Salem/EMF

[secondchoice]

What did Salem buy in past that got them in "debt jail"?

I remember Citadel buying the ABC radio division, then Cumulus paid too much for Citadel, Clear Channel was a victim of a leverage buy out, and Audacy buying the CBS radio stations and getting whammied by the Covid advertising cutbacks, but I don't remember hearing about any big deals that involved Salem.

 

[JeremyAndrews]

I think it's just the result of radio these days. They have a very narrow focus, which is Brokered Preaching, Contemporary Christian and Conservative Talk. Brokered Preaching probably is not as profitable as it once was. I mentioned above, Contemporary Christian tends to thrive in a Non Commercial environment more than it does in a commercial environment. Conservative Talk is generally a strong format in some areas, but the audience is aging out. These stations mostly clear their network programming.

 

[secondchoice]

I don't know the money demos but 104.7 is almost always a top 10 station in Atlanta (6+).

 

[JeremyAndrews]

I don't know the money demos but 104.7 is almost always a top 10 station in Atlanta (6+).

It depends on the market. I'm guessing they bill fine in markets like Atlanta where they have good ratings. But there are markets where the format does not have good ratings. In that case, non commercial stations thrive because listener donations pay the bills.

 

[PTBoardOp93]

What did Salem buy in past that got them in "debt jail"?

About 25% of their stations were acquired since 2012, many of which came from the breakup of Radio Disney.

Salem doesn't have all that much debt. Only around $170 million, or about 1/10th of what sent Audacy into bankruptcy. But the absolute size of the debt isn't really an important metric.

The problem is, the company lost money in five of the last six years (2021 being the only profitable year). Some of those losses were on non-cash mark-to-market on assets like station licenses.

Even so, it's hard for a banker to make loans to a company when they see declining revenue, assets that are being marked down every year or two, and unreliable profits.

 

[Kent]

What did Salem buy in past that got them in "debt jail"?

As Jeremy and PTBoardOp mention, it's not so much a debt problem as it is a revenue issue. Paid preaching, which has always been Salem's bread-and-butter, isn't the business it was 15-20 years ago. Now that everyone has a smartphone, preachers don’t need radio to reach their audience. Salem has tried to keep their business by offering them a portal. Those who buy time on its stations can also have their podcasts and on-demand sermons on Salem's portal. Salem staved off the revenue problem longer than smaller religious broadcasters by offering a greater reach, but, like I mentioned, with everyone owning a smartphone, that reach isn’t the selling point it once was. I haven’t reviewed Salem's financials, but, if I were guessing, I would think it would get less for carrying the preachers over the air while getting a greater cut of money from the online portal. The revenue of the latter likely hasn’t caught up to the former and may never.

 

[charles1234]

Did anybody mention that K-Love and K-Love classic are on Air 1’s HD2 and HD3?

 

[PTBoardOp93]

I were guessing, I would think it would get less for carrying the preachers over the air

In 2017, Salem reported block programming accounted for $83.5 million in revenue. In 2023, it was $78.4 million. So a 6% decline, plus the impact of inflation over those years.

 

[Mediafrog+]

Did anybody mention that K-Love and K-Love classic are on Air 1’s HD2 and HD3?

Yes, in this thread: https://www.radiodiscussions.com/threads/k-love-now-playing-in-dfw.770393/

 

[secondchoice]

I forgot how long does the IRS allows good will to be deducted. I have heard of a lot of stations, if the owner financed, were 10 years. Did Disney get their money at the closing?