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Salem Media bought by WaterStone

As I said with Audacy and Cumulus, there is no downside to taking a radio company private. If someone is willing to put up the money, take it.

There may have been a time when being a public company, and trading on the stock market was a good thing for radio. Not anymore.
 
TheBigA said:
As I said with Audacy and Cumulus, there is no downside to taking a radio company private.
Click to expand...

There's usually plenty of downside when it's a private equity firm with the sole intention of strip-mining the company, loading it with debt, laying off workers and hollowing out the business as the predictable steps of their looting scheme.

That may not be what this is, but there's a big difference between a takeover by a private owner that wants the company succeed and one that wants to ransack it. That's a distinction that needs to be made.
 
Theater of My Mind said:
That's a distinction that needs to be made.
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You're misunderstanding my point. What I'm saying is that radio doesn't benefit by being in the stock market. All it does is drive down company value in public for everyone to see. For months, the conversation has been about Salem's falling stock price. That conversation is over. They can concentrate on building the company from within, instead of worrying about quarterly numbers and satisfying stockholders,
 
Mediafrog+ said:
What would they do in regard to “building the company from within”? Doing things the same way is going to have the same result.
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Two years ago, there was talk of building up their digital presence. So far, I haven't seen any results there. But that would be my suggestion.

They aren't going to build anything with their AM stations. But they could do more with some of the content.
 
TheBigA said:
You're misunderstanding my point. What I'm saying is that radio doesn't benefit by being in the stock market. All it does is drive down company value in public for everyone to see. For months, the conversation has been about Salem's falling stock price. That conversation is over. They can concentrate on building the company from within, instead of worrying about quarterly numbers and satisfying stockholders,
Click to expand...
Honestly, what was the point of the conversations about Salem’s stock price? The stock has been delisted and the company no longer subject to SEC reporting requirements. It has been a zombie stock for a while.
 
The biggest advantage of going private (assuming, as @Theater of My Mind has pointed out, that the new owner is not a parasitic one) is that you can do with the company what you want. Put another way, if you decide to tread water and just let the shows run themselves, nobody's going to stop you. Since, as @TheBigA has pointed out, radio is currently not doing well in the public stock market, having that kind of freedom at the corporate level, even if it's only for a little while, might turn out to be a good thing.

The biggest downside to going private? Since public stockholders are not footing the bill, there will be less money available for the new owner to do the things it wants to do, including expanded Internet options. While I'm not a fan of this company or its programming (I am a liberal atheist after all), I still wish the new owners good luck. They most certainly will need it!
 
ted chittenden said:
Since public stockholders are not footing the bill, there will be less money available for the new owner to do the things it wants to do, including expanded Internet options.
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The new owner is a Christian charity, so they can raise money from their believers. As K-Love has shown, there is the potential for limitless funds.
 
ted chittenden said:
The biggest downside to going private? Since public stockholders are not footing the bill, there will be less money available for the new owner to do the things it wants to do, including expanded Internet options. While I'm not a fan of this company or its programming (I am a liberal atheist after all), I still wish the new owners good luck. They most certainly will need it!
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From the article: "Waterstone, founded in 1980, is a Christian philanthropic advisory firm to assist wealthy donors maximize both their giving and their tax benefits." Waterstone sounds like it could be a philanthopic charity, more than private equity partner. It will be interesting to see where they take the company.

TheBigA said:
The new owner is a Christian charity, so they can raise money from their believers. As K-Love has shown, there is the potential for limitless funds.
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If this is so, will all there stations be converted to NonComm status?
 
BoboKnight said:
Honestly, what was the point of the conversations about Salem’s stock price? The stock has been delisted and the company no longer subject to SEC reporting requirements. It has been a zombie stock for a while.
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Partially correct. Salem still had a public market valuation. It was delisted from the NASDAQ, but still traded OTC. You are correct that they filed the paperwork in 2024 to suspend their SEC reporting obligations - which saves them some money - but they continued to provide voluntary public reporting.

I think the press release gives some insights as to where this is going. The old decision makers are out and the legacy model will be dismantled to save the brand. They don't say that radio is going away, but the physical footprint probably continues to shrink with investment focused on digital and streaming.

The investments may not ROI at first, but now Waterstone can do what it believes needs to be done without shareholder scrutiny. There is a "turn-around" element to this, but Waterstone is not a PE entity. It is largely a collection of Donor Advised Funds supporting a particular mission (Venture Philanthropy). So, it isn't the same as a K-Love raising money over the air. They are using private philanthropy as a capital engine to make this impactful whereas a public company had a mandate to be profitable.
 
leethalweapon said:
If this is so, will all there stations be converted to NonComm status?
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Not with the current Word/Answer formats. The former has commercial sales, the other is a brokered time structure.
Richard Sanders said:
The old decision makers are out and the legacy model will be dismantled to save the brand.
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Would they drop the Word/Answer formats for something different and more effective? Continuing the same format model won’t get them anywhere.
Richard Sanders said:
They don't say that radio is going away, but the physical footprint probably continues to shrink with investment focused on digital and streaming.
Click to expand...
Here is a list of the current Salem Media stations. What might they spin off?

salemmedia.com

Radio Stations - By State - Salem Media

Radio Stations Salem Media Group owns 95 radio stations in 35 markets, including 30 stations in the top 10 markets and 62 stations in the top 25 markets.
salemmedia.com salemmedia.com
 
WaterStone's investment is mainly focused on digital and streaming, or at least that what we employees were told back in December '24. They want to grow the Salem News Channel and SalemNow (longform documentaries), and all the news/talk hosts have a stream they promote on-air. The issue is how to make that stand out among so many other offerings in the very crowded conservative media landscape.

I still believe selling off the CCM stations was a mistake, because at least they brought in some ad revenue. The two remaining radio formats are not long for the world (though Christian talk/teaching may stick around a little longer).
 
Mediafrog+ said:
Here is a list of the current Salem Media stations. What might they spin off?
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If their strategy is all about digital and streaming, then they probably look at OTA radio as a funnel. Radio establishes trust and habit and it commands attention in a way stand-alone digital can't. But the future and best opportunity at scale is streaming and digital.

If it were me, I'd focus mainly on full-market signals in large markets (LA, DC) and highly responsive religious markets (Dallas, Colorado Springs) and carry just the two main formats. I would need to know more about all the secondary markets and AM/Translator combos to make decisions about those. Do they cash-flow? What is the liquidation value of any physical assets in that market? I'd be comfortable with taking a small loss in a specific market if it drives my broader digital strategy, but it would have to be selective.

Under this framework, the block teaching format would remain the B2B cash cow feeding one distinct digital ecosystem. The Conservative Talk format would serve as a funnel to a separate consumer digital ecosystem that includes podcasts and premium services. While there is still some monetezation at the OTA level, the ultimate goal would be to use whatever broadcast signals they keep to aggregate the audience, then migrate them to the digital footprint where the margins scale better over time.
 
ted chittenden said:
The biggest downside to going private? Since public stockholders are not footing the bill, there will be less money available for the new owner to do the things it wants to do, including expanded Internet options. While I'm not a fan of this company or its programming (I am a liberal atheist after all), I still wish the new owners good luck. They most certainly will need it!
Click to expand...
Public and privately held company owners have the same financing systems. They can get loans (either through a lender or by issuing bonds) or by selling more shares to the current “owners” or to additional share buyers. The buyer of Salem is a corporation, not a sole proprietorship so in this respect it works just like the same as now except that there is not an open market on the shares.
 


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