    Christian Teaching and Talk
       
WLTA-AM
  2000    Christian Teaching and Talk
       
WFSH-FM
  2000    Contemporary Christian Music
       
WGKA-AM
  2004    News Talk
       
WDWD-AM
  2015    Christian Teaching and Talk
Washington, D.C.
  8  
WAVA-FM
  1992    Christian Teaching and Talk
       
WAVA-AM
  2000    Christian Teaching and Talk
       
WWRC-AM
  2017    News Talk
Philadelphia, PA
  9  
WFIL-AM
  1993    Christian Teaching and Talk
       
WNTP-AM
  1994    News Talk
Boston, MA
  10  
WEZE-AM
  1997    Christian Teaching and Talk
       
WROL-AM
  2001    Christian Teaching and Talk
Seattle-Tacoma, WA
  11  
KGNW-AM
  1986    Christian Teaching and Talk
       
KLFE-AM (5)
  1994    News Talk
       
KKOL-AM
  Pending    Other
       
KNTS-AM (5)
  1997    Regional Mexican
Detroit, MI
  13  
WDTK-AM
  2004    News Talk
       
WLQV-AM
  2006    Christian Teaching and Talk
Phoenix, AZ
  14  
KKNT-AM
  1996    News Talk
       
KPXQ-AM
  1999    Christian Teaching and Talk
       
KXXT-AM
  2014    Christian Teaching and Talk
Minneapolis-St.
Paul, MN
  15  
KKMS-AM
  1996    Christian Teaching and Talk
       
KDIZ-AM
  1998    News Talk
       
WWTC-AM
  2001    News Talk
       
KYCR-AM
  2015    Business
San Diego, CA
  16  
KPRZ-AM
  1987    Christian Teaching and Talk
       
KCBQ-AM
  2000    News Talk
Tampa, FL
  17  
WTWD-AM (6)
  2000    Christian Teaching and Talk
       
WTBN-AM (6)
  2001    Christian Teaching and Talk
       
WGUL-AM
  2005    News Talk
       
WLCC-AM
  2022    Christian Teaching and Talk
Denver-Boulder, CO
  18  
KRKS-FM
  1993    Christian Teaching and Talk
       
KRKS-AM
  1994    Christian Teaching and Talk
       
KNUS-AM
  1996    News Talk
       
KBJD-AM (7)
  1999    Other
Portland, OR
  21  
KPDQ-FM
  1986    Christian Teaching and Talk
       
KPDQ-AM
  1986    Christian Teaching and Talk
       
KFIS-FM
  2002    Contemporary Christian Music
       
KRYP-FM
  2005    Regional Mexican
       
KDZR-AM
  2015    Spanish Language
       
KPAM-AM
  2019    News Talk
San Antonio, TX
  24  
KSLR-AM
  1994    Christian Teaching and Talk
       
KLUP-AM
  2000    News Talk
 
11

Table of Contents
                 
Market (1)
 
MSA
Rank (2)
 
Station
Call Letters
 
Year
Acquired
  
Format
Riverside-San Bernardino, CA
  25  
KTIE-AM
  2001    News Talk
Sacramento, CA
  27  
KFIA-AM
  1995    Christian Teaching and Talk
       
KTKZ-AM
  1997    News Talk
       
KSAC-FM
  2002    Business
       
KKFS-FM
  2006    Contemporary Christian Music
Pittsburgh, PA
  29  
WORD-FM
  1993    Christian Teaching and Talk
       
WPIT-AM
  1993    Christian Teaching and Talk
       
WPGP-AM
  2015    News Talk
Orlando, FL
  31  
WORL-AM
  2006    News Talk
       
WTLN-AM
  2015    Christian Teaching and Talk
Cleveland, OH
  34  
WHKW-AM
  2000    Christian Teaching and Talk
       
WFHM-FM
  2001    Contemporary Christian Music
       
WHK-AM
  2005    News Talk
Columbus, OH
  35  
WRFD-AM
  1987    Christian Teaching and Talk
       
WTOH-FM
  2013    News Talk
Nashville, TN
  40  
WBOZ-FM
(8)
  2000    Contemporary Christian Music
       
WFFH-FM
(8)
  2002    Contemporary Christian Music
       
WFFI-FM
(8)
  2002    Contemporary Christian Music
Louisville, KY
  55  
WFIA-FM
  1999    Operated by a third party under a Time Brokerage Agreement (“TBA”)
       
WGTK-AM
  2000    Operated by a third party under a TBA
       
WFIA-AM
  2001    Operated by a third party under a TBA
Greenville, SC
  58  
WGTK-FM
  2013    News Talk
       
WRTH-FM
  2014    Classic Hits
       
WLTE-FM
  2014    Classic Hits
Honolulu, HI
  64  
KAIM-FM
  2000    Contemporary Christian Music
       
KGU-AM
  2000    Country
       
KHCM-AM
  2000    Operated by a third party under a TBA
       
KHCM-FM
  2004    Country Music
       
KGU-FM
  2004    Christian Teaching and Talk
       
KKOL-FM
  2005    Oldies
       
KHNR-AM
  2006    News Talk
Sarasota-Bradenton, FL
  69  
WLSS-AM
  2005    News Talk
Colorado Springs, CO
  86  
KGFT-FM
  1996    Christian Teaching and Talk
       
KBIQ-FM
  1996    Contemporary Christian Music
       
KZNT-AM
  2003    News Talk
Little Rock, AR
  93  
KDIS-FM
  2014    Christian Teaching and Talk
       
KKSP-FM
  2015    Contemporary Christian Music
       
KDXE-FM
  2018    News Talk
       
KZTS-AM
  2018    Gospel
Oxnard-Ventura, CA
  124  
KDAR-FM
  1974    Christian Teaching and Talk
Warrenton, VA
     
WRCW-AM
  2012    News Talk
 
(1)
Actual city of license may differ from metropolitan market served.
(2)
All metropolitan statistical area (“MSA”) rank information used in this annual report, excluding information concerning the Commonwealth of Puerto Rico, is from the Fall 2021 Radio Market Survey Schedule &
 
12

Table of Contents
  Population Rankings published by Nielsen. According to the Radio Market Survey, the population estimates are based upon the 2010 U.S. Bureau Census estimates updated and projected to January 1, 2022 by Nielsen Demographics.
(3)
This market includes the Nassau-Suffolk, NY Metro market, which independently has a MSA rank of 19.
(4)
This market includes the San Jose, CA market, which independently has a MSA rank of 37.
(5)
KNTS-AM
is an expanded band AM station paired with KLFE(AM). The licenses for these stations include a condition that the most recent license renewal was granted subject to the resolution of AM expanded band dual operating authority issues in MB Docket
No. 07-294.
(6)
WTBN-AM
is simulcast with
WTWD-AM,
Tampa, FL.
(7)
KBJD-AM
is an expanded band AM station paired with KRKS(AM). The licenses for these stations include a condition that the most recent license renewal was granted subject to the resolution of AM expanded band dual operating authority issues in MB Docket
No. 07-294.
(8)
WBOZ-FM
is trimulcast with
WFFH-FM,
Nashville, TN and
WFFI-FM,
Nashville, TN.
Broadcast revenue includes radio advertising spots, programming revenue, digital revenue from each of our radio station websites, digital email blasts, Salem Surround revenue, event revenue, and network advertising revenue. The principal source of network broadcast revenue is from the sale of spot advertising time. Salem Consumer Products, our
e-commerce
site, generates broadcast revenue from the sale of host content materials.
We recognize advertising revenue from radio stations as the spots air or are delivered. For the year ended December 31, 2021, we derived 21.8% of our net broadcast revenue, or $41.7 million, from the sale of local spot advertising and 7.5% of our net broadcast revenue, or $14.3 million, from the sale of national spot advertising.
We recognize programming revenue as the programs air. For the year ended December 31, 2021, we derived 25.4% of our net broadcast revenue from the sale of national time and 12.9% of our net broadcast revenue from the sale of local time, or $48.7 million and $24.8 million, respectively. National program revenue is primarily generated from geographically diverse, well-established
non-profit
religious and educational organizations that purchase time on our stations in a large number of markets in the United States. National program producers typically purchase 12
1
/
2
, 25 or
50-minute
blocks of time on a Monday through Friday basis and may offer supplemental programming for weekend release. We generate local program revenue from community organizations and churches that typically purchase blocks for weekend releases and from local speakers who generally purchase daily releases. Our strategy is to identify and assist quality local programs to expand into national syndication.
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 including Today’s Christian Music (“TCM.”) SRN
TM
’s net revenue for the year ended December 31, 2021, was $23.0 million, or 12.0% of net broadcast revenue.
Salem Media Representatives
Salem Media Representatives (“SMR”) is our national advertising sales firm with offices in 12 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. SMR’s net commission revenue to independent radio station affiliates for the year ended December 31, 2021, was $0.5 million or 0.2% of net broadcast revenue.
 
13

Table of Contents
Salem Surround
Salem Surround is our national multimedia advertising agency with locations in 33 markets across the United States. Salem Surround specializes in digital marketing services for each of our radio stations and websites as well as provides a full-service digital marketing strategy for each of our clients. Salem Surround provides custom digital product offerings, including tools for metasearch, retargeting, website design, reputation management, online listing services, and social media marketing. Digital product offerings may include third-party websites, such as Google or Facebook, which can be included in a digital advertising social media campaign. We manage all aspects of the digital campaign, including social media placements, review and approval of target audiences, and the monitoring of actual results to make modifications as needed.
Salem Podcast Network
The Salem Podcast Network (“SPN”) is a highly specialized platform for conservative, political, news, and family-oriented podcasts. SPN reaches over 11 million downloads per month, with one show already in the top 10 of all podcasts, and another in the top 10 in the News category according to the Apple Podcast Rankings.
Digital Media
Our digital media segment provides Christian, conservative, investing content, retirement,
e-commerce,
audio and video streaming, and other resources digitally through the web. Revenue generated from our digital media segment includes advertising arrangements based on
cost-per-click,
or performance-based advertising; display advertisements where revenue is dependent upon the number of page views; and lead generation advertisements where revenue is dependent upon users registering for, purchasing, or demonstrating an interest in our advertisers’ products or services. We also generate revenue from digital subscriptions, streaming, downloads, and product sales through our church product websites and investing websites. Revenue is recognized upon digital delivery or page views, downloads and upon shipment of products. Revenue from this operating segment is reported as Digital Media revenue on our Consolidated Statements of Operations included in Item 8 of this annual report.
We own and operate numerous websites including:
Salem Web Network (“SWN”)
Christian Content Websites:
BibleStudyTools.com
is a Bible website for verse search and
in-depth
studies featuring commentaries, reading plans, and other helpful resources designed as aids to Bible study.
Crosswalk.com
®
offers compelling, editorial-driven, biblically based, lifestyle and devotional content to Christians who take seriously their relationship with Christ.
Christianity.com
offers engaging articles and video focused on exploring the deeper, theological issues and apologetics of the Christian faith. It is also a leading provider of online Bible trivia games.
iBelieve.com
creates editorial-driven, lifestyle content, focused on helping Christian women use personal experience to examine the deeper issues of life and faith.
GodTube
®
.com
is a video viewing platform for Christian videos with faith-based, family-friendly content.
OnePlace
®
.com
is a provider of
on-demand
online audio streaming for nearly 200 radio programs from more than 185 popular Christian broadcast ministries. Oneplace
.com serves as both a complement to, and an extension of our block programming Christian radio business.
GodUpdates.com
provides inspiring stories, thought-provoking articles and videos about topics important to Christians.
 
14

Table of Contents
CrossCards
®
.com
provides faith-based, inspirational
e-greeting
cards for all occasions.
ChristianHeadlines.com
reports the news of importance to the Christian audience with a headlines blog, Christian worldview commentary, and features on events from the worldwide Christian Church.
LightSource.com
provides
on-demand
video streaming for nearly 85 Christian television programs from more than 70 ministry partners.
CCMmagazine.com
provides information and insight on Christian music.
Townhall Media
– Conservative Opinion Websites:
Townhall.com
®
is an interactive community that brings users, conservative public policy organizations, congressional staff, and political activists together under the broad umbrella of conservative thoughts, ideas and actions.
RedState
®
.com
is a conservative, political news blog for right of center activists.
pjmedia
®
.com
is an integrated website that offers conservative news and commentary and is a reliable source for original, political news and analysis.
Twitchy
®
.com
is a website featuring selected quotes and current events centered on U.S. politics, global news, sports, entertainment, media, and breaking news.
HotAir
®
.com
is a leading news and commentary site with conservative news and opinions.
BearingArms.com
is a website providing news and resources on Second Amendment issues, gun control, self-defense, and firearms.
Salem Church Products Websites:
Salem Church Products websites offer resources for churches and ministries in the areas of church media, worship, children’s and youth ministry, preaching, teaching and employment. These websites include:
SermonSearch
.com
is a subscription-based resource for preachers and teachers with preparation materials like sermon outlines, illustrations, and preaching ideas from many of America’s top Christian communicators.
WorshipHouseMedia.com
is an online church media resource, providing videos and other multi-media resources to churches to enhance worship and sermons.
Shiftworship.com
subscription-based website offering motion backgrounds, stills, and countdowns to help churches create a visual worship experience.
SermonSpice
®
.com
is an online provider of church media for local churches and ministries.
CenterlineNewMedia.com
– provides access to media assets for church services, including worship backgrounds, mini movies, and social graphics.
WorshipHouseKids.com
provides children’s and family ministry videos and media to make children’s ministry fun, interactive, and easy.
PlaybackMedia.com
offers motion backgrounds, stills and countdowns to help churches create a visual worship experience.
Preaching.com
is a leading resource for pastors and church leaders that offers tools and ideas to help them lead well.
ChurchStaffing.com
is a source of job search information for churches and ministries offering a platform for personnel and staff relations. This site allows those seeking employment to submit resumes and view job listings.
 
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Table of Contents
ChristianJobs.com
provides services catering to the hiring needs of Christian-based businesses, nonprofit organizations, and ministries. The site connects these organizations with thousands of job seekers through its online presence and partnerships with Salem’s radio stations.
Childrens-Ministry-Deals.com
offers a variety of digital resources including videos, song tracks, sermon archives, job listings, and Sunday school curriculum to pastors and Church leaders.
Digital Investing and Retirement Websites and Publications
Our digital platform includes the following investing and retirement websites and publications:
Eagle Financial Publications – provides market analysis and investment strategies for individual subscribers to newsletters from a variety of investing commentators including Bob Carlson, Bryan Perry, Jim Woods, Dr. Mark Skousen, and Jon Johnson.
www.DividendInvestor.com
– offers stock screening tools and dividend information for individual subscribers to obtain dividend information and data.
www.StockInvestor.com
– provides market analysis and investment strategies, recommendations, and opinions for individuals interested in the stock market.
www.Retirementwatch.com
– provides information on retirement and estate planning related topics.
Digital Mobile Applications
Our digital mobile applications, available in iOS and/or Android platforms, provide another means by which our content is available to our audiences. Our mobile applications include the following:
 
   
Daily Bible Devotion
 
   
King James Bible
 
   
Daily Bible
 
   
Christian Radio
 
   
OnePlace
®
 
   
Light Source
 
   
¡Citas y Mas Citas!
 
   
Bíblia Portuguese Bible
 
   
Bibliya Tagalog Bible
 
   
Japanese Bible
 
   
La Bibbia
 
   
La Biblia Reina Valera
 
   
Louis Segond French Bible
 
   
Luther Bible German
 
   
Spanish Bible Reina Valera
 
   
Vietnamese Bible
 
   
Vulgate Latin Bible
 
   
Twitchy
®
 
16

Table of Contents
   
Bible Study Tools
 
   
Bible Quotes
 
   
Bible Trivia
 
   
iBelieve
 
   
Bible Baseball Trivia
 
   
Christian Ecards
 
   
One Bible
 
   
Bible+1
 
   
Biblia
 
   
HotAir
®
 
   
Townhall
®
.com
 
   
Red State
Publishing
We publish books for audiences interested in Christian and family-themed content as well as conservative news and opinion. We operate two businesses in our book publishing segment.
Regnery
®
Publishing is a traditional book publisher that has published dozens of bestselling books by leading conservative, Christian and history authors and personalities. Books are sold in traditional printed form and as eBooks with the following categories:
 
   
Regnery Political – Regnery Political, dedicated to serious works of cultural, social, and political analysis, is a reaffirmation of Regnery’s tradition of publishing original and penetrating conservative thinkers.
 
   
Regnery History – Regnery History brings new light to old subjects and introduces stories that deserve attention but may have been ignored or even covered up in the past.
 
   
Regnery Kids – Regnery Kidsbooks are
non-partisan,
entertaining, and brilliantly written and illustrated by award-winning authors and artists.
 
   
Gateway Editions – Regnery Gateway, dedicated to serious works of cultural, social, and political analysis, is a reaffirmation of Regnery’s tradition of publishing original and penetrating conservative thinkers.
 
   
Salem Books – Our goal is to help people grow in their faith and find comfort, encouragement, practical advice, and timeless wisdom in compelling books by trusted authors.
Salem Author Services is a self-publishing service for authors through two imprints: Xulon Press and Mill City Press. Xulon Press offers
print-on-demand
self-publishing services for Christian authors while Mill City Press serves general market authors.
Competition
We operate in a highly competitive broadcast and media business. We compete for audiences, advertisers, and programmers with other radio broadcasters, broadcast and cable television operators, newspapers and magazines, book publishers, national and local digital services, outdoor advertising, direct mail, online marketing and media companies, social media platforms,
web-based
blogs, and mobile devices.
 
17

Table of Contents
BROADCASTING
. Our broadcast audience ratings and market shares are subject to change, and any change in a particular market could adversely affect the revenue of our stations located in that market. While we already compete in some of our markets with stations that offer similar formats, if another radio station were to convert its programming to a format similar to one of ours, or if an existing competitor were to strengthen its operations, our stations could suffer reduced ratings and/or reduced revenue. In these circumstances, we could also incur significantly higher promotional and other related expenses. We cannot assure that our stations will maintain or increase their current audience ratings and revenue.
We compete for advertising revenue with other commercial religious format stations as well as general format radio stations. Our competition for advertising dollars includes other radio stations as well as digital websites and social media, broadcast television, cable television, newspapers, magazines, direct mail and billboard advertising, some of which may be controlled by horizontally integrated companies. Several factors can materially affect competitive advantage, including, but not limited to, audience ratings, program content, management talent and expertise, sales talent and experience, audience characteristics, signal strength, and the number and characteristics of other radio stations in the same market.
Christian and Family-Themed Radio.
The segment of this industry that focus on Christian and family themes is also a highly competitive business. The financial success of each of our radio stations that focuses on Christian Teaching and Talk is dependent, to a significant degree, upon its ability to generate revenue from the sale of block program time to national and local religious and educational organizations. We compete for this program revenue with a number of different commercial and
non-commercial
radio station licensees. While we believe that no commercial group owner in the United States specializing in Christian and family-themed programming approaches Salem in size of potential listening audience and presence in major markets, other religious radio stations exist and enjoy varying degrees of prominence and success in some of our markets.
New Methods of Content Delivery
. Competition also comes from new media technologies and services. These include delivery of audio programming by cable television and satellite systems, digital audio radio services, mobile devices including smart phone applications for iPhone
®
and Android
®
, personal communications services, social media, and the service of low powered, limited coverage FM radio stations authorized by the FCC. The delivery of live and stored audio programming through the Internet has also created new competition. In addition, satellite delivered digital audio radio, which delivers multiple audio programming formats to national audiences, has created competition. We have attempted to address these existing and potential competitive threats through a more active strategy to acquire and integrate new electronic communications formats including digital acquisitions, the launch of Salem Surround, and our exclusive arrangement to provide Christian and family-themed talk on SiriusXM, a satellite digital audio radio service.
NETWORK.
SRN
TM
competes with other commercial radio networks that offer news and talk programming to religious and general format stations and noncommercial networks that offer Christian music formats. SRN
TM
also competes with other radio networks for the services of talk show personalities.
DIGITAL MEDIA.
SWN
and Townhall Media compete for visitors and advertisers with other companies that deliver online audio programming, that deliver Christian and conservative digital content, and providers of general market websites and social media. The online media and distribution business changes quickly and is highly competitive. We compete to attract and maintain interactions with advertisers, consumers, content creators and web publishers. Salem Church Products competes for customers with other online sites that offer resources useful in ministries, preaching, teaching, and for employment within the Christian community.
PUBLISHING.
Regnery
®
Publishing competes with other book publishers for readers and book sales as well as competes for product quality, customer service, suitability of format and subject matter, author reputation, price, timely availability of both new titles and revisions of existing books, digital availability of published products, and timely delivery of products to customers. Salem Author Services competes for authors with other
on-demand
publishers including those focused exclusively on Christian book publishers.
 
18

Table of Contents
Federal Regulation of Radio Broadcasting
Introduction
. The ownership, operation, and sale of broadcast stations, including those licensed to Salem, are subject to the jurisdiction of the FCC, which acts under authority derived from The Communications Act of 1934, as amended, and the rules and regulations promulgated thereunder (“Communications Act”). Among other things, the FCC assigns frequency bands for broadcasting; determines whether to approve certain changes in ownership or control of station licenses; regulates transmission facilities, including power employed, antenna and tower heights, and location of transmission facilities; adopts and implements regulations and policies that directly or indirectly affect the ownership, operation and employment practices of stations; and has the power to impose penalties for violations of its rules under the Communications Act.
The following is a brief summary of certain provisions of the Communications Act and of specific FCC regulations and policies. Failure to observe these or other rules and policies can result in the imposition of various sanctions, including monetary forfeitures, the grant of “short” (less than the maximum) license renewal terms or, for particularly egregious violations, the denial of a license renewal application, the revocation of a license or the denial of FCC consent to acquire additional broadcast properties. For further information concerning the nature and extent of federal regulation of broadcast stations you should refer to the Communications Act, FCC rules and the public notices and rulings of the FCC.
License Grant and Renewal
. Radio broadcast licenses are granted for maximum terms of eight years. Licenses must be renewed through an application to the FCC. Under the Communications Act, the FCC will renew a broadcast license if it finds that the station has served the public interest, convenience and necessity, that there have been no serious violations by the licensee of the Communications Act or the rules and regulations of the FCC and that there have been no other violations by the licensee of the Communications Act or the rules and regulations of the FCC that, when taken together, would constitute a pattern of abuse.
From time to time, the renewal of certain licenses may be delayed. We continue to operate these radio stations under their existing licenses until the licenses are renewed. The affected stations are authorized to continue operations until the FCC acts upon the renewal applications. We continually monitor our stations’ compliance with the various regulatory requirements that are necessary for the FCC renewal. We are currently in the midst of the FCC’s radio renewal cycle, and license renewal applications for certain of our stations will be pending during the course of the renewal cycle. We expect all of our broadcast licenses to be renewed by the cycle’s conclusion.
Petitions to deny license renewals can be filed by certain interested parties, including members of the public in a station’s market. Such petitions may raise various issues before the FCC. The FCC is required to hold hearings on renewal applications if the FCC is unable to determine that renewal of a license would serve the public interest, convenience, and necessity, or if a petition to deny raises a “substantial and material question of fact” as to whether the grant of the renewal application would be
prima facie
inconsistent with the public interest, convenience, and necessity. In addition, during certain periods when a renewal application is pending, the transferability of the applicant’s license is restricted.
The following table sets forth information with respect to each of our radio stations for which we hold the license. Stations that we operate under an LMA or TBA are not reflected on this table. A broadcast station’s market may be different from its community of license. The coverage of an AM radio station is chiefly a function of the power of the radio station’s transmitter, less dissipative power losses and any directional antenna adjustments. For FM radio stations, signal coverage area is chiefly a function of the Effective Radiated Power (“ERP”) of the radio station’s antenna and the Height Above Average Terrain (“HAAT”) of the radio station’s antenna.
 
 
19

Table of Contents
                             
Market (1)
 
Station Call
Letters
 
Frequency
 
Operating
Frequency
 
Expiration
Date of
License
 
FCC
Class
 
Height Above
Average Terrain
(in feet)
 
Power
(in Kilowatts)
Day / Night
New York, NY
  WMCA   AM   570   June 2022   B   n/a   5 / 5
    WNYM   AM   970   June 2022   B   n/a   50 / 5
Los Angeles, CA
  KKLA   FM   99.5   December 2029   B   2,959   10
    KRLA   AM   870   December 2029   B   n/a   50 / 3
    KFSH   FM   95.9   December 2029   A   328   6
Chicago, IL
  WYLL   AM   1160   December 2028   B   n/a   50 / 50
    WIND   AM   560   December 2028   B   n/a   5 / 5
San Francisco, CA
  KFAX   AM   1100   December 2029   B   n/a   50 / 50
    KDOW   AM   1220   December 2029   D   n/a   5 / 0.145
    KTRB   AM   860   December 2029   B   n/a   50 / 50
    KDIA   AM   1640   December 2029   B   n/a   10 / 10
    KDYA   AM   1190   December 2029   D   n/a   3 / —
Dallas-Fort
Worth, TX
  KLTY   FM   94.9   August 2029   C   1,667   100
    KWRD   FM   100.7   August 2029   C   1,988   98
    KSKY   AM   660   August 2029   B   n/a   20 / 0.7
    KTNO   AM   620   August 2029   B   n/a   5 / 4.5
Houston-Galveston, TX
  KNTH   AM   1070   August 2029   B   n/a   10 / 5
    KKHT   FM   100.7   August 2029   C   1,952   100
Atlanta, GA
  WNIV   AM   970   April 2028   D   n/a   5 / 0.039
    WLTA   AM   1400   April 2028   C   n/a   1 / 1
    WFSH   FM   104.7   April 2028   C1   1,657   24
    WGKA   AM   920   April 2028   B   n/a   14 / 0.49
    WDWD   AM   590   April 2028   B   n/a   12 / 4.5
Washington, D.C.
  WAVA   FM   105.1   October 2027   B   604   33
    WAVA   AM   780   October 2027   D   n/a   12
    WWRC   AM   570   October 2027   B   n/a   5 / 1
Philadelphia, PA
  WFIL   AM   560   August 2022   B   n/a   5 / 5
    WNTP   AM   990   August 2022   B   n/a   50 / 10
Boston, MA
  WEZE   AM   590   April 2022   B   n/a   5 / 5
    WROL   AM   950   April 2022   D   n/a   5 / 0.09
Seattle-Tacoma, WA
  KGNW   AM   820   February 2030   B   n/a   50 / 5
    KLFE (1)   AM   1590   February 2022(2)   B   n/a   20 / 5
    KNTS (1)   AM   1680   February 2022(2)   B   n/a   10 / 1
Detroit, MI
  WDTK   AM   1400   October 2028   C   n/a   1 / 1
    WLQV   AM   1500   October 2028   B   n/a   50 / 10
Phoenix, AZ
  KKNT   AM   960   October 2029   B   n/a   5 / 5
    KPXQ   AM   1360   October 2029   B   n/a   50 / 1
    KXXT   AM   1010   October 2029   B   n/a   15 / 0.25
Minneapolis-St.
Paul, MN
  KKMS   AM   980   April 2029   B   n/a   5 / 5
    KDIZ   AM   1570   April 2029   B   n/a   4 / 0.22
    WWTC   AM   1280   April 2029   B   n/a   10 / 15
    KYCR   AM   1440   April 2029   B   n/a   5 / 0.5
San Diego, CA
  KPRZ   AM   1210   December 2029   B   n/a   20 / 10
    KCBQ   AM   1170   December 2029   B   n/a   50 / 2.9
Tampa, FL
  WTWD   AM   910   February 2028   B   n/a   5 / 5
    WTBN   AM   570   February 2028   B   n/a   5 / 5
    WGUL   AM   860   February 2028   B   n/a   5 / 1.5
 
20

Table of Contents
Market (1)
 
Station Call
Letters
 
Frequency
 
Operating
Frequency
 
Expiration
Date of
License
 
FCC
Class
 
Height Above
Average Terrain
(in feet)
 
Power
(in Kilowatts)
Day / Night
Denver-Boulder, CO
  KRKS   FM   94.7   April 2029   C   984   100
  KRKS (1)   AM   990   April 2029   B   n/a   6.5 / 0.39
  KNUS   AM   710   April 2029   B   n/a   5 / 5
  KBJD (1)   AM   1650   April 2029   B   n/a   10 / 1
Portland, OR
  KPDQ   FM   93.9   February 2030   C1   1,270   52
  KPDQ   AM   800   February 2030   B   n/a   1 / 0.5
  KFIS   FM   104.1   February 2030   C2   1266   6.9
  KRYP   FM   93.1   February 2030   C3   1,270   1.6
  KDZR   AM   1640   February 2030   B   n/a   10 / 1
  KPAM   AM   860   February 2022   B   n/a   50 / 15
San Antonio, TX
  KSLR   AM   630   August 2029   B   n/a   5 / 4.3
  KLUP   AM   930   August 2029   B   n/a   5 / 1
Riverside-San
Bernardino, CA
  KTIE   AM   590   December 2029   B   n/a   2.5 / 0.96
Sacramento, CA
  KFIA   AM   710   December 2021(2)   B   n/a   25 / 1
  KTKZ   AM   1380   December 2029   B   n/a   5 / 5
  KSAC   FM   105.5   December 2029   B1   1,010   2.55
  KKFS   FM   103.9   December 2029   A   328   6
Pittsburgh, PA
  WORD   FM   101.5   August 2022   B   535   43
  WPIT   AM   730   August 2022   D   n/a   5 / 0.024
  WPGP   AM   1250   August 2022   B   n/a   5 / 5
Orlando, FL
  WORL   AM   950   February 2028   B   n/a   12 / 5
  WTLN   AM   990   February 2028   B   n/a   50 / 14
Cleveland, OH
  WHKW   AM   1220   October 2028   B   n/a   50 / 50
  WFHM   FM   95.5   October 2028   B   620   31
  WHK   AM   1420   October 2028   B   n/a   5 / 5
Columbus, OH
  WRFD   AM   880   October 2028   D   n/a   23
  WTOH   FM   98.9   October 2028   A   505   2.6
Nashville, TN
  WBOZ   FM   104.9   August 2028   A   328   6
  WFFH   FM   94.1   August 2028   A   453   3.2
  WFFI   FM   93.7   August 2028   A   755   1.15
Louisville, KY
  WFIA   FM   94.7   August 2028   A   394   3.3
  WGTK   AM   970   August 2028   B   n/a   5 / 5
  WFIA   AM   900   August 2028   D   n/a   0.93 / 0.162
Greenville, SC
  WGTK   FM   94.5   December 2027   C   1,490   100
  WRTH   FM   103.3   December 2027   A   479   2.7
  WLTE   FM   95.9   December 2027   A   233   6
Honolulu, HI
  KAIM   FM   95.5   February 2030   C   1,854   100
  KGU   AM   760   February 2030   B   n/a   10 / 10
  KHCM   AM   880   February 2030   B   n/a   2 / 2
  KHCM   FM   97.5   February 2030   C1   46   80
  KGU   FM   99.5   February 2030   C   1,965   100
  KKOL   FM   107.9   February 2030   C   1,965   100
  KHNR   AM   690   February 2030   B   n/a   10 / 10
Sarasota-Bradenton, FL
  WLSS   AM   930   February 2028   B   n/a   5 / 3
Little Rock, AR
  KDIS   FM   99.5   June 2028   A   312   6
  KKSP   FM   93.3   June 2028   C3   699   22
  KDXE   FM   101.1   June 2028   A   876   0.85
  KZTS   AM   1380   June 2028   B   n/a   5 / 2.5
 
21

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Market (1)
 
Station Call
Letters
 
Frequency
 
Operating
Frequency
 
Expiration
Date of
License
 
FCC
Class
 
Height Above
Average Terrain
(in feet)
 
Power
(in Kilowatts)
Day / Night
Colorado Springs, CO
  KGFT   FM   100.7   April 2029   C   2,218   78
  KBIQ   FM   102.7   April 2029   C   2,280   72
  KZNT   AM   1460   April 2029   B   n/a   5 / 0.5
Oxnard-Ventura, CA
  KDAR   FM   98.3   December 2029   B1   1,289   1.5
Warrenton, Virginia
  WRCW   AM   1250   October 2027   D   n/a   3 / 0.125
 
1.
Radio station
KNTS-AM
is an expanded band station paired with station
KLFE-AM
in the Seattle, WA market, and station
KBJD-AM
is an expanded band station paired with
KRKS-AM
in the Denver, CO market. We are operating these four stations pursuant to FCC licenses or other FCC authority pending resolution by the FCC of the issue of AM expanded band dual operating authority. Depending upon how the FCC resolves that issue, it is possible that we will be required to surrender one station license in each station pair. Except for these stations, we are not currently aware of any facts that would prevent the timely renewal of our licenses to operate our radio stations, although there can be no assurance that our licenses will be renewed.
2.
FCC license renewal pending.
The following table sets forth information with respect to each of our radio stations FM translators for which we are the licensee and/or operate:
 
Market
 
Station Call
Letters
 
Operating
Frequency
 
Expiration
Date of
License
 
FCC
Class
 
Height
Average
(in feet)
 
Power
(in
Day
  
Power
(in
Night
Boston
  W262CV (WROL)   100.3   4/1/2022   D   164   0.25    0.25
Cleveland
  W245CY (WHKW)   96.9   10/1/2028   D   520   0.005    0.005
Cleveland
  W273DG (WHK)   102.5   10/1/2028   D   520   0.005    0.005
Colorado Springs
  K266CK (KZNT)   101.1   4/1/2029   D   -191   0.099    0.099
Columbus
  W240CX (WTOH)   95.9   10/1/2028   D   505   0.99    0.525
Columbus
  W283CL (WRFD)   104.5   10/1/2028   D   545   0.25    0.25
Dallas-Ft.
Worth
  K273BJ
(KLTY-FM)
  102.5   8/1/2029   D   434   0.25    0.25
Detroit
  W224CC (WLQV)   92.7   10/1/2028   D   924   0.099    0.099
Detroit
  W268CN (WDTK)   101.5   10/1/2028   D   914   0.099    0.099
Greenville
 
W245CH (WGTK-FM)
  96.9   12/1/2027   D   1,364   0.25    0.25
Greenville
  W275BJ
(WGTK-FM)
  102.9   12/1/2027   D   1,390   0.25    0.25
Honolulu
  K232FL (KHNR)   94.3   2/1/2022   D   204   0.25    0.25
Honolulu
 
K236CR (KGU-AM)
  95.1   2/1/2022   D   204   0.25    0.25
Houston
  K277DE (KNTH)   103.3   8/1/2029   D   514   0.25    0.25
Little Rock
  K288EZ (KZTS)   105.5   6/1/2028   D   332   0.25    0.25
Little Rock
  K277DP (KZTS)   103.3   6/0/2028   D   323   0.25    0.25
Louisville
  W297BV (WFIA)   107.3   8/1/2028   D   286   0.25    0.25
Louisville
  W228EO (WGTK)   93.5   9/9/2022   D   191   0.099    0.099
Minneapolis
  K298CO (WWTC)   107.5   4/1/2029   D   176   0.25    0.25
New York
  W272DX (WMCA)   102.3   6/1/2022   D   357   0.25    0.25
Orlando
  W268CT (WTLN)   101.5   2/1/2028   D   323   0.25    0.25
Orlando
  W235CR (WORL)   94.9   2/1/2028   D   434   0.225    0.225
Pittsburgh
  W223CS (WPGP)   92.5   8/1/2022   D   455   0.11    0.11
Pittsburgh
  W243BW (WPIT)   96.5   8/1/2022   D   466   0.25    0.25
Portland
  K292HH (KPDQ)   106.3   2/1/2022   D   1,150   0.099    0.099
Sacramento
  K289CT (KFIA)   105.7   12/1/2021(1)   D   291   0.25    0.25
San Diego
  K241CT (KCBQ)   96.1   12/1/2029   D   826   0.25    0.25
 
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Market
 
Station Call
Letters
 
Operating
Frequency
 
Expiration
Date of
License
 
FCC
Class
 
Height
Average
(in feet)
 
Power
(in
Day
  
Power
(in
Night
San Diego
  K291CR (KPRZ)   106.1   12/1/2029   D   820   0.25    0.25
San Francisco
  K237GZ (KDOW)   95.3   12/1/2029   D   1,263   0.04    0.04
Seattle
  K281CQ (KGNW)   104.1   2/1/2022   D   1,248   0.099    0.099
Tampa
  W271CY (WTWD)   102.1   2/1/2028   D   271   0.125    0.125
Tampa
  W229DJ (WGUL)   93.7   2/1/2028   D   272   0.099    0.099
Tampa/Sarasota
  W229BR (WLSS)   93.7   2/1/2028   D   212   0.099    0.099
Tampa/Sarasota
  W262CP (WTBN)   100.3   2/1/2028   D   1,074   0.25    0.25
Washington DC
  W244EB (WAVA)   96.7   10/1/2027   D   641   0.15    0.15
 
1.
FCC Renewal pending
Ownership Matters
. The Communications Act prohibits the assignment of a broadcast license or the transfer of control of a broadcast license without the prior approval of the FCC. In determining whether to assign, transfer, grant or renew a broadcast license, the FCC considers a number of factors pertaining to the licensee, including compliance with various rules limiting common ownership of media properties, the “character” of the licensee and those persons holding “attributable” interests therein, and compliance with the Communications Act’s limitation on alien ownership, as well as compliance with other FCC policies, including equal employment opportunity requirements.
FCC rules and policies define the interests of individuals and entities, known as “attributable” interests, which implicate FCC rules governing ownership of broadcast stations. And other specified mass media entities. Under these rules, attributable interests generally include: (1) officers and directors of a licensee and of its direct and indirect parents; (2) general partners; (3) limited partners and limited liability company members, unless properly “insulated” from management activities; (4) a 5% or more direct or indirect voting stock interest in a corporate licensee or parent, except that, for a narrowly defined class of passive investors, the attribution threshold is a 20% or more voting stock interest; and (5) combined equity and debt interests in excess of 33% of a licensee’s total asset value, if the interest holder provides over 15% of the licensee station’s total weekly programming, or has an attributable same-service (radio or television) broadcast or newspaper interest in the same market (“EDP Rule”). An entity that owns one or more radio stations in a market and programs more than 15% of the broadcast time or sells more than 15% per week of the advertising time on a radio station in the same market is generally deemed to have an attributable interest in that station. Debt instruments,
non-voting
corporate stock, minority voting stock interests in corporations having a single majority stockholder, and properly insulated limited partnership and limited liability company interests generally are not subject to attribution unless such interests implicate the EDP Rule.
The FCC ownership rules relevant to our business are summarized below. Because of these rules, a purchaser of voting stock of the company that acquires an “attributable” interest in the company may violate the FCC’s rule if it also has an attributable interest in another radio station, depending on the number and location of those radio stations. Such a purchaser also may be restricted in the other companies in which it may invest, to the extent that these investments give rise to an attributable interest. If an attributable stockholder of the company violates any of these ownership rules, the company may be unable to obtain from the FCC one or more authorizations needed to conduct its radio station business and may be unable to obtain FCC consents for certain future acquisitions.
Foreign Ownership:
Under the Communications Act, a broadcast license may not be granted to or held by a corporation that has more than
one-fifth
of its capital stock owned or voted by aliens or their representatives, by foreign governments or their representatives, or by
non-U.S.
corporations. Under the Communications Act, there are limitations on the licensee of a broadcast license, that is held by any corporation that is controlled, directly or indirectly, by any other corporation more than
one-fourth
of whose capital stock is owned or voted by aliens or
 
23

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their representatives, by foreign governments or their representatives, or by
non-U.S.
corporations. These restrictions apply in modified form to other forms of business organizations, including partnerships. We, therefore, may be restricted from having more than
one-fourth
of our stock owned or voted by aliens, foreign governments, or
non-U.S.
corporations, although the FCC will entertain and authorize, on a
case-by-case
basis and upon a sufficient public interest showing, proposals to exceed the 25% indirect foreign ownership limit in broadcasting holding companies. The FCC generally will not make such a determination absent favorable executive branch review.
Local Radio Ownership
: The maximum allowable number of radio stations that may be commonly owned in a market is based on the size of the market. In markets with 45 or more stations, one entity may have an attributable interest in up to eight stations, of which no more than five are in the same radio service (AM or FM). In markets with
30-44
stations, one entity may have an attributable interest in up to seven stations, of which no more than four are in the same service. In markets with
15-29
stations, one entity may have an attributable interest in up to six stations, of which no more than four are in the same service. In markets with 14 or fewer stations, one entity may have an attributable interest in up to five stations, of which no more than three are in the same service, so long as the entity does not have an interest in more than 50% of all stations in the market. To apply these ownership tiers, the FCC relies on Nielsen Metro Survey Areas, where they exist, and a signal contour-overlap methodology where they do not exist. An FCC rulemaking is pending to determine how to define radio markets for stations located outside Nielsen Metro Survey Areas.
The FCC also restricts the number of television stations an entity may own both in local markets and nationwide.
Our current ownership of radio broadcast stations complies with the FCC’s multiple ownership rules; however, these rules may limit the number of additional stations that we may acquire in the future in certain of our markets.
Cross-Ownership
: In 2021, the FCC eliminated its prohibition on newspaper/broadcast cross-ownership rule and its rule limiting common ownership of television stations and same market radio stations.
Review of Media Ownership Rules
:
The Communications Act requires the FCC to periodically review its media ownership rules, and those reviews have been and continue to be the subject of litigation and
follow-on
regulatory proceedings. In November 2019, the United States Court of Appeals for the Third Circuit issued a decision that resulted in reinstatement of rules restricting cross-ownership of newspapers and broadcast radio (or television) stations, and of broadcast radio and television stations, which the FCC had previously eliminated. The Supreme Court of the United States vacated the Third Circuit’s decision in April 2021, and the cross-ownership rules are therefore not currently in effect.
In December 2018, the FCC commenced its 2018 quadrennial review of its media ownership regulations. In June 2021, following the Supreme Court decision described above, the FCC sought comment to refresh the record in its 2018 quadrennial review, and that review remains pending. Among other things, the FCC is seeking comment on all aspects of the local radio ownership rule including whether the current version of the rule remains necessary in the public interest. We cannot predict the outcome of the FCC’s media ownership proceedings or their effects on our business in the future.
Federal Antitrust Considerations
. The Federal Trade Commission (“FTC”) and the Department of Justice (“DOJ”), which evaluate transactions to determine whether those transactions should be challenged under the federal antitrust laws, are also active in their review of radio station acquisitions, particularly where an operator proposes to acquire additional stations in its existing markets.
For an acquisition meeting certain size thresholds, the Hart-Scott-Rodino Improvements Act (“HSR Act”) and the rules promulgated thereunder require the parties to file Notification and Report Forms with the FTC and the DOJ and to observe specified waiting period requirements before consummating the acquisition. At any time before or after the consummation of a proposed acquisition, the FTC or the DOJ could take such action under the
 
24

Table of Contents
antitrust laws, as it deems necessary or desirable in the public interest, including seeking to enjoin the acquisition or seeking divestiture of the business acquired or other assets of the company. The FTC or the DOJ may investigate acquisitions that are not required to be reported under the HSR Act under the antitrust laws before or after consummation. In addition, private parties may under certain circumstances bring legal action to challenge an acquisition under the antitrust laws. The DOJ has stated publicly that it believes that LMAs and other similar agreements customarily entered into in connection with radio station transfers prior to the expiration of the waiting period under the HSR Act could violate the HSR Act.
We can provide no assurances that our acquisition strategy will not be adversely affected in any material respect by antitrust reviews.
Geographic Financial Information
Our customers are based in various locations throughout the United States. While no one customer currently accounts for 10% or more of our total revenue individually or in the aggregate, our broadcast operating segment is particularly dependent on revenue generated from our Los Angeles and Dallas broadcast markets. Our Los Angeles radio stations generated 10.1% of our total net broadcasting revenue for the year ended December 31, 2021, and 10.6% of our total net broadcasting revenue for the year ended December 31, 2020. Our Dallas radio stations generated 9.0% of our total net broadcasting revenue for the year ended December 31, 2021, and 9.3% of our total net broadcasting revenue for the year ended December 31, 2020.
Because substantial portions of our broadcast revenue are derived from our Los Angeles and Dallas markets, our ability to generate revenue in those markets could be adversely affected by local or regional economic downturns in these areas.
Available Information
Our Internet address is www.salemmedia.com. We make available free of charge on our investor relations website under the heading “SEC Filings,” our Annual Reports on Form
10-K,
Quarterly Reports on Form
10-Q,
Current Reports on Form
8-K
and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act. These reports are available as soon as reasonably practical after we electronically file them or furnish them to the SEC.
Any information found on our website is not a part of, or incorporated by reference into, this or any other report of the company filed with, or furnished to, the SEC.
ITEM 1A. RISK FACTORS.
Not required for smaller reporting companies.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
None.
ITEM 2. PROPERTIES.
We own or lease various properties throughout the United States from which we conduct business. No one physical property is material to our overall business operations. The types of properties required to support each of our radio stations, digital and publishing operations typically include offices, studios, and tower sites where broadcasting transmitters and antenna equipment are located. The majority of our office, studio and tower facilities are leased pursuant to long-term leases. We believe that each of our properties are in good condition and suitable for our operations; however, we continually evaluate opportunities to upgrade our properties. We believe that we will be able to renew existing leases when applicable or obtain comparable facilities, as necessary.
 
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Table of Contents
Executive Offices
Our executive offices are located in Irving, Texas, where we own an approximately 43,000 square foot office building.
Broadcasting
Our broadcast facilities include offices and studios, transmitter locations, antenna sites and tower sites. Offices and studios are typically located in buildings that are in a downtown or business district. Transmitter, antenna, and tower sites are located in areas that provide maximum market coverage. Our radio stations broadcast from 91 tower sites, including 31 tower sites in which we own the land. We own the land for seven additional tower sites that we lease to other broadcasters.
SRN
TM
, SMR, Salem Consumer Products, our Dallas radio stations studios and offices, and our executive offices are located in the Dallas, Texas metropolitan area. We also own office buildings in Honolulu, Hawaii; Tampa, Florida; Orlando, Florida and Greenville, South Carolina from which our radio stations studios and offices operate. Our national radio network operates from various offices and studios. These studios may be used to generate programming or programming can also be relayed from a remote point of origination. Our network also leases satellite transponders used in the delivery of its programming.
Our current lease agreements range from four months to twenty-eight years remaining on the lease term. We lease certain property from our principal stockholders or trusts and partnerships created for the benefit of the principal stockholders and their families. These leases are described in Note 16, Related Party Transactions in the notes to our Consolidated Financial Statements contained in Item 8 of this annual report.
While none of our owned or leased properties is individually material to our operations, if we were required to relocate any of our broadcast towers, the cost would be significant. Significant costs are due to the moving and reconstruction of the tower as well as the limited number of sites in any geographic area that permit a tower of reasonable height to provide adequate market coverage. These limitations are due to zoning and other land use restrictions, as well as Federal Aviation Administration and FCC regulations.
Digital Media
Our digital media entities operate from office buildings and require additional data storage centers. SWN operates from leased office facilities in Richmond, Virginia and Nashville, Tennessee. Townhall Media operates from a leased facility in Arlington, Virginia that is shared with our radio stations and Eagle Financial Publications. Our current lease agreements range from one to six years remaining on the lease term.
Publishing
Regnery
®
Publishing operates from a leased facility in Washington, D.C. with inventory fulfillment managed by a third-party in Delran, New Jersey. Salem Author Services operates from a leased facility in Orlando, Florida. Our current lease agreements range from two to three years remaining on the lease term.
Corporate
Certain corporate administrative functions are performed in Camarillo, California where we own an approximately 46,000 square foot office building.
ITEM 3. LEGAL PROCEEDINGS.
We and our subsidiaries, incident to our business activities, are parties to a number of legal proceedings, lawsuits, arbitrations and other claims. Such matters are subject to many uncertainties and outcomes that are not
 
26

Table of Contents
predictable with assurance. We maintain insurance that may provide coverage for such matters. Consequently, we are unable to ascertain the ultimate aggregate amount of monetary liability or the financial impact with respect to these matters. We believe, at this time, that the final resolution of these matters, individually and in the aggregate, will not adversely affect our annual consolidated financial position, results of operations, or cash flows.
ITEM 4. MINE AND SAFETY DISCLOSURES.
Not Applicable.
 
27

Table of Contents
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Our Class A common stock trades on the NASDAQ Global Market
®
(“NASDAQ-NGM”)
under the symbol SALM. On February 11, 2022, we had approximately 50 stockholders of record (not including the number of persons or entities holding stock in nominee or street name through various brokerage firms) and 21,605,324 outstanding shares of Class A common stock and two stockholders of record and 5,553,696 outstanding shares of Class B common stock.
In April 2021, we filed a prospectus supplement to our shelf registration statement on Form
S-3
with the SEC covering the offering, issuance and sale of up to $15.0 million of our Class A Common Stock pursuant to an
at-the-market
facility, with B. Riley Securities, Inc. acting as sales agent. No Common Stock transactions have taken place under the facility.
The following table sets forth for the fiscal quarters indicated the range of high and low sale price information per share of the Class A common stock of the company as reported on the
NASDAQ-NGM.
 
    
2020
    
2021
 
     1
st
 Qtr
     2
nd
 Qtr
     3
rd
 Qtr
     4
th
 Qtr
     1
st
 Qtr
     2
nd
 Qtr
     3
rd
 Qtr
     4
th
 Qtr
 
High
(mid-day)
   $ 1.74      $ 2.62      $ 2.46      $ 1.25     
$
3.95
 
  
$
3.15
 
  
$
3.85
 
  
$
6.82
 
Low
(mid-day)
   $ 0.65      $ 0.69      $ 0.85      $ 0.78     
$
1.04
 
  
$
1.69
 
  
$
1.91
 
  
$
2.67
 
There is no established public trading market for the company’s Class B common stock.
DIVIDEND POLICY
Our dividend policy is based upon our Board of Directors’ current assessment of our business and the environment in which we operate. The actual declaration of any future equity distributions and the establishment of the per share amount, record dates, and payment dates are subject to final determination by our Board of Directors and dependent upon future earnings, cash flows, financial and legal requirements, and other factors. The reduction or elimination of equity distributions may negatively affect the market price of our common stock.
On May 6, 2020, our Board of Directors voted to discontinue distributions on our common stock indefinitely due to the adverse economic impact of the
COVID-19
pandemic on our financial position, results of operations, and cash flows.
Our sole source of cash available for making any future equity distributions is our operating cash flow subject to our 2024 Notes, 2028 Notes, Delayed Draw 2028, and our Asset Based Loan (“ABL Facility”), which contain covenants that restrict the payment of dividends and equity distributions unless certain specified conditions are satisfied.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 6. [RESERVED].
 
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
General
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the Consolidated Financial Statements and related notes included elsewhere in this annual report. Our Consolidated Financial Statements are not directly comparable from period to period due to acquisitions and dispositions. Refer to Note 3 of our Consolidated Financial Statements under Item 8 of this annual report for details of each of these transactions. We have elected the presentation requirements under
Rule 12b-2
of the Exchange Act as a smaller reporting company and have herein included a
two-year
discussion of our financial condition and results of operations.
Historical operating results are not necessarily indicative of future operating results. Actual future results may differ from those contained in or implied by the forward-looking statements as a result of various factors. These factors include, but are not limited to:
 
   
the coronavirus
COVID-19
pandemic
(“COVID-19”)
that adversely impacted our business,
 
   
risks and uncertainties relating to the need for additional funds to service our debt,
 
   
risks and uncertainties relating to the need for additional funds to execute our business strategy,
 
   
our ability to access borrowings under our ABL Facility,
 
   
reductions in revenue forecasts,
 
   
our ability to renew our broadcast licenses,
 
   
changes in interest rates,
 
   
the timing of our ability to complete any acquisitions or dispositions,
 
   
costs and synergies resulting from the integration of any completed acquisitions,
 
   
our ability to effectively manage costs,
 
   
our ability to drive and manage growth,
 
   
the popularity of radio as a broadcasting and advertising medium,
 
   
changes in consumer tastes,
 
   
the impact of general economic conditions in the United States or in specific markets in which we do business,
 
   
the impact of inflation increasing operating costs and changing consumer habits,
 
   
industry conditions, including existing competition and future competitive technologies,
 
   
disruptions or postponements of advertising schedules and programming in response to national or world events,
 
   
our ability to generate revenue from new sources, including local commerce and technology-based initiatives, and
 
   
the impact of regulatory rules or proceedings that may affect our business from time to time, and the future
write-off
of any material portion of the fair value of our FCC broadcast licenses and goodwill.
 
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Overview
Salem Media Group, Inc. (“Salem” “we” “us” “our” and “its”) is a domestic multimedia company specializing in Christian and conservative content, with media properties comprising radio broadcasting, digital media, and publishing. Our content is intended for audiences interested in Christian and family-themed programming and conservative news talk. We maintain a website at www.salemmedia.com. Our annual reports on Form
10-K,
quarterly reports on Form
10-Q,
current reports on Form
8-K,
and any amendments to these reports are available free of charge through our website as soon as reasonably practicable after those reports are electronically filed with or furnished to the SEC.
The information on our website is not a part of or incorporated by reference into this or any other report of the company filed with, or furnished to, the SEC.
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 exclude costs related to corporate functions, such as accounting and finance, human resources, legal, tax and treasury. We also exclude costs such as amortization, depreciation, taxes, and interest expense when evaluating the performance of our operating segments.
Our principal sources of broadcast revenue include:
 
   
the sale of block program time to national and local program producers;
 
   
the sale of advertising time on our radio stations to national and local advertisers;
 
   
the sale of banner advertisements on our station websites or on our mobile applications;
 
   
the sale of digital streaming advertisements on our station websites or on our mobile applications;
 
   
the sale of advertisements included in digital newsletters;
 
   
fees earned for the creation of custom web pages and custom digital media campaigns for our advertisers through Salem Surround;
 
   
the sale of advertising time on our national network;
 
   
the syndication of programming on our national network;
 
   
the sale of advertising time through podcasts and
video-on-demand
services;
 
   
product sales and royalties for
on-air
host materials, including podcasts and programs; and
 
   
other revenue such as events, including ticket sales and sponsorships, listener purchase programs, where revenue is generated from special discounts and incentives offered to our listeners from our advertisers; talent fees for voice-overs or custom endorsements from our
on-air
personalities and production services, and rental income for studios, towers or office space.
Our principal sources of digital media revenue include:
 
   
the sale of digital banner advertisements on our websites and mobile applications;
 
   
the sale of digital streaming advertisements on websites and mobile applications;
 
   
the support and promotion to stream third-party content on our websites;
 
   
the sale of advertisements included in digital newsletters;
 
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the digital delivery of newsletters to subscribers; and 
 
   
the number of video and graphic downloads.
Our principal sources of publishing revenue include:
 
   
the sale of books and
e-books;
 
   
publishing fees from authors; and
 
   
the sale of digital advertising in digital newsletters.
In each of our operating segments, the rates we can charge for airtime, advertising and other products and services are dependent upon several factors, including:
 
   
audience share;
 
   
how well our programs and advertisements perform for our clients;
 
   
the size of the market and audience reached;
 
   
the number of impressions delivered;
 
   
the number of advertisements and programs streamed;
 
   
the number of page views achieved;
 
   
the number of downloads completed;
 
   
the number of events held, the number of event sponsorships sold and the attendance at each event;
 
   
demand for books and publications;
 
   
general economic conditions; and
 
   
supply and demand for airtime on a local and national level.
Broadcasting
Our foundational business is radio broadcasting, which includes the ownership and operation of radio stations in large metropolitan markets, our national networks and our national sales firms including Salem Surround. Refer to Item 1. Business of this annual report for a description of our broadcasting operations.
Revenue generated from our radio stations, networks, and sales firms is reported as broadcast revenue in our Consolidated Financial Statements included in Item 8 of this annual report. Advertising revenue is recorded on a gross basis unless an agency represents the advertiser, in which case, revenue is reported net of the commission retained by the agency.
Broadcast revenue is impacted by the rates radio stations can charge for programming and advertising time, the level of airtime sold to programmers and advertisers, the number of impressions delivered, or downloads made, and the number of events held, including the size of the event and the number of attendees. Block programming rates are based upon our stations’ ability to attract audiences that will support the program producers through contributions and purchases of their products. Advertising rates are based upon the demand for advertising time, which in turn is based on our stations and networks’ ability to produce results for their advertisers. We market ourselves to advertisers based on the responsiveness of our audiences. We do not subscribe to traditional audience measuring services for most of our radio stations. In select markets, we subscribe to Nielsen Audio, which develops monthly reports measuring a radio station’s audience share in the demographic groups targeted by advertisers. Each of our radio stations and our networks has a
pre-determined
level of time available for block programming and/or advertising, which may vary at different times of the day.
 
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Nielsen Audio uses the Portable People Meter
TM
(“PPM
) technology to collect data for its ratings service. PPM is a small device that is capable of automatically measuring radio, television, Internet, satellite radio and satellite television signals encoded by the broadcaster. The PPM offers a number of advantages over traditional diary ratings collection systems, including ease of use, more reliable ratings data, shorter time periods between when advertising runs and actual listening data, and little manipulation of data by users. A disadvantage of the PPM includes data fluctuations from changes to the “panel” (a group of individuals holding PPM devices). This makes all stations susceptible to some inconsistencies in ratings that may or may not accurately reflect the actual number of listeners at any given time. We subscribe to Nielsen Audio for ratings services in seven of our broadcast markets.
Our results are subject to seasonal fluctuations. As is typical in the broadcasting industry, our second and fourth quarter advertising revenue typically exceeds our first and third quarter advertising revenue. Seasonal fluctuations in advertising revenue correspond with quarterly fluctuations in the retail industry. Additionally, we experience increased demand for political advertising during election even numbered years, over
non-election
odd numbered years. Political advertising revenue varies based on the number and type of candidates as well as the number and type of debated issues.
Our cash flows from broadcasting may be affected by transitional periods experienced by radio stations when, based on the nature of the radio station, our plans for the market and other circumstances, we find it beneficial to change the station format. During this transitional period, when we develop a radio station’s listener and customer base, the station may generate negative or insignificant cash flow.
In broadcasting, trade or barter agreements are commonly used to reduce cash expenses by exchanging advertising time for goods or services. We may enter barter agreements to exchange airtime or digital advertising for goods or services that can be used in our business or that can be sold to our audience under Listener Purchase Programs. The terms of these barter agreements permit us to preempt the barter airtime or digital campaign in favor of customers who purchase the airtime or digital campaign for cash. The value of these
non-cash
exchanges is included in revenue in an amount equal to the fair value of the goods or services we receive. Each transaction must be reviewed to determine that the products, supplies and/or services we receive have economic substance, or value to us. We record barter operating expenses upon receipt and usage of the products, supplies and services, as applicable. We record barter revenue as advertising spots or digital campaigns are delivered, which represents the point in time that control is transferred to the customer thereby completing our performance obligation. Barter revenue is recorded on a gross basis unless an agency represents the programmer, in which case, revenue is reported net of the commission retained by the agency. During each of the years ended December 31, 2021, and 2020, 99% and 98% of our broadcast revenue was sold for cash, respectively.
Broadcast operating expenses include: (i) employee salaries, commissions and related employee benefits and taxes, (ii) facility expenses such as lease expense and utilities, (iii) marketing and promotional expenses, (iv) production and programming expenses, and (v) music license fees. In addition to these expenses, our network incurs programming costs and lease expenses for satellite communication facilities.
Digital Media
Our digital media segment provides Christian, conservative, investing, retirement,
e-commerce,
audio and video streaming, and other resources digitally through the web. Refer to Item 1. Business of this annual report for a description of each of our digital media websites and operations.
Revenue generated from this segment is reported as digital media revenue in our Consolidated Statements of Operations included in this annual report. Digital media revenue is impacted by the rates our sites can charge for advertising time, the level of advertisements sold, the number of impressions delivered, or the number of products sold, and the number of digital subscriptions sold. Like our broadcasting segment, our second and fourth quarter advertising revenue generally exceeds our first and third quarter advertising revenue. This seasonal
 
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fluctuation in advertising revenue corresponds with quarterly fluctuations in the retail advertising industry. We also experience fluctuations in quarter-over-quarter comparisons based on the date on which Easter is observed, as this holiday generates a higher volume of product downloads from our church product websites. Additionally, we experience increased demand for advertising time and placement during election years for political advertisements.
The primary operating expenses incurred by our digital media businesses include: (i) employee salaries, commissions and related employee benefits and taxes, (ii) facility expenses such as lease expense and utilities, (iii) marketing and promotional expenses, (iv) royalties, (v) streaming costs, and (vi) cost of goods sold associated with
e-commerce
sites.
Publishing
Our publishing operations include book publishing through Regnery
®
Publishing and self-publishing services through Salem Author Services. Refer to Item 1. Business of this annual report for a detailed description of our publishing operations.
Revenue generated from this segment is reported as publishing revenue in our Consolidated Statements of Operations included in this annual report. Publishing revenue is impacted by the retail price of books and
e-books,
the number of books sold, the number and retail price of
e-books
sold, and the number and rate at which self-published books are published. Regnery
®
Publishing revenue is impacted by elections as it generates higher levels of interest and demand for publications containing conservative and political based opinions.
The primary operating expenses incurred by our publishing businesses include: (i) employee salaries, commissions and related employee benefits and taxes, (ii) facility expenses such as lease expense and utilities, (iii) marketing and promotional expenses; and (iv) cost of goods sold that includes book printing and production costs, fulfillment costs, author royalties and inventory reserves.
Known Trends and Uncertainties
The
COVID-19
global pandemic that began in March 2020 materially impacted our business. We experienced a rapid decline in revenue from advertising, programming, events, and book sales. Several advertisers reduced or ceased advertising spending due to the outbreak and
stay-at-home
orders that effectively shut many businesses down. The revenue decline impacted our broadcast segment, which derives substantial revenue from local advertisers who were particularly hard hit due to social distancing and government interventions, and our publishing segment, which derives revenue from book sales through retail stores and live events.
While we see progress being made in revenue returning to
pre-pandemic
levels, the
COVID-19
pandemic continues to create significant uncertainty and disruption in the economy. These uncertainties could materially impact significant accounting estimates related to, but not limited to, allowances for doubtful accounts, impairments, and
right-of-use assets.
As a result, many estimates and assumptions require increased judgment and carry a higher degree of variability and volatility. These estimates may change as new events occur and additional information emerges, and such changes are recognized or disclosed in our consolidated financial statements.
The growth of broadcast revenue associated with the sale of airtime remains challenged. We believe this is due to audiences spending less time commuting in cars, increased competition from other forms of content distribution, and decreases in the length of time spent listening to broadcast radio as compared to audio streaming services, podcasts, and satellite radio. These factors may lead advertisers to conclude that the effectiveness of radio has diminished. In response, we continue to enhance our digital assets to complement our broadcast content. The increased use of smart speakers, or voice activated platforms, that provide audiences with the ability to access AM and FM radio stations show increased potential for radio broadcasters to reach audiences.
 
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Our broadcast spot advertising revenue is particularly dependent on advertising from our Los Angeles and Dallas markets, which generated 13.6% and 21.1%, respectively, of our total net broadcast spot advertising revenue during the year ended December 31, 2021, compared to 14.1% and 22.1%, respectively, of our total net broadcast spot advertising revenue during the year ended December 31, 2020.
Digital revenue is impacted by the nature and delivery of page views and the number of advertisements per page. We have experienced a shift in the number of page views from desktop devices to mobile devices. While mobile page views have increased dramatically, they carry a lower number of advertisements per page and are generally sold at lower rates. A shift from desktop page views to mobile device views negatively impacts revenue as mobile devices carry lower rates and less advertisement per page. Decreases in digital revenue could adversely affect our operating results, financial condition, and results of operations. To minimize the impact that any one of these areas could have, we continue to explore opportunities to cross-promote our brands and our content, and to strategically monitor costs.
Key Financial Performance Indicators – Same-Station Definition
In the discussion of our results of operations below, we compare our broadcast operating results between periods on an
as-reported
basis, which includes the operating results of all radio stations and networks owned or operated at any time during either period and on a Same Station basis. Same Station is a
Non-GAAP
financial measure used both in presenting our results to stockholders and the investment community as well as in our internal evaluations and management of the business. We believe that Same Station Operating Income provides a meaningful comparison of period over period performance of our core broadcast operations as this measure excludes the impact of new stations, the impact of stations we no longer own or operate, and the impact of stations operating under a new programming format. Our presentation of Same Station Operating Income is not intended to be considered in isolation or as a substitute for the most directly comparable financial measures reported in accordance with GAAP. Refer to
“Non-GAAP
Financial Measures” below for definitions and a reconciliation of these
non-GAAP
performance measures to the most comparable GAAP measures.
Non-GAAP
Financial Measures
Management uses certain
non-GAAP
financial measures defined below in communications with investors, analysts, rating agencies, banks, and others to assist such parties in understanding the impact of various items on our financial statements. We use these
non-GAAP
financial measures to evaluate financial results, develop budgets, manage expenditures and as a measure of performance under compensation programs.
Our presentation of these
non-GAAP
financial measures should not be considered as a substitute for or superior to the most directly comparable financial measures as reported in accordance with GAAP.
Item 10€ of Regulation
S-K
defines and prescribes the conditions under which certain
non-GAAP
financial information may be presented in this annual report. We closely monitor EBITDA, Adjusted EBITDA, Station Operating Income (“SOI”), Same Station net broadcast revenue, Same Station broadcast operating expenses, Same Station Operating Income, Digital Media Operating Income, and Publishing Operating Income, all of which are
non-GAAP
financial measures. We believe that these
non-GAAP
financial measures provide useful information about our core operating results, and thus, are appropriate to enhance the overall understanding of our financial performance. These
non-GAAP
financial measures are intended to provide management and investors a more complete understanding of our underlying operational results, trends, and performance.
The performance of a radio broadcasting company is customarily measured by the ability of its stations to generate SOI. We define SOI as net broadcast revenue less broadcast operating expenses. Accordingly, changes in net broadcast revenue and broadcast operating expenses, as explained above, have a direct impact on changes in SOI. SOI is not a measure of performance calculated in accordance with GAAP. SOI should be viewed as a supplement to and not a substitute for our results of operations presented on the basis of GAAP. We believe that
 
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SOI is a useful
non-GAAP
financial measure to investors when considered in conjunction with operating income (the most directly comparable GAAP financial measures to SOI), because it is generally recognized by the radio broadcasting industry as a tool in measuring performance and in applying valuation methodologies for companies in the media, entertainment, and communications industries. SOI is commonly used by investors and analysts who report on the industry to provide comparisons between broadcasting groups. We use SOI as one of the key measures of operating efficiency and profitability, including our internal reviews for potential impairment of indefinite-lived intangible assets and our internal reviews to approve capital expenditures. SOI does not purport to represent cash provided by operating activities. Our statement of cash flows presents our cash activity in accordance with GAAP and our income statement presents our financial performance prepared in accordance with GAAP. Our definition of SOI is not necessarily comparable to similarly titled measures reported by other companies.
We define Same Station net broadcast revenue as net broadcast revenue from our radio stations and networks that we own or operate in the same format on the first and last day of each quarter, as well as the corresponding quarter of the prior year. We define Same Station broadcast operating expenses as broadcast operating expenses from our radio stations and networks that we own or operate in the same format on the first and last day of each quarter, as well as the corresponding quarter of the prior year. Same Station Operating Income includes those stations we own or operate in the same format on the first and last day of each quarter, as well as the corresponding quarter of the prior year. Same Station Operating Income for a full calendar year is calculated as the sum of the Same Station-results for each of the four quarters of that year. We use Same Station Operating Income, a
non-GAAP
financial measure, both in presenting our results to stockholders and the investment community, and in our internal evaluations and management of the business. We believe that Same Station Operating Income provides a meaningful comparison of period over period performance of our core broadcast operations as this measure excludes the impact of new stations, the impact of stations we no longer own or operate, and the impact of stations operating under a new programming format. Our presentation of Same Station Operating Income is not intended to be considered in isolation or as a substitute for the most directly comparable financial measures reported in accordance with GAAP. Our definition of Same Station net broadcast revenue, Same Station broadcast operating expenses and Same Station Operating Income is not necessarily comparable to similarly titled measures reported by other companies.
We apply a similar methodology to our digital media and publishing group. Digital Media Operating Income is defined as net digital media revenue less digital media operating expenses. Publishing Operating Income (Loss) is defined as net publishing revenue less publishing operating expenses. Digital Media Operating Income and Publishing Operating Income are not measures of performance in accordance with GAAP. Our presentations of these
non-GAAP
financial performance measures are not to be considered a substitute for, or superior to, our operating results reported in accordance with GAAP. We believe that Digital Media Operating Income and Publishing Operating Income are useful
non-GAAP
financial measures to investors, when considered in conjunction with operating income (the most directly comparable GAAP financial measure), because they are comparable to those used to measure performance of our broadcasting entities. We use this analysis as one of the key measures of operating efficiency, profitability and in our internal reviews for impairment of indefinite-lived intangible assets and our internal reviews to approve capital expenditures. This measurement does not purport to represent cash provided by operating activities. Our statement of cash flows presents our cash activity in accordance with GAAP and our income statement presents our financial performance in accordance with GAAP. Our definitions of Digital Media Operating Income and Publishing Operating Income (Loss) are not necessarily comparable to similarly titled measures reported by other companies.
We define EBITDA as net income before interest, taxes, depreciation, and amortization. We define Adjusted EBITDA as EBITDA before gains or losses on the disposition of assets, before changes in the estimated fair value of contingent
earn-out
consideration, before gains on bargain purchases, before the change in fair value of interest rate swaps, before impairments, before debt modification costs, before net miscellaneous income and expenses, before loss on early retirement of debt, before (gain) loss from discontinued operations and before
non-cash
compensation expense. EBITDA and Adjusted EBITDA are commonly used by the broadcast and
 
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media industry as important measures of performance and are used by investors and analysts who report on the industry to provide meaningful comparisons between broadcasters. EBITDA and Adjusted EBITDA are not measures of liquidity or of performance in accordance with GAAP and should be viewed as a supplement to and not a substitute for or superior to our results of operations and financial condition presented in accordance with GAAP. Our definitions of EBITDA and Adjusted EBITDA are not necessarily comparable to similarly titled measures reported by other companies.
For all
non-GAAP
financial measures, investors should consider the limitations associated with these metrics, including the potential lack of comparability of these measures from one company to another.
Reconciliation of
Non-GAAP
Financial Measures:
In the tables below, we present a reconciliation of net broadcast revenue, the most comparable GAAP measure, to Same Station net broadcast revenue, and broadcast operating expenses, the most comparable GAAP measure to Same Station broadcast operating expense. We show our calculation of SOI and Same Station Operating Income, which is reconciled from net income, the most comparable GAAP measure in the table following our calculation of Digital Media Operating Income and Publishing Operating Income (Loss). Our presentation of these
non-GAAP
measures are not to be considered a substitute for or superior to the most directly comparable measures reported in accordance with GAAP.
In the table below, we present our calculations of Station Operating Income, Digital Media Operating Income, and Publishing Operating Income. Our presentation of these
non-GAAP
performance indicators are not to be considered a substitute for or superior to the directly comparable measures reported in accordance with GAAP.
 
    
Year Ended December 31,
 
     2020     
2021
 
    
(Dollars in thousands)
 
Net broadcast revenue
   $ 178,127     
$
191,443
 
Less broadcast operating expenses
     (140,942   
 
(145,720
  
 
 
    
 
 
 
Station Operating Income
   $ 37,185     
$
45,723
 
  
 
 
    
 
 
 
Net digital media revenue
   $ 39,593     
$
42,164
 
Less digital media operating expenses
     (31,725   
 
(33,797
  
 
 
    
 
 
 
Digital Media Operating Income
   $ 7,868     
$
8,367
 
  
 
 
    
 
 
 
Net publishing revenue
   $ 18,519     
$
24,640
 
Less publishing operating expenses
     (21,950   
 
(23,220
  
 
 
    
 
 
 
Publishing Operating Income (Loss)
   $ (3,431   
$
1,420
 
  
 
 
    
 
 
 
In the table below, we present a reconciliation of net income (loss), the most directly comparable GAAP measure to Station Operating Income, Digital Media Operating Income, and Publishing Operating Income (Loss). Our presentation of these
non-GAAP
performance indicators are not to be considered a substitute for or superior to the most directly comparable measures reported in accordance with GAAP.
 
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Year Ended December 31,
 
     2020     
2021
 
    
(Dollars in thousands)
 
Net income (loss)
   $ (54,062   
$
41,514
 
Plus provision for (benefit from) income taxes
     30,274     
 
(759
Plus net miscellaneous (income) and expenses
     9     
 
(110
Plus gain on the forgiveness of PPP loans
     —       
 
(11,212
Plus (gain) loss on early retirement of long-term debt
     (49   
 
1,026
 
Plus interest expense, net of capitalized interest
     16,075     
 
15,799
 
Less interest income