Share price has, often, nothing to do with the profitability of a business. Salem is doing moderately well, despite the recession and the pandemic, but is "contaminated" by a couple of more prominent big radio companies that are in serious debt-related situations.
Because like other broadcaster's that rely on advertising, ad revenue has been on a decline since the 2008 Recession. Doesn't matter what format.
But I believe that radio is no longer even half of Salem's gross income.
I don't know, but according to the link, looks like broadcast radio is still the cash cow:
Could be, although since they've held the same amount of stations for several years, you wouldn't think that would account for a 38% expense increase inside of this year. I'm guessing there may have been some talent bonuses, unexpected CapX, or some combination timing around that percentage.
Doesn't sound that "limited" to me.
Considering 30% of U.S. Citizens consider themselves 'Christian-Conservatives", seems to me that's a pretty large audience to target.
Thanks for posting this... I did not initially find those figures and thought that Salem was quite a bit heavier in digital and non-radio, but obviously I was wrong. What is the big question is why the operating expenses increased so much... it sounds like some kind of one-time expense, like a lease pay-off or some kind of settlement that is not part of the "ITDA" of "EBITDA".
As mentioned in another response, CapX generally would not be "expensible" in such a large amount and would likely be amortized over multiple years, not a one-time. A bonus might have been significant, IIRC, one of their principals retired recently and may have had some large amount due at that time (but that still seems very large). The only kind of one-time I can see that might approach that would be paying off a lease were they have moved corporate HQ or something like that.
I wonder how much of their "back office" like accounting, payables, traffic, continuity and the like is centralized. Even many smaller groups are consolidating those operations into one location... with the elimination of those old problems of having 3 or 4 stations in a cluster and finding out on Friday morning that "Pete" or "Mary" who are half of the traffic department got sick and won't be in for the 16 logs needed through the long weekend...
That depends. You're correct in the case of budgeted 'capex', where an amount is effectively set aside for scheduled upgrades or replacement. Assets are then amortized over the expected life span, or a select number of months/years. Un-budgeted CapX is when some unexpected expense or series of expenses. For example; a real estate asset requires unexpected major renovations, or a manufacturer goes out of business and you're suddenly faced with unexpected replacement of all your network infrastructure. Another example is more recently, where a company gets hit by ransomware, requiring a massive IT overhaul, including network, servers, workstations, etc., to be entirely replaced.
It's been a while, but I believe many of their markets are back office de-centralized. Believe finance, AP/AR, etc., is centralized, but not sure about Traffic, Operations, ect.
But then the old asset's remaining undepreciated value is written off and the new system is capitalized and depreciated according to accepted accounting principles and IRS rules.
Sometimes centralization causes a one-time expensible cost when all the local people in a particular function are let go and given severance while new people are hired in the centralized location. So, in this case, if Salem had centralized traffic and continuity and production, they might have had severance in a dozen or more market clusters and the start-up expenses of the new centralized function. That could be a sizable amount of money if changes in office space were involved, such as reducing local market square footage and building out at the new central location.
