Salem Media Group, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Broadcast Licenses (Tables)

Broadcast Licenses (Tables)

12 Months Ended

Dec. 31, 2021

Indefinite-lived Intangible Assets [Line Items]

Schedule of Changes in Broadcasting Licenses

The following table presents the changes in broadcasting licenses that include acquisitions and divestitures of radio stations and FM translators as described in Note 3 — Recent Transactions.


	Year Ended December 31,
	2020			2021
	(Dollars in thousands)
Balance, beginning of period before cumulative loss on impairment	$	435,300		$	434,209
Accumulated loss on impairment		(97,442	)		(114,436	)

Balance, beginning of period after cumulative loss on impairment		337,858			319,773

Acquisitions of radio stations		—			235
Disposition of radio stations and FM translators		(1,091	)		—
Impairments based on the estimated fair value of broadcast licenses		(16,994	)		—

Balance, end of period after cumulative loss on impairment	$	319,773		$	320.008

Balance, end of period before cumulative loss on impairment	$	434,209		$	434,444
Accumulated loss on impairment		(114,436	)		(114,436	)

Balance, end of period after cumulative loss on impairment	$	319,773		$	320,008

Schedule Of Carrying Value and Fair Value of Broadcast Licenses

The table below presents the percentage within a range by which our prior year

start-up

income estimated fair value exceeds the current year carrying value for the 24 broadcasting market licenses tested:


	Geographic Market Clusters as of December 31, 2021 Percentage Range by Which 2020 Estimated Fair Value Exceeds 2021 Carrying Value
	≤ 25%		>26%-50%		>51% to 75%		> +than 76%


Number of accounting units		12		1		4		7
Broadcast license carrying value (in thousands)		193,396		7,004		52,299		21,785

The table below shows the percentage within a range by which our prior year estimated fair value exceeded the carrying value of our broadcasting licenses for these six market clusters:


	Geographic Market Clusters as of December 31, 2021 Tested due to SOI Multiple or length of time from prior valuation – Percentage Range by Which 2020 Estimated Fair Value Exceeds 2021 Carrying Value
	≤ 25%		>26%-50%		>51% to 75%		> +than 76%


Number of accounting units		—		3		2		1
Broadcast license carrying value (in thousands)		—		11,967		27,465		6,092

Schedule of Estimates and Assumptions Used in the Start - Up Income Valuation for Broadcast Licenses

The assumptions used reflect those of a hypothetical market participant and not necessarily the actual or projected results of Salem. The key estimates and assumptions used in the

start-up

income valuation for the broadcast licenses tested in each period were as follows:


Broadcast Licenses	December 31, 2020	December 31, 2021

Risk-adjusted discount rate	8.5%	8.5%
Operating profit margin ranges	4.2% - 31.0%	3.9% - 30.9%
Long-term revenue growth rates	0.4% - 0.9%	0.4% - 0.7%

Schedule of Interim Impairment Testing Under Start-Up Income Approach

The table below presents the results of our impairment testing under the

start-up

income approach:


Market Cluster	Excess Fair Value December 31, 2021 Estimate

Atlanta, GA		99.0	%
Boston, MA		22.3	%
Chicago, IL		13.9	%
Cleveland, OH		29.1	%
Col Springs, CO		61.7	%
Columbus, OH		3.5	%
Dallas, TX		11.4	%
Greenville, SC		15.3	%
Honolulu, HI		14.3	%
Little Rock		4.7	%
Louisville, KY		8.5	%

Minneapolis, MN		153.5	%
Orlando FL		11.5	%
Philadelphia, PA		14.7	%
Portland, OR		18.7	%
Sacramento, CA		6.3	%
San Diego, CA		50.9	%
San Francisco, C A		28.4	%