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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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Form 10-K

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(Mark one)

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(Mark one)

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☑

þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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For the fiscal year ended December 31 2017, 2023

OR

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or

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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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For the transition period for          tofrom_________________________ to_______________________________

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Commission file number 1-11588

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SAGA COMMUNICATIONS, INC.

(Exact name of registrant as specified in its charter)

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Delaware
38-3042953

Florida

38-3042953

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

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73 Kercheval Avenue

Grosse Pointe Farms, Michigan

48236

(Address of principal executive offices)

(Zip Code)

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Registrant’s telephone number, including area code:

(313) (313) 886-7070

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Securities registered pursuant to Section 12(b) of the Act:

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Title of each class

Trading Symbol

Name of each exchange on which registered

Class A Common Stock, $.01 par value

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NYSE American

SGA

NASDAQ Global Market

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Securities registered pursuant to Section 12(g) of the Act: None

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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨◻     No þ☑

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Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨◻     No þ☑

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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 þ☑     No ¨◻

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Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted 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 and post such files).  Yes þ☑     No ¨◻

Indicate by check mark if disclosure of delinquent filers pursuant to Rule 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K.  þ

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”filer,” “smaller reporting company” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act.

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Large accelerated filer¨
◻

Accelerated
filer  þ☑

Non-accelerated filer¨
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Smaller Reporting
Company¨☑

Emerging growth company¨

(Do not check if a smaller
reporting company)
☐

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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.¨◻

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Indicate by checkmark 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. ☑

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If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ◻

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨☐     No þ☑

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AggregateOn June 30, 2023 the aggregate market value of the shares of Class A Common Stock and the Class B Common Stock (assuming conversion thereof into Class A Common Stock) held by nonaffiliates of the registrant, computed on the basis of the closing stock price of the Class A Common Stock on June 30, 2017 on the NYSE American: $229,017,827.NASDAQ was $81,896,718.

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The number of shares of the registrant’s Class A Common Stock, $.01 par value and Class B Common Stock, $.01 par value, outstanding as of March 2, 20182024 was 5,042,709 and 898,633, respectively.6,263,236.

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DOCUMENTS INCORPORATED BY REFERENCE

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Portions of the Proxy Statement for the 20182024 Annual Meeting of StockholdersShareholders (to be filed with the Securities and Exchange Commission not later than 120 days after the end of the Company’s fiscal year) are incorporated by reference in Part III hereof.

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Table of Contents

Saga Communications, Inc.

20172023 Form 10-K Annual Report

Table of Contents

Page

Page

PART I

Item 1.

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BusinessPART I

4

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Item 1A.1.

Risk FactorsBusiness

23

4

Item 1A.

Risk Factors

23

Item 1B.

Unresolved Staff Comments

27

30

Item 2.1C.

PropertiesCybersecurity

27

31

Item 3.2.

Legal ProceedingsProperties

27

32

Item 3.

Legal Proceedings

32

Item 4.

Mine Safety Disclosures

27

32

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PART II

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Item 5.

Market for Registrant’s Common Equity, Related StockholderShareholder Matters and Issuer Purchases of Equity Securities

28

32

Item 6.

[Selected Financial DataReserved]

31

33

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

33

34

Item 7A.

Quantitative and Qualitative Disclosures aboutAbout Market Risk

45

Item 8.

Financial Statements and Supplementary Data

45

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

45

Item 9A.

Controls and Procedures

45

46

Item 9B.

Other Information

48

Item 9C.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspection

48

PART III

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PART III

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Item 10.

Directors, Executive Officers and Corporate Governance

48

Item 11.

Executive Compensation

48

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related StockholderShareholder Matters

48

Item 13.

Certain Relationships and Related Transactions, and Director Independence

48

Item 14.

Principal Accountant Fees and Services

48

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PART IV

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Item 15.

Exhibits and Financial Statement Schedules

49

Signatures

88

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Table of Contents

Forward-Looking Statements

Statements contained in this Form 10-K that are not historical facts are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In addition, words such as “will,” “may,” “believes,” “expects”,“intends,” “expects,” “anticipates,” “plans,” “estimates,” “guidance,” and similar expressions are intended to identify forward-looking statements. These statements are made as of the date of this report or as otherwise indicated, based on current expectations. We undertake no obligation to update this information. A number of important factors could cause our actual results for 20182023 and beyond to differ materially from those expressed in any forward-looking statements made by or on our behalf. Forward-looking statements are not guarantees of future performance as they involve a number of risks, uncertainties and assumptions that may prove to be incorrect and that may cause our actual results and experiences to differ materially from the anticipated results or other expectations expressed in such forward-looking statements. The risks, uncertainties and assumptions that may affect our performance, which are described in Item 1A of this report, include our financial leverage and debt service requirements, dependence on key personnel, dependence on key stations and advertising revenue they generate, global, U.S. and local economic conditions, including the effects of inflation, our ability to successfully integrate acquired stations, regulatory requirements including royalties we pay, new technologies, health epidemics, natural disasters, terrorist attacks, information technology and cybersecurity failures and data security breaches. We cannot be sure that we will be able to anticipate or respond timely to changes in any of these factors, which could adversely affect the operating results in one or more fiscal quarters. Results of operations in any past period should not be considered, in and of itself, indicative of the results to be expected for future periods. Fluctuations in operating results may also result in fluctuations in the price of our stock.

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3

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Table of Contents

PART I

Item 1.     Business

We are a broadcastmedia company primarily engaged in acquiring, developing and operating broadcast properties. On May 9, 2017 we entered into an agreement to sell our Joplin, Missouri and Victoria, Texas television stations and subsequently closed on this transaction on September 1, 2017. The television stations that were sold constituted our entire television segment. The historical results of operations for the television stations are presented as discontinued operations for all periods presented (see Note 3). As a result of the sale of our television stations and those stations being reported as discontinued operations we only have one reportable segment at December 31, 2017. Unless indicated otherwise, the information in the Notes to Consolidated Financial Statements relatesproperties including opportunities complimentary to our continuing operations.core radio business including digital, e-commerce and non-traditional revenue initiatives. As of February 28, 2018,29, 2024, we owned seventy-fiveseventy-nine FM, and thirty-three AM radio stations and eighty metro signals serving twenty-six markets, including Bellingham, Washington; Columbus, Ohio; Norfolk, Virginia; Milwaukee, Wisconsin; Manchester, New Hampshire;twenty-seven markets. Our principal executive offices are located at 73 Kercheval, Grosse Pointe Farms, Michigan 48236. We are a Florida corporation, reorganized in 2020. We were originally organized as a Delaware corporation in 1986.

During 2022, our founder and Des Moines, Iowa.

The following table sets forth information about our radio stations andformer Chief Executive Officer (“CEO”), Edward K. Christian passed away. As of the markets they servedate of his passing, Mr. Christian held approximately 65% of the combined voting power of the Company’s Common Stock. His passing resulted in the conversion of his Class B Shares into Class A Shares that were transferred to an estate planning trust that now owns approximately 16% of the common stock outstanding. We were also required to make certain payments to his estate as of February 28, 2018:outlined in his employment agreement.

    2017  2017     
    Market  Market     
    Ranking  Ranking     
    By Radio  By Radio    Target
Station Market (a) Revenue (b)  Market (b)  Station Format Demographics
             
FM:              
WKLH Milwaukee, WI  30   41  Classic Rock Men 40-64
WHQG Milwaukee, WI  30   41  Rock Men 18-49
WJMR Milwaukee, WI  30   41  Urban Adult Contemporary Women 25-54
WNRG Milwaukee, WI  30   41  Contemporary Hits Adults 18-34
WSNY Columbus, OH  33   37  Adult Contemporary Women 25-54
WNND Columbus, OH  33   37  Classic Hits Adults 35-64
WNNP Columbus, OH  33   37  Classic Hits Adults 35-64
WLVQ Columbus, OH  33   37  Classic Rock Men 40-64
WVMX Columbus, OH  33   37  Hot Adult Contemporary Women 25-44
WNOR Norfolk, VA  41   45  Rock Men 18-49
WAFX Norfolk, VA  41   45  Classic Rock Men 35-64
KSTZ Des Moines, IA  66   71  Hot Adult Contemporary Women 25-44
KSTZ-HD2 Des Moines, IA  66   71  Country Legends Adults 45-64
KIOA Des Moines, IA  66   71  Classic Hits Adults 45-64
KAZR Des Moines, IA  66   71  Rock Men 25-49
KAZR-HD2 Des Moines, IA  66   71  Oldies/Classic Hits Adults 45+
KMYR Des Moines, IA  66   71  Soft Adult Contemporary Women 25-54
KIOA-HD2 Des Moines, IA  66   71  Contemporary Hits Adults 18-34
WMGX Portland, ME  74   95  Hot Adult Contemporary Women 25-44
WYNZ Portland, ME  74   95  Classic Hits Adults 45-64
WPOR Portland, ME  74   95  Country Adults 25-54
WCLZ Portland, ME  74   95  Adult Album Alternative Adults 25-54
WAVF Charleston, SC  92   78  Adult Contemporary Adults 25-54
WCKN Charleston, SC  92   78  Country Adults 25-54
WMXZ Charleston, SC  92   78  Hot Adult Contemporary Women 25-44
WMXZ-HD2 Charleston, SC  92   78  Urban Hits Adults 18-34
WXST Charleston, SC  92   78  Urban Adult Contemporary Adults 25-54
WAQY Springfield, MA  97   96  Classic Rock Men 35-54
WLZX Springfield, MA  97   96  Alternative Rock Men 18-49
WZID Manchester, NH  116   198  Adult Contemporary Women 25-54
WMLL Manchester, NH  116   198  Classic Hits Adults 45-64
WZID-HD2 Manchester, NH  116   198  Contemporary Hits Adults 18-34
WZID-HD3 Manchester, NH  116   198  Classic Country Adults 45-64
WOXL Asheville, NC  154   158  Adult Contemporary Women 25-54
WTMT Asheville, NC  154   158  Classic Rock Men 40-64
WTMT-HD2 Asheville, NC  154   158  Classic Hits Adults 45-64
WTMT-HD3 Asheville, NC  154   158  Country Legends Adults 45-64
WOXL-HD2 Asheville, NC  154   158  Adult Album Alternative Adults 25-54
WSIG Harrisonburg, VA  168   251  Classic Country Adults 35-64
WQPO Harrisonburg, VA  168   251  Contemporary Hits Women 18-34

(footnotes follow tables)

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    2017  2017     
    Market  Market     
    Ranking  Ranking     
    By Radio  By Radio    Target
Station Market (a) Revenue (b)  Market (b)  Station Format Demographics
             
WQPO-HD3 Harrisonburg, VA  168   251  Classic Rock Male 40-64
WMQR Harrisonburg, VA  168   251  Adult Contemporary Female 25-44
WWRE Harrisonburg, VA  168   251  Classic Hits Adults 45-64
WNAX Yankton, SD  180   258  Country Adults 25-54
WWWV Charlottesville, VA  190   206  Classic Rock Men 40-64
WQMZ Charlottesville, VA  190   206  Adult Contemporary Women 25-54
WCNR Charlottesville, VA  190   206  Adult Album Alternative Adults 25-54
WCVL Charlottesville, VA  190   206  Country Adults 25-54
WLHH Hilton Head, SC  246   222  Classic Hits Adults 45-64
WOEZ Hilton Head, SC  246   222  Adult Contemporary Women 35-64
WVSC Hilton Head, SC  246   222  Soft Adult Contemporary Women 35-64
WVSC-HD2 Hilton Head, SC  246   222  Oldies/Classic Hits Adults 45-64
KISM Bellingham, WA  N/A   N/A  Classic Rock Men 40-64
KAFE Bellingham, WA  N/A   N/A  Adult Contemporary Women 25-54
WKVT Brattleboro, VT  N/A   N/A  Classic Hits Adults 40-64
WRSY Brattleboro, VT  N/A   N/A  Adult Album Alternative Adults 25-54
WQEL Bucyrus, OH  N/A   N/A  Classic Hits Adults 40-64
WLRW Champaign, IL  N/A   N/A  Hot Adult Contemporary Women 25-44
WREE Champaign, IL  N/A   N/A  Classic Hits Adults 40-64
WYXY Champaign, IL  N/A   N/A  Classic Country Adults 45-64
WIXY Champaign, IL  N/A   N/A  Country Adults 25-54
WIXY-HD2 Champaign, IL  N/A   N/A  Rock Men 18-49
WIXY-HD3 Champaign, IL  N/A   N/A  Contemporary Hits Adults 18-34
WLRW-HD2 Champaign, IL  N/A   N/A  Oldies/Classic Hits Adults 45-64
WCVQ Clarksville, TN — Hopkinsville, KY  N/A   N/A  Hot Adult Contemporary Women 25-54
WVVR Clarksville, TN — Hopkinsville, KY  N/A   N/A  Country Adults 25-54
WZZP Clarksville, TN — Hopkinsville, KY  N/A   N/A  Rock Men 18-49
WRND Clarksville, TN — Hopkinsville, KY  N/A   N/A  Classic Hits Adults 40-64
WCVQ-HD2 Clarksville, TN — Hopkinsville, KY  N/A   N/A  Contemporary Christian Adults 25-54
WCVQ-HD3 Clarksville, TN — Hopkinsville, KY  N/A   N/A  Country Legends Adults 45-64
WHAI Greenfield, MA  N/A   N/A  Adult Contemporary Women 25-54
WPVQ Greenfield, MA  N/A   N/A  Country Adults 25-54
WIII Ithaca, NY  N/A   N/A  Iconic Rock Men 40-64
WQNY Ithaca, NY  N/A   N/A  Country Adults 25-54
WYXL Ithaca, NY  N/A   N/A  Adult Contemporary Women 25-54
WYXL-HD2 Ithaca, NY  N/A   N/A  Adult Album Alternative Adults 25-54
WYXL-HD3 Ithaca, NY  N/A   N/A  Sports Men 25-64
WFIZ Ithaca, NY  N/A   N/A  Contemporary Hits Adults 18-34
WFIZ-HD2 Ithaca, NY  N/A   N/A  Oldies/Classic Hits Adults 40-64
KEGI Jonesboro, AR  N/A   N/A  Classic Rock Men 40-64
KDXY Jonesboro, AR  N/A   N/A  Country Adults 25-54
KJBX Jonesboro, AR  N/A   N/A  Adult Contemporary Women 25-54
KJBX-HD2 Jonesboro, AR  N/A   N/A  Country Legends Adults 45-64
KDXY-HD2 Jonesboro, AR  N/A   N/A  Contemporary Hits Adults 18-34
KDXY-HD3 Jonesboro, AR  N/A   N/A  Sports ESPN Men 35-64
WKNE Keene, NH  N/A   N/A  Hot Adult Contemporary Women 25-54
WSNI Keene, NH  N/A   N/A  Adult Contemporary Women 25-44

(footnotes follow tables)

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    2017  2017     
    Market  Market     
    Ranking  Ranking     
    By Radio  By Radio    Target
Station Market (a) Revenue (b)  Market (b)  Station Format Demographics
             
WINQ Keene, NH  N/A   N/A  Country Adults 25-54
WKNE-HD2 Keene, NH  N/A   N/A  Adult Album Alternative Adults 25-54
WKNE-HD3 Keene, NH  N/A   N/A  Classic Country Adults 45-64
KMIT Mitchell, SD  N/A   N/A  Country Adults 25-54
KMIT-HD2 Mitchell, SD  N/A   N/A  Adult Contemporary Women 25-54
KMIT-HD3 Mitchell, SD  N/A   N/A  Sports Men 18-64
KUQL Mitchell, SD  N/A   N/A  Classic Hits/Oldies Adults 45-64
WRSI Northampton, MA  N/A   N/A  Adult Album Alternative Adults 25-54
WLZX-HD2 Northampton, MA  N/A   N/A  Contemporary Hits Adults 18-34
KICD Spencer, IA  N/A   N/A  Country Adults 25-54
KMRR Spencer, IA  N/A   N/A  Adult Contemporary Women 25-54
WYMG Springfield, IL  N/A   N/A  Classic Rock Men 25-54
WDBR Springfield, IL  N/A   N/A  Contemporary Hits Adults 18-34
WQQL Springfield, IL  N/A   N/A  Classic Hits/Oldies Adults 45-64
WLFZ Springfield, IL  N/A   N/A  Country Adults 25-54
WDBR-HD2 Springfield, IL  N/A   N/A  Country Legends Adults 45-64
WDBR-HD3 Springfield, IL  N/A   N/A  Oldies/Classic Hits Adults 45-64
               
AM:              
WJYI Milwaukee, WI  30   41  Christian Adults 25-54
WJOI Norfolk, VA  41   45  Adult Standards Adults 45-64
KRNT Des Moines, IA  66   71  Sports Men 18-64
KPSZ Des Moines, IA  66   71  Christian Adults 25-54
WGAN Portland, ME  74   95  News/Talk Adults 35-64
WZAN Portland, ME  74   95  Talk/Sports Men 18-64
WBAE Portland, ME  74   95  News/Talk Adults 35-64
WGIN Portland, ME  74   95  News/Talk Adults 35-64
WSPO Charleston, SC  92   78  Gospel Adults 25-54
WHNP Springfield, MA  97   96  News/Talk Adults 35-64
WFEA Manchester, NH  116   198  News/Talk Adults 35-64
WISE Asheville, NC  154   158  Sports/Talk Men 18-64
WYSE Asheville, NC  154   158  Sports/Talk Men 18-64
WSVA Harrisonburg, VA  168   251  News/Talk Adults 35-64
WHBG Harrisonburg, VA  168   251  Sports ESPN Men 18-64
WNAX Yankton, SD  180   258  News/Talk Adults 35-64
WINA Charlottesville, VA  190   206  News/Talk Adults 35-64
WVAX Charlottesville, VA  190   206  Sports Talk Men 18-64
KGMI Bellingham, WA  N/A   N/A  News/Talk Adults 35-64
KPUG Bellingham, WA  N/A   N/A  Sports/Talk Men 18-64
KBAI Bellingham, WA  N/A   N/A  Classic Hits Adults 40-64
WKVT Brattleboro, VT  N/A   N/A  News/Talk Adults 35-64
WBCO Bucyrus, OH  N/A   N/A  Classic Country Adults 45-64
WRND Clarksville, TN — Hopkinsville, KY  N/A   N/A  Classic Hits Adults 40-64
WKFN Clarksville, TN — Hopkinsville, KY  N/A   N/A  Sports/Talk ESPN Men 18-64
WHMQ Greenfield, MA  N/A   N/A  News/Talk Adults 35-64
WNYY Ithaca, NY  N/A   N/A  Oldies/Classic Hits Adults 45-64
WHCU Ithaca, NY  N/A   N/A  News/Talk Adults 35-64
WKBK Keene, NH  N/A   N/A  News/Talk Adults 35-64
WZBK Keene, NH  N/A   N/A  Sports Talk Men 18-64
WHMP Northampton, MA  N/A   N/A  News/Talk Adults 35-64
KICD Spencer, IA  N/A   N/A  News/Talk Adults 35-64
WTAX Springfield, IL  N/A   N/A  News/Talk Adults 35-64

(footnotes follow tables)

6

(a)Actual city of license may differ from metropolitan market actually served.
(b)Derived from Investing in Radio 2017 Market Report.

Strategy

Our strategy is to operate top billing radio stations, including opportunities complimentary to our core radio business including digital, e-commerce and non-traditional revenue initiatives, in mid-sized markets, which we define as markets ranked from 20 to 200 out of the markets summarized by Investing in Radio Market Report.

ProgrammingLocal programming and marketing are key components in our strategy to achieve top ratings in our radio operations. In many of our markets, the three or four most highly rated radio stations receive a disproportionately high share of the market’s advertising revenues. As a result, a station’s revenue is dependent upon its ability to maximize its number of listeners/viewerslisteners within an advertiser’s given demographic parameters. In certain cases we use attributes other than specific market listener data for sales activities. In those markets where sufficient alternative data is available, we do not subscribeWe also use our strong local presence and community involvement to an independent listener rating service.

develop strong relationships with our listeners, advertising clients and community organizations.

The radio stations that we own and/or operate employ a variety of programming formats, including Classic Hits, Adult Hits, Top 40, Country, Classic Country, Legends, Mainstream/Hot/SoftSoft/Urban Adult Contemporary, Pure Oldies, Classic Rock, Rock and News/Talk. We regularly perform extensive market research, including music evaluations, focus groups and strategic vulnerability studies. Our stations also employ audience promotions to further develop and secure a loyal following.

The television stations that we owned and/or operated, prior to their sale, during 2017 were comprised of two CBS affiliates, one ABC affiliate, two Fox affiliates, one Univision affiliate, one NBC affiliate, one Telemundo affiliate and one Cozi TV affiliate. In addition to securing network programming, we carefully selected available syndicated programming to maximize viewership. We also developed local programming, including a strong local news franchise in each of our television markets.

We concentrate on the development of strong decentralized local management, which is responsible for the day-to-day operations, including local community development, of the stations we own and/or operate. We compensate local management based on the station’s financial performance, as well as other performance factors that are deemed to affect the long-term ability of the stations to serve their local communities and to achieve financial performance objectives. Corporate management is responsible for long-range planning, establishing policies and procedures, resource allocation and monitoring the activities of the stations.

Under the Telecommunications Act of 1996 (the “Telecommunications Act”), we are permitted to own as many asup to eight radio stations in a single market. See “Federal Regulation of Radio and Television Broadcasting”. We seek to acquire reasonably priced broadcast properties with significant growth potential that are located in markets with well-established and relatively stable economies. We often focus on local economies supported by a strong presence of state or federal government or one or more major universities. Future acquisitions will be subject to the availability of financing, the terms of our credit facility, and compliance with the Communications Act of 1934 (the “Communications Act”) and Federal Communications Commission (“FCC”) rules.

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Table of Contents

Advertising Sales

Our primary source of revenue is from the sale of advertising for broadcast on our stations. Depending on the format of a particular radio station, there are a predetermined number of advertisements broadcast each hour. The number of advertisements broadcast on our television stations were limited by certain network affiliation and syndication agreements and, with respect to children’s programs, federal regulation. We determine the number of advertisements broadcast hourly that can maximize a station’s available revenue dollars without jeopardizing listening/viewinglistening levels. While there may be shifts from time to time in the number of advertisements broadcast during a particular time of the day, the total number of advertisements broadcast on a particular station generally does not vary significantly from year to year. Any change in our revenue, with the exception of those instances where stations are acquired or sold, is generally the result of pricing adjustments, which are made to ensure that the station efficiently utilizes available inventory.

Advertising rates charged by radio and television stations are based primarily on a station’s ability to attract audiences in the demographic groups targeted by advertisers, the number of stations in the market competing for the same demographic group, the supply of and demand for radio and television advertising time, and other qualitative factors including rates charged by competing radio and television stations within a given market. Radio rates are generally highest during morning and afternoon drive-time hours, while television advertising rates are generally higher during prime time evening viewing periods.hours. Most advertising contracts are short-term, generally running for only a few weeks. This allows broadcasters the ability to modify advertising rates as dictated by changes in station ownership within a market, changes in listener/viewerlistener ratings and changes in the business climate within a particular market.

7

Approximately $124,809,000$108,509,000 or 87%90% of our gross revenue for the year ended December 31, 20172023 (approximately $131,233,000$108,999,000 or 85%89% in fiscal 20162022 and approximately $125,558,000$102,367,000 or 87%89% in fiscal 2015)2021) was generated from the sale of local advertising for both continuing operations and discontinued operations.advertising. Additional revenue is generated from the sale of national advertising, network compensation payments, barter and other miscellaneous transactions. In all of our markets, we attempt to maintain a local sales force that is generally larger than our competitors. The principal goal in our sales efforts is to develop long-standing customer relationships through frequent direct contacts, which we believe represents a competitive advantage. We also typically provide incentives to our sales staff to seek out new opportunities resulting in the establishment of new client relationships, as well as new sources of revenue, not directly associated with the sale of broadcast time.

Each of our stations also engages independent national sales representatives to assist us in obtaining national advertising revenues. These representatives obtain advertising through national advertising agencies and receive a commission from us based on our net revenue from the advertising obtained. Total gross revenue resulting from national advertising for both continuing operations and discontinued operations in fiscal 20172023 was approximately $18,151,000$11,880,000 or 13%10% of our gross revenue (approximately $23,545,000$13,657,000 or 15%11% in fiscal 2016 which includes $5,183,0002022 and approximately $13,138,000 or 11% in fiscal 2021). Gross national political sales or 3% of gross revenue and approximately $18,368,000 or 13%is included in fiscal 2015).

these numbers.

Competition

Both radio and televisionRadio broadcasting areis a highly competitive businesses.business. Our stations compete for listeners/viewerslisteners and advertising revenues directly with other radio and/or television stations, as well as other media, within their markets. Our radio and television stations compete for listeners/viewerslisteners primarily on the basis of program content and by employing on-air talent which appeals to a particular demographic group. By building a strong listener/viewerlistener base comprised of a specific demographic group in each of our markets, we are able to attract advertisers seeking to reach these listeners/viewers.

listeners.

Other media, including broadcast television and/or radio (as applicable), cable television, newspapers, magazines, direct mail, the Internet, coupons and billboard advertising, also compete with us for advertising revenues.

The radio and television broadcasting industries areindustry is also subject to competition from new media technologies, such as the delivery of audio programming by cable and satellite television systems, satellite radio systems, direct reception from satellites, and streaming of audio on the Internet.

​

5

Table of Contents

Seasonality

Seasonality

Our revenue varies throughout the year. Advertising expenditures, our primary source of revenue, is generally lowest in the first quarter.

Environmental Compliance

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.

Human Capital Resources

Employees

Our key human capital management objectives are to attract, develop and retain top industry talent that reflects the diversity of the communities in which we broadcast. To support this goal, our human resources programs are designed to develop talent to prepare for key roles and leadership positions for the future; reward employees through competitive industry pay, benefits and other programs, instill our culture with a focus on ethical behavior and enhance our employees’ performance through investment in current technology, tools and training to enable our employees to operate at a high level.

As of December 31, 2017,2023, we had approximately 683589 full-time employees and 347244 part-time employees, none of whom are represented by unions. We believe that our relations with our employees are good.

We employ several high-profile personalities with large loyal audiences in their respective markets. We have entered into employment and non-competition agreements with our President and with most of our on-air personalities, as well as non-competition agreements with our commissioned sales representatives.

We are committed to hiring, developing and supporting a diverse and inclusive workplace. Our management teams are expected to exhibit and promote honest, ethical and respectful conduct in the workplace. All of our employees must adhere to a code of conduct that sets standards for appropriate ethical behavior.

Available Information

You can find more information about us at our Internet website www.sagacommunications.com.www.sagacom.com. Our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and any amendments to those reports are available free of charge on our Internet website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (the “SEC”).

8

Federal Regulation of Radio and Television Broadcasting

Introduction.   The ownership, operation and sale of radio and television stations, including those licensed to us, are subject to the jurisdiction of the FCC, which acts under authority granted by the Communications Act. Among other things, the FCC assigns frequency bands for broadcasting; determines the particular frequencies, locations and operating power of stations; issues, renews, revokes and modifies station licenses; determines whether to approve changes in ownership or control of station licenses; regulates equipment used by stations; 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 or the Communications Act. For additional information on the impact of FCC regulations and the introduction of new technologies on our operations, see “Forward Looking Statements” and “Risk Factors” contained elsewhere herein.in this report.

​

6

Table of Contents

The following is a brief summary of certain provisions of the Communications Act and of specific FCC regulations and policies. Reference should be made to the Communications Act, FCC rules (Title 47 Code of Federal Regulation, Chapter I, Subchapters A and C) and the public notices and rulings of the FCC for further information concerning the nature and extent of federal regulation of broadcast stations.

License Renewal.   Radio and television broadcasting licenses are granted for maximum terms of eight years, and are subject to renewal upon application to the FCC. Under its “two-step” renewal process, the FCC must grant a renewal application if it finds that during the preceding term the licensee has served the public interest, convenience and necessity, and there have been no serious violations of the Communications Act or the FCC’s rules which, taken together, would constitute a pattern of abuse. If a renewal applicant fails to meet these standards, the FCC may either deny its application or grant the application on such terms and conditions as are appropriate, including renewal for less than the full 8-year term. In making the determination of whether to renew the license, the FCC may not consider whether the public interest would be served by the grant of a license to a person other than the renewal applicant. If the FCC, after notice and opportunity for a hearing, finds that the licensee has failed to meet the requirements for renewal and no mitigating factors justify the imposition of lesser sanctions, the FCC may issue an order denying the renewal application, and only thereafter may the FCC accept applications for a construction permit specifying the broadcasting facilities of the former licensee. Petitions may be filed to deny the renewal applications of our stations, but any such petitions must raise issues that would cause the FCC to deny a renewal application under the standards adopted in the “two-step” renewal process. Failure to renew a license could have a material adverse effect on the Company’s business. Radio station licenses generally expire along with the licenses of all other radio stations in a given state. The FCC accepts renewal applications for various groups of radio stations every two months. The last cycle having begun in June 2019, concluded for the Company’s stations in June 2022. All the Company’s licenses have been renewed for their regular terms. In the future, we intend to timely file renewal applications as required forwere routinely granted by the Company’s stations.FCC. In January 2018 and again in February 2022, the FCC designated the renewal applications of two AM radio stations (not the Company’s) for hearing based on the stations’ records of extended periods of silence during and following their respective license renewal terms. Under the Communications Act, if a broadcast station fails to transmit signals for any consecutive 12-month period, the FCC license expires at the end of that period, unless the FCC exercises its discretion to extend or reinstate the license “to promote equity and fairness.” The FCC, to date, has rarely exercised such discretion. Further, the FCC has revoked the licenses of broadcast stations that failed to pay regulatory fees. The Company is current in the payment of regulatory fees to the FCC.

​

9

7

Table of Contents

The following table sets forth information about our radio stations, including the marketmarkets they serve, their format, and broadcast powerthe FCC class of each of the broadcast stations that we own or operate with an attributable interest and the date on which each such station’s FCC license expires:

​

​

​

​

​

​

​

​

​

​

    

​

​

​

Power

Station

​

FCC Station

​

Expiration Date of

Station

Market (1)

(Watts)

Format

Class (2)

FCC Authorization

​

​

​

​

​

​

​

​

​

​

​

FM:

​

​

WOXL

Asheville, NC

Hot Adult Contemporary

50,000

​

C2

​

December 1, 20192027

​

WTMT

Asheville, NC

Classic Rock

50,000

​

C2

​

December 1, 20192027

​

KISM

Bellingham, WA

Classic Rock

100,000

​

C

​

February 1, 20222030

​

KAFE

Bellingham, WA

Adult Contemporary

100,000

​

C

​

February 1, 20222030

​

WRSY

Brattleboro, VT

Adult Album Alternative

3,000

​

A

​

April 1, 20222030

​

WKVT

Brattleboro, VT

Classic Hits

6,000

​

A

​

April 1, 20222030

​

WQEL

Bucyrus, OH

Classic Rock

3,000

​

A

​

October 1, 20202028

​

WLRW

Champaign, IL

Hot Adult Contemporary

50,000

​

B

​

December 1, 20202028

​

WIXY

Champaign, IL

Country

25,000

​

B1

​

December 1, 20202028

​

WREE

Champaign, IL

Classic Hits

25,000

​

B1

​

December 1, 20202028

​

WYXY

Champaign, IL

Classic Country

50,000

​

B

​

December 1, 20202028

​

WAVF

Charleston, SC

Adult Variety Hits

100,000

​

C

​

December 1, 20192027

​

WCKN

Charleston, SC

Country

100,000

​

C1

​

December 1, 20192027

​

WMXZ

Charleston, SC

Hot Adult Contemporary

50,000

​

C2

​

December 1, 20192027

​

WXST

Charleston, SC

Urban Adult Contemporary

100,000

​

C1

​

December 1, 20192027

​

WWWV

Charlottesville, VA

Classic Rock

50,000

​

B

​

October 1, 20192027

​

WQMZ

Charlottesville, VA

Adult Contemporary

6,000

​

A

​

October 1, 20192027

​

WCNR

Charlottesville, VA

Adult Album Alternative

6,000

​

A

​

October 1, 20192027

​

WCVL

Charlottesville, VA

Country

6,000

​

A

​

October 1, 20192027

​

WCVQ

Clarksville, TN/Hopkinsville, KY

Hot Adult Contemporary

100,000

​

C1

​

August 1, 20202028

​

WZZP

Clarksville, TN/Hopkinsville, KY

Rock

6,000

​

A

​

August 1, 20202028

​

WVVR

Clarksville, TN/Hopkinsville, KY

Country

100,000

​

C0

​

August 1, 20202028

​

WRND

Clarksville, TN/Hopkinsville, KY

Classic Hits

6,000

​

A

​

August 1, 20202028

​

WSNY

Columbus, OH

Adult Contemporary

50,000

​

B

​

October 1, 20202028

​

WNNP

Columbus, OH

Classic Hits

6,000

​

A

​

October 1, 20202028

​

WNND

Columbus, OH

Classic Hits

6,000

​

A

​

October 1, 20202028

​

WVMX

Columbus, OH

Hot Adult Contemporary

6,000

​

A

​

October 1, 20202028

​

WLVQ

Columbus, OH

Classic Rock

50,000

​

B

​

October 1, 20202028

​

KSTZ

Des Moines, IA

Hot Adult Contemporary

100,000

​

C

​

February 1, 20212029

​

KIOA

Des Moines, IA

Classic Hits

100,000

​

C1

​

February 1, 20212029

​

KAZR

Des Moines, IA

Rock

100,000

​

C1

​

February 1, 20212029

​

KMYR

KOEZ

Des Moines, IA

Soft Adult Contemporary

100,000

​

C1

​

February 1, 20212029

​

WHAI

Greenfield, MA

Adult Contemporary

3,000

​

A

​

April 1, 20222030

​

WPVQ

Greenfield, MA

Country

3,000

​

A

​

April 1, 20222030

​

WMQR

Harrisonburg, VA

Hot Adult Contemporary

25,000

​

B1

​

October 1, 20192027

​

WQPO

Harrisonburg, VA

Contemporary Hits

50,000

​

B

​

October 1, 20192027

​

WSIG

Harrisonburg, VA

Classic Country

25,000

​

B1

​

October 1, 20192027

​

WWRE

Harrisonburg, VA

Classic Hits

6,000

​

A

​

October 1, 20192027

​

WOEZ

Hilton Head Island, SC

Soft Adult Contemporary

25,000

​

C3

​

December 1, 20192027

​

WLHH

Hilton Head Island, SC

Classic Hits

25,000

​

C3

​

December 1, 20192027

​

WVSC

Hilton Head Island, SC

Adult Variety Hits

25,000

​

C3

​

December 1, 20192027

​

WYXL

Ithaca, NY

Adult Contemporary

50,000

​

B

​

June 1, 20222030

​

WQNY

Ithaca, NY

Country

50,000

​

B

​

June 1, 20222030

​

WIII

Ithaca, NY

Classic Rock

50,000

​

B

​

June 1, 20222030

​

WFIZ

Ithaca, NY

Contemporary Hits

6,000

​

A

​

June 1, 20222030

​

​

8

(footnotes follow tables)Table of Contents

​

​

10

​

​

​

​

​

​

​

​

​

​

​

​

Station

​

FCC Station

​

Expiration Date of

​

Station

Market (1)

Format

Class (2)

FCC Authorization

​

KEGI

Jonesboro, AR

Classic Rock

​

C2

​

June 1, 2028

​

KDXY

Jonesboro, AR

Country

​

C3

​

June 1, 2028

​

KJBX

Jonesboro, AR

Adult Contemporary

​

C3

​

June 1, 2028

​

WKNE

Keene, NH

Hot Adult Contemporary

​

B

​

April 1, 2030

​

WSNI

Keene, NH

Adult Contemporary

​

A

​

April 1, 2030

​

WINQ

Keene, NH

Country

​

A

​

April 1, 2030

​

WZID

Manchester, NH

Adult Contemporary

​

B

​

April 1, 2030

​

WMLL

Manchester, NH

Country

​

A

​

April 1, 2030

​

WKLH

Milwaukee, WI

Classic Rock

​

B

​

December 1, 2028

​

WHQG

Milwaukee, WI

Rock

​

B

​

December 1, 2028

​

WRXS

Milwaukee, WI

Oldies

​

A

​

December 1, 2028

​

WJMR

Milwaukee, WI

Urban Adult Contemporary

​

A

​

December 1, 2028

​

KMIT

Mitchell, SD

Country

​

C1

​

April 1, 2029

​

KUQL

Mitchell, SD

Classic Hits

​

C1

​

April 1, 2029

​

WNOR

Norfolk, VA

Rock

​

B

​

October 1, 2027

​

WAFX

Norfolk, VA

Classic Rock

​

C

​

October 1, 2027

​

WOGK

Ocala, FL

Country

​

C0

​

February 1, 2028

​

WYND

Ocala, FL

Classic Rock

​

A

​

February 1, 2028

​

WNDD

Ocala, FL

Classic Rock

​

A

​

February 1, 2028

​

WNDN

Ocala, FL

Classic Rock

​

A

​

February 1, 2028

​

WRSI

Northampton, MA

Adult Album Alternative

​

A

​

April 1, 2030

​

WPOR

Portland, ME

Country

​

B

​

April 1, 2030

​

WCLZ

Portland, ME

Adult Album Alternative

​

B

​

April 1, 2030

​

WMGX

Portland, ME

Hot Adult Contemporary

​

B

​

April 1, 2030

​

WYNZ

Portland, ME

Classic Hits

​

B1

​

April 1, 2030

​

KICD

Spencer, IA

Country

​

C1

​

February 1, 2029

​

KMRR

Spencer, IA

Adult Contemporary

​

C3

​

February 1, 2029

​

WLZX

Springfield, MA

Rock

​

A

​

April 1, 2030

​

WAQY

Springfield, MA

Classic Rock

​

B

​

April 1, 2030

​

WYMG

Springfield, IL

Classic Rock

​

B

​

December 1, 2028

​

WLFZ

Springfield, IL

Country

​

B

​

December 1, 2028

​

WDBR

Springfield, IL

Contemporary Hits

​

B

​

December 1, 2028

​

WTAX

Springfield, IL

News/Talk

​

B1

​

December 1, 2028

​

WNAX

Yankton, SD

Country

​

C1

​

April 1, 2029

​

​

​

​

​

​

​

​

​

​

​

AM:

​

​

​

​

​

​

​

​

​

WISE

Asheville, NC

Sports/Talk

​

B

​

December 1, 2027

​

WYSE

Asheville, NC

Sports/Talk

​

D

​

December 1, 2027

​

KGMI

Bellingham, WA

News/Talk

​

B

​

February 1, 2030

​

KPUG

Bellingham, WA

Sports/Talk

​

B

​

February 1, 2030

​

KBAI

Bellingham, WA

Classic Hits

​

B

​

February 1, 2030

​

WINQ

Brattleboro, VT

Country

​

C

​

April 1, 2030

​

WBCO

Bucyrus, OH

Classic Country

​

D

​

October 1, 2028

​

WSPO

Charleston, SC

Gospel

​

B

​

December 1, 2027

​

WINA

Charlottesville, VA

News/Talk

​

B

​

October 1, 2027

​

WVAX

Charlottesville, VA

Sports/Talk

​

C

​

October 1, 2027

​

WQEZ

Clarksville, TN/Hopkinsville, KY

Soft Adult Contemporary

​

D

​

August 1, 2028

​

WKFN

Clarksville, TN

Sports/Talk

​

D

​

August 1, 2028

​

WNZE

​

Clarksville, TN

​

News/Talk

​

C

​

August 1, 2028

​

KRNT

Des Moines, IA

Sports/Talk

​

B

​

February 1, 2029

​

KPSZ

Des Moines, IA

Christian

​

B

​

February 1, 2029

​

9

Table of Contents

    Power  Expiration Date of
Station Market (1) (Watts) (2)  FCC Authorization
        
KEGI Jonesboro, AR  50,000  June 1, 2020
KDXY Jonesboro, AR  25,000  June 1, 2020
KJBX Jonesboro, AR  6,000  June 1, 2020
WKNE Keene, NH  50,000  April 1, 2022
WSNI Keene, NH  6,000  April 1, 2022
WINQ Keene, NH  6,000  April 1, 2022
WZID Manchester, NH  50,000  April 1, 2022
WMLL Manchester, NH  6,000  April 1, 2022
WKLH Milwaukee, WI  50,000  December 1, 2020
WHQG Milwaukee, WI  50,000  December 1, 2020
WNRG Milwaukee, WI  6,000  December 1, 2020
WJMR Milwaukee, WI  6,000  December 1, 2020
KMIT Mitchell, SD  100,000  April 1, 2021
KUQL Mitchell, SD  100,000  April 1, 2021
WNOR Norfolk, VA  50,000  October 1, 2019
WAFX Norfolk, VA  100,000  October 1, 2019
WRSI Northampton, MA  3,000  April 1, 2022
WPOR Portland, ME  50,000  April 1, 2022
WCLZ Portland, ME  50,000  April 1, 2022
WMGX Portland, ME  50,000  April 1, 2022
WYNZ Portland, ME  25,000  April 1, 2022
KICD Spencer, IA  100,000  February 1, 2021
KMRR Spencer, IA  25,000  February 1, 2021
WLZX Springfield, MA  6,000  April 1, 2022
WAQY Springfield, MA  50,000  April 1, 2022
WYMG Springfield, IL  50,000  December 1, 2020
WLFZ Springfield, IL  50,000  December 1, 2020
WDBR Springfield, IL  50,000  December 1, 2020
WQQL Springfield, IL  25,000  December 1, 2020
WNAX Yankton, SD  100,000  April 1, 2021
         
AM:        
WISE Asheville, NC  5,000  December 1, 2019
WYSE Asheville, NC  5,000(5) December 1, 2019
KGMI Bellingham, WA  5,000  February 1, 2022
KPUG Bellingham, WA  10,000  February 1, 2022
KBAI Bellingham, WA  1,000(5) February 1, 2022
WKVT Brattleboro, VT  1,000  April 1, 2022
WBCO Bucyrus, OH  500(5) October 1, 2020
WSPO Charleston, SC  5,000  December 1, 2019
WINA Charlottesville, VA  5,000  October 1, 2019
WVAX Charlottesville, VA  1,000  October 1, 2019
WRND Clarksville, TN/Hopkinsville, KY  1,000(5) August 1, 2020
WKFN Clarksville, TN  1,000(5) August 1, 2020
KRNT Des Moines, IA  5,000  February 1, 2021
KPSZ Des Moines, IA  10,000  February 1, 2021
WHMQ Greenfield, MA  1,000  April 1, 2022
WSVA Harrisonburg, VA  5,000  October 1, 2019
WHBG Harrisonburg, VA  1,000(5) October 1, 2019

(footnotes follow tables)

11

    Power  Expiration Date of
Station Market (1) (Watts) (2)  FCC Authorization
        
WHCU Ithaca, NY  5,000  June 1, 2022
WNYY Ithaca, NY  5,000  June 1, 2022
WKBK Keene, NH  5,000  April 1, 2022
WZBK Keene, NH  1,000(5) April 1, 2022
WFEA Manchester, NH  5,000  April 1, 2022
WJYI Milwaukee, WI  1,000  December 1, 2020
WJOI Norfolk, VA  1,000  October 1, 2019
WHMP Northampton, MA  1,000  April 1, 2022
WGAN Portland, ME  5,000  April 1, 2022
WZAN Portland, ME  5,000  April 1, 2022
WBAE Portland, ME  1,000  April 1, 2022
WGIN Portland, ME  1,000  April 1, 2022
KICD Spencer, IA  1,000  February 1, 2021
WLZX Springfield, MA  2,500(5) April 1, 2022
WTAX Springfield, IL  1,000  December 1, 2020
WNAX Yankton, SD  5,000  April 1, 2021

​

(As previously described herein the following television stations were sold on September 1, 2017)

TV/Channel:

​

KOAM (DTV Ch 7)

​

​

Joplin, MO/Pittsburg, KS

​

​

​

DTV 14,800

​

​

​

​

​

​

​

​

Station

​

FCC Station

​

Expiration Date of

​

Station

Market (1)

Format

Class (2)

FCC Authorization

​

WIZZ

Greenfield, MA

Oldies

​

D

​

April 1, 2030

​

WSVA

Harrisonburg, VA

News/Talk

​

B

​

October 1, 2027

​

WHBG

Harrisonburg, VA

Sports/Talk

​

D

​

October 1, 2027

​

WHCU

Ithaca, NY

News/Talk

​

B

​

June 1, 20222030

​

KFJX (3) (DTV Ch 13)

WNYY

Joplin, MO/Pittsburg, KS

Ithaca, NY

Oldies

 DTV 5,600

​

B

​

June 1, 20222030

​

KAVU (DTV Ch 15)

WKBK

Victoria, TX

Keene, NH

News/Talk

DTV 900,000

​

B

​

August

April 1, 20222030

​

KVCT(3) (DTV Ch 11)

WZBK

Victoria, TX

Keene, NH

Classic Hits

DTV 11,350

​

D

​

August

April 1, 20222030

​

KUNU-LD(4) (Digital Ch 28)

WFEA

Victoria, TX

Manchester, NH

News/Talk

DTV 15,000

​

B

​

August

April 1, 20222030

​

KVTX-LP(4) (Digital Ch 45)

WJOI

Victoria, TX

Milwaukee, WI

Christian

DTV 15,000

​

C

​

August

December 1, 20222028

​

KXTS-LD(4) (Digital Ch 19)

WHMP

Victoria, TX

Northampton, MA

News/Talk

DTV 15,000

​

C

​

August

April 1, 20222030

​

KMOL-LD(4) (Digital Ch 17)

WGAN

Victoria, TX

Portland, ME

News/Talk

DTV 15,000

​

B

​

August

April 1, 20222030

​

KQZY-LP(4)(Digital Ch 33)

WZAN

Victoria, TX

Portland, ME

Classic Country

DTV 4,000

​

B

​

August 2, 2022

April 1, 2030

​

WBAE

Portland, ME

Soft Adult Contemporary

​

C

​

April 1, 2030

​

WVAE

Portland, ME

Soft Adult Contemporary

​

C

​

April 1, 2030

​

KICD

Spencer, IA

News/Talk

​

C

​

February 1, 2029

​

WLZX

Springfield, MA

Rock

​

D

​

April 1, 2030

​

WTAX

Springfield, IL

News/Talk

​

C

​

December 1, 2028

​

WNAX

Yankton, SD

News/Talk

​

B

​

April 1, 2029

​

(1)Some stations are licensed to a different community located within the market that they serve.

(2)SomeIn order of increasing power, AM stations are licensed to operate withclassified as: Class D, C, B or A. (See Title 47 C.F.R. §73.21 for a combinationdefinition of AM station class information, including operating power.) In order of increasing power and antenna height, FM stations are classified as: Class A, B1, C3, B, C2, C1, C0 or C. (See Title 47 C.F.R. §73.210 for a definition of FM station class information, including effective radiated power (“[“ERP”)] and antenna height, which may be different from, but provide equivalent coverage to, the power shown. The ERP of our television stations is expressed in terms of visual (“vis”height.) components. WHBG, WYSE, WISE, KPSZ, KPUG, KGMI, KBAI, WZBK, WBCO, WRND, WKFN, WNYY, WHCU, WINQ(AM) and WHCUWSVA operate with lower power at night than the power shown.

(3)We provided services to KFJX pursuant to a shared services agreement with the licensee of KFJX, Surtsey Media, LLC (“Surtsey”).  Until the television sale in 2017 we programmed KVCT pursuant to a time brokerage agreement with Surtsey. See Note 10 of the Notes to Consolidated Financial Statements included with this Form 10-K for additional information on our relationship with Surtsey.

(4)KUNU-LD, KXTS-LD, KVTX-LP, KMOL-LDduring daytime. WYSE, WBCO, WQEZ, WKFN, WHBG, WZBK and KQZY-LPWLZX(AM) are LPTV“Class D” stations that operated as “secondary” stations (i.e., if they conflict with the operations of a “full power” television station, the LPTV stations must change their facilities or terminate operations).

(5)Operatesoperate daytime only or with greatly reduced power at night.

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Ownership Matters.   The Communications Act prohibits the assignment of a broadcast license or the transfer of control of a broadcast licensee without the prior approval of the FCC. In determining whether to grant or renew a broadcast license, the FCC considers a number of factors pertaining to the licensee, including compliance with the Communications Act’s limitations on alien ownership; compliance with various rules limiting common ownership of broadcast, cable and newspaper properties; and the “character” and other qualifications of the licensee and those persons holding “attributable or cognizable” interests therein.

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Under the Communications Act (Section 310(b)), broadcast licenses may not be granted to any corporation having more than one-fifth of its issued and outstanding capital stock owned or voted by aliens (including non-U.S. corporations), foreign governments or their representatives (collectively, “Aliens”). The Communications Act also prohibits a corporation, without FCC waiver, from holding a broadcast license if that corporation is controlled, directly or indirectly, by another corporation in which more than 25% of the issued and outstanding capital stock is owned or voted by Aliens. The FCC has issued interpretations of existing law under which these restrictions in modified form apply to other forms of business organizations, including partnerships. Although weWe serve as a holding company for most of our various radio station subsidiaries (where(and as such we could notcannot have more than 25% of our stock owned or voted by Aliens), we directly own two radio stations and two FM translators so that we cannot have more than 20% of our stock owned by Aliens..

On September 29, 2016, theThe FCC has adopted rules to extend to broadcast licensees the same rules and procedures that common carrier wireless licensees use to seek approval for foreign ownership, with broadcast-specific modifications.

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The new rules and procedures allow a broadcast licensee to request in a petition for declaratory ruling under Title 47 U.S.C. Section 310(b)(4):

(1)approval of up to and including 100 percent aggregate foreign ownership of its controlling U.S. parent;
(2)approval for a proposed, controlling foreign investor to increase its equity and/or voting interests in the U.S. parent up to and including 100 percent at some future time without filing a new petition—this applies where the foreign investor would acquire an initial controlling interest of less than 100 percent; and
(3)approval for a non-controlling foreign investor named in the petition to increase its equity and/or voting interests in the U.S. parent at some future time, up to and including a non-controlling 49.99 percent equity and/or voting interest.

The new rules would require the Company to seek specific approval only of foreign individuals or entities with a greater than 5 percent ownership interest (or, in certain situations, an interest greater than 10 percent).

The new rules allow broadcast licensees that have foreign ownership rulings to apply those rulings to all radio and television broadcast licenses then held or subsequently proposed to be acquired by the same licensee and its covered subsidiaries and affiliates, regardless of the broadcast service (e.g., AM, FM, or TV) or the geographic area in which the stations are located.

The new methodology provides a framework for a publicly traded licensee or controlling U.S. parent to ascertain its foreign ownership using information that is “known or reasonably should be known” to the company in the ordinary course of business.

For publicly traded licensees and U.S. parent companies (like the Company), the new rules formalize the current equitable practice of recognizing a licensee’s good faith efforts to comply with Section 310(b) where the non-compliance was due solely to circumstances beyond the licensee’s control that were not known or reasonably foreseeable to the licensee.

The Communications Act and FCC rules also generally prohibit or restrict the common ownership, operation or control of a radio broadcast station and a television broadcast station serving the same geographic market. In its2006 Quadrennial Regulatory Review , released February 4, 2008, the FCC adopted a presumption, in the top 20 Nielsen Designated Market Areas (“DMAs”), that it is not inconsistent with the public interest for one entity to own a daily newspaper and a radio station or, under the following limited circumstances, a daily newspaper and a television station, if (1) the television station is not ranked among the top four stations in the DMA and (2) at least eight independent “major media voices” remain in the DMA. In all other instances, the FCC adopted a presumption that a newspaper/broadcast station combination would not be in the public interest, with two limited exceptions, and emphasized that the FCC is unlikely to approve such transactions. Taking into account these respective presumptions, in determining whether the grant of a transaction that would result in newspaper/broadcast cross-ownership is in the public interest, the FCC will consider the following factors: (1) whether the cross-ownership will increase the amount of local news disseminated through the affected media outlets in the combination; (2) whether each affected media outlet in the combination will exercise its own independent news judgment; (3) the level of concentration in the DMA; and (4) the financial condition of the newspaper or broadcast outlet, and if the newspaper or broadcast station is in financial distress, the proposed owner’s commitment to invest significantly in newsroom operations.

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The FCC established criteria for obtaining a waiver of the rules to permit the ownership of two television stations in the same DMA that would not otherwise comply with the FCC’s rules. Under certain circumstances, a television station may merge with a “failed” or “failing” station or an “unbuilt” station if strict criteria are satisfied. Additionally, the FCC now permits a party to own up to two television stations (if permitted under the modified TV duopoly rule) and up to six radio stations (if permitted under the local radio ownership rules), or one television station and up to seven radio stations, in any market (“Qualifying Market”) where at least 20 independently owned media voices remain in the market after the combination is affected. The FCC will permit the common ownership of up to two television stations and four radio stations in any market where at least 10 independently owned media voices remain after the combination is affected. The FCC will permit the common ownership of up to two television stations (if permitted under the FCC’s local television multiple ownership rule) and one radio station notwithstanding the number of voices in the market. The FCC also adopted rules that make television time brokerage agreements or TBA’s count as if the brokered station were owned by the brokering station in making a determination of compliance with the FCC’s multiple ownership rules. TBA’s entered into before November 5, 1996, are grandfathered until the FCC announces a required termination date. As a result of the FCC’s rules, we would not be permitted to acquire a television broadcast station (other than LPTV) in a non-Qualifying Market in which we owned television properties. The FCC revised its rules to permit a television station to affiliate with two or more major networks of television broadcast stations under certain conditions. (Major existing networks are still subject to the FCC’s dual network ban). For more detailed information, see the discussion of recent FCC action under “Time Brokerage Agreements.”

We are permitted to own an unlimited number of radio stations on a nationwide basis (subject to the local ownership restrictions described below). We are permitted to own an unlimited number of television stations on a nationwide basis so long as the ownership of the stations would not result in an aggregate national audience reach (i.e., the total number of television households in the DMAs in which the relevant stations are located divided by the total national television households as measured by DMA data at the time of a grant, transfer or assignment of a license with UHF television stations are attributed with 50 percent of the television households in their DMA market for purposes of making this calculation) of 39%. In September 2016, the FCC voted to eliminate this so-called “UHF discount,” but the decision is subject to petitions for reconsideration. The multiple ownership rules now permit opportunities for newspaper-broadcast combinations, as follows:

In markets with three or fewer TV stations, no cross-ownership is permitted among TV, radio and newspapers. A company may obtain a waiver of that ban if it can show that the television station does not serve the area served by the cross-owned property (i.e., the radio station or the newspaper).

In markets with between 4 and 8 TV stations, combinations are limited to one of the following:

(A)A daily newspaper; one TV station; and up to half of the radio station limit for that market (i.e ., if the radio limit in the market is 6, the company can only own 3) or

(B)A daily newspaper; and up to the radio station limit for that market; (i.e ., no TV stations) or

(C)Two TV stations (if permissible under local TV ownership rule); and up to the radio station limit for that market (i.e ., no daily newspapers).

In markets with nine or more TV stations, the FCC has eliminated the newspaper-broadcast cross-ownership ban and the television-radio cross-ownership ban.

Under the rules, the number of radio stations one party may own in a local Nielsen Audio-rated radio market is determined by the number of full-power commercial and noncommercial educational (“NCE”) radio stations in the market as determined by Nielsen Audio and BIA Advisory Services, LLC d/b/a BIA/Kelsey. Radio markets that are not Nielsen Audio rated are determined by analysis of the broadcast coverage contours of the radio stations involved. Numerous parties, including the Company, have sought reconsideration of the multiple ownership rules. InPrometheus Radio v. FCC , Case No. 03-3388 (U.S. Court of Appeals D.C. Circuit), on June 24, 2004, the court remanded the case to the FCC for the FCC to justify or modify its approach to setting numerical limits and for the FCC to reconsider or better explain its decision to repeal the failed station solicitation rule, and lifted a previously-imposed stay on the effect of the revised radio multiple ownership rules. ByFurther Notice of Proposed Rule Making (2006 Quadrennial Regulatory Review), released July 24, 2006, the FCC solicited comments. The rules adopted in the2006 Quadrennial Regulatory Review were vacated in part by the Third Circuit Court of Appeals inPrometheus Radio Project v. FCC (652 F. 3d 432 (2011)) because the FCC’s procedures in the rule making proceeding did not satisfy the Administrative Procedure Act. The newspaper-broadcast cross-ownership rule was vacated, but the media ownership rules were affirmed. The FCC had created special benefits for so-called “eligible entities.” Because there was no data attempting to show a connection between the FCC’s eligible entity definition and the goal of increasing ownership of minorities and women under §309(j) of the Telecommunication Act of 1996, the “eligible entity” definition adopted was vacated as arbitrary and capricious. On April 15, 2014, the FCC released its2014 Quadrennial Regulatory Review which consists of aFurther Notice of Proposed Rulemaking (“FNPRM”)and Report and Order(“R&O”) incorporating the record of its2010 Quadrennial Regulatory Review into the FNPRM. (In the2010 Quadrennial Regulatory Review, the FCC also sought comment on whether television local news service (“LNS”) agreements and shared service agreements (“SSA”) are substantively equivalent to agreements that are already subject to the FCC’s attribution rules, and are therefore attributable now or should be in the future.) The FNPRM sought comment on whether to eliminate restrictions on newspaper/radio combinations and the radio/television cross-ownership rule in favor of reliance on the local radio rule and the local television rule. The FCC proposed to retain the current local television ownership rule with a minor modification to update the previous analog contour provision in light of the digital transition. The FCC sought comment on whether to retain the prohibition on the cross-ownership of newspapers and television stations, and if so, whether the FCC should reform the restriction to consider waivers for newspaper/television combinations. The FCC proposed to retain the current local radio ownership rule and the dual network rule without modification. In addition, in the R&O , the FCC attributed to the brokering station same-market television joint sales agreements (“JSAs”) that cover more than 15 percent of the weekly advertising time for the brokered station, but this rule was vacated by the U. S. Court of Appeals for the Third Circuit inPrometheus Radio Project v. FCC et al., 824 F 3d 33 (2016). 

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Under the Communications Act, and the FCC’s “Local Radio Ownership Rule,” we are permitted to own radio stations (without regard to the audience shares of the stations) based upon the number of full-power commercial and NCE radio stations in the relevant radio market as follows:

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​

​

Number of Stations

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In Radio Market

Number of Stations We Can Own

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14 or Fewer

Total of 5 stations, not more than 3 in the same service (AM or FM), except the Company cannot own more than 50% of the stations in the market.

15-29

Total of 6 stations, not more than 4 in the same service (AM or FM).

30-44

Total of 7 stations, not more than 4 in the same service (AM or FM).

45 or More

Total of 8 stations, not more than 5 in the same service (AM or FM).

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In​

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The FCC is required by the Telecommunications Act of 1996 to review its media ownership rules every four years to determine whether they remain “necessary in the public interest as the result of competition.” The FCC’s 2010/2014 Quadrennial Review Order on Reconsideration, 32 FCC 17-156, released November 20,Rcd 9802 (2017), modified the FCC’s media ownership rules by: (1) eliminating the newspaper/broadcast cross-ownership and radio/television cross-ownership rules; (2) revising the local television ownership rule by eliminating the “eight voices” test and permitting applicants to seek the combination of two top-four ranked stations in a given market on a case-by-case basis; and (3) deeming joint sales agreements between television stations to be non-attributable. In FCC v. Prometheus Radio Project, 141 S. Ct. 1150 (2021), the U. S. Supreme Court reversed a decision of the Court of Appeals for the Third Circuit which had vacated the FCC’s 2017 order. On December 12, 2018, the FCC adopted a new policy effective February 7,Notice of Proposed Rulemaking (“NPRM”) to initiate the 2018 on radio “embedded markets,”i.e., smaller markets, as defined by Nielsen Audio, that are includedQuadrennial Review proceeding. On June 4, 2021, the FCC released a Public Notice seeking to refresh the record in a larger parent market. Pending the outcome of a review2018 Quadrennial Review proceeding. In 2018 Quadrennial Regulatory Review—Review of the policy,Commission’s Broadcast Ownership Rules and Other Rules Adopted Pursuant to Section 202 of the Telecommunications Act of 1996, FCC 23-117, released December 26, 2023, the FCC adopted a presumptionfound that a waiver ofits existing rules, with some minor modifications, remain necessary in the localpublic interest. The FCC retained the “dual network rule” and the “local radio ownership rule, as” the latter of which was modified only to stations in these markets servesmake permanent the public interest if the transaction at issue satisfies the two-prong test: (1) a station owner would be requiredinterim contour-overlap methodology long used to comply with the numericaldetermine ownership limits usingin areas outside the boundaries of defined Nielsen Audio Metro markets and in Puerto Rico. The FCC retained its local television ownership rule with adjustments to reflect changes that have occurred in the television marketplace to update the methodology for determining station ranking within a market to better reflect current industry practices, and expanded the existing prohibition on use of affiliation to circumvent the restriction on acquiring a second top-four ranked station in each embedded market; and (2) the station owner would be required to comply with the ownership limits using a contour-overlap methodology in lieu of the Commission’s current parent market analysis.

market.

New rules tothat could be promulgated under the Communications Act may permit us to own, operate, control or have a cognizable interest in additional radio broadcast stations if the FCC determines that such ownership, operation, control or cognizable interest will result in an increase in the number of radio stations in operation. No firm date has been established for initiation of this rule-making proceeding. New rules could restrict the Company’s ability to acquire additional radio and television stations in some markets and could have required the Company to terminate its arrangements with Surtsey.markets. The Court and FCC proceedings are ongoing and we cannot predict what action, if any, the Court or the FCC may take to further modify its rules. Due to changes in local radio markets, the ownership of some of our radio stations, in the future, could exceed the current ownership limits imposed by the Local Radio Ownership Rule. Their current ownership structure is “grandfathered” by the FCC. Absent a waiver, it might not be possible to sell all of them as currently configured in “clusters” to a single purchaser. The statements herein are based solely on the FCC’s multiple ownership rules in effect as of the date hereof and do not include any forward-looking statements concerning compliance with any future multiple ownership rules.

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All commercial broadcasters were required to file a “biennial” ownership report, by December 1, 2023, describing the ownership of its stations as of October 1, 2023. The Company timely filed its reports. The FCC eliminated the prior requirement to file with the FCC paper copies of certain agreements, corporate organization documents, and the like. Instead, a broadcaster is required to upload copies of these documents to the station’s online public inspection file (“OPIF”), or provide a list of such documents and make them available to a requesting party. The FCC generally applies its ownership limits to “attributable” interests held by an individual, corporation, partnership or other association. In the case of corporations holding broadcast licenses, the interests of officers, directors and those who, directly or indirectly, have the right to vote 5% or more of the corporation’s stock (or 20% or more of such stock in the case of certain passive investors that are holding stock for investment purposes only) are generally attributable, as are positions of an officer or director of a corporate parent of a broadcast licensee. Currently, noneone of our directors has an attributable interest or interests in companies applying for or licensed to operate broadcast stations other than us.

the Company.

The FCC’s ownership attribution rules (a) apply to limited liability companies and registered limited liability partnerships the same attribution rules that the FCC applies to limited partnerships; and (b) include an equity/debt plus (“EDP”) rule that attributes the other media interests of an otherwise passive investor if the investor is (1) a “major-market program supplier” that supplies over 15% of a station’s total weekly broadcast programming hours, or (2) a same-market media entity subject to the FCC’s multiple ownership rules (including broadcasters, cable operators and newspapers) so that its interest in a licensee or other media entity in that market will be attributed if that interest, aggregating both debt and equity holdings, exceeds 33% of the total asset value (equity plus debt) of the licensee or media entity. We could be prohibited from acquiring a financial interest in stations in markets where application of the EDP rule would result in us having an attributable interest in the stations. In reconsidering its rules, the FCC also eliminated the “single majority shareholder exemption” which provides that minority voting shares in a corporation where one shareholder controls a majority of the voting stock are not attributable; however, in December 2001 the FCC “suspended” the elimination of this exemption until the FCC resolved issues concerning cable television ownership.

Proposals are before the FCC whereby the government would take back part of the spectrum allotted for over-the-air television in favor of wireless broadband. The FCC is conducting a proceeding whereby broadcasters could voluntarily participate in a “reverse auction” of their over-the-air broadcast spectrum, otherwise agree to modifications in the spectrum available to them, move from the UHF to the VHF band (with or without compensations), or become subject to restrictions on their usage of the spectrum. The Company filed an application with the FCC seeking to participate in the reverse auction; however, the Company was not a winning bidder in the reverse auction. Therefore, it did not be relinquish any of its spectrum. However, one of the Company’s former television stations will be required to change its operating channel. Some or all of the Company’s costs for that change will be reimbursed by the FCC.

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In addition to the FCC’s multiple ownership rules, the Antitrust Division of the United States Department of Justice and the Federal Trade Commission and some state governments have the authority to examine proposed transactions for compliance with antitrust statutes and guidelines. The Antitrust Division has issued “civil investigative demands” and obtained consent decrees requiring the divestiture of stations in a particular market based on antitrust concerns.

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Programming and Operation.   The Communications Act requires broadcasters to serve the “public interest.” Licensees are required to present programming that is responsive to community problems, needs and interests and to maintain certain records demonstrating such responsiveness. Complaints from listeners concerning a station’s programming often will be considered by the FCC when it evaluates renewal applications of a licensee, although such complaints may be filed at any time and generally may be considered by the FCC at any time. Stations also must follow various rules promulgated under the Communications Act that regulate, among other things, political advertising, sponsorship identification, the advertisement of contests and lotteries, obscene and indecent broadcasts, and technical operations, including limits on radio frequency radiation. In 2020, the FCC entered into a Consent Decree with Sinclair Broadcast Group, which agreed to pay a $48 million dollar fine to settle issues related to sponsorship identification violations, among other matters. The FCC nowalso entered into a Consent Decree with Cumulus Radio to settle violations of the sponsorship identification requirements in connection with the broadcast of issue ads promoting a construction project in New Hampshire. In an Order and Consent Decree, Townsquare Media, Inc., DA 24-54, released January 17, 2024, the licensee of AM radio stations in Idaho agreed to pay a civil penalty of $500,000 to resolve an investigation into violations of the FCC’s rules relating to on-air sponsorship identification and the maintenance of online political files. There are other examples of FCC enforcement action for violation of the sponsorship identification requirements. A licensee that broadcasts or advertises information about a contest it conducts must fully and accurately disclose the material terms of the contest, and conduct the contest substantially as announced or advertised over the air or on the Internet. The disclosure of material terms must be made by either periodic disclosures broadcast on the station or written disclosures on the station's Internet web site. Violation of the rule can result in significant fines. In 2020, the FCC fined a broadcaster $5,200 for failing to conduct its contests as advertised by failing to award prizes in a timely manner. Another licensee entered into a Consent Decree with the FCC, paying a fine of $125,000 for, among other things, predetermining the outcome of a contest. The FCC requires the owners of antenna supporting structures (towers) to register them with the FCC. As an owner of such towers, weour subsidiaries are subject to the registration requirements. The Children’s Television Act of 1990 and the FCC’s rules promulgated thereunder require television broadcasters to limit the amount of commercial matter which may be aired in children’s programming to 10.5 minutes per hour on weekends and 12 minutes per hour on weekdays. The Children’s Television Act and the FCC’s rules also require each television licensee to serve, over the term of its license, the educational and informational needs of children through the licensee’s programming (and to present at least three hours per week of “core” educational programming specifically designed to serve such needs). Licensees are required to publicize the availability of this programming and to file quarterly a report with the FCC on these programs and related matters. On April 27, 2012,January 13, 2020, the FCC released an Order confirming aSecond Report Consent Decree whereby the owner of several antenna structures agreed to pay the government a civil penalty of $1,130,000 and Order that requires television stationsdevelop a Compliance Plan requiring reports for two years as a result of (1) failing to post their public files online in a central, FCC-hosted database, rather than maintainingconduct required daily inspections of the files locallylighting systems at their10 towers, (2) failing to completely log lighting failures at 7 towers, and (3) failing to timely notify the FCC of its acquisition of 2 towers. In 2017, the FCC eliminated the broadcast main studios. It did not impose any new reporting obligation on the Company.studio rule. The FCC did not adopt new disclosure obligations for sponsorship identification and shared services agreements as had been proposed (But seeretained the discussion in “Time Brokerage Agreements” concerning the disclosure of JSAs). On January 29, 2016, the FCC releasedrequirement that stations maintain aReport and Order which expanded local or toll-free telephone number to ensure consumers have ready access to their local stations. The FCC’s rules require cable operators, direct satellite TV providers, broadcast radio licensees, and satellite radio licensees the requirement thatto post public inspection files be posted to the FCC's online database.database (the “OPIF” referred to above) rather than maintaining them in a local public inspection file. The FCC believes posting these files to the OPIF renders the materials more widely accessible to the public. The Company’s radio stations post their public inspection files to the FCC’s website. The FCC has warned licensees of possible enforcement action if these files are found not to be in compliance at the time of license renewal. Because of inadvertent untimely posting to the OPIF of certain political records at stations owned by one of the Company’s subsidiaries, that subsidiary was obliged to enter into a Consent Decreewith these rules.the FCC (FCC Order, DA 20-1263, released October 26, 2020). The Consent Decree required Company employees responsible for performing, supervising, overseeing, or managing activities related to the maintenance of online political files to thoroughly understand the Company’s obligation to comply with laws regulating political broadcasting and to promptly report to the FCC any noncompliance with those laws. The affected subsidiary filed a report with the FCC on December 8, 2021, regarding its record of compliance with the political laws and the Company’s obligations under the Consent Decree terminated as of February 7, 2022. The FCC in 2020 revised its rules governing the publication of local notice of the filing of certain broadcast applications. FCC licensees, like the Company’s subsidiaries, must maintain a tab on their station websites where the public can view the OPIF and a tab where notices describing pending applications must be posted, rather than printing such notices in local newspapers. In an NPRM, Priority Application Review for Broadcast Stations that Provide Local Journalism or Other Locally Originated Programming, FCC 24-1 (MB Docket No. 24-14), released January 17, 2024, the FCC proposed to prioritize processing review of certain applications filed by commercial and noncommercial radio and television broadcast stations that provide locally originated programming. The FCC stated that its goal is “to provide additional incentive to stations to provide programming that responds to the needs and interests of the communities they are licensed to serve.” The FCC stated that the program would be “voluntary” and that such prioritization would be granted to renewal applicants, as well as applicants for assignment or transfer of license, that certify they provide locally originated programming, thereby advancing the FCC’s efforts to promote localism and serve local communities across the nation. If the Company were not to certify that its stations provide local programming, actions on its applications to acquire new facilities might be deferred until applications containing such

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certifications had been earlier processed. However, there is some risk in certifying since competitors or members of the public might file adverse petitions challenging the accuracy of such certifications. The FCC is seeking comment on the proposal and the Company cannot predict whether such rules will be adopted and become effective.

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The Company is required to pay (1) FCC filing fees in connection with its applications and (2) annual regulatory fees determined by the number and character of the radio stations the Company owns as of October 1 of each prior year. The Company timely paid its regulatory fees for Fiscal Year 2023.

Equal Employment Opportunity Rules.   Equal employment opportunity (EEO) rules and policies for broadcasters prohibit discrimination by broadcasters and multichannel video programming distributors (“MVPDs”).distributors. They also require broadcasters to provide notice of job vacancies and to undertake additional outreach measures, such as job fairs and scholarship programs. The rules mandate a “three prong” outreach program; i.e., Prong 1: widely disseminate information concerning each full-time (30 hours or more) job vacancy, except for vacancies filled in exigent circumstances; Prong 2: provide notice of each full-time job vacancy to recruitment organizations that have requested such notice; and Prong 3: complete two (for broadcast employment units with five to ten full-time employees or that are located in smaller markets) or four (for employment units with more than ten full-time employees located in larger markets) longer-term recruitment initiatives within a two-year period. These include, for example, job fairs, scholarship and internship programs, and other community events designed to inform the public as to employment opportunities in broadcasting. The rules mandate extensive record keeping and reporting requirements. In 2017, the FCC issued a Declaratory Ruling permitting broadcast stations to use the internet for job postings as their sole means of recruiting employees (so long as the postings reach all segments of the station’s community). The EEO rules are enforced through review at renewal time, at mid-term for larger broadcasters, and through random audits and targeted investigations resulting from information received as to possible violations. The FCC has not yet decided on whether and how to apply the EEO rule to part-time positions. 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 full eight-year) renewal terms or, for particularly egregious violations, the denial of a license renewal application or the revocation of a license. As announced in an NPRM released June 21, 2019 (MB Docket No. 19-177), the FCC is reviewing the EEO rules. In the NPRM, the FCC seeks comment on its track record on EEO enforcement, whether the agency should make improvements to EEO compliance and enforcement, and invites comment on its audit program. In a Further NPRM (MB Docket No. 98-204), released July 23, 2021, the FCC sought to refresh the existing record regarding the statutorily mandated collection of data on the FCC Form 395-B, as contemplated by the Act. This employment report form is intended to gather workforce composition data from broadcasters on an annual basis but the filing of the form was suspended in 2001 in the wake of a decision by the U.S. Court of Appeals (MD/DC/DE Broadcasters Association v. FCC, Case No. 1094, 236 F.3d 13 (2001); rehearing denied, 253 F. 3d 732 (2001), cert. denied, 534 U.S. 1113 (2002)) vacating certain aspects of the EEO requirements. While the FCC in 2004 adopted revised regulations regarding the filing of Form 395-B and updated the form, the requirement that broadcasters once again submit the form to the FCC was suspended until issues were resolved regarding confidentiality of the employment data. On February 22, 2024, the FCC released its Fourth Report and Order, Order on Reconsideration, and Second Further Notice of Rulemaking, FCC 24-18, reinstating the filing of Form 395-B. The Company cannot predict the impact of the reinstated form on the Company or its operations.

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Time Brokerage Agreements.Agreements.   As is common in the industry, we have previously entered into what have commonly been referred to as Time Brokerage Agreements (“TBAs”). which are sometimes termed “Local Marketing Agreements.” Such arrangements are an extension of the concept of agreements under which a licensee of a station sells (or “leases”) blocks of time on its station to an entity or entities which purchase the blocks of time and use the time to broadcast material the lessee has produced, or which sell their own commercial advertising announcements during the time periods in question. While these agreements may take varying forms, under a typical TBA, separately owned and licensed radio or television stations agree to enter into cooperative arrangements of varying sorts, subject to compliance with the requirements of antitrust laws and with the FCC’s rules and policies. Under these types of arrangements, separately-owned stations agree to function cooperatively in terms of programming, advertising sales, and other matters, subject to the licensee of each station maintaining independent control over the financing, programming and station operations of its own station. One typical type of TBA is a programming agreement between two separately-owned radio or television stations serving a common service area, whereby the licensee of one station purchases substantial portions of the broadcast day on the other licensee’s station, subject to ultimate editorial and other controls being exercised by the latter licensee, and sells advertising time during such program segments.

The Company’s stations currently are not parties to any TBAs.

The FCC’s rules provide that a station purchasing (brokering)(brokering or leasing) time on another station serving the same market will be considered to have an attributable ownership interest in the brokered station for purposes of the FCC’s multiple ownership rules. As a result, under the rules, a broadcast station will not be permitted to enter into a time brokerage agreement giving it the right to purchase more than 15% of the broadcast time, on a weekly basis, of another local station that it could not own under the local ownership rules of the FCC’s multiple ownership rules. The FCC’s rules also prohibitEffective October 22, 2020, the FCC eliminated Title 47 C.F.R. § 73.3556, a broadcast licensee from simulcasting more than 25%rule that prohibited the duplication of its programming on another stationco-owned radio stations in the same broadcast service (i.e., AM-AM or FM-FM) whether it owns the stations or through a TBA arrangement, where the brokered and brokering stations serve substantially the same geographic area.

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The FCC’s multiple ownership rules count stations brokered under a JSA toward the brokering station’s permissible ownership totals,market. A petition for reconsideration of that action as long as (1) the brokering entity owns or has an attributable interest in one or more stations in the local market, and (2) the joint advertising sales amount to more than 15%FM duplication is pending. Reports have circulated that some members of the brokered station’s advertising time per week. In December, 2014,FCC are considering a proposal that would reinstate the rule in some form. If the non-duplication rule were reinstated, it could require the Company to expend additional funds to program separately some currently simulcast stations. The Company cannot predict how the FCC adopted aNotice of Proposed Rulemaking and Report and Order in connection with its2014 Quadrennial Regulatory Review – Review ofmay act on the Commission’s Broadcast Ownership Rules and Other Rules Adopted Pursuant to Section 202 of the Telecommunications Act of 1996 (“Reportand Order ”). petition.

The FCC has adopted rules that require the broadcast of a new attribution rulespecific disclosure at the time of broadcast if material aired pursuant to a lease of time on a station has been sponsored, paid for, JSAs that applies when: (1) both broadcast televisionor furnished by a foreign governmental entity. Consistent with the Communications Act and the FCC’s sponsorship identification rules, the Company’s stations are licensedrequired to disclose political programming or programming involving the same DMA; and (2)discussion of a controversial issue if such programming is provided by a foreign governmental entity for free, or for nominal compensation, as an inducement to air. The rule requires the brokering station is authorizedCompany to sell more than 15 percent ofexercise reasonable diligence (and obtain certifications from lessees) to ascertain whether the weekly advertisingforeign sponsorship disclosure requirements apply at the time of the brokered station. In these circumstances, the brokeringlease agreement and at any renewal thereof. A station will have an attributable interestmust place in the brokered station. The rule became effectiveits OPIF on June 19, 2014. However, as a result of action by the U. S. Congress in 2015, stations that have a television JSA signed before the release of theReport and Order will have until October 1, 2025, to ensure that the agreement complies with the FCC’s media ownership rules or to come into compliance with the media ownership rules by another means. For example,quarterly basis certain information if the local television ownership rule (47 C.F.R. § 73.3555(b)) prohibits the brokering station from having an attributable interest in more than one broadcast television station in the same DMA, the licensees of the affected stations would either have to terminate the agreement or modify the agreement to ensure that the brokering station is authorized to sell no more than 15 percent of the brokered station’s weekly advertising time, or the licensee of the brokering station would have to take other steps to avoid having an attributable interest in more than one broadcast television station in the market. Licensees that believe application of the attribution rule to their particular circumstances would not serve the public interest may seek a waiver of this rule. Likewise, licensees that believe application of the local television ownership rule would adversely affect competition, diversity, or localism may seek a waiver of that rule. Television JSAs entered into after the release of theReport and Order must comply with the FCC’s media ownership rules at the time they are executed; the compliance period does not apply to any television JSA entered into after the release of theReport and Order. TheReport and Order requires that all attributable television JSAs be filed withbroadcasts such foreign-sponsored programming. On October 6, 2022, the FCC and we have complied with this deadline.

Priorreleased a Second NPRM, seeking comment on establishing a requirement that licensees require a lessee to the sale of our television stations, we haduse a television TBA in the Victoria, Texas, market with Surtsey. On January 31, 2012, we amended the TBA which included an extension of the grandfathered TBA for KVCT-TV and an assignable option with Surtsey for KVCT-TV. Even though the Victoria marketspecific certification form to disclose whether a lessee is or is not a Qualifying Market such that the duopoly would otherwise be permissible, as discussed above, we believed that the TBA was “grandfathered” under the FCC’s rulesforeign governmental entity and did not need to be terminated earlier than the date to be establishedwhether it knows of any entity or individual further back in the ownership reviewprogramming production or distribution chain that qualifies as a foreign governmental entity. By Public Notice, released December 13, 2022, the FCC extended the Comment and Reply Comment Deadlines in this proceeding. See “Ownership Matters” above. This TBA was terminated when we sold our television stations on September 1, 2017.

On March 7, 2003 we entered into an agreement of understanding with Surtsey, whereby we have guaranteed upIf adopted, the proposed rules would require the Company to $1,250,000 ofupload the debt incurred by Surtsey in closing on the acquisition of a construction permit for KFJX-TV, a television station in Pittsburg, Kansas, serving the Joplin, Missouri television market. In consideration for our guarantee, Surtsey entered into various agreements with us relatingcertifications to the station, includingOPIF whether or not the lessee has a Shared Services Agreement, Agreement for Use of Ancillary Digital Spectrum and Agreement for the Sale of Commercial Time, which is considered by the FCCconnection to be a JSA. On January 31, 2012, the Company and Surtsey amended these agreements and entered into an agreement which included an assignable option with Surtsey for KFJX-TV. When we sold our television stations on September 1, 2017, the debt we had guaranteed was paid off and the related agreements that we had entered into with Surtsey were terminated.

Other FCC Requirements

The “V-Chip.”   The FCC adopted rules requiring every television receiver, 13 inches or larger, sold in the United States since January 2000 to contain a “V-chip” which allows parents to block programs on a standardized rating system. The FCC also adopted the TV Parental Guidelines, developed by the Industry Ratings Implementation Group, which apply to all broadcast television programming except for news and sports. As a part of the legislation, television station licensees are required to attach as an exhibit to their applications for license renewal a summary of written comments and suggestions received from the public and maintained by the licensee that comment on the licensee’s programming characterized as violent.

Digital Television.   Under the FCC’s rules all U.S. television broadcasters have been required to convert their operations from NTSC (analog) to digital television (“DTV”). DTV licensees may use their DTV channels for a multiplicity of services such as high-definition television broadcasts, multiple standard definition television broadcasts, data, audio, and other services so long as the licensee provides at least one free video channel equal in quality to the previous NTSC technical standard. Our full-service television stations and Low Power Television (“LPTV”) stations provided DTV service and terminated NTSC operations. We held licenses that authorized KOAM-TV to operate on Channel 7 for DTV and KAVU-TV to operate on Channel 15 for DTV. The FCC’s rules require broadcasters to include Program and System Information Protocol (“PSIP”) information in their digital broadcast signals.

Formerly brokered Station KVCT provided DTV service on Channel 11. KFJX-TV, with which KOAM-TV shared certain services, provided DTV services on Channel 13.

In October 2003, the FCC adopted rules requiring “plug and play” cable compatibility which would allow consumers to plug their cable directly into their digital TV set without the need for a set-top box. In January 2013, the U.S. Court of Appeals for the D.C. Circuit vacated the rules.foreign government. The Company cannot predict whether such new rules will be adopted, and if so, the FCC will adopt other proposals to address this matter. The FCC has adopted rules whereby television licensees are charged a fee of 5% of gross revenue derived from the offering of ancillary or supplementary services on DTV spectrum for which a subscription fee is charged. Licensees and “permittees” of DTV stations were required to file with the FCC a report by December 1 of each year describing such services. None of the Company’s stations offered ancillary or supplementary services on their DTV channels.form they might take.

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Other FCC Requirements.

White Spaces.   On September 23, 2010, the FCC adopted aSecond Memorandum Opinion and Order in ET Docket No. 04-186 that updated the rules for unlicensed wireless devices that can operate in broadcast television spectrum at locations where that spectrum is unused by licensed services. This unused TV spectrum is commonly referred to as television "white spaces." The rules allow for the use of unlicensed TV bands devices in the unused spectrum to provide broadband data and other services for consumers and businesses. It is possible that such operations have the potential for causing interference to broadcast operation, but we cannot yet judge whether such operations will have an adverse impact on the Company’s operations.

“Must-Carry” Rules.  The Cable Television Consumer Protection and Competition Act of 1992, among other matters, requires cable television system operators to carry the signals of local commercial and non-commercial television stations and certain LPTV stations. Cable television operators and other MVPDs may not carry broadcast signals without, in certain circumstances, obtaining the transmitting station’s consent. A local television broadcaster must make a choice every three years whether to proceed under the “must-carry” rules or waive the right to mandatory-uncompensated coverage and negotiate a grant of retransmission consent in exchange for consideration from the MVPD. Such must-carry rights extend to the DTV signals broadcast by our stations. For the three-year period commencing on January 1, 2015, we generally elected “retransmission consent” in notifying MVPDs that carry our television programming in our television markets.

LPTV and Class A Television Stations.   Currently, the service areas of LPTV stations are not protected. LPTV stations can be required to terminate their operations if they cause interference to full power stations. LPTV stations meeting certain criteria were permitted to certify to the FCC their eligibility to be reclassified as “Class A Television Stations” whose signal contours would be protected against interference from other stations. Stations deemed “Class A Stations” by the FCC would thus be protected from interference. Until September 1, 2017, we owned five LPTV stations, KUNU-LD, KVTX-LP, KXTS-LD, KMOL-LD, and KQZY-LD, Victoria, Texas, all of which operate in the digital mode. None of the stations qualifies under the FCC’s established criteria for Class A status.

Low Power FM Radio.   The FCC has created   There exists a “low power radio service” on the FM band (“LPFM”) in which the FCC authorizes the construction and operation of noncommercial educationalNCE FM stations with up to 100 watts effective radiated power (“ERP”)ERP with antenna height above average terrain (“HAAT”) at up to 30 meters (100 feet). This combination is calculated to produce a service area radius of approximately 3.5 miles. The FCC’s rules will not permit any broadcaster or other media entity subject to the FCC’s ownership rules to control or hold an attributable interest in an LPFM station or enter into related operating agreements with an LPFM licensee. Thus, absent a waiver, we could not own or program an LPFM station. LPFM stations are allocated throughout the FM broadcast band, (i.e., 88.1 to 107.9 MHz), although they must operate with a noncommercialan NCE format. The FCC has established allocation rules that require FM stations to be separated by specified distances to other stations on the same frequency, and stations on frequencies on the first, second and third channels adjacent to the center frequency. The FCC has granted construction permits and licenses for LPFM stations. On January 4, 2011, the President signed into lawAs required by the Local Community Radio Act of 2010, which required the FCC to modify the rules authorizing the operation of LPFM, as proposed in MM Docket No. 99-25.  In an order released December 4, 2012 the FCC modified its rules to implement the new law. The law requires the FCC to comply withmaintain its existing minimum distance separation requirements for full-service FM stations, FM translator stations, and FM booster stations that broadcast radio reading services via an analog subcarrier frequency to avoid potential interference by LPFM stations; and when licensing new FM translator stations, FM booster stations, and LPFM stations, to ensure that: (i) licenses are available to FM translator stations, FM booster stations, and LPFM stations; (ii) such decisions are made based on the needs of the local community; and (iii) FM translator stations, FM booster stations, and LPFM stations remain equal in status and secondary to existing and modified full-service FM stations. By Report and Order, released April 23, 2020, the FCC modified the LPFM technical rules in four main ways: (1) expanding the permissible use of directional antennas; (2) expanding the definition of minor change applications for LPFM stations; (3) allowing LPFM stations to own FM boosters; and (4) permitting LPFM and Class D FM stations operating on the NCE FM reserved band (channels 201 to 220) to propose facilities short-spaced to television stations operating on channel 6 (TV6) with the consent of the potentially affected stations. The FCC also took other less significant actions affecting the LPFM service.

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On January 5, 2012, the FCC released a Report to Congress on the impact that LPFM stations willwould have on full-service commercial FM stations. The FCC “found no statistically reliable evidence that low-power FM stations have a substantial or consistent economic impact on full-service commercial FM stations,” and that “low-power FM stations generally do not have, and in the future are unlikely to have, a demonstrable economic impact on full-service commercial FM radio stations.” We cannot predict what, if any, impact the newSome LPFM stations willthat broadcast commercial announcements in violation of the law could have a negative economic impact on the Company’s full-servicestations. On July 31, 2023, the FCC’s Media Bureau announced a filing window for applications for LPFM new station construction permits. The filing window opened on Wednesday, December 6, 2023, and was extended to close on December 15, 2023. More than 1,000 LPFM applications were received during the filing window. Although rule-compliant LPFM stations compete for audience with the Company’s full-power and FM translatorstranslator stations, the Company cannot predict whether there will be future negative economic impact on its stations.

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As part of the transition of television stations from analog to digital operations, the FCC sought comment in a 2014 NPRM on whether to allow low power television (“LPTV”) stations (so-called “Franken FM” or “FM6” radio stations) on digital television channel 6 to continue to operate analog FM radio-type services on an ancillary or supplementary basis on 87.75 MHz at the lower end of the portion of the FM band reserved for NCE stations.On June 7, 2022 (MB Docket No. 03-185), the FCC released a Fifth NPRM seeking comment on whether FM6 operations serve the public interest and should be authorized to continue in any capacity. The FCC limited the scope of FM6 operations to only those LPTV channel 6 stations with "active" FM6 engineering special temporary authority on the release date of the Fifth NPRM. Inits Fifth Report and Order, Amendment of Parts 73 & 74 of the Commission's Rules to Establish Rules for Digital Low Power TV & TV Translator Stations, FCC 23-58, released July 20, 2023, the FCC concluded that the public interest will be served by allowing the continued operation of existing analog FM6 LPTV radio stations subject to certain conditions. The FCC declined to adopt a proposal discussed in the Fifth NPRM that would allow new FM radio stations to be licensed on 82-88 MHz across the United States, for lack of record support. There are only 14 authorized FM6 stations. There is an FM6 station in the Norfolk, Virginia, radio market where the Company operates two commercial radio stations. The Company cannot predict whether the FM6 station will have any impact on the Company’s stations in that market.

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As a broadcaster, the Company is required to comply with the FCC rules implementing the Emergency Alert System (“EAS”). The Company’s stations must transmit Presidential messages during national emergencies and may transmit local messages, such as severe weather alerts and AMBER (America’s Missing: Broadcast Emergency Response) alerts. On January 7, 2021, the FCC’s Enforcement Bureau issued an “Enforcement Advisory” which highlighted EAS participants’ obligations, identified measures to improve the EAS, and warned that failure to comply with the EAS rules may subject a violator to sanctions including, but not limited to, substantial monetary forfeitures. Our stations are required periodically to file with the FCC forms reporting on the results of EAS tests. In September, 2022, the FCC adopted new EAS requirements directing EAS participants to check whether certain types of alerts are available in common alerting protocol (“CAP”) format and, if so, to transmit the CAP version of the alert rather than the legacy-formatted version. The FCC also prescribed text that EAS participants must broadcast using plain language terms. In an NPRM adopted October 27, 2022, the FCC proposed to require EAS participants to report to the FCC compromises of EAS equipment, communications systems, and services. The FCC proposed to require EAS participants to annually certify to having a cybersecurity risk management plan in place and to employ sufficient security measures to ensure the confidentiality, integrity, and availability of their respective alerting systems.

Use of FM Boosters for Geo-Targeting. By NPRM released December 1, 2020, the FCC sought comment on whether to modify the FCC’s rules governing the operation of FM booster stations by FM radio broadcasters in certain limited circumstances. Through its NPRM, the FCC sought comment regarding changes to the booster station rules that could enable FM broadcasters to use FM booster stations to air “geo-targeted” content (e.g., news, weather, and advertisements) independent of the signals of the booster’s primary station within different portions of the primary station's protected service contour for a limited period of time during the broadcast hour. The FCC has solicited public comment on tests of the proposed system. The Company cannot predict whether the FCC will adopt the proposed rules, and if adopted, whether the Company would use FM booster stations in this manner. The Company currently has no FM booster stations.

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Digital Audio Radio Satellite Service and Internet Radio.   In adopting its rules for the Digital Audio Radio Satellite Service (“DARS”) in the 2310-2360 MHz frequency band, the FCC stated, “although healthy satellite DARS systems are likely to have some adverse impact on terrestrial radio audience size, revenues and profits, the record does not demonstrate that licensing satellite DARS would have such a strong adverse impact that it threatens the provision of local service.” The FCC granted two nationwide licenses, one to XM Satellite Radio, which began broadcasting in May 2001, and a second to Sirius Satellite Radio, which began broadcasting in February 2002. The satellite radio systems provide multiple channels of audio programming in exchange for the payment of a subscription fee. The FCC approved the application of Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. to transfer control of the licenses and authorizations held by the two companies to one company, which is now known as Sirius XM Radio, Inc. Various companies have introduced devices that permit the reception of audio programming streamed over the Internet on home computers and on portable receivers such as cell phones, in automobiles, and in automobiles.through so-called “smart speakers” like Amazon’s Alexa service. A number of digital music providers have developed and are offering their product through the Internet. Terrestrial radio operators (including the Company) are also making their product available through the Internet. WeDue to interference generated by their electric motors, some manufacturers of all-electric vehicles do not market vehicles that can receive AM broadcasts over the air (although AM broadcasts can be heard over digital streaming services, such as Tunein Radio). In the U. S. Senate, a Bill, S.1669 bill would require the Department of Transportation to issue a rule that requires all new motor vehicles to have devices that can access AM broadcast stations installed as standard equipment. The Company cannot predict whether the bill will be enacted into law. To date, the Company has not perceived negative economic impact from DARS or Internet-streamed audio on the extent to which, such competing reception devices and DARS will have an adverse impact on our business.

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Satellite Carriage of Local TV Stations.  The Satellite Home Viewer Improvement Act (“SHVIA”), a copyright law, prevents direct-to-home satellite television carriers from retransmitting broadcast network television signals to consumers unless those consumers (1) are “unserved” by the over-the-air signals of their local network affiliateCompany’s full-service stations and (2) have not received cable serviceFM translators, possibly due, in part, to the possibility of confusion in the preceding 90 days. According to the SHVIA, “unserved” means that a consumer cannot receive, using a conventional outdoor rooftop antenna, a television signal that is strong enough to provide an adequate television picture. In December 2001 the U.S. Court of Appeals for the District of Columbia upheld the FCC’s rules for satellite carriage of local television stations which require satellite carriers to carry upon request all local TV broadcast stations in local markets in which the satellite carriers carry at least one TV broadcast station, also known as the “carry one, carry all” rule. In December 2004, Congress passed and the President signed the Satellite Home Viewer Extension and Reauthorization Act of 2004 (“SHVERA”), which again amends the copyright laws and the Communications Act. The SHVIA governs the manner in which satellite carriers offer local broadcast programming to subscribers,digital advertising market, but the SHVIA copyright license for satellite carriers was more limited than the statutory copyright license for cable operators. Specifically, for satellite purposes, “local,” though out-of-market (i.e., “significantly viewed”) signals were treated the same as truly “distant” (e.g., hundreds of miles away) signals for purposes of the SHVIA’s statutory copyright licenses. The SHVERA is intended to address this inconsistency by giving satellite carriers the option to offer FCC-determined “significantly viewed” signals to subscribers. In November 2005, the FCC adopted aReport and Order to implement SHVERA to enable satellite carriers to offer FCC-determined “significantly viewed” signals of out-of-market broadcast stations to subscribers subject to certain constraints set forth in SHVERA. TheOrder includes an updated list of stations currently deemed significantly viewed. On November 23, 2010, the FCC released three orders that implemented the Satellite Television Extension and Localism Act of 2010 (“STELA”). The FCC modified its Significantly Viewed (“SV”) rules to implement Section 203 of the STELA which amends Section 340 of the Communications Act to give satellite carriers the authority to offer out-of-market but SV broadcast television stations as part of their local service to subscribers. Section 203 of the STELA changes the restrictions on subscriber eligibility to receive SV network stations from satellite carriers. The STELA Reauthorization Act of 2014 (“STELAR”) added satellite television carriage to the FCC’s market modification authority, which previously applied only to cable television carriage. STELAR also extended until December 31, 2019, the exemption from retransmission consent requirements. STELAR permits the FCC to add communities to, or delete communities from, a station's local television market for purposes of satellite carriage, following a written request. In the FCC’s 2015STELAR Market Modification Report and Order implementing Section 102 of the STELAR, the FCC adopted satellite television market modification rules that provide a process for broadcasters, satellite carriers, and county governments to request changes to the boundaries of a particular commercial broadcast television station's local television market to include a new community located in a neighboring local market. The rules enable a broadcast television station toCompany cannot predict whether there will be carried by a satellite carrier in such a new community if the station is shown to have a local relationship to that community.

future negative economic impact.

In-Band On-Channel “Hybrid Digital” Radio.   The FCC has adoptedFCC’s rules permittingpermit radio stations to broadcast using in-band, on-channel (IBOC) as the technology that allows AM and FM stations to operate using the IBOC systemssystem developed by iBiquity Digital Corporation. This technology has become commonly known as “hybrid digital” or HD radio. Stations broadcast the same main channel program material in both analog and digital modes. HD radio technology permits “hybrid” operations, the simultaneous transmission of analog and digital signals with a single AM and FM channel. HD radio technology can provide near CD-quality sound on FM channels and FM quality on AM channels. HD radio technology also permits the transmission of up to threefour additional program streams over FM stations and one over AM stations (which streams do not count as separate radio stations under the radio stations.multiple ownership rules.) At the present time, we are configured to broadcast in HD radio on 5755 stations. In an Order and NPRM, the FCC proposed changes to its digital audio broadcasting technical rules that would permit additional FM stations to increase FM HD effective radiated power beyond the existing levels without the need for individual Commission authorization. In addition, the FCC proposed to allow digital FM stations to operate with asymmetric power on the digital sidebands. This would allow stations to operate with different power levels on the upper and lower digital sidebands, as a way to facilitate greater digital FM radio coverage without interfering with adjacent channel FM stations. The Company cannot predict whether the proposed rules will be adopted.

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On October 28, 2020, the FCC released a Report and Order, in which it adopted rules (effective January 4, 2021) to allow AM radio stations to broadcast an all-digital signal using the HD Radio IBOC mode termed “MA3.” In adopting the new rules, the FCC said that a voluntary conversion to all-digital broadcasting will benefit many AM stations and we continuetheir listeners by improving reception quality and listenable coverage in stations' service areas. At this time, the Company has not made a decision on whether to convert any of its AM radio stations to HD radio on an ongoing basis.all-digital operation.

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Use of FM Translators by AM Stations and Digital Program Streams.   FM translator stations are relatively low power radio stations (maximum ERP: 250 Watts) that rebroadcast the programs of full-power AM and FM stations on a secondary basis, meaning they must terminate or modify their operation if they cause interference to a full-power station. The FCC permits AM stations to be rebroadcast on FM translator stations in order to improve reception of programs broadcast by AM stations. The Company intends to continue to use some of its existing FM translators in connection with some of its AM stations. The Company is using some of its existing FM translators to rebroadcast HD radio program streams generated by some of its FM stations, which is permitted by the FCC. In a 2015 Report and Order, released October 23, 2015,Revitalization of the AM Service, the FCC announced an opportunity, restricted to AM licensees and permittees, to apply for and receive authorizations to relocate existing FM translator stations within 250 miles for the sole and limited purpose of enhancing their existing service to the public. On January 29, 2016,To implement this policy, the FCC opened a one-time only“filing windows,” the last one closing October 31, 2016. Some of the Company’s subsidiaries that are AM licensees, acquired FM translators during the filing window, during which only Class C and Class Drelocated them to their local markets to pair with some of the Company’s AM broadcast stations could participate. That window closed on July 28, 2016, and a second window (open to all classes of stations) opened on July 29, 2016, and closed on October 31, 2016.stations. The FM translators so acquired mustwere obligated to rebroadcast the related AM station for at least four years, not counting any periods of silence. Some of the Company’s subsidiaries that are AM licensees, acquired FM translators and relocated them to their local markets to pair with its some of their AM broadcast stations. The FCC later opened two windows for the filing of applications for construction permits for new FM translators. The firsttranslators, the final window (limited to Class D and D AM broadcast stations), was open from July 21 to August 2, 2017, and the second window (open to all classes of AM broadcast stations), was open fromclosing January 25 to 31, 2018, and have now closed.2018. In the filing windows, qualifying AM licensees could apply for one, and only one, new FM translator station, in the non-reserved FM band to be used solely to re-broadcast the AM licensee’s AM signal to provide fill-in and/or nighttime service on a permanent basis. The Company has filed applications in both windows and has obtained some construction permits as a result. If the Company’s subsidiariesCompany should decide tothat a subsidiary should sell or suspend operations of an AM station with such an FM construction permit or license, the Companysubsidiary would also be required to concurrently sell or suspend operations of the FM translator. WhereThe FCC has adopted rules regarding FM translator interference (1) allowing FM translators to resolve interference issues by changing channels to any available same-band frequency using a minor modification application; (2) standardizing the information that must be compiled and submitted by a station claiming interference from an applicationFM translator, including a required minimum number of listener complaints; (3) establishing interference complaint resolution procedures; and (4) establishing an outer contour limit (45 dBm) for the affected station within which interference complaints will be considered actionable while providing for a “new” construction permit is clear of spectrum so it canprocess to waive that limit in special circumstances. Because FM translators are “secondary services,” they could be granted, the FCC sets a deadlinedisplaced by which a “long-form” application must be filed to acquire the permit. Where an application is mutually exclusive (“MX”) with another proposal, the FCC general affords the applicants an opportunity to resolve the MX situation and obtain a construction permit. Where the parties cannot resolve the MX situation, the FCC makes the application subject to an auction where the highest bidder obtains the permit.full power stations.

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Hart-Scott-Rodino Antitrust Improvements Act of 1976.   The Federal Trade Commission and the Department of Justice, the federal agencies responsible for enforcing the federal antitrust laws, may investigate certain acquisitions. Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, an acquisition meeting certain size thresholds requires the parties to file Notification and Report Forms with the Federal Trade Commission and the Department of Justice and to observe specified waiting period requirements before consummating the acquisition. Any decision by the Federal Trade Commission or the Department of Justice to challenge a proposed acquisition could affect our ability to consummate the acquisition or to consummate it on the proposed terms. We cannot predict whether the FCC will adopt rules that would restrict our ability to acquire additional stations.

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Changes to Application and Assignment Procedures.   In January 2010, the    FCC adopted a First Report and Order that givesrules  give Native American tribes a priority to obtain broadcast radio licenses in tribal communities. The Order providesrules provide an opportunity for tribes to establish new service specifically designed to offer programming that meets the needs of tribal citizens. In addition, the First Report and Order modifiedrules modify the FCC’s radio application and assignment procedures, assisting qualified applicants to more rapidly introduce new radio service to the public. These modifications (1) Prohibitprohibit an AM applicant that obtains a construction permit through a dispositive Section 307(b) preference from downgrading the service level that led to the dispositive preference; (2) Requiresrequire technical proposals for new or major change AM facilities filed with Form 175 (i.e .,., FCC “short-form” Auction) applications to meet certain minimum technical standards to be eligible for further auction processing; and (3) Givesgive FCC operating bureaus authority to cap filing window applications. On December 29,In 2011, the FCC released its Third Report and Order which limits eligibility for authorizations associated with allotments added to the FM Table of Allotments using the “Tribal Priority” to the tribes whom the Tribal Priority was intended to benefit. In October 2018, the FCC released a Public“Second Further Notice released December 2, 2010 (GN Docket No. 10-244) theof Proposed Rulemaking” as part of its ongoing effort to assist AM broadcast stations in providing full-time service to their communities. The FCC sought comment on how it could design, adopt,technical proposals to reduce nighttime interference afforded to wide-area “Class A” AM radio stations to enable more local AM stations to increase their nighttime service. The Company has no Class A AM radio stations, but has Class B, Class C and implement an additional new preference program inClass D AM radio stations, some of which might benefit if the FCC changes its competitive bidding process for persons or entities that have overcome substantial disadvantage and would be eligible forrules as proposed. In 2018, the FCC issued a bidding credit. In aNotice of Proposed Rulemaking, released October 10, 2014, and in theQuadrennial Regulatory ReviewInquiry on whether to issue an NPRM, the FCC also sought comment on a proposal for applicants that could lead to be accorded licensing preferences if they could demonstrate that they have overcome “significant social and economic disadvantages.” In its Report and Order; Order on Reconsiderationcreation of the First Report and Order; Third Order on Reconsideration of the Second Report and Order; Third Report and Order, released July 21, 2015, the FCC declined to adopt at that time specific bidding preferences for other types of entities, including those that serve unserved/underserved areas or areas with persistent poverty, as well as those that have overcome disadvantages. The FCC further declined to consider any modification of the tribal lands bidding credit because the record did not support revisions to its current policies for the award of this benefit. 

Spectrum Auctions and Channel Sharing.Congress passed and the President signed into law the Middle Class Tax Relief and Job Creation Act of 2012, (codified at 47 U.S.C. § 309(j)(8)(G) 47 U.S.C. § 1452) (2012) (“Spectrum Act”). In aReport and Order, released June 2, 2014, in GN Docket 12-268, the FCC adopted rules to implement the Spectrum Act, including rules to implement the auction of broadcast television spectrum for use by other services. The FCC stated its mandate to protect full power and Class A television facilities that already were operating pursuant to a license (or a pending application for a license to cover a construction permit) on February 22, 2012, and to protect facilities in addition to those the statute requires the FCC to protect, based on consideration of the potential impact on the FCC’s flexibility in the repacking process and its auction goals. The FCC concluded that protecting other categories of facilities, including stations and television translator stations, would unduly constrain the FCC’s flexibility in the repacking process and undermine the likelihood of meeting its objectives for the incentive auction. To help preserve the services provided by LPTV and TV translator stations, the FCC will open a special filing window for such stations that are displaced to select a new channel and will amend its rulesClass C4 FM station that would allow use of power of up to expedite12 kW ERP, but the process for displaced stations to relocate. The reverse and forward spectrum auctions were integrated in a series of stages.  Each stage consisted of a reverse auction and a forward auction bidding process, and additional stages as were necessary.  Broadcasters indicated throughmatter remains pending before the pre-auction application process their willingness to relinquish spectrum usage rights at the opening prices.  Based on broadcasters’ collective willingness, the initial spectrum clearing target was set. Then the reverse auction bidding process was run to determine the total amount of incentive payments to broadcasters required to clear that amount of spectrum. The forward auction bidding process followed the reverse auction bidding process.  Full power and Class A station licensees were eligible to participate in the reverse auction. They could bid to voluntarily relinquish the spectrum usage rights associated with station facilities that are eligible for protection in the repacking process. Bidders had the three bid options specified by the Spectrum Act: (1) license relinquishment; (2) reassignment from a UHF to a VHF channel; and (3) channel sharing. UHF-to-VHF bidders could limit their bids to a high (channels 7 to 13) or low (channels 2 to 6) VHF channel. Bidders had the additional option to bid for reassignment from a high VHF channel to a low VHF channel. Potential bidders had to submit certified applications. Between the short-form application filing deadline and the announcement of the results of the reverse auction and the repacking process, all full power and Class A licensees were prohibited from communicating directly or indirectly any reverse or forward auction applicant’s bids or bidding strategies to any other full power or Class A licensee or forward auction applicant. The FCC shares forward auction proceeds with licensees that relinquish rights in the reverse auction as soon as practicable following the successful conclusion of the incentive auction. The FCC will reimburse costs reasonably incurred by television stations that are reassigned to new channels in the repacking process. The FCC will grandfather existing broadcast station combinations that otherwise would no longer comply with the media ownership rules as a result of the reverse auction. The Company timely filed an application to participate in the reverse auction; however, the Company was not a winning bidder in the reverse auction.  Therefore, it did not relinquish any of its spectrum.  However, one of the Company’s former television stations will be required to change its operating channel. Some or all of the Company’s costs for that change will be reimbursed by the FCC.

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The Company pays for the use of music broadcast on its stations by obtaining licenses from organizations called performing rights societies,organizations (“PRO”) (e.g.Broadcast Music, Inc. (“BMI”), American Society of Composers, Authors and Publishers SESAC, LLC, and Global Music Rights LLC), which, in turn pay composers, authors and publishers for their works. A new organization, Global Music Rights, has recently began issuing licenses for the composers, authors and publishers that it represents. Federal law grants a performance right for sound recordings in favor of recording companies and performing artists for non-interactive digital transmissions and Internet radio. As a result, users of music, including the Company, are required to pay royalties for these uses through Sound Exchange, a non-profit performance rights organization. (Other PROs could be formed, which could increase the royalties we pay.) Periodically, bills have been introduced in Congress, that if passed, would have required the Company to pay additional fees to an organization called MusicFirst which would distribute the money to other entities. Efforts continue by certain organizations to persuade Congress to enact a law that would require such payments. We cannot predict whether such a law might be enacted. Should such a law be enacted, it would impose an additional financial burden on the Company, but the extent of the burden would depend on how the fee payment requirement was structured. Periodically, bills have been introduced in Congress that, if adopted, would require the Company to pay additional fees to one or more organizations that would distribute the money to performers or other entities. The American Music Fairness Act was introduced on February 2, 2023, in both the Senate and House of Representatives (118th Congress). (A similar Bill died in the 117th Congress.) The Act would require radio stations to have an additional license to publicly perform certain sound recordings. The Copyright Royalty Board would periodically determine the royalty rates for such a license. Terrestrial broadcast stations, and the owners of such stations, that fall below certain revenue thresholds would pay certain flat fees, instead of the board-established rate, for a license.

In late 2018, Congress passed the “Music Modernization Act” which was signed into law by the President. The law (1) improves compensation to songwriters and streamlined how their music is licensed; (2) enables legacy artists (who recorded music before 1972) to be paid royalties when their music is played on digital radio; and (3) provides a consistent legal process for studio professionals, including record producers and engineers to receive royalties for their contributions to music that they help to create. The law creates a blanket license for digital music providers to make permanent downloads, limited downloads, and interactive streams, creates a collective (“Mechanical Rights Collective”) to administer the blanket license, and makes various improvements to royalty rate proceedings. This law could impose an additional financial burden on the Company, but the extent of the burden depends on how the fee payment requirement is structured.

On January 3, 2013, ​

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Proposal to Mandate Broadcasters to Participate in the Disaster Information Reporting System (“DIRS”) and Network Outage Reporting System (“NORS”). In an NPRM, Resilient Networks; Amendments to Part 4 of the Commission’s Rules Concerning Disruptions to Communications; New Part 4 of the Commission’s Rules Concerning Disruptions to Communications, 36 FCC Rcd 14802 (2021), the FCC released theSixth Further Notice of Proposed Rulemaking, which sought comment on the requirementmeasures to help ensure that persons with attributable interests in broadcast licensees and other entities filing an FCC Ownership Report provide an “FCC Registration Number” (“FRN”) linked to their social security numbers. Questions had been raised about the security of the FCC’s Registration System where this data would be stored. On January 20, 2016,communications services remain operational when disasters strike. The NPRM asks whether the FCC released itsReportshould adopt rules making participation in the DIRS and Order, Second Report and Order and Order on Reconsideration that implemented a Restricted Use FRN (RUFRN) that individuals may use solely for the purpose of broadcast ownership report filings. The FCC stated its belief that the RUFRN would allow for sufficient unique identification of individuals listed on broadcast ownership reports without necessitating the disclosure to the FCC of individuals’ full Social Security Numbers (SSNs). The FCC eliminated the availability of the Special Use FRN (SUFRN) for broadcast station ownership reports, except in very limited circumstances.NORS mandatory. On January 4, 2017, the FCC’s Media Bureau issued an Order or Reconsideration denying petitions for reconsideration of the requirement. On February 2, 2017,2024, the FCC set aside the Order on Reconsiderationmade public a proposed “Second Further NPRM” to inquire whether to require TV and returned the petitions for reconsiderationradio broadcasters, satellite providers, and broadband Internet access service providers to pending status to be consideredreport in NORS and/or DIRS. Implementation of DIRS and NORS by the full FCC. The FCC is also seeking comment on whether to expandCompany could result in significant costs, but the biennial ownership reporting requirement to include interests, entities and individuals that are not attributable because of (a) the single majority shareholder exemption and (b) the exemption for interests held in eligible entities pursuant to the higher EDP threshold. The Company has utilized the single majority shareholder exemption in reporting ownership interests in the Company. The Company cannot predict whether these proposalsthe rules will be adopted and if so, whether information provided by those persons with a reportable attributable interest in the Company will be secure. form they may take.

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Proposed Changes.   The FCC has under consideration, and may in the future consider and adopt, new laws, regulations and policies regarding a wide variety of matters that could, directly or indirectly, affect us and the operation and ownership of our broadcast properties. Application processing rules adopted by the FCC might require us to apply for facilities modifications to our standard broadcast stations in future “window” periods for filing applications or result in the stations being “locked in” with their present facilities. The FCC is authorized to use auctions for the allocation of radio broadcast spectrum frequencies for commercial use. The implementation of this law could require us to bid for the use of certain frequencies.

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Information About Our Executive Officers

Our current executive officers are:

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Name

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Age

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Position

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Name

Age

Position

Edward K. Christian

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73

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Christopher S. Forgy

63

President, Chief Executive Officer and Chairman;Officer; Director

Warren S. Lada63Chief Operating Officer

Samuel D. Bush

60

66

Senior Vice President, Treasurer and Chief Financial Officer

Marcia K. Lobaito69Senior Vice President, Corporate Secretary, and Director of Business Affairs

Catherine A. Bobinski

58

64

Senior Vice President/Finance, Chief Accounting Officer and Corporate Controller

Wayne Leland

59

Senior Vice President of Operations

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Officers are elected annually by our Board of Directors and serve at the discretion of the Board. Set forth below is information with respect to our executive officers.

Mr. ChristianForgy has been President and Chief Executive Officer and Chairman since our inception in 1986.

Mr. Lada has been Chief Operating Officer since March 2016.December 2022. He was Executive Vice President, Operations from 2012 to 2016. He waspreviously our Senior Vice President of Operations from 2000May 2018 until his appointment to 2012President and Vice President, Operations from 1997 to 2000. From 1992 to 1997 heChief Executive Officer. He was Regional Vice PresidentPresident/General Manager of our subsidiary,Columbus, Ohio market from 2010 to 2018 and was Director of Sales of our Columbus, Ohio market from 1995 to 2006. He has been with Saga Communications of New England, Inc.

for over 20 years..

Mr. Bush has been Senior Vice President since 2002 and Chief Financial Officer and Treasurer since September 1997. He was Vice President from 1997 to 2002. From 1988 to 1997 he held various positions with the Media Finance Group at AT&T Capital Corporation, including senior vice president.

Ms. Lobaito has been Senior Vice President since 2005, Director of Business Affairs and Corporate Secretary since our inception in 1986 and Vice President from 1996 to 2005.

Ms. Bobinski has been Senior Vice President/Finance since March 2012 and Chief Accounting Officer and Corporate Controller since September 1991. She was Vice President from March 1999 to March 2012. Ms. Bobinski is a certified public accountant.

Mr. Leland was promoted to Senior Vice President of Operations effective January 2023. He was President/General Manager of our Norfolk, Virginia market from 2011 to 2022. He has been with Saga for 11 years and has been in the broadcasting industry since 1986.

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Item 1A.RiskRisk Factors

The more prominent risks and uncertainties inherent in our business are described in more detail below. However, these are not the only risks and uncertainties we face. Our business may also face additional risks and uncertainties that are unknown to us at this time.

General Risks Related to the Economy

GlobalContinued Uncertain Financial and Economic Conditions and Uncertainties May Continue to Affectmay have an Adverse Impact on our Business, Results of Operations or Financial Condition

We derive revenues from the sale of advertising and expenditures by advertisers tend to be cyclical and are reflective of economic conditions. Periods of a slowing economy, recession or economic uncertainty may be accompanied by a decrease in advertising. The globalFinancial and economic downturn that began in 2008 caused a decline in advertisingconditions continue to be uncertain over the longer term and marketing by our customers, which hadthe continuation or worsening of such conditions, including prolonged or increased inflationary developments, could reduce consumer confidence and have an adverse effect on our revenue, profit marginsbusiness, results of operations and/or financial condition. If consumer confidence were to decline, this decline could negatively affect our advertising customers' businesses and cash flows. Globaltheir advertising budgets. In addition, volatile economic conditions could have been slowa negative impact on our industry or the industries of our customers who advertise on our stations, resulting in reduced advertising sales. Furthermore, it may be possible that actions taken by any governmental or regulatory body for the purpose of stabilizing the economy or financial markets will not achieve their intended effect. In addition to recoverany negative direct consequences to our business or results of operations arising from these financial and remain uncertain. There caneconomic developments, some of these actions may adversely affect financial institutions, capital providers, advertisers or other consumers on whom we rely, including our access to future capital or financing arrangements necessary to support our business. Our inability to obtain financing in amounts and at times necessary could make it more difficult or impossible to meet our obligations or otherwise take actions in our best interests.

We May be no assurance that anyAdversely Affected by the Effects of Inflation

Inflation has the recent economic improvements will be broad basedpotential to adversely affect our liquidity, business, financial condition and sustainable, or that they will enhance conditionsresults of operations by increasing our overall cost structure, particularly if we are unable to achieve commensurate increases in markets relevant to us. If economic conditions do notthe prices we charge our customers. The existence of inflation in the economy has resulted in, and may continue to improve, economic uncertainty increases or economic conditions deteriorate again; global economic conditionsresult in, higher interest rates, increased cost of labor and other similar effects. As a result of inflation, we have experienced and may once again adverselycontinue to experience, cost increases. Although we may take measures to mitigate the impact of this inflation, if these measures are not effective, our business. Due to the continued uncertain pace of economic growth, we cannot predict future revenue trends. Further, there can be no assurance that we will not experience future adverse effects that may be material to our cash flows, competitive position,business, financial condition, results of operations and liquidity could be materially adversely affected. Even if such measures are effective, there could be a difference between the timing of when these beneficial actions impact our results of operation and when the cost of inflation is incurred.

Our Business and Operations Could be Adversely Affected by Health Epidemics, Pandemics or Similar Outbreaks, Natural Disasters and Other Catastrophes, Impacting the Markets and Communities in which we and our Partners, Advertisers, and Users Operate

We face various risks related to health epidemics, pandemics, or similar outbreaks, natural disasters and other catastrophes that are beyond our control, which have materially and adversely affected our business and may continue to materially and adversely affect our results of operations, liquidity and financial condition. The extent of the impact of health epidemics, pandemics or similar outbreaks, natural disasters and other catastrophes in the future, on our business, including our ability to execute our near-term and long-term business strategies and initiatives in the expected time frame, will depend on numerous factors that we may not be able to accurately predict or assess, including the negative impact on the economy and economic activity, changes in advertising customers and consumer behavior, short and longer-term impact on the levels of consumer confidence; actions governments, businesses and individuals take in response to such outbreaks, and any resulting macroeconomic conditions; and how quickly economies recover after such outbreaks or pandemics subside.

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The effects of health epidemics, pandemics or similar outbreaks, natural disasters and other catastrophes in the future, may also impact financial markets and corporate credit markets which could adversely impact our access capital.

to financing or the terms of any such financing. To the extent pandemics or outbreaks adversely affect our business and financial results, it may also have the effect of heightening many of the other risks described herein.

The volatility in global financial markets maySuccess of Our Business is Dependent Upon Advertising Revenues, which are Seasonal and Cyclical, and also limit ourFluctuate as a Result of a Number of Factors, Some of Which are Beyond Our Control.

Our primary source of revenue is the sale of advertising. Our ability to accesssell advertising depends, among other things, on:

●economic conditions in the areas where our stations are located and in the nation as a whole;
●national and local demand for radio and digital advertising;
●the popularity of our programming;
●changes in the population demographics in the areas where our stations are located;
●local and national advertising price fluctuations, which can be affected by the availability of programming, the popularity of programming, and the relative supply of and demand for commercial advertising;
●the capability and effectiveness of our sales organization;
●our competitors' activities, including increased competition from other advertising-based mediums;
●decisions by advertisers to withdraw or delay planned advertising expenditures for any reason; and
●other factors beyond our control.

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Our operations and revenues also tend to be seasonal in nature, with generally lower revenue generated in the capitalfirst quarter of the year and generally higher revenue generated in the second and fourth quarters of the year. This seasonality causes and will likely continue to cause a variation in our quarterly operating results. Such variations could have a material effect on the timing of our cash flows. In addition, our revenues tend to fluctuate between years, consistent with, among other things, increased advertising expenditures in even-numbered years by political candidates, political parties and special interest groups.

We Depend on Key Stations

Historically our top five markets at a time when combined represented 36%, 38%, and 39% of our net operating revenue for the years ended December 31, 2023, 2022 and 2021, respectively. Accordingly, we would like,may have greater exposure to adverse events or need, to do so,conditions that affect the economy in any of these markets, which could have an impacta material adverse effect on our flexibility to react to changing economic and business conditions. Accordingly, if the economy does not fully recover or worsens, our business,revenue, results of operations and financial conditioncondition.

Local, National and Global Economic Conditions May Affect our Advertising Revenue

Our financial results are dependent primarily on our ability to generate advertising revenue through rates charged to advertisers. The advertising rates a station is able to charge are affected by many factors, including the general strength of the local and national economies. Generally, advertising declines during periods of economic recession or downturns in the economy. Our revenue has been and is likely to be adversely affected during such periods, whether they occur on a global level, national level or in the geographic markets in which we operate. During such periods we may also be required to reduce our advertising rates in order to attract available advertisers. Such a decline in advertising rates could be materiallyalso have a material adverse effect on our revenue, results of operations and adversely affected.financial condition.

The ongoing supply chain and labor shortage issues could result in an adverse impact on our business due to our customer’s reduction in advertising spending as their businesses are negatively impacted by low inventories, product delays, and labor shortages resulting in reduced revenue.

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The Russia-Ukraine war and the conflict in Gaza have created not only great devastation but also a worldwide instability that could impact economies across the globe. While direct impacts to our business are limited, the indirect impacts to our customers could impact demand for advertising and other indirect impacts could arise. In addition, the impact of other current macro-economic factors on our business, including inflation, supply chain constraints and geopolitical events, is uncertain.

Risks Related to Our Financing

We May Have Substantial Indebtedness and Debt Service Requirements

AtWhile we currently have no debt outstanding at December 31, 2017 our long-term debt was approximately $25,000,000. We2023 we have previously borrowed and expect to continue tomay borrow to finance acquisitions and for other corporate purposes. Because ofIf we borrow in the future, our indebtedness, a portion of our cash flow from operations is required for debt service. Our leverage could make us vulnerable to an increase in interest rates, particularly related to the Secured Overnight Financing Rate (“SOFR”) as outlined in our new credit facility amendment, a downturn in our operating performance, or a decline in general economic conditions. TheOur credit facility is subject to mandatory prepayment requirements, including but not limited to, certain sales of assets, certain insurance proceeds, certain debt issuances and certain sales of equity. Any outstanding balance under the credit facility will be due on the maturity date of August 18, 2020.December 19, 2027. We believe that cash flows from operations will be sufficient to meet ourany debt service requirements for interest and scheduled payments of principal under the credit facility.facility in the future. However, if such cash flow is not sufficient, we may be required to sell additional equity securities, refinance our obligations or dispose of one or more of our properties in order to make such scheduled payments. We cannot be sure that we would be able to affect any such transactions on favorable terms, if at all.

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Variable-Rate Indebtedness Exposes us to Interest Rate Risk, which could Cause Our Debt Service Obligations to Increase Significantly.

Certain of our secured indebtedness, including borrowings under our existing credit facility, is or is expected to be, as applicable, subject to variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable-rate indebtedness would increase and our net loss would increase, even though the amount borrowed under the facility remained the same. As of December 31, 2022, we had no outstanding variable-rate debt. However, if and to the extent we borrow in the future, an unfavorable movement in interest rates, primarily SOFR, could result in higher interest expense and cash payments for us. Although we may enter into interest rate hedges, involving the partial or full (i) exchange of floating for fixed-rate interest payments or (ii) obtaining an interest rate cap, to reduce interest rate volatility, we cannot provide assurance that we will enter into such arrangements or that they will successfully mitigate such interest rate volatility. SOFR is a broad measure of the cost of borrowing cash in the overnight U.S treasury repo market, and the Federal Reserve Bank of New York has published the daily rate since 2018.

Our Debt Covenants Restrict our Financial and Operational Flexibility

Our credit facility contains a number of financial covenants which, among other things, require us to maintain specified financial ratios and impose certain limitations on us with respect to investments, additional indebtedness, dividends, distributions, guarantees, liens and encumbrances. Our ability to meet these financial ratios can be affected by operating performance or other events beyond our control, and we cannot assure you that we will meet those ratios. Certain events of default under our credit facility could allow the lenders to declare all amounts outstanding to be immediately due and payable and, therefore, could have a material adverse effect on our business. We have pledged substantially all of our assets (excluding our FCC licenses and certain other assets) in support of the credit facility and each of our subsidiaries has guaranteed the credit facility and has pledged substantially all of their assets (excluding their FCC licenses and certain other assets) in support of the credit facility.

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Risks Related to the Radio Broadcasting Industry

Our Stations Must Compete for Advertising Revenues in Their Respective Markets

Radio broadcasting is a highly competitive business. Our stations compete for listeners and advertising revenues within their respective markets directly with other radio stations, as well as with other media, such as broadcast radio (as applicable), cable television and/or radio, satellite television and/or satellite radio systems, newspapers, magazines, direct mail, the Internet, coupons and billboard advertising. Audience ratings and market shares are subject to change, and any change in a particular market could have a material adverse effect on the revenue of our stations located in that market. While we already compete in some of our markets with other stations with similar programming formats, if another radio station in a market were to convert its programming format to a format similar to one of our stations, or if a new station were to adopt a comparable format or if an existing competitor were to strengthen its operations, our stations could experience a reduction in ratings and/or advertising revenue and could incur increased promotional and other expenses. Other radio broadcasting companies may enter into the markets in which we operate or may operate in the future. These companies may be larger and have more financial resources than we have. We cannot assure you that any of our stations will be able to maintain or increase their current audience ratings and advertising revenues.

We Depend on Key Personnel

Our business is partially dependent upon the performance of certain key individuals, particularly Edward K. Christian,Christopher S. Forgy, our President and CEO. Although we have entered into employment and non-competition agreements with Mr. Christian,Forgy, which terminate on March 31, 2021,December 7, 2025, and certain other key personnel, including on-air personalities, we cannot be sure that such key personnel will remain with us. We can give no assurance that all or any of these employees will remain with us or will retain their audiences. Many of our key employees are at-will employees who are under no legal obligation to remain with us. Our competitors may choose to extend offers to any of these individuals on terms which we may be unwilling to meet. In addition, any or all of our key employees may decide to leave for a variety of personal or other reasons beyond our control. Furthermore, the popularity and audience loyalty of our key on-air personalities is highly sensitive to rapidly changing public tastes. A loss of such popularity or audience loyalty is beyond our control and could limit our ability to generate revenues.

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We Depend on Key Stations

Historically our top six markets when combined represented 46%, 48% and 46% of our net operating revenue for the years ended December 31, 2017, 2016 and 2015, respectively. Accordingly, we may have greater exposure to adverse events or conditions that affect the economy in any of these markets, which could have a material adverse effect on our revenue, results of operations and financial condition.

Local and National Economic Conditions May Affect our Advertising Revenue

Our financial results are dependent primarily on our ability to generate advertising revenue through rates charged to advertisers. The advertising rates a station is able to charge are affected by many factors, including the general strength of the local and national economies. Generally, advertising declines during periods of economic recession or downturns in the economy. Our revenue has been and is likely to be adversely affected during such periods, whether they occur on a national level or in the geographic markets in which we operate. During such periods we may also be required to reduce our advertising rates in order to attract available advertisers. Such a decline in advertising rates could also have a material adverse effect on our revenue, results of operations and financial condition.

Our Stations Must Compete for Advertising Revenues in Their Respective Markets

Radio broadcasting is a highly competitive business. Our stations compete for listeners/viewers and advertising revenues within their respective markets directly with other radio stations, as well as with other media, such as broadcast radio (as applicable), cable television and/or radio, satellite television and/or satellite radio systems, newspapers, magazines, direct mail, the Internet, coupons and billboard advertising. Audience ratings and market shares are subject to change, and any change in a particular market could have a material adverse effect on the revenue of our stations located in that market. While we already compete in some of our markets with other stations with similar programming formats, if another radio station in a market were to convert its programming format to a format similar to one of our stations, if a new station were to adopt a comparable format or if an existing competitor were to strengthen its operations, our stations could experience a reduction in ratings and/or advertising revenue and could incur increased promotional and other expenses. Other radio broadcasting companies may enter into the markets in which we operate or may operate in the future. These companies may be larger and have more financial resources than we have. We cannot assure you that any of our stations will be able to maintain or increase their current audience ratings and advertising revenues.  

Our Success Depends on our Ability to Identify Consummate and Integrate Acquired Stations

As part of our strategy, we have pursued and may continue to pursue acquisitions of additional radio stations, subject to the terms of our credit facility. Broadcasting is a rapidly consolidating industry, with many companies seeking to consummate acquisitions and increase their market share. In this environment, we compete and will continue to compete with many other buyers for the acquisition of radio stations. Some of those competitorsCompetitors may be able to outbid us for acquisitions because they have greater financial resources.acquisitions. As a result of these and other factors, our ability to identify and consummate future acquisitions is uncertain.

Our consummation of all future acquisitions is subject to various conditions, including FCC and other regulatory approvals. The FCC must approve any transfer of control or assignment of broadcast licenses. Such acquisitions could be delayed by shutdowns of the U.S. Government. In addition, acquisitions may encounter intense scrutiny under federal and state antitrust laws. Our future acquisitions may be subject to notification under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and to a waiting period and possible review by the Department of Justice and the Federal Trade Commission. Any delays, injunctions, conditions or modifications by any of these federal agencies could have a negative effect on us and result in the abandonment of all or part of otherwise attractive acquisition opportunities. We cannot predict whether we will be successful in identifying future acquisition opportunities or what the consequences will be of any acquisitions.

Certain of our acquisitions may prove unprofitable and fail to generate anticipated cash flows. In addition, the success of any completed acquisition will depend on our ability to effectively integrate the acquired stations. The process of integrating acquired stations may involve numerous risks, including difficulties in the assimilation of operations, the diversion of management’s attention from other business concerns, risk of entering new markets, and the potential loss of key employees of the acquired stations.

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The Royalties We Pay to Copyright Owners Could Increase Significantly, and Proposed Legislation Could Require Radio Broadcasters to Pay Royalties to Record Labels and Recording Artists

We pay royalties to copyright owners of musical compositions (typically song composers and publishers) whenever we broadcast or stream musical compositions. These royalties are paid through ASCAP, BMI, SESAC, GMR and Sound Exchange. The rates at which we pay royalties to copyright owners are privately negotiated or set pursuant to a regulatory process. Increased royalty rates could significantly increase our expenses, which could adversely affect our business. There is no guarantee that the licenses and associated royalty rates that currently are available to us will be available to us in the future. In addition, legislation has been previously introduced in Congress that would require radio broadcasters to pay a performance royalty to record labels and performing artists for use of their recorded songs. The proposed legislation would add an additional layer of royalties to be paid directly to the record labels and artists. It is currently unknown what proposed legislation, if any, will become law, whether industry groups will enter into an agreement with respect to performance fees, and what significance this royalty would have on our results from operations, cash flows or financial position.

Risks Related to Regulation of Our Business

Future Impairment of our FCC Broadcasting Licenses Could Affect our Operating Results

As of December 31, 2017,2023, our FCC broadcasting licenses represented 37.5%39% of our total assets. We are required to test our FCC broadcasting licenses for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that our FCC broadcasting licenses might be impaired which may result in future impairment losses. For further discussion, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates included with this Form 10-K.

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Our Business is Subject to Extensive Federal Regulation

The broadcasting industry is subject to extensive federal regulation which, among other things, requires approval by the FCC of transfers, assignments and renewals of broadcasting licenses, limits the number of broadcasting properties that may be acquired within a specific market, and regulates programming and operations. For a detailed description of the material regulations applicable to our business, see “Federal Regulation of Radio and Television Broadcasting” and “Other FCC Requirements” in Item 1 of this Form 10-K. Failure to comply with these regulations could, under certain circumstances and among other things, result in the denial of renewal or revocation of FCC licenses, shortened license renewal terms, monetary forfeitures or other penalties which would adversely affect our profitability. Changes in ownership requirements could limit our ability to own or acquire stations in certain markets.

New Federal Regulations or Fees Could Affect our Broadcasting Operations

There has been proposed legislation in the past and there could be again in the future that requires radio broadcasters to pay additional fees such as a spectrum fee for the use of the spectrum or a royalty fee to record labels and performing artists for use of their recorded music. Currently, we pay royalties to song composers, publishers, and performers indirectly through third parties. Any proposed legislation that is adopted intobecomes law could add an additional layer of royalties to be paid directly to the record labels and artists. While thisThese proposed legislation did not become law, it hasroyalties have been the subject of considerable debate and activity by the broadcast industry and other parties affected by the legislation. It is currently unknown what impact any potential required royalty payments would have on our results of operations, cash flows or financial position.

​

27

Table of Contents

The FCC’s Vigorous Enforcement of Indecency Rules Could Affect our Broadcasting Operations

Federal law regulates the broadcast of obscene, indecent or profane material. The FCC has increased its enforcement efforts relating to the regulation of indecency violations, and Congress has increased the penalties for broadcasting obscene, indecent or profane programming, and these penalties may potentially subject broadcasters to license revocation, renewal or qualification proceedings in the event that they broadcast such material. The FCC has expanded the scope of items considered indecent to include material that could be considered “blasphemy,” “personally reviling epithets,” “profanity” and vulgar or coarse words, amounting to a nuisance. Effective January 15, 2024, the maximum forfeiture penalty (after 2024 annual inflation adjustment) for an indecency violation is $495,500 per incident and $4,573,840 for a continuing violation arising from a single act or failure to act. In March 2015, the FCC issued a Notice of Apparent Liability for the then maximum forfeiture amount of $325,000 against a television station for violation of the indecency laws. In addition, the FCC’s heightened focus on the indecency regulations against the broadcast industry may encourage third parties to oppose our license renewal applications or applications for consent to acquire broadcast stations. Because the FCC may investigate indecency complaints prior to notifying a licensee of the existence of a complaint, a licensee may not have knowledge of a complaint unless and until the complaint results in the issuance of a formal FCC letter of inquiry or notice of apparent liability for forfeiture. We may in the future become subject to inquiries or proceedings related to our stations’ broadcast of obscene, indecent or profane material. To the extent that any inquiries or other proceedings result in the imposition of fines, a settlement with the FCC, revocation of any of our station licenses or denials of license renewal applications, our result of operations and business could be materially adversely affected.

​

25

We are Subject to a Series of Risks Regarding Scrutiny of Environmental, Social and Governance Matters

​

Companies across industries are facing increasing scrutiny from a variety of stakeholders related to their environmental, social, and governance (“ESG”) practices. For example, various groups produce ESG scores or ratings based at least in part on a company’s ESG disclosures, and certain market participants, including institutional investors, use such ratings to assess companies’ ESG profiles. There are also increasing regulatory expectations for ESG matters. Various policymakers, including the SEC, have adopted (or are considering adopting) requirements to disclose certain climate-related or other ESG information, which may require additional costs to comply. This and other stakeholder expectations will likely lead to increased costs as well as scrutiny that could heighten the risk. Additionally, many of our customers, business partners, and suppliers may be subject to similar expectations, which may augment or create additionally risks, including risks that may not be known to us.

​

Risks Related to Technology and Cybersecurity

​

New Technologies May Affect our Broadcasting Operations

The FCC has and is considering ways to introduce new technologies to the broadcasting industry, including satellite and terrestrial delivery of digital audio broadcasting and the standardization of available technologies which significantly enhance the sound quality of AM broadcasters. We are unable to predict the effect such technologies may have on our broadcasting operations. The capital expenditures necessary to implement such technologies could be substantial. Moreover,

Information Technology and Cybersecurity Failures or Data Security Breaches Could Harm Our Business

Any internal technology error or failure impacting systems hosted internally or externally, or any large-scale external interruption in technology infrastructure we depend on, such as power, telecommunications or the FCCInternet, may impose additional publicdisrupt our technology network. Any individual, sustained or repeated failure of technology could impact our customer service obligations on television broadcastersand result in return for their useincreased costs or reduced revenues. Our technology systems and related data also may be vulnerable to a variety of sources of interruption due to events beyond our control, including natural disasters, terrorist attacks, telecommunications failures, computer viruses, hackers and other security issues. While we have in place, and continue to invest in, technology security initiatives and disaster recovery plans, these measures may not be adequate or implemented properly to prevent a business disruption and its adverse financial impact and consequences to our business' reputation.

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Table of Contents

In addition, as a part of our ordinary business operations, we may collect and store sensitive data, including personal information of our clients, listeners and employees. The secure operation of the digital television spectrum. This could addnetworks and systems on which this type of information is stored, processed and maintained is critical to our operational costs. One issue yetbusiness operations and strategy. Any compromise of our technology systems resulting from attacks by hackers or breaches due to employee error or malfeasance could result in the loss, disclosure, misappropriation of or access to clients’, listeners’, employees’ or business partners’ information. Any such loss, disclosure, misappropriation or access could result in legal claims or proceedings, liability or regulatory penalties under laws protecting the privacy of personal information, disrupt operations and damage our reputation, any or all of which could adversely affect our business.

​

To meet business objectives, the Company relies on both internal information technology (IT) systems and networks, and those of third parties and their vendors, to process and store sensitive data, including confidential research, business plans, financial information, intellectual property, and personal data that may be subject to legal protection. The extensive information security and cybersecurity threats, which affect companies globally, pose a risk to the security and availability of these IT systems and networks, and the confidentiality, integrity, and availability of the Company’s sensitive data. The Company continually assesses these threats and makes investments to increase internal protection, detection, and response capabilities, as well as ensure the Company’s third-party providers have required capabilities and controls, to address this risk.

​

In September 2021, one of our third-party service providers of a critical application used in our business, was the victim of a ransomware cyberattack. However, the Company’s data was not breached in connection with this incident and the incident did not have a material impact on the Company’s business or operations.

​

To date, the Company has not experienced any material impact to the business or operations resulting from information or cybersecurity attacks; however, because of the frequently changing attack techniques, along with the increased volume and sophistication of the attacks, there remains the potential for the Company to be resolved is the extent to which cable systems will be required to carry broadcasters’ new digital channels. Our television stations are highly dependent on their carriage by cable systemsadversely impacted. This impact could result in reputational, competitive, operational or other business harm as well as financial costs and regulatory action. The Company currently maintains cybersecurity insurance in the areas they served. FCC rules that impose noevent of an information security or limited obligations on cable systemscyber incident; however, the coverage may not be sufficient to carrycover all financial losses nor may it be available in the digital television signalsfuture.

​

29

Table of television broadcast stations in their local markets could adversely affected our television operations.  Contents

Risks Related to the Ownership of Our Stock

The Company is No Longer Controlled by our President, Chief Executive Officer and Chairman

As of March 2, 2018, Edward K. Christian, our founder and former President, Chief Executive Officer and Chairman, holdspassed away on August 19, 2022. Mr. Christian held approximately 64%65% of the combined voting power of our Common Stock (not(based on Class B Common Stock generally being entitled to ten votes per share, with certain exceptions, but not including options to acquire Class B Common Stock and based on Class B shares generally entitled to ten votes per share)Stock). As a result, Mr. Christian was generally is able to control the vote on most matters submitted to the vote of stockholdersshareholders and, therefore, iswas able to direct our management and policies, except with respect to (i) the election of the two Class A directors, (ii) those matters where the shares of our Class B Common Stock are only entitled to one vote per share, and (iii) other matters requiring a class vote under the provisions of our certificate of incorporation, bylaws or applicable law. For a descriptionUpon Mr. Christian’s passing on August 19, 2022, his Class B shares were transferred into an estate planning trust and that transfer resulted in an automatic conversion of each Class B share he held into one fully paid and non-assessable Class A Share. Those Class A Shares have the same voting rights as all other Class A Shares, and the estate has approximately 16% voting rights after the conversion of the voting rightsshares from Class B Shares to Class A Shares. The Company’s subsidiaries holding FCC licenses timely applied to the FCC for consent to transfer of our Common Stock, see Note 10control of the Notes to Consolidated Financial Statements included with this Form 10-K. Without the approval ofsubsidiaries from Mr. Christian we will beto the shareholders of the Company, and those applications were routinely approved by the FCC on December 20, 2023. As a result of the change in voting control, the Company has entered into a period of significant transition and is potentially more vulnerable to activist investors or hostile takeover attempts. If the Company is unable to consummate transactions involvingmanage this transition effectively, it may have an actual or potential change of control, including transactions in which stockholders might otherwise receive a premium for their shares over then-current market prices.adverse impact on the Company and its shareholders.

26

We May Experience Volatility in the Market Price of our Common Stock

The market price of our common stock has fluctuated in the past and may continue to be volatile. In addition to stock market fluctuations due to economic or other factors, the volatility of our shares may be influenced by lower trading volume and concentrated ownership relative to many of our publicly-held competitors. Because several of our shareholders own significant portions of our outstanding shares, our stock is relatively less liquid and therefore more susceptible to price fluctuations than many other companies’ shares. If these shareholders were to sell all or a portion of their holdings of our common stock, then the market price of our common stock could be negatively affected. Investors should be aware that they could experience short-term volatility in our stock if such shareholders decide to sell all or a portion of their holdings of our common stock at once or within a short period of time.

We are a Smaller Reporting Company and Intend to Avail Ourselves of Certain Reduced Disclosure Requirements Applicable to Smaller Reporting Companies, which could make our Common Stock Less Attractive to Investors.

Information technologyWe are a smaller reporting company, as defined in the Exchange Act, and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not applicable to smaller reporting companies, including reduced disclosure obligations regarding executive compensation. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. We intend to take advantage of certain of these reporting exemptions until we are no longer a smaller reporting company. We will remain a smaller reporting company until the aggregate market value of our outstanding common stock held by non-affiliates as of the last business day of our most recently completed second fiscal quarter is $250 million or more.

Item 1B.   Unresolved Staff Comments

None.

​

30

Table of Contents

​

Item 1C. Cybersecurity

Risk Management and Strategy

We have established processes and policies for assessing, identifying and managing material risks posed by cybersecurity failuresthreats. Our processes and policies are based upon the National Institute of Standards and Technology (NIST) Cybersecurity Framework and include a Cybersecurity Incident Response Plan (“CIRP”). This does not imply that we meet any particular technical standards, specifications, or datarequirements, only that we use the NIST as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.

Our cybersecurity risk management processes, policies and CIRP are focused on (1) developing organizational understanding to manage cybersecurity risks, (2) applying safeguards to protect our systems, (3) detecting the occurrence of a cybersecurity incident, (4) responding to a cybersecurity incident and (5) recovering from a cybersecurity incident. Where appropriate, these processes and policies are integrated into our overall risk management systems and processes. For instance, all of our employees with network access are required to complete information security breaches could harmand privacy training on an annual basis. We are continuously working to improve our business

Any internal technology error or failure impacting systems hosted internally or externally, or any large scale external interruption in technology infrastructure we depend on, such as power, telecommunications or the Internet, may disrupt our technology network. Any individual, sustained or repeated failure of technology could impact our customer service and result in increased costs or reduced revenues. Ourinformation technology systems and related data also may be vulnerable to a variety of sources of interruption due to events beyond our control, including natural disasters, terrorist attacks, telecommunications failures, computer viruses, hackersprovide employee awareness training around phishing, malware, and other security issues. Whilecyber risks to enhance our levels of protection. We have engaged independent consultants and other third-parties to assist us in establishing and improving our policies. Our processes and policies include the identification of those third-party relationships which have the greatest potential to expose us to cybersecurity threats and, upon identification, we have in place, and continue to invest in, technology security initiatives and disaster recovery plans, these measures may not be adequate or implemented properly to prevent a business disruption and its adverse financial and consequences to our business' reputation.

In addition,conduct additional due diligence as a part of our ordinary business operations, we may collect and store sensitive data, including personal informationestablishing those relationships. We also maintain insurance coverage for cybersecurity insurance as part of our clients, listenersoverall insurance portfolio. For additional information concerning cybersecurity risks we face, see Item lA Risk Factors - Information Technology and employees.Cybersecurity Failures or Data Security Breaches Could Harm Our Business.

Governance

Cybersecurity and risks related to our information technology and other computer resources are an important focus of our Board of Directors' risk oversight. The secure operationBoard has created a Cybersecurity Sub Committee of our Audit Committee for oversight of cybersecurity and other information technology risks. Our Cybersecurity Sub Committee of our Audit Committee receives materials on a frequent basis to address the identification and status of information technology cybersecurity risks, and management, including our Chief Technology Officer (CTO), provides periodic updates to our Cybersecurity Sub Committee. The Sub Committee reports to the full Board regarding its activities. The full Board also receives briefings from management on our cyber risk management program.

The CTO is responsible for managing our information security team to ensure they are assessing and managing cybersecurity risks in accordance with our processes and procedures. Our CTO has approximately 25 years' experience managing enterprise information technology systems.

Our management team supervises efforts to prevent, detect, mitigate and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment.

Pursuant to our CIRP, when a cybersecurity event has been identified through our detection processes, it is assessed in order to determine whether the event is a cybersecurity incident. Our CIRP designates the primary manager of a cybersecurity incident, describes the parties who should be informed about the incident and outlines the processes for containment, eradication, recovery and resolution of the networksincident. Depending on the severity and systems on which this typeimpact of information is stored, processed and maintained is critical to our business operations and strategy. Any compromisea cybersecurity threat, members of our technology systems resulting from attacks by hackers or breaches due to employee error or malfeasance could result insenior management team and Board of Directors are notified of an incident and kept informed of the loss, disclosure, misappropriationmitigation and remediation of or access to clients’, listeners’, employees’ or business partners’ information. Any such loss, disclosure, misappropriation or access could result in legal claims or proceedings, liability or regulatory penalties under laws protecting the privacyincident.

31

Table of personal information, disrupt operations and damage our reputation, any or all of which could adversely affect our business.Contents

Item 1B.  Unresolved Staff Comments2

None.

Item 2..  Properties

Our corporate headquarters is located in Grosse Pointe Farms, Michigan. The types of properties required to support each of our stations include offices, studios, and transmitter and antenna sites. A station’s studios are generally housed with its offices in business districts. The transmitter sites and antenna sites are generally located so as to provide maximum market coverage for our stations’ broadcast signals.

As of December 31, 2017,2023, the studios and offices of 2425 of our 2728 operating locations, including our corporate headquarters in Michigan, are located in facilities we own. The remaining studios and offices are located in leased facilities with lease terms that expire in less than 1 month1.7 years to 78.0 years. We own or lease our transmitter and antenna sites, with lease terms that expire in 3 months1 year to 7267 years. We do not anticipate any difficulties in renewing those leases that expire within the next five years or in leasing other space, if required.

No one property is material to our overall operations. We believe that our properties are in good condition and suitable for our operations.

We own substantially all of the equipment used in our broadcasting business.

Item 3.Legal Proceedings

The Company is subject to various outstanding claims which arise in the ordinary course of business, and to other legal proceedings. Management anticipates that any potential liability of the Company, which may arise out of or with respect to these matters, will not materially affect the Company’s financial statements.

Item 4.Mine Safety Disclosures

Not applicable.

27

PART II

Item 5.Market for Registrant’s Common Equity, Related StockholderShareholder Matters and Issuer Purchases of Equity Securities

The Company’sOur Class A Common Stock trades on the NYSE AmericanNASDAQ Global Market of the NASDAQ Stock Market LLC under the ticker symbol SGA. There is no public trading market for the Company’s Class B Common Stock. The following table sets forth the high and low sales prices of the Class A Common Stock as reported by the NYSE American for the calendar quarters indicated (prices for periods prior to the four-for-three stock split are adjusted for such split):

Year High  Low 
       
2016:        
First Quarter $42.55  $35.77 
Second Quarter $46.10  $36.70 
Third Quarter $45.36  $37.02 
Fourth Quarter $51.25  $40.05 
2017:        
First Quarter $51.40  $47.55 
Second Quarter $51.95  $45.45 
Third Quarter $46.80  $37.75 
Fourth Quarter $46.60  $40.35 

The closing price for the Company’sour Class A Common Stock on March 2, 20185, 2024 as reported by the NYSE AmericanNASDAQ was $38.90.$23.39. As of March 2, 2018,5, 2024, there were approximately 170168 holders of record of the Company’sour Class A Common Stock, and one holderStock. This figure does not include an estimate of the Company’s Class B Common Stock.

indeterminate number of beneficial holders whose shares may be held of record by brokerage firms and clearing agencies.

Dividends

During 2017, the Company’s2023, our Board of Directors declared four quarterly cash dividends and aone special cash dividend totaling $2.00$3.00 per share on itsour Classes A and B shares. These dividends totaling approximately $11.8$18.6 million were accrued or paid during 2017.2023. See Note 1 of the financial statements for specific details on the dividends.

During 2016, the Company’s2022, our Board of Directors declared four quarterly cash dividends and atwo special cash dividenddividends totaling $1.30$4.86 per share on itsour Classes A and B shares. These dividends totaling approximately $7.6$29.6 million were accrued or paid during 2016.2022. In December 2022, the Board of Directors adopted a new variable dividend policy for the allocation of cash flows aligned with the Company’s goals of maintaining a strong balance sheet, increasing cash returns to shareholders, and continuing to grow the Company through strategic acquisitions. See Note 1 of the financial statements for specific details on the dividends.

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Table of Contents

During 2015, the Company’s2021, our Board of Directors declared fourthree quarterly cash dividends and a special cash dividend totaling $1.10$0.98 per share on itsour Classes A and B shares. These dividends totaling approximately $6.4$5.9 million were accrued or paid during 2015.2021. See Note 1 of the financial statements for specific details on the dividends.

28

The Company currently intends to declare regular quarterly cash dividends as well as variable dividends in accordance with the terms of its variable dividend policy. As previously reported, our Board adopted a variable dividend policy for the allocation of available cash aligned with the goals of maintaining a strong balance sheet, increasing cash returns to shareholders, and continuing to grow the Company through strategic acquisitions. The Company may also declare special dividends and implementation of stock buybacks in future periods. The declaration and payment of any future dividend, whether fixed, special, or based on the variable policy, or the implementation of any stock buyback program will remain at the full discretion of the Board and will depend on the Company’s financial results, cash requirements, future expectations, and other pertinent factors.

Securities Authorized for Issuance Under Equity Compensation Plan Information

The following table sets forth as of December 31, 2017, the number of securities outstanding under our equity compensation plans, the weighted average exercise price of such securities and the number of securities available for grant under these plans:

  (a)  (b)  (c) 
        Number of Securities 
        Remaining Available for 
  Number of Shares to     Future Issuance 
  be Issued Upon  Weighted-Average  Under Equity 
  Exercise of
Outstanding		  Exercise Price of
Outstanding Options,		  Compensation
Plans		 
Plan Category Options
Warrants, and Rights		  Warrants
and Rights		  (Excluding
Column (a))		 
          
Equity Compensation Plans Approved by Stockholders:            
Employees’ 401(k) Savings and Investment Plan  —  $—   520,665 
2005 Incentive Compensation Plan  96,639(1) $0.00(2)  368,749 
Equity Compensation Plans Not Approved by Stockholders:            
None  —       — 
Total  96,639       889,414 

(1)All 96,639 shares are restricted stock.

(2)Weighted-Average Exercise Price of Outstanding Options is $0.00 as they are all restricted stock.

Recent Sales of Unregistered Securities

Not applicable.

Issuer Purchases of Equity Securities

The following table summarizes our repurchases of our Class A Common Stock during the three months ended December 31, 2017. All shares2023. Shares repurchased during the quarter were from the retention of shares for the payment of withholding taxes related to the vesting of restricted stock.

​

           Approximate 
        Total Number  Dollar 
        of  Value of 
        Shares  Shares 
        Purchased  that May Yet 
     Average  as Part of  be 
  Total Number  Price  Publicly  Purchased 
  of Shares  Paid per  Announced  Under the 
Period Purchased  Share  Program  Program(a) 
October 1 - October 31, 2017  -  $-      -  $23,315,667 
November 1 – November 30, 2017  20,134  $45.134   -  $22,406,934 
December 1 – December 31, 2017  -  $-   -  $22,406,934 
Total  20,134  $45.134   -  $22,406,934 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total Number

​

Approximate

​

​

​

​

​

​

​

of

​

Dollar

​

​

​

​

​

​

Shares

​

Value of

​

​

​

​

​

​

Purchased

​

Shares

​

​

Total 

​

Average

​

as Part of

​

that May Yet be

​

​

Number

​

Price

​

Publicly

​

Purchased

​

​

of Shares

​

Paid per

​

Announced

​

Under the

Period

    

Purchased (1)

    

Share

    

Program

    

Program (2)

October 1 - October 31, 2023

​

—

​

$

—

​

—

​

$

18,203,509

November 1 - November 30, 2023

​

10,475

​

$

20.02

​

—

​

$

17,993,800

December 1 - December 31, 2023

​

799

​

$

21.37

​

—

​

$

17,976,728

Total

 

11,274

​

$

20.12

 

—

​

$

17,976,728

(1)(a)All shares were purchased other than through a publicly announced plan or program. The shares were forfeited to the Company for payment of tax withholding obligations related to the vesting of restricted stock.
(2)We have a Stock Buy-Back Program which allows us to purchase our Class A Common Stock. In February 2013, our Board of Directors authorized an increase in the amount committed to the Buy-Back Program from $60 million to approximately $75.8 million.

29

Performance Graph

COMMON STOCK PERFORMANCE

Set forth below isWe are a line graph comparing the cumulative total stockholder return for the years ended December 31, 2013, 2014, 2015, 2016 and 2017 of our Class A Common Stock against the cumulative total returnsmaller reporting company as defined by Rule 12b-2 of the NYSE American Stock Market (US Companies) and a Peer Group selected by us consisting of the following radio and/or television broadcast companies: Beasley Broadcast Group, Inc., CBS Corp., CC Media Holdings, Inc., Cumulus Media Inc., Emmis Communications Corp., Entercom Communications Corp., Entravision Communications Corp., The E.W. Scripps Company, The Nielsen Company, Radio One Inc., Saga Communications, Inc., Salem Communications Corp., Sirius XM Radio Inc., Spanish Broadcasting System, Inc., and Townsquare Media, Inc. The graph and table assume that $100 was invested on December 31, 2012, in each of our Class A Common Stock, the NYSE American Stock Market (US Companies) and the Peer Group and that all dividends were reinvested.  The information contained in this graph shall not be deemed to be “soliciting material” or “filed” with the SEC or subject to the liabilities of Section 18 of theSecurities Exchange Act exceptof 1934 and are no longer required to the extent that we specifically incorporate it by reference intoprovide a document filed under the Securities Act or the Exchange Act.performance graph.

​

Item 6. [Reserved]

 ​

Legend
Symbol Total Return For: 12/12  12/13  12/14  12/15  12/16  12/17 
 Saga Communications Inc.  100.00   149.24   134.85   122.61   165.28   139.00 
                           
 NYSE American Stock Market (US Companies)  100.00   110.23   115.85   90.09   101.31   111.43 
                           
 Peer Group  100.00   154.00   143.64   140.76   160.74   162.75 

The comparisons in the above table are required by the SEC. This table is not intended to forecast or to be indicative of any future return of our Class A Common Stock.

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Table of Contents

Item 6.   Selected Financial Data

  Years Ended December 31, 
  2017 (1)(2)  2016 (1)(3)  2015 (1)(4)  2014 (1)(5)(6)  2013 (1)(7)(8) 
  (In thousands except per share amounts) 
                
OPERATING DATA:                    
Net Operating Revenue $118,149  $118,955  $111,792  $113,627  $109,818 
Station Operating Expense  87,759   86,799   83,188   85,167   79,933 
Corporate General and Administrative  11,657   10,980   10,091   8,901   8,172 
Other Operating (Income) Expense, net  55   (1,351)  509   (1,210)  — 
Impairment of Intangible Assets  1,449   —   874   1,936   2,033 
Operating Income From Continuing Operations $17,229  $22,527  $17,130  $18,833  $19,680 
Interest Expense $903  $744  $855  $1,032  $1,271 
Net Income:                    
From Continuing Operations $22,246  $12,910  $9,146  $10,676  $11,090 
From Discontinued Operations  32,471   5,276   4,268   4,228   4,183 
Net Income $54,717  $18,186  $13,414  $14,904  $15,273 
Basic Earnings (Loss) Per Share:                    
From Continuing Operations $3.77  $2.20  $1.58  $1.84  $1.93 
From Discontinued Operations  5.50   0.90   0.73   0.73   0.73 
Earnings Per Share $9.27  $3.10  $2.31  $2.57  $2.66 
Weighted Average Common Shares  5,803   5,761   5,706   5,700   5,681 
Diluted Earnings (Loss) Per Share:                    
From Continuing Operations $3.77  $2.19  $1.56  $1.83  $1.92 
From Discontinued Operations  5.50   0.90   0.73   0.72   0.72 
Earnings Per Share $9.27  $3.09  $2.29  $2.55  $2.64 
Weighted Average Common and Common Equivalent Shares  5,807   5,771   5,740   5,753   5,745 
Cash Dividends Declared Per Common Share $2.00   1.30   1.10   1.80   1.80 

  December 31, 
  2017 (1)  2016 (1)  2015 (1)  2014 (1)  2013 (1)(8) 
  (In thousands) 
                
BALANCE SHEET DATA:                    
Working Capital $55,269  $36,727  $32,450  $29,476  $27,054 
Net Property and Equipment $56,235  $49,174  $50,277  $47,514  $48,190 
Net Intangible and Other Assets $116,360  $118,052  $106,399  $100,942  $102,953 
Total Assets $248,769  $219,998  $203,464  $190,965  $192,199 
Long-term Debt Including Current Portion $25,000  $35,287  $35,287  $35,000  $45,000 
Stockholders’ Equity $179,465  $134,982  $122,816  $115,245  $109,701 

(footnotes on following page)

31

(1)In May 2017, the Company entered into an agreement to sell its Joplin, Missouri and Victoria, Texas television stations and subsequently closed on this transaction in September 2017.  The historical results of operations for the television stations are presented in the discontinued operations for all periods presented.
(2)Reflects the results of WCVL-FM operated under the terms of an LMA from February 1, 2015 until acquired on April 18, 2017.  Reflects the results of WCKN-FM, WMXF-FM, WXST-FM, WAVF-FM, WSPO-AM, W261-DG, W257BQ, WVSC-FM, WLHH-FM, WOEX-FM, W256CB, W293BZ acquired on September 1, 2017.
(3)Reflects the results of WLVQ-FM operated under the terms of an LMA from November 16, 2015 until acquired in February 2016.

(4)Reflects the results of WSVA-AM, WHBG-AM, WQPO-FM, WWRE-FM, and WMQR-FM acquired in August 2015 and WSIG-FM acquired in September 2015. Reflects the results of WLVQ-FM operated under the terms of an LMA effective November 2015. In December 2015, the Company disposed of the Illinois Radio Network.

(5)In December 2014, the Company sold the Michigan Radio Network, the Michigan Farm Network, the Minnesota News Network, the Minnesota Farm Network.

(6)Reflects the results of WFIZ-FM, acquired in January 2014.

(7)In January 2013, the Company consummated a four-for-three stock split of its Class A and Class B Common Stock. All share and per share information prior to the split has been adjusted to reflect the retroactive equivalent change in the weighted average shares.

(8)In January 2013, the Company sold WXVT-TV in Greenville, Mississippi. The operating results of WXVT-TV have been reported as discontinued operations for all periods presented.

32

Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with Item 1. Business Item 6. Selected Financial Data and the consolidated financial statements and notes thereto of Saga Communications, Inc. and its subsidiaries contained elsewhere herein. The following discussion is presented on both a consolidated basis. We serve twenty-seven radio markets (reporting units) that aggregate into one operating segment (Radio), which also qualifies as a reportable segment. We operate under one reportable business segment for which segment disclosure is consistent with the management decision-making process that determines the allocation of resources and segment basis.the measuring of performance. Corporate general and administrative expenses, interest expense, write-off debt issuance costs, other (income) expense, and income tax provision are managed on a consolidated basis and are reflected only in our discussion of consolidated results.basis.

On May 9, 2017 the Company entered into an agreement to sell its Joplin, Missouri and Victoria, Texas television stations and subsequently closed on this transaction on September 1, 2017. The historical results of operations for the television stations are presented in the discontinued operations for all periods presented (see Note 3). As a result of the Company’s television stations being reported as discontinued operations the Company only has one reportable segment at December 31, 2017. Unless indicated otherwise, the information in the Notes to Consolidated Financial Statements relates to the Company’s continuing operations. The discussion of our operating performance focuses on station operating income because we manage our stations primarily on station operating income. Operating performance is evaluated for each individual market.

We use certain financial measures that are not calculated in accordance with generally accepted accounting principles in the United States of America (GAAP) to assess our financial performance. For example, we evaluate the performance of our markets based on “station operating income” (operating income plus corporate general and administrative expenses, depreciation and amortization, other operating (income) expenses, and impairment of intangible assets). Station operating income is generally recognized by the broadcasting industry as a measure of performance, is used by analysts who report on the performance of the broadcasting industry, and it serves as an indicator of the market value of a group of stations. In addition, we use it to evaluate individual stations, market-level performance, overall operations and as a primary measure for incentive based compensation of executives and other members of management. Station operating income is not necessarily indicative of amounts that may be available to us for debt service requirements, other commitments, reinvestment or other discretionary uses. Station operating income is not a measure of liquidity or of performance in accordance with GAAP, and should be viewed as a supplement to, and not a substitute for, our results of operations presented on a GAAP basis.

General

We are a broadcastmedia company primarily engaged in acquiring, developing and operating broadcast properties.properties including opportunities complimentary to our core radio business including digital, e-commerce and non-traditional revenue initiatives. We actively seek and explore opportunities for expansion through the acquisition of additional broadcast properties. We review acquisition opportunities on an ongoing basis.

​

Continuing Operations - 34

Table of Contents

Radio Stations

Our radio station’sstations’ primary source of revenue is from the sale of advertising for broadcast on our stations. Depending on the format of a particular radio station, there are a predetermined number of advertisements available to be broadcast each hour.

Most advertising contracts are short-term and generally run for a few weeks only. The majority of our revenue is generated from local advertising, which is sold primarily by each radio markets’market’s sales staff. For the years ended December 31, 2017, 20162023, 2022 and 2015,2021, approximately 88%90%, 86%89% and 88%89%, respectively, of our radio station’sstations’ gross revenue was from local advertising. To generate national advertising sales, we engage independent advertising sales representative firms that specialize in national sales for each of our broadcast markets.

Our revenue varies throughout the year. Advertising expenditures, our primary source of revenue, generally have been lowest during the winter months, which include the first quarter of each year. Political revenue was significantly increasedlower in 20162023 and 2021 due to the increaseddecreased number of national, state, and local elections in most of our markets as compared to 20152022. Our gross political revenue for the years ended December 31, 2023, 2022 and 2017.

2021 was $944,000, $3,625,000 and $1,780,000, respectively. We expect political revenue in 2024 to increase from 2023 levels as a result of more elections in 2024 at the local, state and national levels.

Our net operating revenue, station operating expense and operating income vary from market to market based upon the market’s rank or size which is based upon population and the available radio advertising revenue in that particular market.

The broadcasting industry and advertising in general is influenced by the state of the overall economy, including unemployment rates, inflation, energy prices and consumer interest rates. Our stations broadcast primarily in small to midsize markets. Historically, these markets have been more stable than major metropolitan markets during downturns in advertising spending, but may not experience increases in such spending as significant as those in major metropolitan markets in periods of economic improvement.

Our financial results are dependent on a number of factors, the most significant of which is our ability to generate advertising revenue through rates charged to advertisers. The rates a station is able to charge are, in large part, based on a station’s ability to attract audiences in the demographic groups targeted by its advertisers. In a number of our markets, this is measured by periodic reports generated by independent national rating services. In the remainder of our markets it is measured by the results advertisers obtain through the actual running of an advertising schedule. Advertisers measure these results based on increased demand for their goods or services and/or actual revenues generated from such demand. Various factors affect the rate a station can charge, including the general strength of the local and national economies, population growth, ability to provide popular programming, local market competition, target marketing capability of radio compared to other advertising media, and signal strength.

33

When we acquire and/or begin to operate a station or group of stations we generally increase programming and advertising and promotion expenses to increase our share of our target demographic audience. Our strategy sometimes requires levels of spending commensurate with the revenue levels we plan on achieving in two to five years. During periods of economic downturns, or when the level of advertising spending is flat or down across the industry, this strategy may result in the appearance that our cost of operations are increasing at a faster rate than our growth in revenues, until such time as we achieve our targeted levels of revenue for the acquired station or group of stations.

The number of advertisements that can be broadcast without jeopardizing listening levels (and the resulting ratings) is limited in part by the format of a particular radio station. Our stations strive to maximize revenue by constantly managing the number of commercials available for sale and by adjusting prices based upon local market conditions and ratings. While there may be shifts from time to time in the number of advertisements broadcast during a particular time of the day, the total number of advertisements broadcast on a particular station generally does not vary significantly from year to year. Any change in our revenue, with the exception of those instances where stations are acquired or sold, is generally the result of inventory sell out ratios and pricing adjustments, which are made to ensure that the station efficiently utilizes available inventory.

35

Table of Contents

Our radio stations employ a variety of programming formats. We periodically perform market research, including music evaluations, focus groups and strategic vulnerability studies. Because reaching a large and demographically attractive audience is crucial to a station’s financial success, we endeavor to develop strong listener loyalty. Our stations also employ audience promotions to further develop and secure a loyal following. We believe that the diversification of formats on our radio stations helps to insulate us from the effects of changes in musical tastes of the public on any particular format.

The primary operating expenses involved in owning and operating radio stations are employee salaries and related benefit costs, sales commissions, programming expenses, depreciation, and advertising and promotion expenses.

The radio broadcasting industry is subject to rapid technological change, evolving industry standards and the emergence of new media technologies and services. These new technologies and media are gaining advertising share against radio and other traditional media.

We are continuing to expand our digital initiative to provide a seamless experience across multiple platforms. Our goal is to allow our listeners to connect with our brands on demand wherever, however, and whenever they choose. We continue to create and expand opportunities for revenue generation through targeted digital advertising, online community news, entertainment and events and an array of digital services that include online promotions, mobile messaging, and email marketing. In 2017, we also made a concentrated effort to ensure our stations were available via smart speakers such as Amazon Echo, Google Home, etc.

34

During the years ended December 31, 2017, 20162023, 2022 and 2015,2021, our Columbus, Ohio; Des Moines, Iowa; Manchester, New Hampshire; Milwaukee, Wisconsin andWisconsin; Norfolk, Virginia and Portland, Maine markets, when combined, represented approximately 41%36%, 42%38%, and 41%39%, respectively, of our consolidated net operating revenue. An adverse change in any of these radio markets or relative market position in those markets could have a significant impact on our operating results as a whole.

The following tables describe the percentage of our consolidated net operating revenue represented by each of these markets:

​

 Percentage of Consolidated 
 Net Operating Revenue 
 for the Years 
 Ended December 31, 
 2017  2016  2015 
       

​

​

​

​

​

​

​

​

​

​

Percentage of Consolidated

 

​

​

Net Operating Revenue

 

​

​

for the Years

 

​

​

Ended December 31, 

 

​

    

2023

    

2022

    

2021

 

Market:            

    

  

    

  

    

  

​

Columbus, Ohio  11%  12%  9%

 

9

%  

10

%  

10

%

Des Moines, Iowa  7%  8%  8%

 

5

%  

5

%  

6

%

Manchester, New Hampshire  5%  5%  6%
Milwaukee, Wisconsin  12%  12%  12%

 

11

%  

12

%  

11

%

Norfolk, Virginia  6%  5%  6%

 

6

%  

6

%  

6

%

Portland, Maine

 

5

%  

5

%  

6

%

​

​

36

Table of Contents

During the years ended December 31, 2017, 20162023, 2022 and 2015,2021, the radio stations in our five largest markets when combined, represented approximately 48%40%, 49%44% and 44%43%, respectively, of our consolidated station operating income. The following tables describe the percentage of our consolidated station operating income represented by each of these markets:

​

  Percentage of 
  Consolidated Station 
  Operating Income (*) 
  for the Years 
  Ended December 31, 
�� 2017  2016  2015 
          
Market:            
Columbus, Ohio  15%  15%  10%
Des Moines, Iowa  7%  7%  8%
Manchester, New Hampshire  6%  9%  8%
Milwaukee, Wisconsin  14%  14%  13%
Norfolk, Virginia  6%  4%  5%

​

​

​

​

​

​

​

​

​

​

Percentage of Consolidated

​

​

​

Station Operating Income(*)

​

​

​

for the Years Ended

​

​

​

December 31, 

​

​

    

2023

    

2022

    

2021

 

Market:

​

  

    

  

    

  

​

Columbus, Ohio

​

10

%  

13

%  

12

%

Des Moines, Iowa

​

4

%  

4

%  

5

%

Milwaukee, Wisconsin

​

12

%  

14

%  

12

%

Norfolk, Virginia

​

9

%  

7

%  

7

%

Portland, Maine

​

5

%  

6

%  

7

%

(*)

(*)

Operating income plus corporate general and administrative expenses, depreciation and amortization, other operating (income) expenses, and impairment of intangible assets.

35

Discontinued Operations - Television Stations

Our television station’s primary source of revenue was from the sale of advertising for broadcast on our stations. The number of advertisements available for broadcast on our television stations were limited by network affiliation and syndicated programming agreements and, with respect to children’s programs, federal regulation. Our television stations’ local market managers determined the number of advertisements to be broadcast in locally produced programs only, which were primarily news programming and occasionally local sports or information shows.

Our net operating revenue, station operating expense and operating income vary from market to market based upon the market’s rank or size, which was based upon population, available television advertising revenue in that particular market, and the popularity of programming being broadcast.

Our financial results were dependent on a number of factors, the most significant of which was our ability to generate advertising revenue through rates charged to advertisers. The rates a station was able to charge were, in large part, based on a station’s ability to attract audiences in the demographic groups targeted by its advertisers, as measured principally by periodic reports by independent national rating services. Various factors affect the rate a station can charge, including the general strength of the local and national economies, population growth, ability to provide popular programming through locally produced news, sports and weather and as a result of syndication and network affiliation agreements, local market competition, the ability of television broadcasting to reach a mass appeal market compared to other advertising media, and signal strength including cable/satellite coverage, and government regulation and policies.

Our stations strived to maximize revenue by constantly adjusting prices for our commercial spots based upon local market conditions, advertising demands and ratings. While there may have been shifts from time to time in the number of advertisements broadcast during a particular time of day, the total number of advertisements broadcast on a station generally does not vary significantly from year to year. Any change in our revenue, with the exception of those instances where stations are acquired or sold, was generally the result of pricing adjustments, which were made to ensure that the station efficiently utilizes available inventory.

Because audience ratings in the local market are crucial to a station’s financial success, we endeavor to develop strong viewer loyalty by providing locally produced news, weather and sports programming. We believe that this emphasis on the local market provided us with the viewer loyalty we were trying to achieve.

Most of our revenue was generated from local advertising, which was sold primarily by each television markets’ sales staff. For the 8 months ended August 31, 2017 and for the years ended December 31, 2016, and 2015, approximately 83%, 77%, and 85% respectively, of our television segment’s gross revenue was from local advertising. To generate national advertising sales, we engaged independent advertising sales representatives that specialize in national sales for each of our television markets.

Our revenue varies throughout the year. Advertising expenditures, our primary source of revenue, generally have been lowest during the winter months, which include the first quarter of each year. Political revenue significantly increased in 2016 due to the increased number of national, state, and local elections in most of our markets as compared to 2017 and 2015.

The primary operating expenses involved in owning and operating television stations were employee salaries, sales commissions, programming expenses, including news production and the cost of acquiring certain syndicated programming, depreciation, and advertising and promotion expenses.

36

Results of Operations

The following tables summarize our results of operations for the three years ended December 31, 2017, 20162023, 2022 and 2015.

2021.

Consolidated Results of Operations

​

           2017 vs. 2016 (1)  2016 vs. 2015 
  Years Ended December 31,  $ Increase  % Increase  $ Increase  % Increase 
  2017  2016  2015  (Decrease)  (Decrease)  (Decrease)  (Decrease) 
  (In thousands, except %’s and per share information) 
Net operating revenue $118,149  $118,955  $111,792  $(806)  (0.7)% $7,163   6.4%
Station operating expense  87,759   86,799   83,188   960   1.1%  3,611   4.3%
Corporate G&A  11,657   10,980   10,091   677   6.2%  889   8.8%
Other operating expense (income), net  55   (1,351)  509   1,406   N/M   (1,860)  N/M 
Impairment of intangible assets  1,449   —   874   1,449   N/M   (874)  N/M 
Operating income from continuing operations  17,229   22,527   17,130   (5,298)  (23.5)%  5,397   31.5%
Interest expense  903   744   855   159   21.4%  (111)  (13.0)%
Write-off debt issuance costs  —   —   557   —   —   (557)  N/M 
Income from continuing operations before taxes  16,326   21,783   15,718   (5,457)  (25.1)%  6,065   38.6%
Income tax (benefit) expense  (5,920)  8,873   6,572   (14,793)  N/M   2,301   35.0%
Income from continuing operations, net of tax  22,246   12,910   9,146   9,336   N/M   3,764   41.2%
Income from discontinued operations, net of tax  32,471   5,276   4,268   27,195   N/M   1,008   23.6%
Net income $54,717  $18,186  $13,414  $36,531   N/M  $4,772   35.6%
Earnings per share:                            
From continuing operations $3.77  $2.19  $1.56  $1.58   72.2% $0.63   40.4%
From discontinued operations  5.50   0.90   0.73   4.60   N/M   0.17   23.3%
Earnings per share (diluted) $9.27  $3.09  $2.29  $6.18   N/M  $0.80   34.9%

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

2023 vs. 2022

​

2022 vs. 2021

 

​

​

Years Ended December 31, 

​

$ Increase

​

% Increase

​

$ Increase

​

% Increase

 

​

    

2023

    

2022

    

2021

    

(Decrease)

    

(Decrease)

    

(Decrease)

    

(Decrease)

 

​

​

(In thousands, except %’s and per share information)

 

Net operating revenue

    

$

112,773

    

$

114,893

    

$

108,343

    

$

(2,120)

    

(1.8)

%  

$

6,550

    

6.0

%

Station operating expense

​

 

90,199

​

 

87,537

​

 

83,245

​

 

2,662

 

3.0

%  

 

4,292

 

5.2

%

Corporate general and administrative

​

 

10,966

​

 

14,300

​

 

10,040

​

 

(3,334)

 

(23.3)

%  

 

4,260

 

42.4

%

Other operating expense (income), net

​

 

120

​

 

(14)

​

 

7

​

 

134

 

N/M

​

 

(21)

 

N/M

​

Operating income

​

 

11,488

​

 

13,070

​

 

15,051

​

 

(1,582)

 

(12.1)

%  

 

(1,981)

 

(13.2)

%

Interest expense

​

 

173

​

 

130

​

 

284

​

 

43

 

33.1

%  

 

(154)

 

(54.2)

%

Interest income

​

 

(1,441)

​

 

(410)

​

 

(16)

​

 

(1,031)

 

N/M

​

 

(394)

 

N/M

​

Other income

​

 

(119)

​

 

(652)

​

 

(634)

​

 

533

 

(82)

%  

 

(18)

 

N/M

​

Income before income tax expense

​

 

12,875

​

 

14,002

​

 

15,417

​

 

(1,127)

 

(8.0)

%  

 

(1,415)

 

(9.2)

%

Income tax provision

​

 

3,375

​

 

4,800

​

 

4,260

​

 

(1,425)

 

(29.7)

%  

 

540

 

12.7

%

Net income

​

$

9,500

​

$

9,202

​

$

11,157

​

$

298

 

3.2

%  

$

(1,955)

 

(17.5)

%

​

​

 

  

​

 

  

​

 

  

​

 

  

 

  

​

 

  

 

  

​

Earnings per share (diluted)

​

$

1.55

​

$

1.52

​

$

1.85

​

$

0.03

 

2.0

%  

$

(0.33)

 

(17.8)

%

37

Results of Discontinued Operations

           2017 vs. 2016  2016 vs. 2015 
  Years Ended December 31,  $ Increase  % Increase  $ Increase  % Increase 
  2017(1)  2016  2015  (Decrease)  (Decrease)  (Decrease)  (Decrease) 
  (In thousands, except %’s and per share information) 
Net operating revenue $14,238  $23,636  $21,064  $(9,398)  (39.8)% $2,572   12.2%
Station operating expense  9,757   14,743   14,080   (4,986)  (33.8)%  663   4.7%
Other operating expense (income)  31   (42)  32   73   N/M   (74)  N/M 
Operating income from discontinued operations  4,450   8,935   6,952   (4,485)  (50.2)%  1,983   28.5%
Interest expense  21   32   33   (11)  (34.4)%  (1)  (3.0)%
Other income  —   —   (417)  —   —   417   N/M 
Income before income taxes from discontinued operations  4,429   8,903   7,336   (4,474)  (50.3)%  1,567  21.4%
Pretax gain on the disposal of discontinued operations  50,842   —   —   50,842   N/M   —   — 
Total pretax gain on discontinued operations  55,271   8,903   7,336   46,368   N/M   1,567   21.4%
Income tax expense  22,800   3,627   3,068   19,173   N/M   559   18.2%
Income from discontinued operations $32,471  $5,276  $4,268  $27,195   N/M  $1,008   23.6%

(1)Results of operations for the Television stations are reflected through August 31, 2017. The effective date of the sale was September 1, 2017.

​

N/M = Not Meaningful

​

38

37

Table of Contents

Year Ended December 31, 20172023 Compared to Year Ended December 31, 2016

2022

For the year ended December 31, 2017,2023, consolidated net operating revenue was $118,149,000$112,773,000 compared with $118,955,000$114,893,000 for the year ended December 31, 2016,2022, a decrease of $806,000$2,120,000 or 0.7%. We had an increase of approximately $2,885,000 that was attributable to stations that we did not own or operate for the entire comparable period, offset by a decrease of $3,691,000 generated by stations we owned or operated for the comparable period in 2016 (“same station”)1.8%. The decrease in same station revenue in 2023 was primarily the result ofdue to decreases in gross political revenue of $2,260,000,$2,681,000, and gross local revenue of $1,587,000$2,401,000 partially offset by increases in gross interactive revenue of $1,890,000, non-spot revenue of $679,000 and gross national revenue of $385,000 from 2016.2022. The decrease in gross political revenue wasdecreased due to a lowerdecrease in the number of national, state and local elections inelections. The most of our markets. The decreasesignificant decreases in gross local revenue was due to decreasesoccurred in our Bellingham, Washington;Charleston, South Carolina; Columbus, OhioOhio; Ithaca, New York; Milwaukee, Wisconsin; Portland, Maine and Springfield, Illinois markets partially offset by increases at our Asheville, North Carolina; Harrisonburg, Virginia and Ocala, Florida markets.

The increase in gross interactive results is primarily due to an increase in our streaming revenue. The markets with the most significant increases in 2023 in non-spot events were Bellingham, Washington; Charleston, South Carolina; Ithaca, New York and Yankton, South Dakota. The most significant increases in gross national revenue occurred in our Charleston, South Carolina; Charlottesville, Virginia; Des Moines, Iowa; Ocala, Florida and Springfield, Massachusetts markets.

Station operating expense was $87,759,000$90,199,000 for the year ended December 31, 2017,2023, compared with $86,799,000$87,537,000 for the year ended December 31, 2016,2022, an increase of $960,000$2,662,000 or 1.1%3.0%. We had anThe increase in operating expenses was primarily a result of approximately $2,442,000 that was attributable to stations that we did not own or operate for the entire comparable period,increases in compensation-related expenses, healthcare costs, sales survey expenses, utility expenses, building maintenance and repairs, and programming rights expenses of $1,605,000, $469,000, $314,000, $248,000, $235,000, and $172,000, respectively, partially offset by a decrease of approximately $1,482,000 generated by stations we owned or operated for the comparable period in 2016. The decrease is primarily attributable to a decrease of $710,000 in licensing agreements, $387,000decreases in commission expenses due to lower revenues and $346,000 in compensation costs.of $383,000 from 2022.

OperatingWe had operating income for the year ended December 31, 2017 was $17,229,0002023 of $11,488,000 compared to $22,527,000$13,070,000 for the year ended December 31, 2016,2022, a decrease of $5,298,000 or 23.5%.$1,582,000. The decrease was a result of the decrease in net operating revenue and the increase in station operating expense, described above, ana increase in other operating expense of $134,000 partially offset by a decrease in our corporate general and administrative expenses of $677,000$3,334,000 or 6.2%, an impairment charge23.3%. We recorded a loss on sale of $1,449,000fixed assets of $120,000 in 2017 and2023 compared to a gain on sale of fixed assets of $14,000 in 2022. The decrease in other operating income of $1,406,000 from 2016. The increase in corporate general and administrative expenses is due to an increase in key man life insurance of $278,000, an increase of $212,000 in compensations costs and an increase in non-cash compensation related to the amortization of restricted stock grants of $179,000. In 2016, we had other operating income of $1,351,000 due to the gain of $1,415,000 received from the sale of a tower in Norfolk, Virginia.

Income from continuing operations, net of tax for the year ended December 31, 2017 was $22,246,000 compared to $12,910,000 for the year ended December 31, 2016, an increase of $9,336,000 or 72.3%. The increase in income from continuing operations, net of tax is primarily due to the income tax benefit of approximately $11.5 million for the year due to a decrease in the deferred tax rate for federal income tax from 35% to 21% as a result of the Tax Cuts and Jobs Act partially offset by the decrease of operating income, described above, and an increase in interest expense of $159,000 due to an increase in our interest rates. See Note 6 of the financial statements for more information on the impact of the Tax Cuts and Jobs Act.

Income from discontinued operations, net of tax for the period ended August 31, 2017 was $32,471,000 compared to $5,276,000 for the year ended December 31, 2016 an increase of $27,195,000. The increase was a direct result of the pretax gain on the disposal of the operations of $50,842,000, a decrease in station operating expense of $4,986,000 or 33.8%, partially offset by a decrease in net operating revenue of $9,398,000 or 39.8% and an increase in income tax expense of $19,173,000 primarily attributable to the gain on$3.8 million expense recorded in the salethird quarter of 2022 related the television stations. For the period ended August 31, 2017, net operating revenue ofemployment agreement we had with our television stationsfounder and former CEO, Mr. Christian, that was $14,238,000 compared with $23,636,000 for the year ended December 31, 2016,required upon his death. Additionally, we had a decrease of $9,398,000 or 39.8% primarily due to only operating the television stations for eight months$1,020,000 in 2017compensation-related expense partially offset by increase of $416,000 in insurance costs, $407,000 in directors’ fees, $379,000 in legal and a decreaseother consulting fees, and $30,000 in gross political revenue in our Joplin, Missouri market. Station operating expense in the television stations for the period ended August 31, 2017 was $9,757,000, compared with $14,743,000 for the year ended December 31, 2016, a decrease of $4,986,000 or 33.8%. The decrease is primarily due to only operating the television stations for the eight months in 2017 compared to the whole year in 2016.

travel and seminar related expenses.

We generated net income of $54,717,000$9,500,000 ($9.271.55 per share on a fully diluted basis) during the year ended December 31, 2017,2023, compared to $18,186,000$9,202,000 ($3.091.52 per share on a fully diluted basis) for the year ended December 31, 2016,2022, an increase of $36,531,000. This$298,000. The increase in net income is due to the decrease of operating income, described above, an increase in interest expense of $43,000, a directdecrease of other income of $533,000 offset by an increase in interest income of $1,031,000 and a decrease in income taxes of $1,425,000. The increase in interest expense is due to an increase in the interest rates attributable to our unused commitment fees and amortization of bank fees. The decrease in other income is primarily due to reimbursements from the FCC related to their spectrum auction of $115,000 in 2023 versus insurance proceeds in 2022 of $535,000 and reimbursements from the FCC related to their spectrum auction of $116,000 in 2022 as described in footnote 16 (Other Income). The increase in interest income is related to higher rates of return on money market accounts reflected as cash equivalents and from our short-term investment accounts which began in May 2022. The decrease in our income tax expense is due to the decreased in net income before income tax combined with the increase in rate in 2022 as a result of the increasepermanent difference between book and taxable income related to the compensation paid to our founder and former CEO as described above and in footnote 6 (Income Taxes).

​

38

Table of $27,195,000 in income from discontinued operations, net of tax and the increase in income from continuing operations, net of tax of $9,336,000. Contents

39

Year Ended December 31, 20162022 Compared to Year Ended December 31, 20152021

For the year ended December 31, 2016,2022, consolidated net operating revenue was was $118,955,000$114,893,000 compared with $111,792,000$108,343,000 for the year ended December 31, 2015,2021, an increase of $7,163,000$6,550,000 or 6.4%6.0%. Approximately $5,816,000 or 81% was attributable to stations that we did not own or operate for the entire comparable period and $1,347,000 was attributable to stations we owned or operated for the comparable period. The increase in same station revenue in 2022 was due primarily to an increaseincreases in gross local revenue of $2,284,000, gross political revenue of $2,334,000$1,846,000, non-spot revenue of $1,689,000, gross interactive revenue of $1,577,000, and gross barter revenue of $302,000 partially offset by a decrease in gross national revenue of $697,000 and an increase in agency commissions of $598,000 from 2021. The most significant increases in gross local revenue of $983,000 from 2015. The majority of the increaseand in political revenue was attributable toagency commissions occurred in our Des Moines, Iowa;Asheville, North Carolina; Charleston, South Carolina; Ithaca, New York; and Manchester, New Hampshire and Milwaukee, Wisconsin markets. The increase in gross political revenue wasincreased due to a higheran increase in the number of national, state and local electionselections. The increase in non-spot revenue is primarily due to us hosting more events again in 2022. The markets with the most ofsignificant increases in 2022 in non-spot events were Charleston, South Carolina; Clarksville, Tennessee; Hilton Head, South Carolina; Jonesboro, Arkansas; Milwaukee, Wisconsin; Portland, Maine and Yankton, South Dakota. The increase in gross interactive results is primarily due to an increase in our markets.streaming and website content revenue. The decrease in gross localnational revenue was mainly attributable to decreases inat the majority of markets due to the focus on local market advertisers offset by increases at our Bellingham, WashingtonColumbus, Ohio; Manchester, New Hampshire; and Milwaukee, WisconsinPortland, Maine markets.

Station operating expense was $86,799,000$87,537,000 for the year ended December 31, 2016,2022, compared with $83,188,000$83,245,000 for the year ended December 31, 2015,2021, an increase of $3,611,000$4,292,000 or 4.3%5.2%. The increase in operating expenses was entirely attributable to an increaseprimarily a result of increases in sales survey expenses, compensation related expenses, commission expense, bad debt expenses, barter expenses, music licensing fees, utilities, merchant account fees, and promotional expenses of $1,407,000, $965,000, $840,000, $352,000, $346,000, $311,000, $286,000, $153,000 and $113,000, respectively, partially offset by decreases in healthcare costs of $530,000 from stations that we did not own or operate for the entire comparable period.2021.

OperatingWe had operating income for the year ended December 31, 2016 was $22,527,0002022 of $13,070,000 compared to $17,130,000$15,051,000 for the year ended December 31, 2015, an increase2021, a decrease of $5,397,000 or 31.5%.$1,981,000. The increasedecrease was a result of the increase in net operating revenue partially offset by the increase in station operating expense, described above. Additionally, there wasabove, a decrease in other operating (income) expense of $21,000 offset by an increase in our corporate general and administrative expenses of $4,260,000 or 42.4%. The increase in corporate general and administrative expenses was primarily attributable to expenses under the employment agreement we had with our founder and CEO, Mr. Christian upon his death of $889,000 or 8.8% andwhich $3,900,000 was recorded in the third quarter of 2022. In addition, we had an increase in legal expenses, and transportation related costs of $207,000, and $156,000, respectively, from 2021. For our other operating income of $1,860,000. Operating income for 2015 also included(income) expense, net in 2022 we recorded a non-cash impairment charge of $874,000 in connection with our review of broadcast licenses during the fourth quarter (see Note 2 in the accompanying notes to the consolidated financial statements). The increase in corporate expenses is due to an increase in compensation costs of $527,000 and an increase in non-cash compensation related to the amortization of restricted stock grants of $446,000 partially offset by a decrease in consulting fees of $167,000. Other operating income during 2016 related to the gain of $1,415,000 received fromon the sale of a tower in our Norfolk, Virginia market as discussed in Note 16fixed assets of the financial statements. Other operating expenses during 2015 included the loss of $400,000 incurred from the donation of WBOP-FM to Liberty University, Inc.

Income from continuing operations, net of tax for the year ended December 31, 2016 was $12,910,000$14,000 compared to $9,146,000 fora loss on the year ended December 31, 2015, an increase of $3,764,000 or 41.2%. The increase in income from continuing operations, net of tax is due to the increase in operating income of $5,397,000, as described above, and a decrease in the write-off of debt issuance costs of $557,000, and a decrease in interest expense of $111,000 driven by a decrease in interest rates and amortization of bank fees during 2016. These were partially offset by an increase in income tax expense of $2,301,000

Income from discontinued operations, net of tax for year ended December 31, 2016 was $5,276,000 compared to $4,268,000 for the year ended December 31, 2015 an increase of $1,008,000. The increase was a result of the increase in net operating revenue of $2,572,000, partially offset by an increase in station operating expenses of $663,000, combined with an increase in other operating income of $74,000 related to the gain on disposalsale of fixed assets of $7,000 in 2016 compared to the loss on the disposal of fixed assets in 2015 and a decrease in other income of $417,000 primarily attributable to a gain recognized from insurance proceeds related to lightning damage to two of our transmitters in 2015. The increase in revenue was due primarily to an increase in gross political revenue of $2,929,000 partially offset by a decrease in gross local revenue of $713,000 from 2015. The increase in political revenue was due to a higher number of national, state and local elections our Joplin, Missouri market. The decrease in gross local revenue was mainly attributable to our Victoria, Texas market. The increase in station operating expense was due to increases in compensation related expenses, healthcare costs, national commission expenses, retransmission expense and program rentals of $188,000, $181,000, $159,000, $102,000 and $93,000, respectively. The retransmission cost increases are a direct result of increased revenue in 2016.

2021.

We generated net income of $18,186,000$9,202,000 ($3.091.52 per share on a fully diluted basis) during the year ended December 31, 2016,2022, compared to $13,414,000$11,157,000 ($2.291.85 per share on a fully diluted basis) for the year ended December 31, 2015,2021, a decrease of $1,955,000. The decrease in net income is due to the decrease of operating income, described above, an increase income taxes of $4,772,000. This$540,000, offset by a decrease in interest expense of $154,000, an increase in interest income of $394,000 and an increase in other income of $18,000. The decrease in interest expense is a direct resultdue to no longer having any debt outstanding, after paying off the remaining balance in the fourth quarter of 2021. The increase in interest income is related to our short-term investments as described in footnote 1 (Summary of Significant Accounting Policies). The increase in other income is primarily due to insurance proceeds for weather-related damages of $535,000 and reimbursements from the FCC related to their spectrum auction of $116,000 in 2022 versus insurance proceeds in 2021 of $589,000 and other gains of $45,000 in 2021 as described in footnote 16 (Other Income). The increase of $3,764,000 ofin our income from continuing operations, net of tax expense is due to the permanent difference between book and taxable income related to the increase of $1,008,000 of income from discontinued operations, net of tax. compensation paid to our founder and CEO as described above and in footnote 6 (Income Taxes).

​

40

39

Table of Contents

Liquidity and Capital Resources

Debt Arrangements and Debt Service Requirements

On August 18, 2015,December 19, 2022, we entered into a new credit facility (the “Credit Facility”) with a group of banks. In connection with the execution of theThird Amendment to our Credit Facility, (the “Third Amendment”), which extended the credit agreement in place at June 30, 2015 (the “Old Credit Agreement”maturity date to December 19, 2027, reduced the lenders to JPMorgan Chase Bank, N.A., and the Huntington National Bank (collectively, the “Lenders”), established an interest rate equal to the secured overnight financing rate (“SOFR”) was terminated,as administered by the SOFR Administrator (currently established as the Federal Reserve Bank of New York) as the interest base and all outstanding amounts were paid in full. The Credit Facility consists of a $100 million five-year revolving facility (the “Revolving Credit Facility”) and matures on August 18, 2020.

increased the basis points.

We have pledged substantially all of our assets (excluding our FCC licenses and certain other assets) in support of the Credit Facility and each of our subsidiaries has guaranteed the Credit Facility and has pledged substantially all of their assets (excluding their FCC licenses and certain other assets) in support of the Credit Facility.

The proceeds from the Credit Facility were used to repay all amounts outstanding on our Old Credit Agreement and pay transactional fees. The unused portion of the Revolving Credit Facility is available for general corporate purposes, including working capital, capital expenditures, permitted acquisitions and related transaction expenses and permitted stock buybacks. We wrote-off unamortized debt issuance costs relating to the Old Credit Agreement of approximately $557 thousand, pre-tax, due to entering into this new credit facility during the quarter ended September 30, 2015.

Approximately $266 thousand$266,000 of debt issuance costs related to the Credit Facility were capitalized and are being amortized over the life of the Credit Facility. These deferred debt issuance costs are included in other assets, net in the condensed consolidated balance sheets.

As a result of the Second Amendment, the Company incurred an additional $120,000 of transaction fees related to the Credit Facility that were capitalized. As a result of the Third Amendment, the Company incurred an additional $161,000 of transaction fees related to the Credit Facility that were capitalized. The cumulative transaction fees are being amortized over the remaining life of the Credit Facility.

Interest rates under the Credit Facility are payable, at our option, at alternatives equal to LIBOR (1.375%SOFR (5.38% at December 31, 2017)2023), plus 1% to 2% or the base rate plus 0% to 1%. The spread over LIBORSOFR and the base rate vary from time to time, depending upon our financial leverage. LetterLetters of credit issued under the Credit Facility will be subject to a participation fee (which is equal to the interest ratesrate applicable to Eurocurrency Loans, as defined in the Credit Agreement) payable to each of the Lenders and a fronting fee equal to 0.25% per annum payable to the issuing bank. Under the Third Amendment, we now pay quarterly commitment fees of 0.25% per annum on the unused portion of the Credit Facility. We also paypreviously paid quarterly commitment fees of 0.2% to 0.3% per annum on the unused portion of the Revolving Credit Facility.

The Credit Facility contains a number of financial covenants (all of which we were in compliance with at December 31, 2017)2023) which, among other things, require us to maintain specified financial ratios and impose certain limitations on us with respect to investments, additional indebtedness, dividends, distributions, guarantees, liens and encumbrances.

We had no debt outstanding at December 31, 2022 or December 31, 2023.

We had approximately $75$50 million of unused borrowing capacity under the Revolving Credit Facility at both December 31, 2016.2022 and December 31, 2023.

​

On October 5, 2017 and November 3, 2017, the Company used $5,287,000 and $5,000,000, respectively40

Table of the proceeds from the Television Sale to pay down a portion of its Revolving Credit Facility.Contents

The loan agreement of approximately $1.1 million of secured debt affiliate was amended in April 2017 to extend the due date of the loan for three years to mature on May 1, 2020. Our affiliate repaid this loan when the television stations were sold on September 1, 2017.

Sources and Uses of Cash

During the years ended December 31, 2017, 20162023, 2022 and 2015,2021, we had net cash flows from operating activities from continuing operations of $23,912,000, $21,828,000$15,379,000, $17,125,000 and $22,042,000,$19,104,000, respectively. We believe that cash flow from operations will be sufficient to meet any quarterly debt service requirements for interest and scheduled payments of principal under the Credit Facility.Facility if we borrow in the future. However, if such cash flow is not sufficient, we may be required to sell additional equity securities, refinance our obligations or dispose of one or more of our properties in order to make such scheduled payments. There can be no assurance that we would be able to effect any such transactions on favorable terms, if at all.

In March 2013, our boardBoard of directorsDirectors authorized an increase to our Stock Buy-Back Program (the “Buy-Back Program”) to allow us to purchase up to $75.8 million of our Class A Common Stock. From itsthe Buy-Back Program’s inception in 1998 through December 31, 2017,2023, we have repurchased two2.2 million shares of our Class A Common Stock for $53.3$57.8 million. During the year ended December 31, 2017,2023, approximately 21,000 11,274 shares were retained for payment of withholding taxes for $946,000$226,781 related to the vesting of restricted stock.

We halted the directions for any additional buybacks under our plan in 2020. We continue to monitor economic conditions to determine if and when it makes sense to make additional buybacks under our plan.

Our capital expenditures, exclusive of acquisitions, for the year ended December 31, 20172023 were $6,246,000$4,356,000 ($3,967,0005,994,000 in 2016) for continuing operations and $335,000 and $894,000 for the years ended December 31, 2017 and 2016, respectively, for discontinued operations.2022). We anticipate capital expenditures in 20182024 to be approximately $5.0 million to $6.0$5.5 million, which we expect to finance through funds generated from operations.

On February 13, 2024, we entered into an agreement to purchase the assets of WKOA (FM), WKHY (FM), WASK (FM), WXXB (FM), WASK (AM) and W269DJ from Neuhoff Communications, Inc. serving the Greater Lafayette, Indiana radio market for $5.3 million which we expect to finance through funds generated from operations or borrowings under our credit agreement. We expect to close on this acquisition in the second quarter of 2024.

On July 12, 2021, we entered into an agreement to acquire WIZZ-AM and a translator from P. & M. Radio for $61,800 of which $5,000 was paid in 2021 and the remainder was paid on April 6, 2022 when we closed on the transaction. Management attributes the goodwill recognized in the acquisition to the power of the existing brands in the Greenfield, Massachusetts market as well as synergies and growth opportunities expected through the combination with the Company’s existing stations. The translators are start-up stations and therefore, have no pro forma revenue and expenses.

On March 3, 2017,January 8, 2021, we closed on an agreement to purchase WBQL and W288DQ from Consolidated Media, LLC, for an aggregate purchase price of $175,000, of which $25,000 was paid in 2020 and the remaining $150,000 paid in 2021. Management attributes the goodwill recognized in the acquisition to the power of the existing brands in the Clarksville, Tennessee market as well as synergies and growth opportunities expected through the combination with the Company’s existing stations.

On December 7, 2023, the Company’s Board of Directors declared a regularspecial cash dividend of $2.00 per share on its Classes A Common Stock. This dividend, totaling approximately $12,500,000, was paid on January 12, 2024 to shareholders of record on December 20, 2023 and is recorded in dividends payable in our Consolidated Balance Sheet at December 31, 2023.

On November 16, 2023, the Company’s Board of Directors declared a quarterly cash dividend of $0.30$0.25 per share on its Class A Common Stock. This dividend, totaling approximately $1,500,000, was paid on December 15, 2023 to shareholders of record on November 27, 2023.

On September 27, 2023, the Company’s Board of Directors declared a quarterly cash dividend of $0.25 per share on its Class A Common Stock. This dividend, totaling approximately $1,500,000, was paid on November 3, 2023 to shareholders of record on October 11, 2023.

41

Table of Contents

On May 9, 2023, the Company’s Board of Directors declared a quarterly cash dividend of $0.25 per share on its Class A Common Stock. This dividend, totaling approximately $1,500,000, was paid on June 16, 2023 to shareholders of record on May 22, 2023.

On March 1, 2023, the Company’s Board of Directors declared a quarterly cash dividend of $0.25 per share on its Class A Common Stock. This dividend, totaling approximately $1,500,000, was paid on April 7, 2023 to shareholders of record on March 20, 2023.

On December 7, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.25 per share and a special cash dividend of $2.00 per share on its Class A Common Stock. This dividend, totaling approximately $13,800,000, was paid on January 13, 2023 to shareholders of record on December 21, 2022 and is recorded in dividends payable in our Consolidated Balance Sheet at December 31, 2022.

On September 20, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.25 per share and a special cash dividend of $2.00 per share on its Class A Common Stock. This dividend, totaling approximately $13,600,000, was paid on October 21, 2022 to shareholders of record on October 3, 2022.

On June 6, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.20 per share on its Classes A and B Common Stock. This dividend, totaling approximately $1.8 million,$1,200,000, was paid to our transfer agent on April 14, 2017June 29, 2022. The dividend was paid by our transfer agent on July 1, 2022 to shareholders of record on June 13, 2022.

On March 28, 2017 and funded by cash on the Company’s balance sheet.

41

On May 3, 2017,1, 2022, the Company’s Board of Directors declared a regularquarterly cash dividend of $0.30$0.16 per share on its Classes A and B Common Stock. This dividend, totaling approximately $1.8 million,$970,000, was paid on June 9, 2017April 8, 2022 to shareholders of record on May 22, 2017 and funded by cash on the Company’s balance sheet.March 21, 2022.

On September 13, 2017,December 14, 2021, the Company’s Board of Directors declared a regularquarterly cash dividend of $0.30$0.16 per share and special cash dividend of $0.50 per share on its Classes A and B Common Stock. This dividend, totaling approximately $1.8 million$3,988,000, was paid on October 13, 2017January 14, 2022 to shareholders of record on September 25,

2017December 27, 2021 and funded by cashwas recorded in dividends payable on the Company’s balance sheet.Consolidated Balance Sheet at December 31, 2021.

On December 7, 2017,September 28, 2021, the Company’s Board of Directors declared a quarterly cash dividend of $0.30 per share and a special cash dividend of $0.80 per share on its Classes A and B shares. This dividend totaling approximately $6.5 million was paid on January 5, 2018 to shareholders of record on December 18, 2017.

On February 28, 2018, the Company’s Board of Directors declared a regular cash dividend of $0.30$0.16 per share on its Classes A and B Common Stock. This dividend, totaling approximately $1.8 million, will be$960,000, was paid on March 30, 2018October 22, 2021 to shareholders of record on March 12, 2018.October 8, 2021.

On June 18, 2021, the Company’s Board of Directors declared a quarterly cash dividend of $0.16 per share on its Classes A and B Common Stock. This dividend, totaling approximately $960,000, was paid on July 16, 2021 to shareholders of record on June 30, 2021 and was recorded in dividends payable on the Company’s Condensed Consolidated Balance Sheet at June 30, 2021. The Company had previously temporarily suspended the quarterly cash dividend in response to the uncertainty of the ongoing impact of COVID-19 as of June 18, 2020.

On January 16, 2017,October 27, 2021, we entered into an assetused $10 million from funds generated by operations to voluntarily pay down the remaining amount on our Revolving Credit Facility.

On May 3, 2022, we used $10 million in cash to purchase agreementU.S. Treasury Bills to be held to maturity with maturity dates between July 2022 and February 2023. During 2022, $8 million of those $10 million were redeemed and we used the proceeds to purchase an FM radio station (WCVL) from WUVA, Incorporated, serving the Charlottesville, Virginiaadditional $8 million of U.S. Treasury Bills to be held to maturity. At December 31, 2022, we had recorded $10.1 million of held-to-maturity U.S. Treasury Bills at amortized cost basis that have a fair market for approximately $1,650,000. Simultaneously,value of $10 million.

During 2023, we entered into a TBA to begin operating the station on February 1, 2017. We completed this acquisition on April 18, 2017. This acquisition was financed through funds generated from operations.

On May 9, 2017 we entered into a definitive agreement to sell our Joplin, Missouri and Victoria, Texas television stations for approximately $66.6 million, subject to certain adjustments, to Evening Telegram Company d/b/a Morgan Murphy Media (the “Television Sale”). The Television Sale was completed on September 1, 2017 and the Company received net proceeds of $69.5 million which included the sales price of $66.6 million, the sales of accounts receivable of approximately $3.4 million, offset by certain closing adjustments and transactional costs of $500 thousand. The Company recognized a pretax gain of $50.8 million as a result of the Television Sale in the third quarter of 2017. The gain net of tax for the Television Sale was $29.9 million. Effective September 1, 2017, the Company used $24.2 million of the proceeds from the Television Sale to finance the acquisition of radio stations in South Carolina (as described in Note 9). On October 5, 2017 and November 3, 2017, the Company used $5,287,000 and $5,000,000, respectively of the proceeds from the Television Sale to pay down a portion of its Revolving Credit Facility (as defined and described in Note 8).

On May 9, 2017, the Company entered into an Asset Purchase Agreement with Apex Media Corporation and Pearce Development, LLC f/k/a Apex Real Property, LLCour U.S. Treasury Bills to purchase additional U.S. Treasury Bills when they were up for approximately $23redemption at various times through the year. We redeemed $20.7 million (subjectin U.S. Treasury Bills and purchase an additionally $20.7 million in U.S. Treasury Bills. At December 2023, we have recorded $10.6 million of held-to-maturity U.S. Treasury Bills at amortized cost basis that have a fair market value of $10.6 million. Our held-to-maturity U.S. Treasury Bills all have original maturity dates ranging from March 2024 to certain purchase price adjustments) plus the right to air certain radio commercials, substantially all the assets related to the operationJuly 2024.

42

Table of the following radio stations principally serving the South Carolina area: WCKN (FM), WMXF(FM), WXST(FM), WAVF(FM), WSPO(AM), W261DG, W257BQ, WVSC(FM), WLHH(FM), WOEZ(FM), W256CB, W293BZ. The Company closed this transaction effective September 1, 2017, simultaneously with the closing of the Television Sale using funds generated from the Television Sale.Contents

We continue to actively seek and explore opportunities for expansion through the acquisitions of additional broadcast properties.

We anticipate that any future acquisitions of radio and television stations and dividend payments will be financed through funds generated from operations, borrowings under the Credit Agreement, additional debt or equity financing, or a combination thereof. However, there can be no assurances that any such financing will be available on acceptable terms, if at all.

42

Summary Disclosures About Contractual Obligations

We have future cash obligations under various types of contracts, including the terms of our Credit Facility, operating leases, programming contracts, employment agreements, and other operating contracts. The following table reflects a summary of our contractual cash obligations and other commercial commitments as of December 31, 2017:2023:

​

  Payments Due By Period 
     Less Than        More Than 
Contractual Obligations: Total  1 Year  1 to 3 Years  4 to 5 Years  5 Years 
  (In thousands) 
                
Long-Term Debt Obligations(1) $25,000  $—  $25,000  $—  $— 
Interest Payments on Long-Term Debt(2)  2,333   886   1,447   —   — 
Operating Leases  8,165   1,453   2,131   1,575   3,006 
Purchase Obligations(3)  26,938   13,344   10,365   1,594   1,635 
Other Long-Term Liabilities  —   —   —   —   — 
                     
Total Contractual Cash Obligations $62,436  $15,683  $38,943  $3,169  $4,641 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Payments Due By Period

​

​

​

​

​

Less Than

​

​

​

​

​

​

​

More Than

Contractual Obligations:

    

Total

    

1 Year

    

1 to 3 Years

    

4 to 5 Years

    

5 Years

​

​

(In thousands)

Interest Payments on Long-Term Debt(1)

​

$

564

​

$

135

​

$

299

​

$

130

​

$

—

Operating Leases

​

 

8,803

​

 

1,857

​

 

3,180

​

 

2,166

​

 

1,600

Purchase Obligations(2)

​

 

31,791

​

 

18,081

​

 

10,585

​

 

3,125

​

 

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total Contractual Cash Obligations

​

$

41,158

​

$

20,073

​

$

14,064

​

$

5,421

​

$

1,600

(1)UnderInterest payments on our Credit Facility the maturity on outstanding debt of $25 million could be accelerated if we do not maintain certain covenants. (See Note 4 of the Notes to Consolidated Financial Statements).
(2)Interest payments on the long-term debt are based on unused commitment of the credit facility and scheduled debt maturities, if we were to borrow in the future and the interest rates are held constant over the remaining terms.
(2)(3)Includes $14,758,000$13,708,000 in obligations under employment agreements and contracts with on-air personalities, other employees, and our President, and CEO, Christopher S. Forgy and Chairman, Edward K. Christian.$5,300,000 in obligations under the asset purchase agreement for the acquisition of radio stations in the Lafayette, Indiana market.

We anticipate that the above contractual cash obligations will be financed through funds generated from operations or additional borrowings under our Credit Facility, or a combination thereof.

​

43

Critical Accounting Policies and Estimates

Our consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States, which require us to make estimates, judgments and assumptions that affect the reported amounts of certain assets, liabilities, revenues, expenses and related disclosures and contingencies. We evaluate estimates used in preparation of our financial statements on a continual basis, including estimates related to the following:

Revenue Recognition:   Revenue from the sale of commercial broadcast time to advertisers is recognized when commercials are broadcast. Revenue is reported net of advertising agency commissions. Agency commissions, when applicable, are based on a stated percentage applied to gross billing. All revenue is recognized in accordance with the Securities and Exchange Commission’s (“SEC”) Staff Accounting Bulletin (“SAB”) No. 104, Topic 13,Revenue Recognition Revised and Updated and the Accounting Standards Codification (ASC) Topic 605,606, Revenue Recognitionfrom Contracts with Customers.

​

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Table of Contents

Carrying Value of Accounts Receivable and Related Allowance for Doubtful Accounts:Credit Losses:   We evaluate the collectability of our accounts receivable based on a combination of factors. In circumstances where we are aware of a specific customer’s inability to meet its financial obligations to us (e.g., bankruptcy filings, credit history, COVID-19 potential impact on our customers’ business, etc.), we record a specific reserve for bad debts against amounts due to reduce the net recognized receivable to the amount we reasonably believe will be collected. For all other customers, we recognize reserves for bad debts based on past loss history and the length of time the receivables are past due, ranging from 50% for amounts 90 days outstanding to 100% for amounts over 120 days outstanding. If our evaluations of the collectability of our accounts receivable differ from actual results, additional bad debt expense and allowances may be required. Our historical estimates have been a reliable method to estimate future allowances and our reserves have averaged approximately 2-4%2-5% of our outstanding receivables. The effect of an increase in our allowance of 1% of our outstanding receivables as of December 31, 2017,2023, from 3.9%3.8% to 4.9%4.8% or from $727,000$618,000 to $923,000$781,000 would result in a decrease in net income of $117,600,$158,000, net of taxes for the year ended December 31, 2017.

2023. In the event we recover amounts previously written off, we will reduce the specific allowance for credit loss.

Purchase Accounting:   We account for our acquisitions under the purchase method of accounting. The total cost of acquisitions is allocated to the underlying net assets, based on their respective estimated fair values as of the acquisition date. The excess of consideration paid over the estimated fair values of the net assets acquired is recorded as goodwill. Determining the fair values of the net assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates including assumptions with respect to future cash inflows and outflows, discount rates, asset lives and market multiples, among other items.

Broadcast Licenses and Goodwill:   As of December 31, 2017,2023, we have recorded approximately $93,259,000$90,240,000 in broadcast licenses and $15,558,000$19,236,000 in goodwill, which represents 43.7%47% of our total assets. In assessing the recoverability of these assets, we must conduct impairment testing and charge to operations an impairment expense only in the periods in which the carrying value of these assets is more than their fair value. We perform an annualconduct the impairment test on October 1testing of each year.

During the fourth quarter of 2017, we recognized a $1,449,000 impairment charge for broadcast licenses and goodwill annually or more frequently if events or changes in certain of our radio markets primarily due to declines in available market revenue, market revenue share, profit margins and estimated long-term growth rates in our Columbus, Ohio market. There were no impairment indicators for goodwill. Please refer to Note 2 — Broadcast Licenses, Goodwill and Other Intangible Assets, incircumstances indicate that the accompanying notes to the consolidated financial statements for a discussion of several key assumptions used in the fair value estimate of our broadcast licenses during our fourth quarter annual impairment test.asset might be impaired.

There was no impairment of broadcast licenses in 2016.2021, 2022 or 2023.

​

During the fourth quarter44

Table of 2015, we recognized a $874,000 impairment charge for broadcast licenses in certain of our radio markets primarily due to declines in available market revenue, market revenue share, profit margins and estimated long-term growth rates in our Columbus, Ohio market. There were no impairment indicators for goodwill. Please refer to Note 2 — Broadcast Licenses, Goodwill and Other Intangible Assets, in the accompanying notes to the consolidated financial statements for a discussion of several key assumptions used in the fair value estimate of our broadcast licenses during our fourth quarter annual impairment test.Contents

We believe our estimate of the value of our broadcast licenses is a critical accounting estimate as the value is significant in relation to our total assets, and our estimate of the value uses assumptions that incorporate variables based on past experiences and judgments about future operating performance of our stations. These variables include but are not limited to: (1) the forecast growth rate of each radio and television market, including population, household income, retail sales and other expenditures that would influence advertising expenditures; (2) market share and profit margin of an average station within a market; (3) estimated capital start-up costs and losses incurred during the early years; (4) risk-adjusted discount rate; (5) the likely media competition within the market area; and (6) terminal values. Changes in our estimates of the fair value of these assets could result in material future period write-downs in the carrying value of our broadcast licenses. For illustrative purposes only, during our 2023 impairment test had the fair values of each of our broadcasting licenses been lower by 10% as of December 31, 2017, the Company-30%, we would not have recorded anhad to record any additional broadcast license impairmentimpairment.

​

Tax Provisions: Our estimates of approximately $1.4 million; hadincome taxes and the fair valuessignificant items giving rise to the deferred tax assets and liabilities are shown in the notes to our consolidated financial statements and reflect our assessment of eachactual future taxes to be paid on items reflected in the financial statements, giving consideration to both timing and probability of these estimates. Actual income taxes could vary from these estimates due to future changes in income tax law or results from the final review of our broadcasting licenses been lowertax returns by 20% as of December 31, 2017,federal, state or foreign tax authorities. We use our judgment to determine whether it is more likely than not that our deferred tax assets will be realized.  Deferred tax assets are reduced by valuation allowances if the Company would have recorded an additional broadcast license impairment of approximately $6.1 million; and hadbelieves it is more than likely than not that some portion or the fair value of our broadcasting licenses been lower by 30% as of December 31, 2017, the Company would have recorded an additional broadcast license impairment of approximately $12.9 million.

44

Stock Based Compensation:   We use a Black-Scholes valuation model to estimate the fair value of stock option awards. Under the fair value method, stock based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the vesting period. Determining the fair value of share-based awards at grant date requires assumptions and judgments about expected volatility and forfeiture rates, among other factors. If actual results differ significantly from these assumptions, then stock based compensation expense may differ materially in the future from that previously recorded.

The fair value of restricted stock awards is determined based on the closing market price of the Company’s Class A Common Stock on the grant date and is adjusted at each reporting date based on the amount of shares ultimately expected to vest.

entire asset will not be realized.

Litigation and Contingencies:   On an ongoing basis, we evaluate our exposure related to litigation and contingencies and record a liability when available information indicates that a liability is probable and estimable. We also disclose significant matters that are reasonably possible to result in a loss or are probable but not estimable.

Market Risk and Risk Management Policies

Our earnings are affected by changes in short-term interest rates as a result of our long-term debt arrangements. If market interest rates averaged 1% more in 2017 than they did during 2017,we had borrowings against our interest expense would increase, and income before taxes would decrease by $332,000. These amounts are determined by considering the impact of the hypothetical interest rates on our borrowing cost. This analysis does not consider the effects of the reduced level of overall economic activity that could exist in such an environment. Further,long-term debt arrangements, in the event of aan adverse change of such magnitude,in interest rates, management would likelymay take actions to further mitigate its exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, the sensitivity analysis assumes no changes in our financial structure.

exposure.

Inflation

The impact of inflation on our operations has not been significant to date. We are however, starting to see the effects of higher inflation starting to impact costs of most goods and services. There can be no assurance that a high rate of inflation in the future would not have an adverse effect on our operations.

Recent Accounting Pronouncements

Recent accounting pronouncements are described in Note 1 to the accompanying financial statements.

Item 7A.   Quantitative and Qualitative Disclosures About Market Risk.

Information appearing under the caption “Market Risk and Risk Management Policies” in Item 7 is hereby incorporated by reference.

Item 8.Financial Statements and Supplementary Data

The financial statements attached hereto are filed as part of this annual report.

Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

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Table of Contents

Item 9A.   Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rule 13a-15 of the Securities Exchange Act of 1934 (the “Exchange Act”). Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures over financial reporting were effective to ensure that material information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act towill be recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms.

45

Changes in Internal Control Over Financial Reporting

There were no changes in our internal controls over financial reporting during the quarteryear ended December 31, 20172023 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework as set forth inInternal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Based on our evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2017.2023. Our internal control over financial reporting as of December 31, 20172023 has been audited by UHY LLP, an independent registered public accounting firm, as stated in its report which appears below.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors Saga Communications, Inc.

Opinion on Internal Control over Financial Reporting

We have audited Saga Communications, Inc.’s (the Company’s) internal control over financial reporting as of December 31, 2017,2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017,2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of Saga Communications, Inc. as of December 31, 20172023 and 2016,2022, and the related consolidated statements of income, stockholders’shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 20172023 and the related notes and financial statement schedule, and our report dated March 13, 201815, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ UHY LLP

Farmington Hills,

Sterling Heights, Michigan

March 13, 201815, 2024

​

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Item 9B.Other Information

None.

Items 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

PART III

Item 10.Directors, Executive Officers and Corporate Governance

The information required by this item is incorporated by reference tofrom the information contained in our Proxy Statement for the 20182024 Annual Meeting of StockholdersShareholders to be filed not later than 120 days after the end of the Company’s fiscal year. See also Item 1. Business — Information About Our Executive Officers.

Item 11.Executive Compensation

The information required by this item is incorporated by reference from the information contained in our Proxy Statement for the 2024 Annual Meeting of Shareholders to be filed not later than 120 days after the end of the Company’s fiscal year.

Item 12.   Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

The information required by this item is incorporated by reference from the information contained in our Proxy Statement for the 2024 Annual Meeting of Shareholders to be filed not later than 120 days after the end of the Company’s fiscal year.

Item 13.   Certain Relationships and Related Transactions, and Director Independence

The information required by this item is incorporated by reference from the information contained in our Proxy Statement for the 2024 Annual Meeting of Shareholders to be filed not later than 120 days after the end of the Company’s fiscal year.

Item 14.   Principal Accountant Fees and Services

The information required by this item is incorporated by reference to the information contained in our Proxy Statement for the 20182024 Annual Meeting of Stockholders to be filed not later than 120 days after the end of the Company’s fiscal year.

​

Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this item is incorporated by reference to the information contained in our Proxy Statement for the 2018 Annual Meeting of Stockholders to be filed not later than 120 days after the end of the Company’s fiscal year. In addition, the information contained in the “Securities Authorized for Issuance Under Equity Compensation Plan Information” subheading under Item 5 of this report is incorporated by reference herein.

Item 13.Certain Relationships and Related Transactions, and Director Independence

The information required by this item is incorporated by reference to the information contained in our Proxy Statement for the 2018 Annual Meeting of Stockholders to be filed not later than 120 days after the end of the Company’s fiscal year.

Item 14.Principal Accountant Fees and Services

The information required by this item is incorporated by reference to the information contained in our Proxy Statement for the 2018 Annual Meeting of Stockholders to be filed not later than 120 days after the end of the Company’s fiscal year.

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PART IV

Item 15.Exhibits and Financial Statement Schedules

(a)(a)1. Financial Statements

The following consolidated financial statements attached hereto are filed as part of this annual report:

​

​

Report of Independent Registered Public Accounting Firm (PCAOB ID 1195)

50

Consolidated Financial Statements:

—  Consolidated Balance Sheets as of December 31, 20172023 and 20162022

51

52

—  Consolidated Statements of Income for the years ended December 31, 2017, 20162023, 2022 and 20152021

52

53

—  Consolidated Statements of Stockholders’Shareholders’ Equity for the years ended December 31, 2017, 20162023, 2022 and 20152021

53

54

—  Consolidated Statements of Cash Flows for the years ended December 31, 2017, 20162023, 2022 and 20152021

54

55

Notes to Consolidated Financial Statements

55

56

​

2.

2. Financial Statement Schedules

Schedule II Valuation and Qualifying Accounts is disclosed in Note 1 to the Consolidated Financial Statements attached hereto and filed as part of this annual report. All other schedules for which provision are made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted.

3.3. Exhibits

The Exhibits filed in response to Item 601 of Regulation S-K are listed in the Exhibit Index, which is incorporated herein by reference.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Saga Communications, Inc.

Opinion on the Financial Statements

​

We have audited the accompanying consolidated balance sheets of Saga Communications, Inc. (the “Company”) as of December 31, 20172023 and 2016,2022, and the related consolidated statements of income, stockholders’shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2017,2023, and the related notes and financial statement Schedule II, Valuation and Qualifying Accounts, listed in the index at item 15(a)(2) (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of Saga Communications, Inc. at December 31, 20172023 and 2016,2022, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2017,2023, in conformity with U.S. generally accepted accounting principles.

​

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2017,2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 13, 201815, 2024 expressed an unqualified opinion thereon.

​

Basis for Opinion

​

These consolidated financial statements are the responsibility of the Company'sCompany’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

​

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of theconsolidated financial statements.statement presentation. We believe that our audits provide a reasonable basis for our opinion.

​

Critical Audit Matter

​

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to an account or disclosure that is material to the financial statements and (2) involved especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

​

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Table of Contents

Critical Audit Matter – Broadcast License Impairment Analysis 

​

As disclosed in Notes 1 and 3 to the financial statements, the Company evaluates Federal Communications Commission licenses (or “broadcast licenses”) for impairment on an annual basis as of October 1st or, more frequently, if events or changes in circumstances indicate that the carrying value of the Company’s broadcast licenses may not be recoverable. The broadcast license balance as of December 31, 2023 was $90.2 million. The Company considers potential impairment by comparing the fair value of a market’s broadcast license to its carrying value. Fair value is estimated by management using the Greenfield method at the market level, which is a discounted cash flow approach assuming a start-up scenario in which the only assets held by an investor are broadcasting licenses. Management’s cash flow projections include significant judgments and assumptions related to market growth rates and market profit margin, estimated available market revenue including market share, terminal values and discount rates.

​

We identified broadcast license impairment as a critical audit matter because of the significant judgments made by management to estimate the fair value of the Company’s broadcast licenses. This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of inputs into the discounted cash flow model driven by management’s estimates.

​

How the Critical Audit Matter Was Addressed in the Audit

​

Our audit procedures performed to evaluate the reasonableness of management’s estimates and assumptions included assessing the methodologies used by the Company and testing the significant assumptions used in the quantitative models. We tested the effectiveness of the control over management’s evaluation and determination of estimates and assumptions used as the inputs in the impairment models. We compared the cash flow models prepared by management to historical revenues and profit margins as well as third-party market data to evaluate the reasonableness of the assumptions. We evaluated historical trends in assessing the reasonableness of growth rate assumptions and performed sensitivity analysis of significant assumptions to evaluate the changes in the fair value of the reporting units that would result from changes in these assumptions. We performed procedures to verify the mathematical accuracy of the calculations of broadcast license impairment used by management. We involved our valuation specialists to assist us in identifying the significant assumptions underlying the models, assessing the rationale and supporting documents related to these assumptions and determining the appropriateness and reasonableness of the methodologies employed. Furthermore, we assessed the appropriateness of the disclosures in the consolidated financial statements.

​

​

/s/ UHY LLP

​

We have served as the Company’s auditor since 2015.

Farmington Hills,Sterling Heights, Michigan

March 13, 201815, 2024

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Saga Communications, Inc.

Consolidated Balance Sheets

(In thousands, except par value)

​

  December 31, 
  2017  2016 
       
ASSETS        
Current assets:        
Cash and cash equivalents $53,030  $26,697 
Accounts receivable, less allowance of $727 ($518 in 2016)  19,307   17,735 
Prepaid expenses and other current assets  2,517   2,397 
Barter transactions  1,320   1,318 
Current assets of discontinued operations  —   4,625 
Total current assets  76,174   52,772 
Net property and equipment  56,235   49,174 
Other assets:        
Broadcast licenses, net  93,259   86,622 
Goodwill  15,558   7,407 
Other intangibles, deferred costs and investments, net of accumulated amortization of $12,588 ($11,804 in 2016)  7,543   5,975 
Assets of discontinued operations  —   18,048 
  $248,769  $219,998 
         
LIABILITIES AND STOCKHOLDERS’ EQUITY        
Current liabilities:        
Accounts payable $2,206  $1,618 
Accrued expenses:        
Payroll and payroll taxes  7,836   6,954 
Dividend payable  6,529   — 
Other  3,243   3,198 
Barter transactions  1,091   1,304 
Current liabilities of discontinued operations  —   2,971 
Total current liabilities  20,905   16,045 
Deferred income taxes  21,072   29,741 
Long-term debt  25,000   35,287 
Other liabilities  2,327   2,885 
Liabilities of discontinued operations  —   1,058 
Total liabilities  69,304   85,016 
Commitments and contingencies  —   — 
Stockholders’ equity:        
Preferred stock, 1,500 shares authorized, none issued and outstanding  —   — 
Common stock:        
Class A common stock, $.01 par value, 35,000 shares authorized, 6,694 issued (6,638 in 2016)  67   66 
Class B common stock, $.01 par value, 3,500 shares authorized, 898 issued and outstanding (878 in 2016)  9   8 
Additional paid-in capital  62,675   59,557 
Retained earnings  151,608   108,733 
Treasury stock (1,656 shares in 2017 and 1,625 in 2016, at cost)  (34,894)  (33,382)
Total stockholders’ equity  179,465   134,982 
  $248,769  $219,998 

​

​

​

​

​

​

​

​

​

December 31, 

​

    

2023

    

2022

​

​

(In thousands)

Assets

​

​

​

​

​

​

Current assets:

​

​

​

​

​

​

Cash and cash equivalents

​

$

29,582

​

$

36,802

Short-term investments

​

​

10,595

​

​

10,123

Accounts receivable, less allowance of $618, ($519 in 2022)

​

 

17,173

​

 

17,440

Prepaid expenses and other current assets

​

 

2,451

​

 

2,479

Barter transactions

​

 

843

​

 

1,015

Total current assets

​

 

60,644

​

 

67,859

Property and equipment

​

 

148,265

​

 

146,054

Less accumulated depreciation

​

 

96,860

​

 

92,856

Net property and equipment

​

 

51,405

​

 

53,198

Other assets:

​

​

​

​

​

​

Broadcast licenses, net

​

 

90,240

​

 

90,307

Goodwill

​

 

19,236

​

 

19,236

Other intangibles, right of use assets, deferred costs and investments, net of accumulated amortization of $15,984 ($15,944 in 2022)

​

 

10,688

​

 

10,153

Total assets

​

$

232,213

​

$

240,753

​

​

​

​

​

​

​

Liabilities and shareholders’ equity

​

 

​

​

 

​

Current liabilities:

​

 

​

​

 

​

Accounts payable

​

$

2,802

​

$

2,654

Accrued expenses:

​

​

​

​

​

​

Accrued payroll and payroll taxes

​

 

5,318

​

 

5,623

Dividend payable

​

 

12,505

​

 

13,754

Other accrued expenses

​

 

6,480

​

 

6,359

Barter transactions

​

 

924

​

 

987

Total current liabilities

​

 

28,029

​

 

29,377

Deferred income taxes

​

 

26,122

​

 

25,737

Other liabilities

​

 

7,513

​

 

7,110

Total liabilities

​

 

61,664

​

 

62,224

Commitments and contingencies

​

 

—

​

 

—

Shareholders’ equity:

​

​

​

​

​

​

Preferred stock, 1,500 shares authorized, none issued and outstanding

​

​

—

​

 

—

Common stock:

​

​

​

​

​

​

Class A common stock, $.01 par value, 35,000 shares authorized, 8,007 issued (7,867 in 2022)

​

​

80

​

​

78

Class B common stock, $.01 par value, 3,500 shares authorized, 0 issued (0 in 2022)

​

 

—

​

 

—

Additional paid-in capital

​

 

72,593

​

 

71,664

Retained earnings

​

 

134,771

​

 

143,896

Treasury stock (1,754 shares in 2023 and 1,753 shares in 2022, at cost)

​

 

(36,895)

​

 

(37,109)

Total shareholders’ equity

​

 

170,549

​

 

178,529

Total liabilities and shareholders' equity

​

$

232,213

​

$

240,753

​

See accompanying notes.

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Saga Communications, Inc.

Consolidated Statements of Income

​

​

​

​

​

​

​

​

​

​

​

​

​

Years Ended December 31, 

​

​

2023

    

2022

    

2021

​

​

(In thousands, except per share data)

Net operating revenue

​

$

112,773

    

$

114,893

  

$

108,343

Operating expenses:

​

 

​

​

 

​

  

 

​

Station operating expense

​

 

90,199

​

 

87,537

  

 

83,245

Corporate general and administrative

​

​

10,966

​

​

14,300

  

​

10,040

Other operating expense (income), net

​

 

120

​

 

(14)

  

 

7

​

​

 

101,285

​

 

101,823

  

 

93,292

Operating income

​

​

11,488

​

​

13,070

​

​

15,051

Other (income) expenses:

​

 

​

​

 

​

  

 

​

Interest expense

​

​

173

​

 

130

  

 

284

Interest income

​

​

(1,441)

​

​

(410)

  

​

(16)

Other income

​

​

(119)

​

​

(652)

  

​

(634)

Income before income tax expense

​

​

12,875

​

​

14,002

  

​

15,417

Income tax provision:

​

​

​

​

​

​

​

​

​

Current

​

​

2,990

​

​

3,865

  

​

4,065

Deferred

​

​

385

​

​

935

  

​

195

​

​

​

3,375

​

 

4,800

  

 

4,260

Net income

​

$

9,500

​

$

9,202

  

$

11,157

​

​

​

​

​

​

​

​

​

​

Earnings per share:

​

​

​

​

​

​

​

​

​

Basic

​

$

1.55

​

$

1.52

​

$

1.85

Diluted

​

$

1.55

​

$

1.52

​

$

1.85

​

​

​

​

​

​

​

​

​

​

Weighted average common shares

​

​

6,045

​

​

5,973

​

​

5,917

Weighted average common and common equivalent shares

​

​

6,045

​

​

5,973

​

​

5,917

​

​

​

​

​

​

​

​

​

​

Dividends declared per share

​

$

3.00

​

$

4.86

​

$

0.98

​

See accompanying notes.

​

Note: Certain prior period amounts have been reclassified to conform to the current year presentation.

51

53

Table of Contents

Saga Communications, Inc.

Consolidated Statements of IncomeShareholders’ Equity

Years ended December 31, 2023, 2022 and 2021

  Years Ended December 31, 
  2017  2016  2015 
  (In thousands, except per share data) 
          
Net operating revenue $118,149   118,955   111,792 
Operating expenses (income):            
Station operating expense  87,759   86,799   83,188 
Corporate general and administrative  11,657   10,980   10,091 
Other operating expense (income), net  55   (1,351)  509 
Impairment of intangible assets  1,449   —   874 
   100,920   96,428   94,662 
Operating income from continuing operations  17,229   22,527   17,130 
Other (income) expenses:            
Interest expense  903   744   855 
Write-off of debt issuance costs  —   —   557 
Income from continuing operations before income taxes  16,326   21,783   15,718 
Income tax provision:            
Current  2,290   6,626   4,091 
Deferred  (8,210)  2,247   2,481 
   (5,920)  8,873   6,572 
Income from continuing operations, net of tax  22,246   12,910   9,146 
Income from discontinued operations, net of tax  32,471   5,276   4,268 
Net income $54,717   18,186   13,414 
             
Basic earnings per share:            
From continuing operations $3.77  $2.20  $1.58 
From discontinued operations  5.50   0.90   0.73 
Basic earnings per share $9.27  $3.10  $2.31 
Weighted average common shares  5,803   5,761   5,706 
             
Diluted earnings per share:            
From continuing operations $3.77  $2.19  $1.56 
From discontinued operations  5.50   0.90   0.73 
Diluted earnings per share $9.27  $3.09  $2.29 
Weighted average common and common equivalent shares  5,807   5,771   5,740 
Dividends declared per share $2.00  $1.30  $1.10 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Class A

​

Class B

​

Additional

​

​

​

​

​

​

​

Total

​

​

Common Stock

​

Common Stock

​

Paid-In

​

Retained

​

Treasury

​

Shareholders’

​

    

Shares

    

Amount

    

Shares

    

Amount

    

Capital

    

Earnings

    

Stock

    

Equity

​

​

(In thousands)

Balance at January 1, 2021

 

6,785

​

$

68

 

938

​

$

9

​

$

68,900

​

$

158,990

​

$

(37,425)

​

​

190,542

Net income

 

—

​

 

—

 

—

​

 

—

​

 

—

​

 

11,157

​

 

—

​

 

11,157

Conversion of shares from Class B to Class A

 

12

​

 

—

 

(12)

​

 

—

​

 

—

​

 

—

​

 

—

​

 

—

Forfeiture of restricted stock

 

38

​

 

—

 

39

​

 

—

​

 

—

​

 

—

​

 

—

​

 

—

Dividends declared per common share

 

—

​

 

—

 

—

​

 

—

​

 

—

​

 

(5,901)

​

 

—

​

 

(5,901)

Compensation expense related to restricted stock awards

 

—

​

 

—

 

—

​

 

—

​

 

1,335

​

 

—

​

 

—

​

 

1,335

Purchase of shares held in treasury

 

—

​

 

—

 

—

​

 

—

​

 

—

​

 

—

​

 

(435)

​

 

(435)

401(k) plan contribution

 

—

​

 

—

 

—

​

 

—

​

 

(200)

​

 

—

​

 

421

​

 

221

Balance at December 31, 2021

 

6,835

​

$

68

 

965

​

$

9

​

$

70,035

​

$

164,246

​

$

(37,439)

​

$

196,919

Net income

 

—

​

 

—

 

—

​

 

—

​

 

—

​

 

9,202

​

 

—

​

 

9,202

Conversion of shares from Class B to Class A

 

965

​

 

9

 

(965)

​

 

(9)

​

 

—

​

 

—

​

 

—

​

 

—

Issuance of restricted stock

 

67

​

 

1

 

—

​

 

—

​

 

(1)

​

 

—

​

 

—

​

 

—

Dividends declared per common share

 

—

​

 

—

 

—

​

 

—

​

 

—

​

 

(29,552)

​

 

—

​

 

(29,552)

Compensation expense related to restricted stock awards

 

—

​

 

—

 

—

​

 

—

​

 

1,858

​

 

—

​

 

—

​

 

1,858

Purchase of shares held in treasury

 

—

​

 

—

 

—

​

 

—

​

 

—

​

 

—

​

 

(147)

​

 

(147)

401(k) plan contribution

 

—

​

 

—

 

—

​

 

—

​

 

(228)

​

 

—

​

 

477

​

 

249

Balance at December 31, 2022

 

7,867

​

$

78

 

—

​

$

—

​

$

71,664

​

$

143,896

​

$

(37,109)

​

$

178,529

Net income

 

—

​

 

—

 

—

​

 

—

​

 

—

​

 

9,500

​

 

—

​

 

9,500

Conversion of shares from Class B to Class A

 

—

​

 

—

 

—

​

 

—

​

 

—

​

 

—

​

 

—

​

 

—

Issuance of restricted stock

 

140

​

 

2

 

—

​

 

—

​

​

(2)

​

 

—

​

 

—

​

 

—

Dividends declared per common share

 

—

​

 

—

 

—

​

 

—

​

 

—

​

 

(18,625)

​

 

—

​

 

(18,625)

Compensation expense related to restricted stock awards

 

—

​

 

—

 

—

​

 

—

​

 

1,116

​

 

—

​

 

—

​

 

1,116

Purchase of shares held in treasury

 

—

​

 

—

 

—

​

 

—

​

 

—

​

 

—

​

 

(227)

​

 

(227)

401(k) plan contribution

 

—

​

 

—

 

—

​

 

—

​

 

(185)

​

 

—

​

 

441

​

 

256

Balance at December 31, 2023

 

8,007

​

$

80

 

—

​

$

—

​

$

72,593

​

$

134,771

​

$

(36,895)

​

$

170,549

​

See accompanying notes.

​

Note: Certain prior period amounts have been reclassified to conform to the current year presentation.

52

54

Table of Contents

Saga Communications, Inc.

Consolidated Statements of Stockholders’ EquityCash Flows

Years ended December 31, 2017, 2016 and 2015​

​

​

​

​

​

​

​

​

​

​

​

 

​

​

​

​

​

​

​

​

​

 

Years Ended December 31, 

​

    

2023

    

2022

    

2021

​

 

​

(In thousands)

​

​

​

​

​

​

​

​

​

​

Statement of Cash Flows

​

​

​

​

​

​

​

​

​

Cash flows from operating activities:

​

​

​

​

​

​

​

​

​

Net income

​

$

9,500

​

$

9,202

​

$

11,157

Adjustments to reconcile net income to net cash provided by operating activities:

​

​

​

​

​

​

​

​

​

Depreciation and amortization

​

​

5,055

​

​

5,171

​

​

5,749

Deferred income tax expense

​

​

385

​

​

935

​

​

195

Amortization of deferred costs

​

​

36

​

​

10

​

​

37

Compensation expense related to restricted stock awards

​

​

1,116

​

​

1,858

​

​

1,335

Loss on sale of assets, net

​

​

120

​

​

(14)

​

​

7

(Gain) on insurance claims

​

​

—

​

​

(534)

​

​

(589)

Other (gain) loss, net

​

​

(119)

​

​

(118)

​

​

(45)

Barter (revenue) expense, net

​

​

50

​

​

46

​

​

(2)

Deferred and other compensation

​

​

(100)

​

​

1,425

​

​

(215)

Changes in assets and liabilities:

​

​

​

​

​

​

​

​

​

(Increase) decrease in receivables and prepaid expenses

​

​

(1,303)

​

​

(1,135)

​

​

507

Increase (decrease) in accounts payable, accrued expenses, and other liabilities

​

​

639

​

​

279

​

​

968

Total adjustments

​

​

5,879

​

​

7,923

​

​

7,947

Net cash provided by operating activities

​

​

15,379

​

​

17,125

​

​

19,104

Cash flows from investing activities:

​

​

​

​

​

​

​

​

​

Purchase of short-term investments

​

​

(20,728)

​

​

(18,000)

​

​

—

Redemption of short-term investments

​

​

20,723

​

​

8,000

​

​

—

Acquisition of property and equipment (Capital Expenditures)

​

​

(4,356)

​

 

(5,994)

​

​

(3,969)

Acquisition of broadcast properties

​

​

—

​

 

(57)

​

​

(150)

Proceeds from sale and disposal of assets

​

​

1,747

​

​

411

​

​

142

Proceeds from insurance claims

​

​

—

​

​

534

​

​

589

Other investing activities

​

​

117

​

 

116

​

​

40

Net cash used in investing activities

​

​

(2,497)

​

 

(14,990)

​

​

(3,348)

Cash flows from financing activities:

​

​

​

​

​

​

​

​

​

Payments on long-term debt

​

​

—

​

​

—

​

​

(10,000)

Cash dividends paid

​

​

(19,875)

​

 

(19,785)

​

​

(1,914)

Payments for debt issuance costs

​

​

—

​

 

(161)

​

​

—

Purchase of treasury shares

​

​

(227)

​

 

(147)

​

​

(435)

Net cash used in financing activities

​

​

(20,102)

​

 

(20,093)

​

​

(12,349)

Net increase (decrease) in cash and cash equivalents

​

​

(7,220)

​

 

(17,958)

​

​

3,407

Cash and cash equivalents, beginning of period

​

​

36,802

​

 

54,760

​

​

51,353

Cash and cash equivalents, end of period

​

$

29,582

​

$

36,802

​

$

54,760

  Class A  Class B  Additional        Total 
  Common Stock  Common Stock  Paid-In  Retained  Treasury  Stockholders’ 
  Shares  Amount  Shares  Amount  Capital  Earnings  Stock  Equity 
  (In thousands) 
Balance at January 1, 2015  6,446  $64   843  $8  $52,496  $91,178  $(28,501) $115,245 
Net income                      13,414       13,414 
Conversion of shares from Class B to Class A  40   1   (40)  (1)              — 
Issuance of restricted stock  26   —   30   —               — 
Forfeiture of restricted stock  (2)  —                       — 
Net proceeds from exercised options  93   1   32   1   3,393       (4,162)  (767)
Dividends declared per common share                      (6,412)      (6,412)
Compensation expense related to restricted stock awards                  1,655           1,655 
Purchase of shares held in treasury                          (563)  (563)
401(k) plan contribution                  (34)      278   244 
Balance at December 31, 2015  6,603  $66   865  $8  $57,510  $98,180  $(32,948) $122,816 
Net income                      18,186       18,186 
Conversion of shares from Class B to Class A  12   —   (12)  —               — 
Issuance of restricted stock  23   —   25   —               — 
Dividends declared per common share                      (7,633)      (7,633)
Compensation expense related to restricted stock awards                  2,101           2,101 
Purchase of shares held in treasury                          (746)  (746)
401(k) plan contribution                  (54)      312   258 
Balance at December 31, 2016  6,638  $66   878  $8  $59,557  $108,733  $(33,382) $134,982 
Net income                      54,717       54,717 
Conversion of shares from Class B to Class A  17   —   (17)  —               — 
Issuance of restricted stock  19   —   29   1   (1)          — 
Forfeiture of restricted stock  (1)  —                       — 
Net proceeds from exercised options  21   1   8   —   826       (826)  1 
Dividends declared per common share                      (11,842)      (11,842)
Compensation expense related to restricted stock awards                  2,279           2,279 
Purchase of shares held in treasury                          (946)  (946)
401(k) plan contribution                  14       260   274 
Balance at December 31, 2017  6,694  $67   898  $9  $62,675  $151,608  $(34,894) $179,465 

​

See accompanying notes.

​

53

55

Table of Contents

Saga Communications, Inc.

Consolidated Statements of Cash Flows

  Years Ended December 31, 
  2017  2016  2015 
  (In thousands) 
          
Cash flows from operating activities:            
Net income $54,717  $18,186  $13,414 
Adjustments to reconcile net income to net cash provided by operating activities:            
Income from discontinued operations  (32,471)  (5,276)  (4,268)
Depreciation and amortization  6,251   5,876   5,425 
Deferred income taxes  (8,210)  2,247   2,481 
Impairment of intangible assets  1,449   —   874 
Amortization of deferred costs  53   53   131 
Compensation expense related to restricted stock awards  2,279   2,101   1,655 
(Gain) loss on sale of assets  55   (1,351)  509 
Barter revenue, net  (251)  (254)  (163)
Deferred and other compensation  (337)  14   (41)
Write-off of debt issuance costs  —   —   557 
Changes in assets and liabilities:            
Decrease (increase) in receivables and prepaid expenses  (434)  (885)  233 
Increase in accounts payable, accrued expenses, and other liabilities  811   1,117   1,235 
Total adjustments  (30,805)  3,642   8,628 
Net cash provided by continuing operating activities  23,912   21,828   22,042 
Net cash provided by (used in) discontinued operating activities  (18,538)  7,478   6,577 
Net cash provided by (used in) operating activities  5,374   29,306   28,619 
Cash flows from investing activities:            
Acquisition of property and equipment  (6,246)  (3,967)  (3,570)
Proceeds from sale and disposal of assets  419   1,676   165 
Acquisition of broadcast properties  (25,856)  (12,841)  (11,842)
Other investing activities  (5)  39   (666)
Net cash used in continuing investing activities  (31,688)  (15,093)  (15,913)
Net cash received provided by (used in) discontinued operations investing activities  69,193   (835)  (1,193)
Net cash received from (used in) investing activities  37,505   (15,928)  (17,106)
Cash flows from financing activities:            
Payments on long-term debt  (10,287)  —   (35,000)
Proceeds from long-term debt  —   —   35,287 
Cash dividends paid  (5,313)  (7,633)  (6,412)
Payments for debt issuance costs  —   —   (266)
Other financing activities  (946)  (746)  (1,331)
Net cash used in financing activities  (16,546)  (8,379)  (7,722)
Net increase in cash and cash equivalents  26,333   4,999   3,791 
Cash and cash equivalents, beginning of year  26,697   21,698   17,907 
Cash and cash equivalents, end of year $53,030  $26,697  $21,698 

See accompanying notes.

Note: Certain prior period amounts have been reclassified to conform to the current year presentation.

54

Saga Communications, Inc.

Notes to Consolidated Financial Statements

​

1.1.    Summary of Significant Accounting Policies

Nature of Business

Saga Communications, Inc. is a broadcastingmedia company whose business is devoted to acquiring, developing and operating broadcast properties. As of December 31, 2017, we ownedproperties including opportunities complimentary to our core radio business including digital, e-commerce and non-traditional revenue initiatives. We currently own or operated seventy-fiveseventy-nine FM, and thirty-three AM radio stations and eighty metro signals, serving twenty-sixtwenty-seven markets throughout the United States. On May 9, 2017 the Company entered into an agreement to sell its Joplin, Missouri and Victoria, Texas television stations and subsequently closed on this transaction on September 1, 2017. The historical results of operations for the television stations are presented in the discontinued operations for all periods presented (see Note 3). As a result of the Company’s television stations being reported as discontinued operations the Company only has one reportable segment at December 31, 2017. Unless indicated otherwise, the information in the Notes to Consolidated Financial Statements relates to the Company’s continuing operations.

Principles of Consolidation

The consolidated financial statements include the accounts of Saga Communications, Inc. and our wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States (GAAP) requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. While we do not believe thatOur accounting estimates require the ultimate settlementuse of any amounts reported will materially affectjudgment as future events and the effect of these events cannot be predicted with certainty. The accounting estimates may change as new events occur, as more experience is acquired and as more information is obtained. We evaluate and update assumptions and estimates on an ongoing basis and may use outside experts to assist in the our financial position or results of future operations, actualevaluation, as considered necessary. Actual results may differ from estimates provided.

provided and there may be changes to those estimates in the future periods.

Concentration of Risk

Certain cash deposits with financial institutions may at times exceed FDIC insurance limits.

Our top sixfive markets when combined represented 46%36%, 48%38% and 46%39% of our net operating revenue for the years ended December 31, 2017, 20162023, 2022 and 2015,2021, respectively.

We sell advertising to local and national companies throughout the United States. We perform ongoing credit evaluations of our customers and generally do not require collateral. We maintain an allowance for doubtful accountscredit losses at a level which we believe is sufficient to cover potential credit losses.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand and time deposits with original maturities of three months or less. We did not have any time deposits at December 31, 20172023 and 2016.

2022.

Financial Instruments

We account for marketable securities in accordance with ASC 320, “Investments – Debt Securities,” which require that certain debt securities be classified into one of three categories: held-to-maturity, available-for-sale, or trading securities, and depending upon the classification, value the security at amortized cost or fair market value. At December 31, 2023 and 2022, we have recorded $10.6 million and $10.1 million, respectively, of held-to-maturity U.S. Treasury Bills at amortized cost basis that have a fair market value of $10.6 million and $10.0 million respectively. Our held-to-maturity U.S. Treasury Bills all have original maturity dates ranging from March 2024 to July 2024.

​

56

Table of Contents

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

Our financial instruments are comprised of cash and cash equivalents, short-term investments, accounts receivable, accounts payable and long-term debt. The carrying value of cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to their short maturities. The carrying value of long-term debt approximates fair value as it carries interest rates that either fluctuate with the euro-dollarsecured overnight financing rate (“SOFR”), prime rate or have been reset at the prevailing market rate at December 31, 2017.

55

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

2023.

Allowance for Doubtful Accounts

Credit Losses

A provision for doubtful accountscredit losses is recorded based on our judgment of the collectability of receivables. Amounts are written off when determined to be fully uncollectible. Delinquent accounts are based on contractual terms. The activity in the allowance for doubtful accountscredit losses during the years ended December 31, 2017, 20162023, 2022 and 20152021 was as follows:

​

           Write Off of    
  Balance  Charged to  Allowance  Uncollectible  Balance at 
  at Beginning  Costs and  From  Accounts, Net of  End of 
Year Ended of Period  Expenses  Acquisitions  Recoveries  Period 
  (in thousands) 
                
December 31, 2017 $518  $333  $181  $(305) $727 
December 31, 2016 $614  $195  $—  $(291) $518 
December 31, 2015 $378  $294  $99  $(157) $614 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

    

​

    

    

​

    

Write Off of

    

    

​

​

​

Balance

​

Charged to

​

Uncollectible

​

Balance at

​

​

at Beginning

​

Costs and

​

Accounts, Net of

​

End of

Year Ended

    

of Period

    

Expenses

    

Recoveries

    

Period

​

​

(in thousands)

December 31, 2023

​

$

519

​

$

397

​

$

(298)

​

$

618

December 31, 2022

​

$

469

​

$

408

​

$

(358)

​

$

519

December 31, 2021

​

$

648

​

$

56

​

$

(235)

​

$

469

​

Barter Transactions

Our radio and television stations trade air time for goods and services used principally for promotional, sales and other business activities. An asset and a liability are recorded at the fair market value of goods or services received. Barter revenue is recorded when commercials are broadcast, and barter expense is recorded when goods or services received are used.

Property and Equipment

Property and equipment are carried at cost. Expenditures for maintenance and repairs are expensed as incurred. When property and equipment is sold or otherwise disposed of, the related cost and accumulated depreciation is removed from the respective accounts and the gain or loss realized on disposition is reflected in earnings. Depreciation is provided using the straight-line method based on the estimated useful life of the assets. We review our property and equipment for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of these assets is measured by comparison of their carrying amounts to future undiscounted cash flows the assets are expected to generate. If the assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the assets exceeds its fair market value. We did not record any impairment of property and equipment during 2017, 20162023, 2022 and 2015.2021.

​

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Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

Property and equipment consisted of the following:

​

​

​

​

​

​

​

​

​

​

​

​

    

Estimated

    

December 31, 

​

    

Useful Life

    

2023

    

2022

 Estimated  December 31, 
 Useful Life  2017  2016 
   (In thousands) 
       

​

​

​

​

​

​

​

​

​

​

​

(In thousands)

​

​

​

​

​

​

​

​

​

​

Land and land improvements  —  $13,594  $12,307 

 

​

—

​

$

15,239

​

$

15,259

Buildings  31.5 years   34,905   32,046 

 

​

31.5 years

​

 

40,460

​

 

40,823

Towers and antennae  7-15 years   24,538   23,066 

 

​

7-15 years

​

 

27,145

​

 

26,992

Equipment  3-15 years   52,534   56,745 

 

​

3-15 years

​

 

54,747

​

 

52,459

Furniture, fixtures and leasehold improvements  7-20 years   6,822   7,261 

 

​

7-20 years

​

 

7,907

​

 

7,741

Vehicles  5 years   3,463   3,255 

 

​

5 years

​

 

2,767

​

 

2,780

      135,856   134,680 

​

 

​

​

​

 

148,265

​

​

146,054

Accumulated depreciation      (79,621)  (85,506)

 

​

​

​

 

(96,860)

​

 

(92,856)

Net property and equipment     $56,235  $49,174 

​

​

​

​

$

51,405

​

$

53,198

​

Depreciation expense for continuing operations for the  years ended December 31, 2017, 20162023, 2022 and 20152021, was $5,391,000, $5,234,000$5,013,000, $5,133,000 and $5,194,000,$5,362,000, respectively. Depreciation expense for discontinued operations for the years ended December 31, 2017, 2016 and 2015 was $445,000, $1,387,000 and $1,399,000, respectively.

56

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

Intangible Assets

Intangible assets deemed to have indefinite useful lives, which include broadcast licenses and goodwill, are not amortized and are subject to impairment tests which are conducted as of October 1 of each year, or more frequently if impairment indicators arise.

We have 108112 broadcast licenses serving 2627 markets, which require renewal over the period of 2019-2022.2027-2030. In determining that the Company’s broadcast licenses qualified as indefinite-lived intangible assets, management considered a variety of factors including our broadcast licenses may be renewed indefinitely at little cost; our broadcast licenses are essential to our business and we intend to renew our licenses indefinitely; we have never been denied the renewal of an FCC broadcast license nor do we believe that there will be any compelling challenge to the renewal of our broadcast licenses; and we do not believe that the technology used in broadcasting will be replaced by another technology in the foreseeable future.

Separable intangible assets that have finite lives are amortized over their useful lives using the straight-line method. Favorable lease agreements are amortized over the leases length, ranging from fiveone to twenty-six years. Other intangibles are amortized over one to fifteen years. Customer relationships are amortized over three years.

Deferred Costs

The costs related to the issuance of debt are capitalized and amortized to interest expense over the life of the debt.Credit Facility. During the years ended December 31, 2017, 20162023, 2022 and 2015,2021, we recognized interest expense related to the amortization of debt issuance costs of $53,000, $53,000$36,000, $10,000 and $131,000,$37,000, respectively. In 2015 we wrote-off unamortized debt issuance costs of $557,000, pre-tax, in connection with our new credit facility. See Note 4 – Long-Term Debt.

At December 31, 20172023 and 20162022 the net book value of debt issuance costs related to our line of credit was $138,000,$130,000, and $191,000,$166,000, respectively, and was presented in other intangibles, deferred costs and investments in our Consolidated Balance Sheets.

​

58

Table of Contents

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

Leases

We determine whether a contract is or contains a lease at inception. The lease liabilities and right-of-use assets are recorded on the balance sheet for all leases with an expected term of at least one year, based on the present value of the lease payments using (1) the rate implicit in the lease or (2) our incremental borrowing rate (“IBR”). Our IBR is defined as the rate of interest we would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. We follow the accounting guidance for leases, which includes the recognition of lease expense for leases on a straight-line basis over the lease term. See Note 12 – Commitments and Contingencies for more information on Leases.

Common Stock

Our founder and former Chairman, President, and CEO, Edward K. Christian, passed away on August 19, 2022. As of the date of his passing, Mr. Christian, who was also our principal shareholder, held approximately 65% of the combined voting power of the Company’s Common Stock based on our Class B Common Stock (together with the Class A Common Stock, collectively, the “Common Stock”) generally being entitled to ten votes per share. As a result, Mr. Christian was generally able to control the vote on most matters submitted to the vote of shareholders and, therefore, was able to direct our management and policies, except with respect to (i) the election of two Class A directors, (ii) those matters where the shares of our Class B Common Stock were only entitled to one vote per share, and (iii) other matters requiring a class vote under the provisions of our certificate of incorporation, bylaws or applicable law. Mr. Christian’s passing resulted in the conversion of his Class B Shares into Class A Shares that were transferred to an estate planning trust that now owns approximately 16% of the common stock outstanding. As a result, we no longer have any shares of Class B Common Stock issued or outstanding.

Treasury Stock

In March 2013, our boardBoard of directorsDirectors authorized an increase in the amount committed to our Stock Buy-Back Program (the “Buy-Back Program”) from $60 million to $75.8 million. The Buy-Back Program allows us to repurchase our Class A Common Stock. As of December 31, 2017,2023, we had remaining authorization of $22.4$18.0 million for future repurchases of our Class A Common Stock.

Repurchases of shares of our Common Stock are recorded as Treasury stock and result in a reduction of Stockholders’Shareholders’ equity. During 2017, 20162023, 2022 and 2015,2021, we acquired 37,14111,274 shares at an average price of $47.72$20.12 per share, 18,6126,044 shares at an average price of $40.06$24.27 per share and 129,38416,577 shares at an average price of $36.53$26.25 per share, respectively.

57

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

Revenue Recognition

Revenue from the sale of commercial broadcast time to advertisers is recognized when commercials are broadcast. Revenue is reported net of advertising agency commissions. Agency commissions, when applicable are based on a stated percentage applied to gross billing. All revenue is recognized in accordance with the Securities and Exchange Commission’s (“SEC”) Staff Accounting Bulletin (“SAB”) No. 104, Topic 13,Revenue Recognition Revised and Updated and The Accounting Standards Codification (ASC) Topic 605,606, Revenue Recognitionfrom Contracts with Customers.

​

59

Table of Contents

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

Local Marketing Agreements

We have entered into Time Brokerage Agreements (“TBAs”) or Local Marketing Agreements (“LMA’s”LMAs”) in certain markets. In a typical TBA/LMA, the FCC licensee of a station makes available, for a fee, blocks of air time on its station to another party that supplies programming to be broadcast during that air time and sells its own commercial advertising announcements during the time periods specified. Revenue and expenses related to LMA’sTBAs/LMAs are included in the accompanying Consolidated Statements of Income. Assets and liabilities related to the LMA’sTBAs/LMAs are included in the accompanying Consolidated Balance Sheets.

Advertising and Promotion Costs

Advertising and promotion costs are expensed as incurred. Such costs related to our continuing operations amounted to $2,441,000, $2,633,000$1,705,000, $1,646,000 and $2,475,000$1,396,000 for the years ended December 31, 2017, 20162023, 2022 and 2015,2021, respectively. Advertising and promotion costs related to our discontinued operations amounted to $240,000, $341,000 and $328,000 for the years ended December 31, 2017, 2016 and 2015, respectively.

Income Taxes

DeferredThe provision for income taxes is calculated using the asset and liability method, under which deferred tax assets and liabilities are determined based on temporary differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The realization of deferred tax assets is primarily dependent upon the generation of future taxable income. Our effective tax rate is higher than the federal statutory rate as a result of the inclusion of state taxes in the income tax amount.

amount and permanent differences primarily relating to executive compensation.

Dividends

The Company currently intends to declare regular quarterly cash dividends, we well as variable dividends in accordance with the terms of our variable dividend policy. The Company may also declare special dividend in future periods. The declaration and payment of any future dividend, whether fixed, special or based on the variable policy will remain at the full discretion of the Board and will depend on the Company’s financial results, cash requirements, future expectations and other pertinent factors.

On December 7, 2017,2023, the Company’s Board of Directors declared a special cash dividend of $2.00 per share on its Classes A Common Stock. This dividend, totaling approximately $12,500,000, was paid on January 12, 2024 to shareholders of record on December 20, 2023 and is recorded in dividends payable in our Consolidated Balance Sheet at December 31, 2023.

On November 16, 2023, the Company’s Board of Directors declared a quarterly cash dividend of $0.30 per share and a special cash dividend of $0.80$0.25 per share on its ClassesClass A and B shares. This dividend totaling approximately $6.5 million was paid on January 5, 2018 to shareholders of record on December 18, 2017.

On September 13, 2017, the Company’s Board of Directors declared a regular cash dividend of $0.30 per share on its Classes A and B Common Stock. This dividend, totaling approximately $1.8 million$1,500,000, was paid on October 13, 2017December 15, 2023 to shareholders of record on September 25,

2017 and funded by cash on the Company’s balance sheet.

November 27, 2023.

On May 3, 2017, the Company’s Board of Directors declared a regular cash dividend of $0.30 per share on its Classes A and B Common Stock. This dividend, totaling approximately $1.8 million, was paid on June 9, 2017 to shareholders of record on May 22, 2017 and funded by cash on the Company’s balance sheet.

On March 3, 2017, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.30 per share on its Classes A and B Common Stock. This dividend, totaling approximately $1.8 million, was paid on April 14, 2017 to shareholders of record on March 28, 2017 and funded by cash on the Company’s balance sheet.

On November 21, 2016September 27, 2023, the Company’s Board of Directors declared a quarterly cash dividend of $0.30 per share and a special cash dividend of $0.20$0.25 per share on its ClassesClass A and B shares.Common Stock. This dividend, totaling $2.9 millionapproximately $1,500,000, was paid on December 23, 2016November 3, 2023 to shareholders of record on December 5, 2016.

October 11, 2023.

On August 30, 2016,May 9, 2023, the Company’s Board of Directors declared a regularquarterly cash dividend of $0.30$0.25 per share on its ClassesClass A and B Common Stock. This dividend, totaling $1.8 millionapproximately $1,500,000, was paid on September 30, 2016June 16, 2023 to shareholders of record on September 14,May 22, 2023.

2016.

58

60

Table of Contents

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

On JuneMarch 1, 2016,2023, the Company’s Board of Directors declared a regularquarterly cash dividend of $0.25 per share on its ClassesClass A and B Common Stock. This dividend, totaling $1.5 million, was paid on July 8, 2016 to shareholders of record on June 15, 2016.

On March 2, 2016, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.25 per share on its Classes A and B Common Stock. This dividend, totaling $1.5 million,approximately $1,500,000, was paid on April 15, 20167, 2023 to shareholders of record on March 28,

2016.

20, 2023.

On November 17, 2015December 7, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.25 per share and a special cash dividend of $2.00 per share on its Classes A Common Stock. This dividend, totaling approximately $13,800,000, was paid on January 13, 2023 to shareholders of record on December 21, 2022 and is recorded in dividends payable in our Consolidated Balance Sheet at December 31, 2022.

On September 20, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.25 per share and a special cash dividend of $2.00 per share on its Classes A Common Stock. This dividend, totaling approximately $13,600,000, was paid on October 21, 2022 to shareholders of record on October 3, 2022.

On June 6, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.20 per share on its Classes A and B Common Stock. This dividend, totaling $2.9 millionapproximately $1,200,000, was paid to our transfer agent on December 11, 2015June 29, 2022. The dividend was paid by our transfer agent on July 1, 2022 to shareholders of record on November 30, 2015.

June 13, 2022.

On September 2, 2015March 1, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.20$0.16 per share on its Classes A and B Common Stock. This dividend, totaling $1.2 millionapproximately $970,000, was paid on October 2, 2015April 8, 2022 to shareholders of record on September 14, 2015.

March 21, 2022.

On June 10, 2015December 14, 2021, the Company’s Board of Directors declared a quarterly cash dividend of $0.20$0.16 per share and special cash dividend of $0.50 per share on its Classes A and B Common Stock. This dividend, totaling $1.2 millionapproximately $3,990,000, was paid on July 10, 2015January 14, 2022 to shareholders of record on June 22, 2015.

December 27, 2021 and was recorded in dividends payable on the Company’s Consolidated Balance Sheet at December 31, 2021.

On March 25, 2015September 28, 2021, the Company’s Board of Directors declared a quarterly cash dividend of $0.20$0.16 per share on its Classes A and B Common Stock. This dividend, totaling $1.2 millionapproximately $960,000, was paid on April 6, 2015October 22, 2021 to shareholders of record on April 17, 2015.October 8, 2021.

On June 18, 2021, the Company’s Board of Directors declared a quarterly cash dividend of $0.16 per share on its Classes A and B Common Stock. This dividend, totaling approximately $960,000, was paid on July 16, 2021 to shareholders of record on June 30, 2021 and was recorded in dividends payable on the Company’s Condensed Consolidated Balance Sheet at June 30, 2021. The Company had previously temporarily suspended the quarterly cash dividend in response to the uncertainty of the ongoing impact of COVID-19 as of June 18, 2020.

Stock-Based Compensation

Stock-based compensation cost for stock option awards is estimated on the date of grant using a Black-Scholes valuation model and is expensed on a straight-line method over the vesting period of the options. Stock-based compensation expense is recognized net of estimated forfeitures. The fair value of restricted stock awards is determined based on the closing market price of the Company’sour Class A Common Stock on the grant date and is adjusted at each reporting date based on the amount of shares ultimately expected to vest. See Note 7 — Stock-Based Compensation for further details regarding the expense calculated under the fair value based method.

​

59

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Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

Segments

We serve twenty-seven radio markets (reporting units) that aggregate into one operating segment (Radio), which also qualifies as a reportable segment. We operate under one reportable business segment for which segment disclosure is consistent with the management decision-making process that determines the allocation of resources and the measuring of performance. The Chief Operating Decision Maker (“CODM”) evaluates the results of the radio operating segment and makes operating and capital investment decisions based at the Company level. Furthermore, technological enhancements and system integration decisions are reached at the Company level and applied to all markets rather than to specific or individual markets to ensure that each market has the same tools and opportunities as every other market. Managers at the market level do not report to the CODM and instead report to other senior management, who are responsible for the operational oversight of radio markets and for communication of results to the CODM. We continually review our operating segment classification to align with operational changes in our business and may make changes as necessary.

Earnings Per Share

Earnings per share is calculated using the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security. The Company hasWe have participating securities related to restricted stock units, granted under the Company’sour Second Amended and Restated 2005 Incentive Compensation Plan and our 2023 Incentive Compensation Plan, that earn dividends on an equal basis with common shares. In applying the two-class method, earnings are allocated to both common shares and participating securities.

The following table sets forth the computation of basic and diluted earnings per share:

​

  Years Ended December 31, 
  2017  2016  2015 
  (In thousands, except per share data) 
          
Numerator:            
Income from continuing operations $22,246  $12,910  $9,146 
Less: Income allocated to unvested participating securities  370   231   171 
Income from continuing operations available to common stockholders $21,876  $12,679  $8,975 
             
Income from discontinued operations $32,471  $5,276  $4,268 
Less: Income allocated to unvested participating securities  541   94   80 
Income from discontinued operations available to common stockholders $31,930  $5,182  $4,188 
             
Net income available to common stockholders $53,806  $17,861  $13,163 
             
Denominator:            
Denominator for basic earnings per share-weighted average shares  5,803   5,761   5,706 
Effect of dilutive securities:            
Stock options  4   10   34 
Denominator for diluted earnings per share — adjusted weighted-average shares and assumed conversions  5,807   5,771   5,740 
             
Basic earnings per share:            
From continuing operations $3.77  $2.20  $1.58 
From discontinued operations  5.50   0.90   0.73 
Basic earnings per share $9.27  $3.10  $2.31 
             
Diluted earnings per share            
From continuing operations $3.77  $2.19  $1.56 
From discontinued operations  5.50   0.90   0.73 
Diluted earnings per share $9.27  $3.09  $2.29 

​

​

​

​

​

​

​

​

​

​

​

​

 

 

​

​

​

​

​

 

 

Years Ended December 31, 

​

    

    

2023

    

2022

    

2021

​

​

 

(In thousands, except per share data)

Numerator:

​

​

​

  

 

​

  

​

​

  

Net income

​

​

$

9,500

​

$

9,202

​

$

11,157

Less: Income allocated to unvested participating securities

​

​

 

149

​

 

140

​

​

190

Net income available to common shareholders

​

​

$

9,351

​

$

9,062

​

$

10,967

​

​

​

​

​

​

​

​

​

​

​

Denominator:

​

​

 

​

​

 

​

​

​

​

Denominator for basic earnings per share — weighted average shares

​

​

 

6,045

​

 

5,973

​

​

5,917

Effect of dilutive securities:

​

​

 

​

​

 

​

​

​

​

Common stock equivalents

​

​

 

—

​

 

—

​

​

—

Denominator for diluted earnings per share — adjusted weighted-average shares and assumed conversions

​

​

 

6,045

​

 

5,973

​

​

5,917

​

​

​

​

​

​

​

​

​

​

​

Earnings per share:

​

​

 

​

​

 

​

​

​

​

Basic

​

​

$

1.55

​

$

1.52

​

$

1.85

Diluted

​

​

$

1.55

​

$

1.52

​

$

1.85

​

The number ofThere were no stock options outstanding that had an antidilutive effect on our earnings per share calculation and therefore have been excluded from dilutive earnings per share calculation, was 0, 0 and 0 for the years ended December 31, 2017, 2016,2023, 2022, and 2015,2021, respectively. The actual effect of these shares, if any, on the diluted earnings per share calculation will vary significantly depending on fluctuations in the stock price.

60

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Table of Contents

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

Recent Accounting Pronouncements

Recently AdoptedNew Accounting Pronouncements

In November 2015,2023, the FASB issuedFinancial Accounting Standards Update No. 2015-17,“Income TaxesBoard (“FASB”) issued ASU 2023-07, “Segment Reporting (Topic 740), Balance Sheet Classification of Deferred Taxes”280): Improvements to Reportable Segment Disclosures” (“ASU 2015-17”2023-07”), which requires companies to classify all deferred tax assetsexpanded disclosure of significant segment expenses and liabilities as noncurrentother segment items on the balance sheet instead of separating deferred taxes into currentan annual and noncurrent amounts. This amendment was adopted on January 1, 2017 on a retrospectiveinterim basis. As a result we have reclassified approximately $1,022,000 of current deferred tax assets into the noncurrent deferred tax liability line item within the Condensed Consolidated Balance Sheet for the period ended December 31, 2016.

In March 2016, the FASB issued ASU No. 2016-09,"Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09"), which includes multiple amendments intended to simplify aspects of share-based payment accounting. Amendments to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements, and forfeitures will be applied using a modified retrospective transition method through a cumulative-effect adjustment to equity as of the beginning of the period of adoption. Amendments to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement will be applied retrospectively, and amendments requiring the recognition of excess tax benefits and tax deficiencies in the income statement are to be applied prospectively. This amendment was adopted on January 1, 2017 and did not have a material impact on our consolidated financial statements.

Recent Accounting Pronouncements – Not Yet Adopted

In May 2017, the FASB issued ASU 2017-09,“Compensation – Stock Compensation (Topic 718), Scope of Modification Accounting)” (“ASU 2017-09”) which clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The new guidance will reduce diversity in practice and result in fewer changes to the terms of an award being accounted for as modifications. ASU 2017-09 will be applied prospectively to awards modified on or after the adoption date. The guidance2023-07 is effective for annual periods, and interim periods within thoseus for annual periods beginning after December 15, 2017, with early adoption permitted. The Company is currently evaluating the impact that this standard will have on our consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350)”(“ASU 2017-04”) which removes step 2 from the goodwill impairment test. Under the new guidance, if a reporting unit’s carrying amount exceeds it fair value, an entity will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. ASU 2017-04 will be applied prospectively and is effective for fiscal years and interim impairment tests performed in periods beginning after December 15, 2019 with early adoption permitted. The Company is currently evaluating the impact of adopting this standard on our consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, “Classification of Certain Cash Receipts and Cash Payments (Topic 230): Statement of Cash Flows”(“ASU 2016-15”), which clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. ASU 2016-15 also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. ASU 2016-15 is effective for fiscal years1, 2024 and interim periods beginning after December 15, 2017. The Company isJanuary 1, 2025. We are currently evaluating the impact that this standardASU 2023-07 will have on our consolidated financial statements.statement disclosures.

In June 2016,December 2023, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses2023-09, “Income Taxes (Topic 326)740): Measurement of Credit Losses on Financial Instruments”(“Improvements to Income Tax Disclosures” (“ASU 2016-13”2023-09”), which amends guidance on reporting credit losses for assets held at amortized cost basisrequires expanded disclosure of our income rate reconciliation and available for sale debt securities.income taxes paid. ASU 2016-132023-09 is effective for fiscal years and interimus for annual periods beginning after December 15, 2019. The Company isJanuary 1, 2025. We are currently evaluating the impact that this standardASU 2023-09 will have on our consolidated financial statements.statement disclosures.

2.    Revenue

In February 2016,Nature of goods and services

The following is a description of principal activities from which we generate our revenue:

Broadcast Advertising Revenue

Our primary source of revenue is from the FASB issued Accounting Standards Update No. 2016-02,“Leases (Topic 842)” (“ASU 2016-02”)¸which requires that all leases withsale of advertising for broadcast on our stations. We recognize revenue from the sale of advertising as performance obligations are satisfied upon airing of the advertising; therefore, revenue is recognized at a termpoint in time when each advertising spot is transmitted. Agency commissions are calculated based on a stated percentage applied to gross billing revenue for our advertising inventory placed by agency and are reported as a reduction of more than one year, covering leased assetsadvertising revenue.

Digital Advertising Revenue

We recognize revenue from our digital initiatives across multiple platforms such as real estate, broadcasting towerstargeted digital advertising, online promotions, advertising on our websites and equipment, be reflected on the balance sheet as assetsdigital audio streams, mobile messaging, email marketing and liabilities for the rights and obligations created by these leases. ASU 2016-02other e-commerce. Revenue is effective for fiscal years fiscal years and interim periods beginning after December 15, 2018. While the Company is currently reviewing the effects of this guidance, the Company believes that this would result in an increaserecorded when each specific performance obligation in the assetsdigital advertising campaign takes place, typically within a one month period.

Other Revenue

Other revenue includes revenue from concerts, promotional events, tower rent and liabilities reflected onother miscellaneous items. Revenue is generally recognized when the Company’s consolidated balance sheets. Weevent is completed, as the promotional events are still evaluating the impact on our consolidated statementscompleted or as each performance obligation is satisfied.

​

63

Table of operations.Contents

61

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

Disaggregation of Revenue

The following table presents revenues disaggregated by revenue source:

In May 2014, the FASB issued Accounting Standards Update No. 2014-09,“Revenue​

​

​

​

​

​

​

​

​

​

​

​

​

 

 

Years Ended

​

 

 

December 31, 

​

    

     

2023

     

2022

     

2021

​

 

 

(in thousands)

Types of Revenue

    

    

​

​

​

​

​

​

​

​

Broadcast Advertising Revenue, net

​

​

$

94,228

​

$

98,709

​

$

95,573

Digital Advertising Revenue

​

​

 

9,623

​

 

7,912

​

 

6,337

Other Revenue

​

​

 

8,922

​

 

8,272

​

 

6,433

Net Revenue

​

​

$

112,773

​

$

114,893

​

$

108,343

​

Contract Liabilities

Payments from Contracts with Customers”(“ASU 2014-09”), which provides guidanceour advertisers are generally due within 30 days although certain advertisers are required to pay in advance. When an advertiser pays for the recognition, measurementservices in advance of the performance obligations these prepayments are contract liabilities. Typical contract liabilities relate to prepayments for advertising spots not yet run; prepayments from sponsors for events that have not yet been held; and disclosuregift cards sold on our websites used to finance a broadcast advertising campaign. Generally all contract liabilities are expected to be recognized within one year and are included in accounts payable in the Company’s Consolidated Financial Statements and are immaterial.

Transaction Price Allocated to the Remaining Performance Obligations

As the majority of revenue resulting fromour contracts with customersare one year or less, we have utilized the optional exemption under ASC 606-10-50-14 and will supersede virtually allnot disclose information about the remaining performance obligations for contracts which have original expected durations of the current revenue recognition guidance under GAAP. The FASB has also issued a number of updates to this standard. This standard is effective for the fiscal and interim periods beginning January 1, 2018. The Company adopted the new guidance on January 1, 2018, using the modified retrospective method, with no impact on its 2017 financial statements. The cumulative effect of initially applying the new guidance had no impact on the opening balance of retained earnings as of January 1, 2018. The Company does not expect the new guidance to have a material impact on its financial statements in future periods. However, additional disclosures will be included in future reporting periods in accordance with requirements of the new guidance.  one year or less.

​

2.

3.    Broadcast Licenses, Goodwill and Other Intangible Assets

We evaluate our FCC licenses for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. We operate our broadcast licenses in each market as a single asset and determine the fair value by relying on a discounted cash flow approach assuming a start-up scenario in which the only assets held by an investor are broadcast licenses. The fair value calculation contains assumptions incorporating variables that are based on past experiences and judgments about future operating performance using industry normalized information for an average station within a market. These variables include, but are not limited to: (1) the forecasted growth rate of each radio or television market, including population, household income, retail sales and other expenditures that would influence advertising expenditures; (2) the estimated available advertising revenue within the market and the related market share and profit margin of an average station within a market; (3) estimated capital start-up costs and losses incurred during the early years; (4) risk-adjusted discount rate; (5) the likely media competition within the market area; and (6) terminal values. If the carrying amount of FCC licenses is greater than their estimated fair value in a given market, the carrying amount of FCC licenses in that market is reduced to its estimated fair value.

We also evaluate goodwill in each of its reporting units (reportable segment) for impairment annually, or more frequently if certain circumstances are present. If the carrying amount of goodwill in a reporting unit is greater than the implied value of goodwill determined by completing a hypothetical purchase price allocation using estimated fair value of the reporting unit, the carrying amount of goodwill in that reporting unit is reduced to its implied value.

62

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

We utilize independent appraisals in testing FCC licenses for impairment when indicators of impairment are present.

We evaluate amortizable intangible assets for recoverability when circumstances indicate impairment may have occurred, using an undiscounted cash flow methodology. If the future undiscounted cash flows for the intangible asset

64

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Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

are less than net book value, then the net book value is reduced to the estimated fair value. Amortizable intangible assets are included in other intangibles, deferred costs and investments in the consolidated balance sheets.

Broadcast Licenses

We have recorded the changes to broadcast licenses for the years ended December 31, 20172023 and 20162022 as follows:

​

  Continuing
Operations		  Discontinued
Operations		  Total 
  (In thousands) 
          
Balance at January 1, 2016 $78,499  $9,607  $88,106 
Acquisitions  8,123   —   8,123 
Balance at December 31, 2016 $86,622  $9,607  $96,229 
Acquisitions  8,086   —   8,086 
Dispositions  —   (9,607)  (9,607)
Impairment charge  (1,449)  —   (1,449)
Balance at December 31, 2017 $93,259  $—  $93,259 

​

​

​

​

​

    

Total

​

​

(in thousands)

​

​

​

​

Balance at January 1, 2022

​

$

90,277

Acquisitions

​

 

30

Balance at December 31, 2022

​

$

90,307

Disposals

​

 

(67)

Balance at December 31, 2023

​

$

90,240

​

20172023 Impairment Test

We completed our impairment annual impairment test of broadcast licenses during the fourth quarter of 20172023 and determined that the fair value of the broadcast licenses were lesswas greater than the amount reflected in the balance sheet for one of the Company’s radio markets, Springfield, Illinois, and recorded non-cash impairment charge of $1,449,000 to reduce the carrying value recorded for each of these assets to the estimated fair market value. The reasons for theour markets and, accordingly, no impairment to the broadcasting licenses recognized in the fourth quarter of 2017 were primarily due to declines in available market revenue, market revenue share, profit margins and estimated long-term growth rates in our Springfield, Illinois market.

was recorded.

The following table reflects certain key estimates and assumptions used in the impairment test intests during the fourth quarter ended 2023, the fourth quarter of 2017.2022 and the fourth quarter of 2021. The ranges for operating profit margin and market long-term revenue growth rates vary by market. In general, when comparing between 2017, 20162023, 2022 and 2015:2021: (1) the market specific operating profit margin range remained relatively consistent; (2) the market long-term revenue growth rates were relatively consistent; (3) the discount rate decreased from 2021 and remained relatively consistent;consistent after that; and (4) current year revenues were 0.8 % lower thanrevenue projections decreased with amounts previously projected for 2017.2023.

​

Fourth

Quarter
2017

Fourth

Quarter
2016

Fourth
Quarter
2015
Discount rates12.4% - 12.5%12.3% - 12.4%12.2% - 12.4%
Operating profit margin ranges19.0% - 36.4%19.5% - 36.4%19.5% - 36.4%
Market long-term revenue growth rates1.1% - 3.5 %1.0% - 2.9 %1.3% - 3.1%

​

​

​

​

​

​

​

​

​

    

Fourth

    

Fourth

    

Fourth

 

​

​

Quarter

​

Quarter

​

Quarter

 

​

    

2023

    

2022

    

2021

 

Discount rates

 

10.0

%  

9.5

%  

12.3% - 12.6

%  

Operating profit margin ranges

 

17.8% - 36.4

%  

17.8% - 36.4

%  

17.8% - 36.4

%  

Market long-term revenue growth rates

 

1.0% - 2.0

%  

1.0% - 2.0

%  

0.2% - 2.6

%  

​

If actual market conditions are less favorable than those estimated by us or if events occur or circumstances change that would reduce the fair value of our broadcast licenses below the carrying value, we may be required to recognize additional impairment charges in future periods. Such a charge could have a material effect on our consolidated financial statements. We will continue to monitor potential triggering events and perform the appropriate analysis when deemed necessary.

​

63

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Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

20162022 Impairment Test

During the fourth quarter of 2016,2022, we completed our annual impairment test of broadcast licenses and determined that the fair value of the broadcast licenses was greater than the carrying value recorded for each of our markets and, accordingly, no impairment was recorded.

20152021 Impairment Test

WeDuring the fourth quarter of 2021, we completed our annual impairment test of broadcast licenses during the fourth quarter of 2015 and determined that the fair value of the broadcast licenses were lesswas greater than the amount reflected in the balance sheet for one of the Company’s radio markets, Columbus, Ohio, and recorded non-cash impairment charge of $874,000 to reduce the carrying value recorded for each of these assets to the estimated fair market value. The reasons for theour markets and, accordingly, no impairment to the broadcasting licenses recognized in the fourth quarter of 2015 were primarily due to declines in available market revenue, market revenue share, profit margins and estimated long-term growth rates in our Columbus, Ohio market.

was recorded.

Goodwill

During the fourth quarter of 2017,2023, 2022 and 2021, the Company performed its annual impairment test of its goodwill in accordance with ASC 350 and determined under the first step that the fair value of our continuing operations was in excess of its carrying value.

value and, accordingly, no impairment was recorded.

We have recorded the changes to goodwill for each of the years ended December 31, 20172023 and 20162022 as follows:

​

  Continuing
Operations		  Discontinued
Operations		  Total 
  (In thousands) 
          
Balance at January 1, 2016 $2,874  $      —  $2,874 
Acquisitions  4,533   —   4,533 
Balance at December 31, 2016 $7,407  $—  $7,407 
Acquisitions  8,151   —   8,151 
Balance at December 31, 2017 $15,558  $—  $15,558 

​

​

​

​

​

    

Total

​

​

(in thousands)

​

​

​

​

Balance at January 1, 2022

​

$

19,209

Acquisitions

​

 

27

Balance at December 31, 2022

​

$

19,236

Acquisitions

​

 

—

Balance at December 31, 2023

​

$

19,236

​

64

​

66

Table of Contents

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

Other Intangible Assets

We have recorded amortizable intangible assets at December 31, 20172023 as follows:

​

​

​

​

​

​

​

​

​

​

​

​

    

Gross

    

    

​

    

    

​

​

​

Carrying

​

Accumulated

​

Net

​

    

Amount

    

Amortization

    

Amount

 Gross     
 Carrying Accumulated Net 
 Amount  Amortization  Amount 
 (In thousands) 

​

​

​

​

​

​

​

​

​

​

​

(In thousands)

Non-competition agreements $3,861  $3,861  $— 

​

$

3,861

​

$

3,861

​

$

—

Favorable lease agreements  5,965   5,468   497 

​

 

5,965

​

 

5,652

​

 

313

Customer relationships  3,546   1,529   2,017 

​

 

4,660

​

 

4,660

​

 

—

Other intangibles  1,834   1,630   204 

​

 

1,844

​

 

1,811

​

 

33

Total amortizable intangible assets $15,206  $12,488  $2,718 

​

$

16,330

​

$

15,984

​

$

346

​

We have recorded amortizable intangible assets at December 31, 20162022 as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

Gross

​

​

​

​

​

 

​

​

Carrying

​

Accumulated

​

Net

​

    

Amount

    

Amortization

    

Amount

 Gross     
 Carrying Accumulated Net 
 Amount  Amortization  Amount 
 (In thousands) 

​

​

​

​

​

​

​

​

​

​

 

(In thousands) 

Non-competition agreements $3,861  $3,861  $— 

 

$

3,861

 

$

3,861

 

$

—

Favorable lease agreements  5,763   5,439   324 

​

​

5,965

​

​

5,624

​

​

341

Customer relationships  1,744   747   997 

​

​

4,660

​

​

4,660

​

​

—

Other intangibles  1,920   1,682   238 

​

​

1,829

​

​

1,799

​

​

30

Total amortizable intangible assets $13,288  $11,729  $1,559 

 

$

16,315

 

$

15,944

 

$

371

​

Aggregate amortization expense for these intangible assets for the years ended December 31, 2017, 20162023, 2022 and 2015,2021, was $860,000, $642,000$42,000, $48,000 and $231,000,$387,000, respectively. Our estimated annual amortization expense for the years ending December 31, 2018, 2019, 2020, 20212024, 2025, 2026, 2027 and 20222028 is $1,094,000, $691,000, $475,000, $49,000$71,000, $67,000, $66,000, $61,000 and $39,000,$31,000, respectively.

​

65

​

​

​

67

Table of Contents

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

4.    Long-Term Debt

3. Discontinued Operations

The Company has no debt outstanding at December 31, 2023 or December 31, 2022.

On May 9, 2017December 19, 2022, we entered into a definitive agreementThird Amendment to sell our Joplin, Missouri and Victoria, Texas television stations (“Television Sale”) for approximately $66.6 million, subject to certain adjustments, to Evening Telegram Company d/b/a Morgan Murphy Media. The Television Sale was completed on September 1, 2017 and the Company received net proceeds of $69.5 million which included the sales price of $66.6 million, the sale of accounts receivable of approximately $3.4 million, offset by certain closing adjustments and transactional costs of $500 thousand. The Company recognized a pretax gain of $50.8 million as a result of the Television Sale in the third quarter of 2017. The gain net of tax for the Television Sale was $29.9 million. Effective September 1, 2017, the Company used $24.2 million of the proceeds from the Television Sale to finance the acquisition of radio stations in South Carolina, which included the purchase price of $23 million, the purchase of $1.3 million in accounts receivable offset by certain closing adjustments and transactional costs of approximately $50,000 (as described in Note 9). On October 5, 2017 and November 3, 2017, the Company used $5,287,000 and $5,000,000 respectively of the proceeds from the Television Sale to pay down a portion of its Revolving Credit Facility, (as defined and described in Note 4).

In accordance with authoritative guidance we have reported(the “Third Amendment”), which extended the results of operations ofmaturity date to December 19, 2027, reduced the Joplin, Missouri and Victoria, Texas television stations as discontinued operations in the accompanying consolidated financial statements. For all previously reported periods, certain amounts in the consolidated financial statements have been reclassified. All of the assets and liabilities of the Joplin, Missouri and Victoria, Texas television stations have been classified as discontinued operations and the net results of operations have been reclassified from continuing operationslenders to discontinued operations. These were previously included in the Company’s television segment.  

The following table shows the components of the results from discontinued operations associated with the Television Sale as reflected in the Company’s Consolidated Statements of Operations (in thousands):

  Year Ended December 31, 
  2017(5)  2016  2015 
          
Net operating revenue $14,238  $23,636  $21,064 
Station operating expense(1)  9,757   14,743   14,080 
Other operating (income) expense  31   (42)  32 
Operating income  4,450   8,935   6,952 
Interest expense(2)  21   32   33 
Other income(3)  —   —   (417)
Income before income taxes  4,429   8,903   7,336 
Pretax gain on the disposal of discontinued operations  50,842   —   — 
Total pretax gain on discontinued operations  55,271   8,903   7,336 
Income tax expense(4)  22,800   3,627   3,068 
Income from discontinued operations, net of tax $32,471  $5,276  $4,268 

(1)No depreciation expense was recorded by the Company beginning May 9, 2017, the date the Television segment assets’ were held for sale.
(2)Interest expense related to the Surtsey debt that is guaranteed by the Television stations. Our affiliate repaid this loan when the television stations were sold on September 1, 2017.
(3)Other income in 2015 relates to a gain on an insurance claim.
(4)The effective tax rates on pretax income from discontinued operations were approximately 41%.
(5)Results of operations for the Television stations are reflected through August 31, 2017. The effective date of the sale was September 1, 2017.

66

SAGA COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS — (Continued)

The following table is a summary of the assets and liabilities of discontinued operations (in thousands):

  

December 31,

2017

  December 31,
2016		 
Major Classes of Current Assets of Discontinued Operations        
Accounts receivable $       —  $3,868 
Prepaid expenses and other current assets  —   625 
Barter transactions  —   132 
Total of current assets of discontinued operations $—  $4,625 
         
Major Classes of Non-Current Assets of Discontinued Operations        
Property and equipment, net(1) $—  $7,388 
Broadcast licenses, net(1)  —   9,607 
Other intangibles, deferred costs and investments, net(1)  —   1,053 
Total of non-current assets of discontinued operations $—  $18,048 
Total Assets Classified as Part of Discontinued Operations in the Condensed Consolidated Balance Sheets $—  $22,673 
         
Major Classes of Current Liabilities of Discontinued Operations        
Accounts payable $—  $759 
Barter transactions  —   163 
Current portion of long term debt  —   1,078 
Other liabilities(1)  —   971 
Total of current liabilities of discontinued operations $—  $2,971 
         
Major Classes of Current Liabilities of Discontinued Operations        
Other liabilities(1) $—  $1,058 
Total of non-current liabilities of discontinued operations $—  $1,058 
Total Liabilities Classified as Part of Discontinued Operations in the Condensed Consolidated Balance Sheets $—  $4,029 
Net Assets Classified as Part of Discontinued Operations in the Condensed Consolidated Balance Sheets $—  $18,644 

(1)For prior periods, the current and long-term classification of assets and liabilities does not change as they did not meet the held-for-sale criteria the prior periods. We closed the disposition on September 1, 2017, therefore all amounts in the current year are considered current assets or liabilities of discontinued operations.

67

SAGA COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS — (Continued)

The following table represents the components of the results from discontinued operations associated with the Television Sale as reflected in the Company’s unaudited Condensed Consolidated Statements of Cash Flows (in thousands):

  

December 31,

2017

  December 31,
2016		  December 31,
2015		 
          
Cash paid during the period            
Interest $21  $32  $33 
Income taxes  23,260   2,677   1,972 
             
Significant operating non-cash items            
Depreciation and amortization(1) $445  $1,387  $1,399 
Broadcast program rights amortization  418   628   637 
Barter revenue, net  18   32   (50)
Acquisition of property and equipment  —   43   3 
Loss (gain) on sale of assets  31   (42)  32 
Pretax gain on television sale  50,842   —   — 
             
Significant investing items            
Acquisition of property and equipment $335  $894  $1,973 
Proceeds from sale and disposal of assets  —   (59)  (3)
Net proceeds from sale of television stations(2)  69,528   —   — 
Proceeds from insurance claim  —   —   (777)

(1)No depreciation expense was recorded by the Company beginning May 9, 2017, the date the Television segment assets’ were held for sale.
(2)Net proceeds from the sale of the television stations reflect the sales price of $66.6 million, the sale of accounts receivable of approximately $3.4 million, offset by certain closing adjustments and transactional costs of approximately $500 thousand.

68

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

4.Long-Term Debt

Long-term debt consisted of the following:

  December 31,  December 31, 
  2017  2016 
  (In thousands) 
    
Credit Facility:        
Revolving Credit Facility $25,000  $35,287 
Amounts payable within one year  —   — 
  $25,000  $35,287 

Future maturities of long-term debt are as follows:

Year Ending
December 31,		 Amount 
  (In thousands) 
    
2018 $— 
2019  — 
2020  25,000 
2021  — 
2022  — 
Thereafter  — 
  $25,000 

On August 18, 2015, we entered into a new credit facility (the “Credit Facility”) with JPMorgan Chase Bank, N.A., Theand the Huntington National Bank Citizens(collectively, the “Lenders”), established an interest rate equal to the secured overnight financing rate (“SOFR”) as administered by the SOFR Administrator (currently established as the Federal Reserve Bank National Associationof New York) as the interest base and J.P. Morgan Securities LLC. In connection withincreased the execution of the Credit Facility, the credit agreement in place at June 30, 2015 (the “Old Credit Agreement”) was terminated, and all outstanding amounts were paid in full. The Credit Facility consists of a $100 million five-year revolving facility (the “Revolving Credit Facility”) and matures on August 18, 2020.

basis points.

We have pledged substantially all of our assets (excluding our FCC licenses and certain other assets) in support of the Credit Facility and each of our subsidiaries has guaranteed the Credit Facility and has pledged substantially all of their assets (excluding their FCC licenses and certain other assets) in support of the Credit Facility.

 The proceeds from the Credit Facility were used to repay all amounts outstanding on our Old Credit Agreement and pay transactional fees. The unused portion of the Revolving Credit Facility is available for general corporate purposes, including working capital, capital expenditures, permitted acquisitions and related transaction expenses and permitted stock buybacks. We wrote-off unamortized debt issuance costs relating to the Old Credit Agreement of approximately $557,000, pre-tax, due to entering into this new agreement during the year ended December 31, 2015.

Approximately $266,000 of debt issuance costs related to the Credit Facility were capitalized and are being amortized over the life of the Credit Facility. These debt issuance costs are included in other assets, net in the consolidated balance sheets.

69

Saga Communications, Inc.

Notes As a result of the Second Amendment, we incurred an additional $120,000 of transaction fees related to Consolidated Financial Statements — (Continued)

the Credit Facility that were capitalized. As a result of the Third Amendment, the Company incurred an additional $161,000 of transaction fees related to the Credit Facility that were capitalized. The cumulative transaction fees are being amortized over the remaining life of the Credit Facility.

Interest rates under the Credit Facility are payable, at our option, at alternatives equal to LIBOR (1.375%SOFR (5.38% at December 31, 2017)2023), plus 1% to 2% or the base rate plus 0% to 1%. The spread over LIBORSOFR and the base rate vary from time to time, depending upon our financial leverage. LetterLetters of credit issued under the Credit Facility will be subject to a participation fee (which is equal to the interest rate applicable to Eurocurrency Loans, as defined in the Credit Agreement) payable to each of the Lenders and a fronting fee equal to 0.25% per annum payable to the issuing bank. We alsoUnder the Third Amendment, we now pay quarterly commitment fees of 0.25% per annum on the unused portion of the Credit Facility. We previously paid quarterly commitment fees of 0.2% to 0.3% per annum on the unused portion of the Revolving Credit Facility.

The Credit Facility contains a number of financial covenants (all of which we were in compliance with at December 31, 2017)2023) which, among other things, require us to maintain specified financial ratios and impose certain limitations on us with respect to investments, additional indebtedness, dividends, distributions, guarantees, liens and encumbrances.

We had approximately $75$50 million of unused borrowing capacity under the Revolving Credit Facility at both December 31, 2017.2023 and December 31, 2022.

​

On October 5, 2017 and November 3, 2017, the Company used $5,287,000 and $5,000,000, respectively of the proceeds from the Television Sale to pay down a portion of its Revolving Credit Facility.

 The loan agreement of approximately $1.1 million of secured debt of affiliate was amended in April, 2017 to extend the due date of the loan for three years to mature on May 1, 2020. Our affiliate repaid this loan when the television stations were sold on September 1, 2017.

5.Supplemental Cash Flow Information

  Years Ended December 31, 
  2017  2016  2015 
  (In thousands) 
          
Cash paid during the period for:            
Interest $850  $636  $718 
Income taxes $2,420  $6,555  $4,192 
Non-cash transactions:            
Barter revenue $3,618  $3,471  $3,433 
Barter expense $3,367  $3,217  $3,270 
Purchase of treasury shares in connection with exercise of stock options $826  $—  $3,294 
Acquisition of property and equipment $8  $49  $44 
Acquisition of broadcast properties $—  $—  $50 
Use of treasury shares for 401(k) match $274  $258  $244 

70

68

Table of Contents

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

​

5.    Supplemental Cash Flow Information

​

6.Income Taxes

​

​

​

​

​

​

​

​

​

​

​

​

Years Ended December 31, 

​

    

2023

    

2022

    

2021

​

​

(In thousands)

​

​

​

​

​

​

​

​

​

​

Cash paid during the period for:

​

​

​

​

​

​

​

​

​

Interest

​

$

100

​

$

145

​

$

253

Income taxes

​

$

2,790

​

$

4,160

​

$

3,450

Non-cash transactions:

​

​

​

​

​

​

​

​

​

Barter revenue

​

$

2,402

​

$

2,431

​

$

2,125

Barter expense

​

$

2,452

​

$

2,477

​

$

2,124

Acquisition of property and equipment

​

$

55

​

$

2

​

$

—

Use of treasury shares for 401(k) match

​

$

256

​

$

249

​

$

221

​

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, the following that impact us: (1) reducing the U.S. federal corporate​

6.    Income Taxes

An income tax rate from 35 percent to 21 percent; (2) eliminating the corporate alternative minimum tax (“AMT”) and changing how existing AMT credits can be realized; (3) creating a new limitation on deductible interest expense; (4) repealing the domestic production activities deduction; (5) limiting the deductibilityexpense of certain executive compensation; and (6) limiting certain other deductions.

The SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on accounting$3,375,000 was recorded for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting relating to the Tax Act under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in its financial statements. If a company cannot determine a provisional estimate to be included in its financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act.

In connection with our initial analysis of the impact of the Tax Act, we have recorded a provisional amount of net tax benefit of $11.5 million in the year ended December 31, 20172023 compared to income tax expense of $4,800,000 for the year ended December 31, 2022. The effective tax rate was approximately 26.2% for the year ended December 31, 2023 compared to 34.3% for the year ended December 31, 2022. The 2022 year to date tax rate was impacted by $3.8 million in expenses in the third quarter related to the remeasurementcompensation of our deferred tax balanceCEO upon his death, in accordance with his employment agreement that are permanent differences between our book and other effects. For various reasons including those discussed below, we have not fully completed our accounting for the income tax effects of the Tax Act. As we were able to make reasonable estimates of the effects of the Tax Act, we recorded provisional amounts.

In connection with the adoption of the Tax Act, we:

–Remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally at a federal rate of 21%. However, we are still analyzing certain aspects of the Tax Act and refining our calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. Our financial statements include provisional amounts for the impacts of deferred tax revaluation.

–Evaluated the future deductibility of executive compensation due to the elimination of the performance-based exception as well as the modification of who is treated as a covered person in connection with limiting the deduction. As part of the Tax Act, there is a transition rule for written, binding contracts in place prior to November 2, 2017 related to executive compensation, that have not been modified in any material respect. Further guidance is needed to fully determine the impact of these provisions. Our financial statements include provisional amounts for the impacts of the changes to the deductibility of executive compensation.

–Performed initial evaluations of the state conformity to the Tax Act. We continue to assess the conformity of each state in which we operate to the Tax Act. Our financial statements include provisional amounts for the impacts of state conformity.

71

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

taxable income.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax liabilities and assets are as follows:

​

​

​

​

​

​

​

​

​

​

December 31, 

​

    

2023

    

2022

 December 31, 
 2017  2016 
 (In thousands) 
     

​

​

​

​

​

​

​

​

(In thousands)

​

​

​

​

​

​

​

Deferred tax liabilities:        

​

​

​

​

​

​

Property and equipment $4,333  $6,858 

​

$

3,976

​

$

4,218

Intangible assets  17,640   24,987 

​

 

23,006

​

 

22,355

Prepaid expenses  317   619 

​

 

490

​

 

477

Total deferred tax liabilities  22,290   32,464 

​

 

27,472

​

 

27,050

Deferred tax assets:        

​

​

​

​

​

​

Allowance for doubtful accounts  116   224 

Allowance for credit losses

​

 

81

​

 

56

Compensation  1,058   2,421 

​

 

1,107

​

 

1,134

Other accrued liabilities  44   78 

​

 

162

​

 

123

  1,218   2,723 

​

​

 

1,350

​

 

1,313

Less: valuation allowance  —   — 

​

 

—

​

 

—

Total net deferred tax assets  1,218   2,723 

​

 

1,350

​

 

1,313

Net deferred tax liabilities $21,072  $29,741 

​

$

26,122

​

$

25,737

Current portion of deferred tax assets $300  $1,022 

​

$

296

​

$

341

Non-current portion of deferred tax liabilities  (21,372)  (30,763)

​

 

(26,418)

​

 

(26,078)

Net deferred tax liabilities $(21,072) $(29,741)

​

$

(26,122)

​

$

(25,737)

​

69

Table of Contents

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

Deferred tax assets are required to be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. At December 31, 20172023 and December 31, 2016,2022, we do not have a valuation allowance for net deferred tax assets.

At December 31, 20172023 and 2016,2022, net deferred tax liabilities include a deferred tax asset of $1,175,000$1,350,000 and $2,723,000,$1,313,000, respectively, relating to deferred compensation, stock-based compensation expense, accrued compensation, the allowance for doubtful accounts,credit losses, and other accrued expenses.

72

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

The significant components of the provision for income taxes are as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

Years Ended December 31, 

​

    

2023

    

2022

    

2021

 Years Ended December 31, 
 2017  2016  2015 
 (In thousands) 
       

​

​

​

​

​

​

​

​

​

​

​

(In thousands)

Current:            

​

​

​

​

​

​

​

​

​

Federal $2,545  $5,616  $3,307 

​

$

2,240

​

$

2,800

​

$

3,080

State  (255)  1,010   784 

​

 

750

​

 

1,065

​

 

985

Total current  2,290   6,626   4,091 

​

 

2,990

​

 

3,865

​

 

4,065

Total deferred  (8,210)  2,247   2,481 

​

 

385

​

 

935

​

 

195

Total Income Tax Provision $(5,920) $8,873  $6,572 

​

$

3,375

​

$

4,800

​

$

4,260

In addition, we recognized a tax expense (benefit) of ($100,000), $0, and $230,000 as a result of stock option exercises for the difference between compensation expense for financial statement and income tax purposes for the years ended December 31, 2017, 2016 and 2015, respectively.

​

The reconciliation of income tax at the U.S. federal statutory tax rates to income tax expense (benefit) is as follows:

​

  Years Ended December 31, 
  2017  2016  2015 
  (In thousands) 
          
Tax expense at U.S. statutory rates $5,716  $7,665  $5,401 
State tax expense (benefit), net of federal benefit  (769)  926   760 
Other, net  633   282   411 
Federal tax reform - deferred tax rate change  (11,500)  —   — 
  $(5,920) $8,873  $6,572 

​

​

​

​

​

​

​

​

​

​

​

​

Years Ended December 31, 

​

    

2023

    

2022

    

2021

​

​

(In thousands)

Tax expense (benefit) at U.S. statutory rates

​

$

2,694

​

$

2,927

​

$

3,209

State tax expense, net of federal benefit

​

 

637

​

 

939

​

 

815

Other, net

​

 

44

​

 

934

​

 

236

​

​

$

3,375

​

$

4,800

​

$

4,260

​

The 20172023, 2022 and 2021 effective tax rate differs fromrates exceed the federal statutory rate primarily due to the impacts of the Tax Actnon-deductible compensation related expenses and state income tax benefit on current year earnings.  The 2016 effective tax rate exceeds the federal statutory rate primarily due to state income taxes.

The Company files income taxes in the U.S. federal jurisdiction, and in various state and local jurisdictions. The Company is no longer subject to U.S. federal examinations by the Internal Revenue Service (IRS) for years prior to 2014. During the first quarter of 2015, the IRS commenced an examination of the Company’s 2013 U.S. federal income tax return which was completed in the first quarter of 2016 and resulted in no changes to the return.2020. The Company is subject to examination for income and non-income tax filings in various states.

As of December 31, 2017,2023, and 20162022 there were no accrued balances recorded related to uncertain tax positions.

We classify income tax-related interest and penalties that are related to income tax liabilities as interest expense and corporate general and administrative expense, respectively.a component of income tax expense. For the years ended December 31, 2017, 20162023, 2022 and 2015,2021, we had no$-, $-, and $600, respectively, tax-related interest orand penalties and had $0 accrued at December 31, 20172023 and 2016.2022.

​

73

70

Table of Contents

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

​

7.7.    Stock-Based Compensation

2005 Incentive Compensation Plan

On October 16, 2013May 13, 2019 our stockholdersshareholders approved an amendment to the Second Amended and Restated Saga Communications, Inc. 2005 Incentive Compensation Plan (the “Second(as amended, “The Second Restated 2005 Plan”). The 2005 Incentive Compensation PlanThis plan was first approved by stockholders in 2005, and replaced our 2003 Stock Option Plan (the “2003 Plan”), subsequently this plan was re-approved by stockholders in 2010.2010 and 2013. The changes inamendment to the Second Restated 2005 Plan (i) increased the number of authorized shares by 233,334 shares of Common Stock, (ii) extended the date for making awards to September 6, 2018, (iii) includes directors as participants, (iv) targets awards according to groupings2023 and (ii) increased the number of participants based on rangesauthorized shares under the Plan by 90,000 shares of base salary of employees and/or retainers of directors, (v) requires participants to retain 50 % of their net annual restricted stock awards during their employment or service as a director, and (vi) includes a clawback provision.Class B Common Stock. The Second Restated 2005 plan allowsPlan allowed for the granting of restricted stock, restricted stock units, incentive stock options, nonqualified stock options, and performance awards to eligible employees and non-employee directors. The Company will request stockholder approval at the 2018 Annual Meeting of Stockholders to amend the Second Restated 2005 Plan to extend the date for making awards to September 6, 2023.

The number of shares of Common Stock that maywas allowed to be issued under the Second Restated 2005 Plan may not exceed 280,000370,000 shares of Class B Common Stock, 900,000990,000 shares of Class A Common Stock of which up to 620,000 shares of Class A Common Stock maywere to be issued pursuant to incentive stock options and 280,000370,000 Class A Common Stock issuablewere to be issued upon conversion of Class B Common Stock. Awards denominated in Class A Common Stock maywere to be granted to any employee or director under the Second Restated 2005 Plan. However,Upon the passing of Mr. Christian, we no longer have any holders of Class B Common Stock, as those awards denominated in Class B Common Stock maywere only able to be granted to Edward K. Christian, President, Chief Executive Officer, Chairman of the Board of Directors, and the holder of 100% of the outstanding Class B Common Stock of the Company.Mr. Christian. Stock options granted under the Second Restated 2005 Plan maywere to be for terms not exceeding ten years from the date of grant and maycould not be exercised at a price which iswas less than 100% of the fair market value of shares at the date of grant.

2023 Incentive Compensation Plan

On May 8, 2023 our shareholders approved the 2023 Incentive Compensation Plan (the “2023 Plan”). The 2023 Plan replaces the Second Restated 2005 Plan. The Board of Directors does not intend to make any further awards under the Second Restated 2005 Plan. However, each outstanding award under the Second Restated 2005 Plan will remain outstanding under the Second Restated 2005 Plan and will continue to be governed under its terms and any applicable award agreement. The 2023 Plan allows for the granting of restricted stock, restricted stock units, incentive stock options, nonqualified stock options, and performance awards, including cash to eligible employees and non-employee directors of the Company and its subsidiaries. The number of shares of Common Stock that may be issued under the 2023 Plan may not exceed 600,000 shares of Class A Common Stock.

Stock-Based Compensation

The Company’sOur stock-based compensation expense is measured and recognized for all stock-based awards to employees using the estimated fair value of the award. Compensation expense is recognized over the period during which an employee is required to provide service in exchange for the award. For these awards, we have recognized compensation expense using a straight-line amortization method. Accounting guidance requires that stock-based compensation expense be based on awards that are ultimately expected to vest; therefore stock-based compensation has been adjusted for estimated forfeitures. When estimating forfeitures, we consider voluntary termination behaviors as well as trends of actual option forfeitures.

74

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

All stock options were fully vested and expensed at December 31, 2012, therefore there was no compensation expense related to stock options for the years ended December 31, 2017, 20162023, 2022 and 2015.2021. We calculated the fair value of each option award on the date of grant using the Black-Scholes option pricing model. The estimated expected volatility, expected term of options and estimated annual forfeiture rate were determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior. The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of grant.

71

Table of Contents

The following summarizes the stock option transactions for the Second Restated 2005 Plan, and the 2003 Plan for the year ended December 31:Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

        Weighted    
        Average    
     Weighted  Remaining  Aggregate 
  Number of  Average  Contractual  Intrinsic 
  Options  Exercise Price  Term (Years)  Value 
             
Outstanding at January 1, 2015  213,170  $31.79   1.2  $2,519,147 
Granted  —   —         
Exercised  (125,354)  27.09         
Forfeited/canceled/expired  (58,781)  43.47         
Outstanding at December 31, 2015  29,035  $28.47   1.4  $289,769 
Granted  —   —         
Exercised  —   —         
Forfeited/canceled/expired  —   —         
Outstanding at December 31, 2016  29,035  $28.47   0.4  $633,834 
Granted  —   —         
Exercised  (29,035)  28.47         
Forfeited/canceled/expired  —   —         
Outstanding at December 31, 2017  —  $—   —  $— 
Vested and Exercisable at December 31, 2017  —  $—   —  $— 

The total intrinsic value of stock options exercised during the years ended December 31, 2017, 2016 and 2015 was $664,321, $0, and $1,120,153, respectively. Cash received from stock options exercised during the years ended December 31, 2017, 2016 and 2015 was $354, $0 and $101,200, respectively.

There were no options granted during 2017, 20162023, 2022 and 20152021 and there were no stock options outstanding as of December 31, 2017.

75

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

2023.

The following summarizes the restricted stock transactions for the year ended December 31:

​

   Weighted 
   Average 
   Grant Date 
 Shares  Fair Value 
     
Outstanding at January 1, 2015  89,832  $41.20 

​

​

​

​

​

​

​

    

​

    

Weighted

​

​

​

​

Average

​

​

​

​

Grant Date

​

    

Shares

    

Fair Value

​

​

​

​

​

​

Outstanding at January 1, 2021

 

63,755

​

$

32.90

Granted  55,081   40.09 

 

77,913

​

 

23.00

Vested  (36,142)  42.11 

 

(41,059)

​

 

33.85

Forfeited/canceled/expired  (1,982)  43.62 

 

—

​

 

-

Outstanding at December 31, 2015  106,789  $40.28 

Outstanding at December 31, 2021

 

100,609

​

$

24.85

Granted  48,471   48.60 

 

66,274

​

 

28.70

Vested  (51,368)  41.20 

 

(75,763)

​

 

25.45

Forfeited/canceled/expired  (630)  38.83 

 

—

​

 

—

Outstanding at December 31, 2016  103,262  $43.73 

Outstanding at December 31, 2022

 

91,120

​

$

27.15

Granted  48,780   44.20 

 

139,663

​

​

20.41

Vested  (54,598)  42.13 

 

(37,224)

​

​

26.74

Forfeited/canceled/expired  (805)  46.23 

 

—

​

​

—

Non-vested and outstanding at December 31, 2017  96,639  $44.85 

Non-vested and outstanding at December 31, 2022

 

193,559

​

$

22.36

Weighted average remaining contractual life (in years)  2.2     

 

2.5

​

 

  

​

The weighted average grant date fair value of restricted stock that vestedgranted during 2017, 20162023, 2022 and 20152021 was $2,300,000, $2,116,000$2,850,000, $1,902,000, and $1,522,000,$1,792,000 respectively. The net value of unrecognized compensation cost related to unvested restricted stock awards aggregated $4,063,000, $4,223,000$4,132,000, $2,397,000 and $3,993,000$2,354,000 at December 31, 2017, 20162023, 2022 and 2015,2021, respectively.

For the years ended December 31, 2017, 20162023, 2022 and 20152021 we had $2,279,000, $2,101,000$1,116,000, $1,858,000 and $1,655,000,$1,335,000, respectively, of total compensation expense related to restricted stock-based arrangements. The expense is included in corporate general and administrative expenses in our results of operations. The associated tax benefit recognized for the years ended December 31, 2017, 20162023, 2022 and 20152021 was $912,000, $840,000$294,000, $149,000 and $662,000,$121,000, respectively.

​

8.

72

Table of Contents

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

​

8.    Employee Benefit Plans

401(k) Plan

We have a defined contribution pension plan (“401(k) Plan”) that covers substantially all employees. Employees can elect to have a portion of their wages withheld and contributed to the plan. The 401(k) Plan also allows us to make a discretionary contribution. Total administrative expense under the 401(k) Plan was $1,700, $1,200$-, $3,500 and $2,300$1,550 in 2017, 20162023, 2022 and 2015,2021, respectively. The Company’s discretionary contribution to the plan was approximately $255,000, $275,000$268,000, $256,000 and $250,000 for the years ended December 31, 2017, 20162023, 2022 and 2015,2021, respectively.

76

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

Deferred Compensation Plan

In 1999 we established a Nonqualified Deferred Compensation Plan which allows officers and certain management employees to annually elect to defer a portion of their compensation, on a pre-tax basis, until their retirement. The retirement benefit to be provided is based on the amount of compensation deferred and any earnings thereon. Deferred compensation expense for the years ended December 31, 2017, 20162023, 2022 and 20152021 was $211,000, $184,000$226,000, $135,000 and $138,000,$100,000, respectively. We invest in company-owned life insurance policies to assist in funding these programs. The cash surrender values of these policies are in a rabbi trust and are recorded as our assets.

Split Dollar Officer Life Insurance

The Company providesWe provide split dollar insurance benefits to certain executive officers and recordsrecord an asset equal to the cumulative premiums paid on the related policies, as the Companywe will fully recover these premiums under the terms of the plan. The Company retainsWe retain a collateral assignment of the cash surrender values and policy death benefits payable to insure recovery of these premiums.

​

9.

9.   Acquisitions and Dispositions

We actively seek and explore opportunities for expansion through the acquisition of additional broadcast properties. The consolidated statements of income include the operating results of the acquired stations from their respective dates of acquisition. All acquisitions were accounted for as purchases and, accordingly, the total purchase consideration was allocated to the acquired assets and assumed liabilities based on their estimated fair values as of the acquisition dates. The excess of the consideration paid over the estimated fair value of net assets acquired have been recorded as goodwill. The Company accounts for acquisition under the provisions of FASB ASC Topic 805,Business Combinations.

Management assigned fair values to the acquired property and equipment through a combination of cost and market approaches based upon each specific asset’s replacement cost, with a provision for depreciation, and to the acquired intangibles, primarily an FCC license, based on the Greenfield valuation methodology, a discounted cash flow approach.

​

73

Table of Contents

2017 Acquisitions and DispositionsSaga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

Pending Acquisitions

On May 9, 2017February 13, 2024, we entered into a definitivean agreement to purchase the assets of WKOA (FM), WKHY (FM), WASK (FM), WXXB (FM), WASK (AM) and W269DJ from Neuhoff Communications, Inc. serving the Greater Lafayette, Indiana radio market for $5.3 million which we expect to finance through funds generated from operations or borrowings under our credit agreement. We expect to close on this acquisition in the second quarter of 2024.

2023 Dispositions

On February 28, 2023, we closed on an agreement to sell WPVQ-AM located in our Joplin, Missouri and Victoria, Texas television stationsGreenfield, Massachusetts market to Hampden Communications Corp for approximately $66.6 million, subject to certain adjustments, to Evening Telegram Company d/b/$2,000. We recorded a Morgan Murphy Media. The Television Sale was completed$43,000 loss on September 1, 2017 and the Company received net proceeds of $69.5 million which included the sales price of $66.6 million, the sale in our other operating (income) expense, net line item on our Consolidated Statement of accounts receivableOperations.

On March 20, 2023, we submitted a request to the FCC to cancel our FCC license for WHMQ-AM located in our Greenfield, Massachusetts market. We recorded a $22,000 loss on the disposal in our other operating (income) expense, net line items in our Consolidated Statement of approximately $3.4 million, offset by certain closing adjustments and transactional costs of approximately $500 thousand.Operations.

2022 Acquisitions

On May 9, 2017, the CompanyJuly 12, 2021, we entered into an Asset Purchase Agreement with Apex Media Corporationagreement to acquire WIZZ-AM and Pearce Development, LLC f/k/a Apex Real Property, LLC to purchase radio stations principally servingtranslator from P. & M. Radio for $61,800 of which $5,000 was paid in 2021 and the South Carolina area for approximately $23 million (subject to certain purchase price adjustments) plusremainder was paid on April 6, 2022 when we closed on the right to air certain radio commercials, substantially all the assets related to the operation of the following radio stations: WCKN(FM), WMXF(FM), WXST(FM), WAVF(FM), WSPO(AM), W261DG, W257BQ, WVSC(FM), WLHH(FM), WOEZ(FM), W256CB, W293BZ. The Company closed this transaction effective September 1, 2017, simultaneously with the closing of the Television Sale using funds generated from the Television Sale of $24.2 million, which included the purchase price of $23 million, the purchase of $1.3 million in accounts receivable offset by certain closing adjustments and transactional costs of approximately $50,000.transaction. Management attributes the goodwill recognized in the acquisition to the power of the existing brands in the Charleston, South Carolina and Hilton Head, South CarolinaGreenfield, Massachusetts market as well as synergies and growth opportunities expected through the combination with the Company’s existing stations. The translators are start-up stations and therefore, have no pro forma revenue and expenses.

77

2021 Acquisitions

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

On January 16, 2017, we entered into8, 2021, the Company closed on an asset purchase agreement to purchase WBQL and W288DQ from Consolidated Media, LLC, for an FM radio station (WCVL) from WUVA, Incorporated, servingaggregate purchase price of $175,000, of which $25,000 was paid in 2020 and the Charlottesville, Virginia market for approximately $1,658,000, which included $8,000remaining $150,000 paid in transactional costs. Simultaneously, we entered into a LMA to begin operating the station on February 1, 2017. We completed this acquisition on April 18, 2017. This acquisition was financed through funds generated from operations. Unaudited proforma results of operations for this acquisition are not required, as such information is not material to our financial statements and therefore is not presented in the pro forma tables in the following pages.

2016 Acquisitions

On November 2, 2015, we entered into an agreement to acquire an FM radio station (WLVQ) from Wilks Broadcast Columbus, LLC, serving the Columbus, Ohio market for approximately $13,791,000, which included $734,000 in accounts receivable and $57,000 in transactional costs. We completed this acquisition on February 3, 2016. We operated this station under a LMA from November 16, 2015 through the completion of the acquisition. This acquisition was financed through funds generated from operations.2021. Management attributes the goodwill recognized in the acquisition to the power of the existing brands in the Columbus, OhioClarksville, Tennessee market as well as the synergies and growth opportunities expected through the combination with the Company’s existing stations.

On March 16, 2016 we acquired an FM translator serving the Portland, Maine market for approximately $50,000.

On March 25, 2016 we acquired an FM translator serving the Milwaukee, Wisconsin market for approximately $50,000.

On April 8, 2016 we acquired an FM translator serving the Charlottesville, Virginia market for approximately $100,000.

On April 11, 2016 we acquired an FM translator serving the Clarksville, Tennessee market for approximately $30,000.

On June 3, 2016 we acquired an FM translator serving the Spencer, Iowa market for approximately $35,000.

On August 11, 2016 we acquired two FM The translators serving the Bellingham, Washington market for approximately $50,000.are start-up stations and therefore, have no pro forma revenue and expenses.

On September 12, 2016 we acquired an FM translator serving the Portland, Maine market for approximately $45,000.

On October 11, 2016 we acquired a FM Translator serving the Bellingham, Washington market for approximately $25,000.

On November 8, 2016 we acquired a FM Translator serving the Des Moines, Iowa market for approximately $25,000.

On November 14, 2016 we acquired a FM Translator serving the Springfield, Illinois market for approximately $23,000.

On December 2, 2016 we acquired a FM Translator serving the Ithaca, New York market for approximately $35,000.

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Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

Condensed Consolidated Balance Sheet of 20172023 and 20162022 Acquisitions:

The following condensed balance sheets represent the estimated fair value assigned to the related assets and liabilities of the 20172023 and 20162022 acquisitions at their respective acquisition dates.

Condensed Consolidated Balance Sheet of 20172023 and 20162022 Acquisitions

  Acquisitions in 
  2017  2016 
  (In thousands) 
Assets Acquired:        
Current assets $1,335  $814 
Property and equipment  6,678   375 
Other assets:        
Broadcast licenses  8,086   8,123 
Goodwill  8,151   4,533 
Other intangibles, deferred costs and investments  2,019   398 
Total other assets  18,256   13,054 
Total assets acquired  26,269   14,243 
Liabilities Assumed:        
Current liabilities  413   41 
Total liabilities assumed  413   41 
Net assets acquired $25,856  $14,202 

Pro Forma Results​

​

​

​

​

​

​

​

​

​

Acquisitions in

​

    

2023

    

2022

​

​

(In thousands)

Assets Acquired:

​

​

​

​

​

​

Property and equipment

​

$

—

 

$

5

Other assets:

​

​

​

​

​

​

Broadcast licenses

​

 

—

 

​

30

Goodwill

​

 

—

 

​

27

Total other assets

​

 

—

 

​

57

Total assets acquired

​

 

—

 

​

62

Liabilities Assumed:

​

​

​

​

​

​

Current liabilities

​

 

—

 

​

—

Total liabilities assumed

​

 

—

 

​

—

Net assets acquired

​

$

—

​

$

62

​

​

​

75

Table of Operations for Acquisitions (Unaudited)Contents

The following unaudited pro forma results of our operations for the years ended December 31, 2017 and 2016 assume the 2017 and 2016 acquisitions occurred as of January 1, 2016. The translators are start-up stations and therefore, have no pro forma revenue and expenses. The pro forma results give effect to certain adjustments, including depreciation, amortization of intangible assets, increased interest expense on acquisition debt and related income tax effects. The pro forma results have been prepared for comparative purposes only and do not purport to indicate the results of operations which would actually have occurred had the combinations been in effect on the dates indicated or which may occur in the future.

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Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

  Years Ended December 31, 
  2017  2016 
  (In thousands, except per share data) 
Pro forma Consolidated Results of Operations      
Net operating revenue $123,651  $126,789 
Station operating expense  92,563   93,818 
Corporate general and administrative  11,657   10,980 
Other operating (income) expenses, net  55   (1,351)
Impairment of intangible assets  1,449   — 
Operating income  17,927   23,342 
Interest expense  903   744 
Income from continuing operations before income tax expense  17,024   22,598 
Income tax (benefit) expense  (5,634)  9,207 
Income from continuing operations, net of tax  22,658   13,391 
Income from discontinued operations, net of tax  32,471   5,276 
Net income $55,129  $18,667 
Basic earnings per share:        
From continuing operations        
From discontinued operations $3.84  $2.28 
Basic earnings per share  5.50   0.90 
  $9.34  $3.18 
Diluted earnings per share:        
From continuing operations $3.84  $2.28 
From discontinued operations  5.50   0.90 
Diluted earnings per share $9.34  $3.18 

80

10.    Related Party Transactions

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

10.Related Party Transactions

Principal StockholderMr. Christian’s Employment Agreement

In June 2011,On January 25, 2022, we entered into a newthird amendment (the “2022 Amendment”) to the employment agreement with Edward K. Christian Chairman, President and CEO, which became effective as ofdated June 1, 2011 and replaces and supersedes his prior(the “2011 employment agreement. Onagreement”), which had previously been amended on February 12, 2016 we entered into an(the “2016 amendment”) and on February 26, 2019 (the “2019 amendment”). The 2011 employment agreement, as amended by the 2016 amendment, the 2019 amendment, and the 2022 amendment, is referred to herein as the “amended 2011 employment agreement.” The 2022 amendment extended Mr. Christian’s employment with the Company from March 31, 2025 to March 31, 2027 and made certain changes to the agreement. The amendment extends the term of the2011 employment agreement to March 31, 2021. The amendment also states that on each anniversarycause it to be compliant with Section 409A of the effective date ofInternal Revenue Code. Pursuant to the amended 2011 employment agreement, the Company’s Compensation committee shall determine in its discretion the amount of any annual increases (which shall not be less than the greater of 4 % or a defined cost of living increase).we paid Mr. Christian maya salary at the rate of $860,000 per year, adjusted as discussed in the next paragraph below. Mr. Christian was permitted to defer any or all of his annual salary.

Under the agreement, Mr. Christian is eligible for discretionary and performance bonuses, stock options and/or stock grants in amounts determined by the Compensation Committee and will continue to participate in the Company’s benefit plans. The Company will maintain insurance policies, will furnish an automobile, will pay for an executive medical plan and will maintain an office for Mr. Christian at its principal executive offices and in Sarasota County, Florida. The amendment adds that Additionally, the Company iswas authorized to pay for Mr. Christian’s tax preparation services on an annual basis, and that thisthe amount will beof which was subject to income tax as additional compensation.

Pursuant to the 2011 employment agreement, commencing on June 1, 2012, and each anniversary thereafter, the Compensation Committee was required to determine in its discretion the amount of any increase in Mr. Christian’s then existing annual salary; provided, however, that such increase would not be less than the greater of 3% or a cost of living increase based on the consumer price index. Pursuant to the 2016 amendment, the amended 2011 employment agreement provided that such increase in Mr. Christian’s then existing salary would not be less than the greater of 4% or a cost of living increase based on the consumer price index.

The amended 2011 employment agreement provides certain paymentsalso provided that Mr. Christian was eligible for equity awards under the 2005 Incentive Compensation Plan as shall be approved by the Compensation Committee and bonuses in such amounts as shall be determined pursuant to the terms of the CEO Plan or as otherwise determined by the Compensation Committee in its discretion based on the performance of the Company and the accomplishments of objectives established by the Compensation Committee in consultation with Mr. Christian.

Under the amended 2011 employment agreement, Mr. Christian was eligible to participate, in accordance with their terms, in all medical and health plans, life insurance, profit sharing, 401(k) Plan, pension, and such other employment benefits as are maintained by the Company or its affiliates for other key employees performing services. During the term of the employment agreement, the Company was required to maintain all existing policies of insurance on Mr. Christian’s life, including the existing split dollar policy. The Company was also required to pay for Mr. Christian to participate in an executive medical plan and to maintain its existing medical reimbursement policy. Mr. Christian was also furnished with an automobile and other fringe benefits as have been afforded him in the past or as are consistent with his position. In addition, the Company agreed to maintain an office for Mr. Christian in Sarasota County, Florida. The 2016 amendment increased the paid vacation time awarded to Mr. Christian on the anniversary date of the 2011 employment agreement from four weeks to six weeks of paid vacation.

​

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Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

Payments Under the Principal Shareholder Employment Agreement

The amended 2011 employment agreement terminated upon Mr. Christian’s death on August 19, 2022. As a result of his passing the Company was required to make several payments to his estate as outlined in his employment agreement, and described above. In accordance with ASC 712-10-25, Nonretirement Postemployment Benefits,we accrued all necessary expenses as of September 30, 2022. As a result of our contractual obligations under the Mr. Christian’s agreement, Mr. Christian’s estate was the beneficiary of a gross amount of approximately $5.8 million in cash, common stock and a life insurance policy of which $3.9 million was recorded upon his passing in the eventthird quarter of 2022, and $1.9 million had been accrued for in previous periods. The estate was the beneficiary of a lump-sum payment of his disability, death orcurrent base salary plus accrued unused vacation time totaling $1.9 million which was paid in October 2022. Mr. Christian’s estate was also provided with a change in control. Upon a change in control,prorated bonus that Mr. Christian may terminate his employment. Theearned of approximately $633,000 which was paid in March 2023. Mr. Christian had approximately $65,000 withheld as deferred compensation that was paid to the estate in January 2023. Additionally, under the agreement, also provides generallyany award previously granted under the Company’s 2005 Incentive Compensation Plan were immediately vested and provided to the estate. At the date of Mr. Christian’s passing, he had approximately 55,000 shares of unvested restricted stock that uponimmediately vested at a changeprice of $24.80 for a total of $1.4 million in control,common stock received by the estate. Mr. Christian’s estate is now the beneficiary of the Split Dollar life insurance policy that has a cash surrender value of approximately $971,000. Under the agreement, the Company will be responsible to pay the estate’s income tax obligation relating to the payout of the life insurance policy. The estimate of the possible loss related to that tax obligation cannot be made at this time due to uncertainties related to the timing of the transfer. Lastly, under the agreement, the Company shall continue to pay for the healthcare coverage and life insurance premiums for Mr. Christian’s spouse for ten years which totals approximately $800,000.

Mr. Lada’s Letter Agreement

On August 21, 2022, we entered into a letter employment agreement with Warren S. Lada, a member of our Board, to serve as our Interim President and CEO following the death of Mr. Christian, to serve in this capacity while the Company conducted a formal search for a permanent successor to Mr. Christian. Under the terms of the letter agreement we paid Mr. Lada an annualized base salary of $750,000 during his service as Interim President and CEO; provided local transportation to the Company offices for up to three days a week and he was eligible to participate in the Company’s benefit plans, including the 401(k) plan, as an employee, upon completion of the eligibility requirements.

Mr. Forgy’s Employment Agreement

On November 16, 2022, we entered into an employment agreement with Christopher S. Forgy, who was appointed as our President and CEO effective December 7, 2022. Mr. Forgy’s employment agreement has an initial term of three years, and we and Mr. Forgy may mutually agree to extend the term for an additional two years. Either party may provide written notice of its intent not to extend the initial term at least one year prior to the end of the initial term.

Under the agreement, Mr. Forgy’s base salary is set at $670,000 for the first year and will increase 4% annually. If the Company and Mr. Forgy mutually agree to renew the term of Mr. Forgy’s employment for an additional two years, Mr. Forgy’s base salary would increase in the fourth and fifth year by 4% as well.

Mr. Forgy will have the opportunity to earn an annual performance bonus under the CEO Plan. His bonus in any fiscal year will be in a minimum of 35% and a maximum of 100% of his annual base salary as of January 1 of the fiscal year, and will be based on his performance and the achievement of performance goals established by the Compensation Committee within the first 90 days of the fiscal year. The Board may instead grant Mr. Forgy a discretionary bonus in the case of a financial, national or global occurrence, or a generally difficult year. Mr. Forgy was granted a $50,000 discretionary bonus for the 2022 fiscal year and a $245,000 discretionary bonus for the 2023 fiscal year. Mr. Forgy is also eligible for equity awards under the 2005 Incentive Compensation Plan, or any successor equity incentive plan, in accordance with the provisions of that plan that apply to the CEO.

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Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

Mr. Forgy will continue to participate in our employee benefit plans, including the medical reimbursement plan, 401(k) plan, deferred compensation plan, and other health and welfare benefit plans. He will be entitled to five weeks of paid vacation days per calendar year. The Company will furnish him with an automobile, pay the initiation fee and monthly dues for a non-golf country club membership and provide Mr. Forgy with a split dollar life insurance agreement with premiums payable by the Company.

Either the Company or Mr. Forgy may terminate the employment term for any reason generally with 30 days advance notice. If Mr. Forgy’s employment is terminated by us for cause, if he resigns without good reason, or if his employment terminates by reason of death or disability, he will receive any accrued but unpaid base salary and any benefits under the Company’s benefit plans (the “accrued amounts.”)

If Mr. Forgy’s employment is terminated by us without cause or if he resigns for good reason, he will receive the accrued amounts; continuation of his base salary for the longer of 18 months or the remainder of the three year initial term or the two-year renewal term, as applicable; any awarded but unpaid annual bonus with respect to any completed fiscal year preceding the termination date; immediate and full vesting of any unvested shares of restricted stock then held by Mr. Forgy; and payment or reimbursement of COBRA premiums for Mr. Forgy and his spouse for up to 18 months.

If Mr. Forgy consents to the renewal term and the Company does not consent, Mr. Forgy will be entitled to the accrued amounts; an amount equal to 2.99 times the average of his total annual salary and bonuses for each150% of the three immediately preceding periodssum of twelve consecutive months,(i) Mr. Forgy’s base salary paid in the prior calendar year plus an additional amount(ii) his annual bonus earned for tax liabilities, relatedthe previous fiscal year, immediate and full vesting of any unvested shares of restricted stock then held by Mr. Forgy; and payment or reimbursement of COBRA premiums for Mr. Forgy and his spouse for up to the payment. For the three years ended December 31, 2017 18 months.

Mr. Christian’s average annual compensation, as defined by the employment agreement was approximately $1,759,000.

In addition, if Mr. Christian’s employment is terminated for any reason, other than for cause, the Company will continue to provide health insurance and medical reimbursement and maintain existing life insurance policiesForgy agreed that, for a period of ten years, and12 months after the current split dollar life insurance policy shall be transferred to Mr. Christian andtermination of his wife, andemployment, he will not (i) solicit business of the type performed by the Company shall reimburse Mr. Christiananywhere in the United States; (ii) solicit from any person who has purchased services from the Company during the three years preceding his termination for any tax consequencesbusiness of such transfer. The agreement contains a covenant not to compete restricting Mr. Christian from competing withthe type performed by the Company in the United States, or in any of its markets if he voluntarily terminates hisother location; or (iii) offer employment to any person employed by the Company, or entice any such person to leave employment with the Company or is terminated for cause, for a three year period thereafter.Company. The amendmentemployment agreement also entitles Mr. Christian to receive severance pay equal to 100% of his then base salary for 24 months payable in equal monthly installmentscontains customary confidentiality and after the date upon which notice of termination is given, any unvested or time-vested stock options previously granted to Mr. Christian by the Company shall become immediately one hundred percent (100%) vested to the extent permitted by law.

On December 21, 2015, Mr. Christian agreed to defer approximately $100,000 of his 2016 salary which was paid 100% on January 6, 2017. On December 13, 2016, Mr. Christian agreed to defer approximately $100,000 of his 2017 salary to be paid 100% on January 5, 2018. On December 5, 2017, Mr. Christian agreed to defer approximately $100,000 of his 2018 salary to be paid 100% on January 4, 2019.

non-disparagement covenants.

Change in Control Agreements

In December 2007, Samuel D. Bush, Senior Vice President and Chief Financial Officer, Warren S. Lada, Chief Operating Officer, Marcia K. Lobaito, Senior Vice President, Corporate Secretary and Director of Business Affairs, and Catherine Bobinski, Senior Vice President/Finance, Chief Accounting Officer and Corporate Controller, entered into Change in Control Agreements. In September 2018, Christopher S. Forgy, Senior Vice President of Operations entered into a Change in Control Agreement. In July 2020, Eric Christian, Chief Marketing Officer entered into a Change in Control Agreement. Eric Christian is the son of Edward K. Christian, our former President, CEO and Chairman. A change in control is defined to mean the occurrence of (a) any person or group becoming the beneficial owner, directly or indirectly, of more than 30% of the combined voting power of the Company’s then outstanding securities and Mr. Christian ceasing to be Chairman and CEO of the Company; (b) the consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which results in the voting securities of the Company outstanding immediately prior thereto continuing to represent more than 50% of the combined voting securities of the Company or such surviving entity; or (c) the approval of the stockholdersshareholders of the Company of a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of its assets.

​

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Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

If there is a change in control, the Company shall pay a lump sum payment within 45 days thereof of 1.5 times the average of the executive’s last three full calendar years of such executive’s base salary and any annual cash bonus paid. In the event that such payment constitutes a “parachute payment” within the meaning of Section 280G subject to an excise tax imposed by Section 4999 of the Internal Revenue Code, the Company shall pay the executive an additional amount so that the executive will receive the entire amount of the lump sum payment before deduction for federal, state and local income tax and payroll tax. In the event of a change in control (other than the approval of plan of liquidation), the Company or the surviving entity may require as a condition to receipt of payment that the executive continue in employment for a period of up to six months after consummation of the change in control. During such six months, executive will continue to earn his pre-existing salary and benefits. In such case, the executive shall be paid the lump sum payment upon completion of the continued employment. If, however, the executive fails to remain employed during this period of continued employment for any reason other than (a) termination without cause by the Company or the surviving entity, (b) death, (c) disability or (d) breach of the agreement by the Company or the surviving entity, then executive shall not be paid the lump sum payment. In addition, if the executive’s employment is terminated by the Company without cause within six months prior to the consummation of a change in control, then the executive shall be paid the lump sum payment within 45 days of such change in control.

Transactions with Affiliate and Other Related Party Transactions

Until the Television Sale (discussed in Note 3) Surtsey Media, LLC (“Surtsey Media”) owned the assetsEffective June 19, 2019, we employed Eric Christian, son of television station KVCT in Victoria, Texas. Surtsey Media is a multi-media company 100%-owned by the daughter of Mr.Edward K. Christian, our President, Chief Executive OfficerCEO and Chairman. We operated KVCT under a Time Brokerage Agreement (“TBA”) with Surtsey Media which we entered into in May 1999. Under the FCC’s ownership rules, we were prohibited from owning or having an attributable or cognizable interest in this station. In January 2012, the TBA was amended. Pursuant to the amendment, (i) the term was extended nine years commencing from June 1, 2013, with rights to extend for two additional eight year terms, (ii) we paid Surtsey Media an extension fee of $27,950 upon execution of the amendment, (iii) the monthly fees, payable to Surtsey Media were increased for each extension period, and (iv) we had an exclusive option, while the TBA was in effect, to purchase all of the assets of station KVCT, subject to certain conditions, based on a formula. Under the amended TBA, prior to the Television Sale, during 2017, 2016 and 2015 we paid Surtsey Media fees of approximately $3,800, $3,900 and $3,800 per month, respectively plus accounting fees and reimbursement of expenses actually incurred in operating the station. The TBA was terminatedChairman at the time, as our Director of the completion of the Television Sale of September 1, 2017.

In March 2003, we entered into an agreement of understanding with Surtsey Media whereby we had guaranteed upSolution Architecture. Eric Christian was promoted to $1,250,000 of the debt incurred, in Surtsey Media closing the acquisition of a construction permit for KFJX-TV station in Pittsburg, Kansas, a full power Fox affiliate serving Joplin, Missouri. In consideration for the guarantee, Surtsey Media entered into various agreements with us relating to the station, including a Shared Services Agreement, Technical Services Agreement, and Agreement for the Sale of Commercial Time and Broker Agreement (the “Station Agreements”). The station went on the air for the first time on October 18, 2003. Under the FCC’s ownership rules we were prohibited from owning or having an attributable or cognizable interest in this station. In January 2012, the Station Agreements were amended. Pursuant to the amendment, (i) the Broker Agreement and the Technical Services Agreement were terminated, (ii) the terms of the continuing Station Agreements were extended nine years commencing from June 1, 2013 , with rights to extend for two additional eight year terms, (iii) we paid Surtsey Media $37,050 upon execution of the amendment, (iv) the monthly fees payable to Surtsey Media were increased for each extension period, and (v) we had an exclusive option, while the Agreement for the Sale of Commercial Time and Shared Services Agreement were in effect, to purchase all of the assets of Station KFJX subject to certain conditions, based on a formula, together with a payment of $1.2 million. Under the amended Station Agreements, prior to the Television Sale, during 2017, 2016 and 2015 we paid fees of approximately $5,200, $5,100 and $5,000 per month, respectively, plus accounting fees and reimbursement of expenses actually incurred in operating the station. We generally prepaid Surtsey quarterly for its estimated expenses. As part of completion of the Television Sale, the debt we guaranteed was paid in full and the amended Station Agreements were terminated.

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Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

Surtsey Productions, Inc., the parent company of Surtsey Media, leases office space in a building owned by us, and paid us rent of $3,000, $6,000, and $6,000 during the first eight months of the year ended December 31, 2017 prior to the Television Sale and the years ended December 31, 2016 and 2015, respectively.

Saga Quad States, our fully owned subsidiary, completed the acquisition from Apex Media Corporation, a South Carolina corporation (“AMC”), and Pearce Development, LLC f/k/a Apex Real Property, LLC, a South Carolina limited liability company (“ARP” and together with AMC, “Seller”), of substantially all of Seller’s assets related to the operation of certain radio and translator stations, upon the satisfaction of certain closing conditions described in the Asset Purchase Agreement dated May 9, 2017 (the “Apex Agreement”) by and among Seller, Saga Quad States, and, solely in his role as guarantor under the Apex Agreement, G. Dean Pearce, as further described in the Form 8-K filed by Saga on May 10, 2017. Mr. Pearce isVice President of AMCDigital Solutions in July 2020 and ARP, and currently serves on thewas subsequently was promoted to Chief Marketing Officer in February 2023. The Board of Directors approved the employment of Saga.Eric Christian and subsequent promotions. As previously disclosed, Edward K. Chrisian passed away in August 2022 and resulted in the conversion of his Class B Shares into Class A Shares that were transferred to an estate planning trust, of which Edward K. Christian’s surviving spouse, and Eric Christian’s mother is the trustee of. The purchase price underestate owns approximately 16% of the Apex Agreement was $23,000,000.00, subject to certain purchase price adjustments, payableCommon Stock outstanding.

​

11.    Common Stock

As previously disclosed, as a result of the passing of our founder and former Chairman, President and CEO, Edward K. Christian and the resultant transfer of his Class B shares into an estate planning trust resulted in cash. The purchase price was determined through arm’s-length negotiations,an automatic conversion of each Class B share he held into one fully paid and was approved bynon-assessable Class A share. We no longer have any shares of Class B Common Stock issued or outstanding, nor will there be any issued in the Saga Board, and Finance and Audit Committee, in accordance with the requirements of Saga’s Corporate Governance Guidelines for the review of related party transactions. In connection with this agreement, we received 500 hours of service from New Pointe Systems, a subsidiary of Pearce Development and have agreed to provide 1,000, 30 second, spots of airtime to Pearce Development. As of December 31, 2017, we have used approximately 400 hours of service from New Pointe Systems, leaving us with approximately 100 hours remaining and we have approximately 1,000 spots left of 30 second spots to provide to Pearce Development. During 2017, we also paid approximately $3,300 rent per month to Pearce Development for our Hilton Head studio and office space beginning September 1, 2017.

11.Common Stock

future.

Dividends. StockholdersShareholders are entitled to receive such dividends as may be declared by our Board of Directors out of funds legally available for such purpose. However, no dividend may be declared or paid in cash or property on any share of any class of Common Stock unless simultaneously the same dividend is declared or paid on each share of the other class of common stock. In the case of any stock dividend, holders of Class A Common Stock are entitled to receive the same percentage dividend (payable in shares of Class A Common Stock) as the holders of Class B Common Stock receive (payable in shares of Class B Common Stock).

Voting Rights. Holders of shares of Common Stock vote as a single class on all matters submitted to a vote of the stockholders,shareholders, with each share of Class A Common Stock entitled to one vote and vote. Prior to Mr. Christian’s passing, each share of Class B Common Stock was entitled to ten votes, except (i) in the election for directors, (ii) with respect to any “going private” transaction between the Company and the principal stockholder,shareholder, and (iii) as otherwise provided by law.

​

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Table of Contents

InSaga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

Prior to Mr. Christian’s passing, in the election of directors, the holders of Class A Common Stock, voting as a separate class, arewere entitled to elect twenty-five percent, or two, of our directors. The holders of the Common Stock, voting as a single class with each share of Class A Common Stock entitled to one vote and each share of Class B Common Stock entitled to ten votes, arewere entitled to elect the remaining directors. The Board of Directors consisted of sixeight members at December 31, 2016.2023. Currently, our Board of Directors consists of eight members. Holders of Common Stock are not entitled to cumulative voting in the election of directors.

The holders of the Common Stock vote as a single class with respect to any proposed “going private” transaction with the principal stockholdershareholder or an affiliate of the principal stockholder,shareholder, with each share of each class of Common Stock entitled to one vote per share.

Under DelawareFlorida law, the affirmative vote of the holders of a majority of the outstanding shares of any class of common stock is required to approve, among other things, a change in the designations, preferences and limitations of the shares of such class of common stock.

Liquidation Rights. Upon our liquidation, dissolution, or winding-up, the holders of Class A Common Stock are entitled to share ratably with the holders of Class B Common Stock in accordance with the number of shares held in all assets available for distribution after payment in full of creditors.

​

In any merger, consolidation, or business combination, the consideration to be received per share by the holders of Class A Common Stock and Class B Common Stock must be identical for each class of stock, except that in any such transaction in which shares of common stock are to be distributed, such shares may differ as to voting rights to the extent that voting rights now differ among the Class A Common Stock and the Class B Common Stock.

Other Provisions.   Each share of Class B Common Stock is convertible, at the option of its holder, into one share of Class A Common Stock at any time. One share of Class B Common Stock converts automatically into one share of Class A Common Stock upon its sale or other transfer to a party unaffiliated with the principal stockholder or, in the event of a transfer to an affiliated party, upon the death of the transferor.

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Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

12.12.    Commitments and Contingencies

Leases

We lease certain land, buildings and equipment under noncancellable operating leases. Rentfor use in our operations. We recognize lease expense for these leases on a straight-line basis over the lease term and combine lease and non-lease components for all leases. Right-of-use ("ROU") assets and lease liabilities are recorded on the balance sheet for all leases with an expected term of at least one year. Some leases include one or more options to renew. The exercise of lease renewal options is generally at our continuing operations fordiscretion. The depreciable lives of ROU assets are limited to the expected lease term. Our lease agreements do not contain any residual value guarantees or material restrictive covenants. As of December 31, 2023, we do not have any non-cancellable operating lease commitments that have not yet commenced.

ROU assets are classified within other intangibles, deferred costs and investments, net on the condensed consolidated balance sheet while current lease liabilities are classified within other accrued expenses and long-term lease liabilities are classified within other liabilities. Leases with an initial term of 12 months or less are not recorded on the balance sheet. ROU assets were $7.0 million and $6.5 million at December 31, 2023 and 2022, respectively. Lease liabilities were $7.3 million and $6.8 million at December 31, 2023 and 2022, respectively. During the year ended December 31, 2017 was $1,558,000 ($1,519,0002023, we recorded additional ROU assets under operating leases of $2,171,000, which is a non-cash transaction. Payments on lease liabilities during the year ended December 31, 2023 and $1,380,0002022 totaled $1,826,000 and $1,797,000,respectively.

Lease expense includes cost for leases with terms in excess of one year. For the years ended December 31, 20162023, 2022 and 2015, respectively).2021, our total lease expense was $1,864,000, $1,807,000 and $1,765,000, respectively. Short-term lease costs are de minimus.

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MinimumSaga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

We have no financing leases and minimum annual rental commitments under noncancellablenon-cancellable operating leases consisted of the following at December 31, 20172023 (in thousands):

​

2018 $1,453 
2019  1,144 
2020  987 
2021  865 
2022  710 
Thereafter  3,006 
  $8,165 

​

​

​

​

Years Ending December 31, 

    

​

​

2024

    

$

1,857

2025

​

 

1,701

2026

​

 

1,479

2027

​

 

1,290

2028

​

 

876

Thereafter

​

 

1,600

Total lease payments (a)

​

 

8,803

Less: Interest (b)

​

 

1,455

Present value of lease liabilities (c)

​

$

7,348

(a)Lease payments include options to extend lease terms that are reasonably certain of being exercised. There were no legally binding minimum lease payments for leases signed but not yet commenced at December 31, 2023.
(b)Our leases do not provide a readily determinable implicit rate. Therefore, we must estimate our discount rate for such leases to determine the present value of lease payments at the lease commencement date.
(c)The weighted average remaining lease term and weighted average discount rate used in calculating our lease liabilities were 6.5 years and 5.4%, respectively, at December 31, 2023.

Performance Fees and Royalties

The Company incursWe incur fees from performing rights organizations (“PRO”) to license the Company’sour public performance of the musical works contained in each PRO’s repertory. The Radio Music Licensing Committee (“RMLC”), of which the Company iswe are a represented participant, (1) entered into an industry-wide settlementInterim License Agreement with American Society of Composers, Authors and Publishers that was effective January 1, 20172022 and will remain in effect until the date on which the parties reached agreement as to, or there is court determination of, new interim or final fees, terms, and conditions of a new license for a five-year term;the five year period commencing on January 1, 2022 and concluding on December 31, 2026; (2) is currently seeking reasonable industry-wide fees fromentered into an Interim License Agreement with Broadcast Music, Inc. that was effective January 1, 2017;2022 and will remain in effect until the date on which the parties reached agreement as to, or there is court determination of, new interim or final fees, terms, and conditions of a new license for the five year period commencing on January 1, 2022 and concluding on December 31, 2026; (3) reached an agreement with the Society of European Stage Authors and Composers that is retroactive to January 1, 2016;2016 and is currently on an interim license at the rate that was in place at the end of 2022 and (4) filed in November 2016 a motion in the U.S. District Court in Pennsylvania againstFebruary 2022, RMLC and Global Music Rights (“GMR”) arguingannounced that GMRthe conditions of their agreement to settle the GMR-RMLC antitrust and/or unfair competition litigations had been reached and we have entered into an agreement with GMR.

To secure the rights to stream music content over the Internet, we also must obtain performance rights licenses and pay public performance royalties to copyright owners of sound recordings (typically, performing artists and record companies). We pay the applicable royalty rates to SoundExchange, the organization designated by the Copyright Royalty Board (“CRB”) to collect and distribute royalties under these statutory licenses. From time to time, SoundExchange notifies us that certain calendar years are subject to routine audits of our royalty payments. The results of such audits could result in higher royalty payments for the subject years. There is a monopoly demanding monopoly pricesno guarantee that the licenses and askingassociated royalty rates that currently are available to us will be available to us in the Courtfuture. In addition, Congress may consider and adopt legislation that would require us to subject GMRpay royalties to an antitrust consent decree. In January 2017, the Company obtained an interim license from GMRsound recording copyright owners for fees effective January 1, 2017broadcasting those recordings on our terrestrial radio stations.

​

​

81

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Saga Communications, Inc.

Notes to avoid any infringement claims by GMR for using GMR’s repertory without a license.Consolidated Financial Statements — (Continued)

Contingencies

In 2003, in connection with our acquisition of one FM radio station, WJZK-FM serving the Columbus, Ohio market, we entered into an agreement whereby we would pay the seller up to an additional $1,000,000 if we obtain approval from the FCC for a city of license change.

​

84

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

13.13.   Fair Value Measurements

As defined in ASC Topic 820, fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

Level 1 — Quoted prices in active markets for identical assets or liabilities.

Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3 — Unobservable inputs in which there is little or no market data available, which requires management to develop its own assumptions in pricing the asset or liability.

Our assets and liabilities disclosed at fair value are summarized below ($000’s omitted):

​

   Fair Value 

​

​

​

​

​

​

​

​

​

​

    

​

    

Fair Value

​

​

Fair Value

​

December 31, 

​

December 31, 

Financial Instrument Fair Value
Hierarchy		 December 31,
2017		 December 31,
2016		 

    

Hierarchy

    

2023

    

2022

Cash and cash equivalents Level 1 $53,030  $26,697 

 

Level 1

​

$

29,582

​

$

36,802

Short-term investments

​

Level 1

​

​

10,596

​

​

10,090

Revolving Credit Facility Level 2  25,000   35,287 

 

Level 2

​

 

—

​

 

—

​

Our financial instruments are comprised of cash and cash equivalents, short-term investments and long-term debt. The carrying value of cash and cash equivalents approximate fair value due to their short maturities. The fair value of cash and cash equivalents isand short-term investments are derived from quoted market prices and are considered a level 1. Interest on the Credit Facility is at a variable rate, and as such the debt obligation outstanding approximates fair value and is considered a level 2.

Non-Recurring Fair Value Measurements

The Company hasWe have certain assets that are measured at fair value on a non-recurring basis under the circumstances and events described in Note 23 — Broadcast Licenses, Goodwill and Other Intangibles, and are adjusted to fair value only when the carrying values are more than the fair values.

During the fourth quarter of 2017, as a result of our annual impairment test, the Company wrote down broadcast licenses with a carrying value of $3,649,000 to their fair value of $2,200,000, resulting in a non-cash impairment charge of $1,449,000, which is included in net income for the year ended December 31, 2017.  The categorization of the framework used to price the assets is considered a level 3, due to the subjective nature of the unobservable inputs used to determine the fair value. (See Note 2 for the disclosure of certain key assumptions used to develop the unobservable inputs.)

During the fourth quarter of 2016, the Company2023, we reviewed the fair value of the assets that are measured at fair value on a non-recurring basis and concluded that these assets were not impaired as the fair value of these assets equaled or exceeded their carrying values.

​

During the fourth quarter of 2015, as a result of our annual impairment test, the Company wrote down broadcast licenses with a carrying value of $13,282,000 to their fair value of $12,408,000, resulting in a non-cash impairment charge of $874,000, which is included in net income for the year ended December 31, 2015.  The categorization of the framework used to price the assets is considered a level 3, due to the subjective nature of the unobservable inputs used to determine the fair value. (See Note 2 for the disclosure of certain key assumptions used to develop the unobservable inputs.)

85

82

Table of Contents

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

14.Quarterly Results of Operations (Unaudited)

  March 31,  June 30,  September 30,  December 31, 
  2017*  2016*  2017  2016*  2017  2016*  2017  2016* 
  (In thousands, except per share data) 
Net operating revenue $26,155  $27,464  $30,261  $30,866  $30,269  $29,878  $31,464  $30,747 
Station operating expenses  21,340   21,140   21,426   21,842   21,755   21,775   23,238   22,042 
Corporate G&A  2,863   2,717   2,880   2,620   3,132   2,728   2,782   2,915 
Other operating expense (income), net  (21)  (3)  79   8   (127)  (1,393)  124   37 
Impairment of intangible assets  —   —   —   —   —   —   1,449   — 
Operating income from continuing operations  1,973   3,610   5,876   6,396   5,509   6,768   3,871   5,753 
Other (income) expenses:                                
Interest expense  208   179   229   182   254   187   212   196 
Income from continuing operations before income taxes  1,765   3,431   5,647   6,214   5,255   6.581   3,659   5,557 
Income tax provision  718   1,418   2,272   2,569   2,290   2,678   (11,200)  2,208 
Income from continuing operations, net of tax  1,047   2,013   3,375   3,645   2,965   3,903   14,859   3,349 
Income (loss) from discontinued operations, net of tax  891   1,011   1,159   1,166   30,451   1,511   (30)  1,588 
Net income $1,938  $3,024  $4,534  $4,811  $33,416  $5,414  $14,829  $4,937 
                                 
Basic earnings per share                                
From continuing operations $0.18  $0.35  $0.57  $0.62  $0.50  $0.66  $2.52  $0.57 
From discontinued operations  0.15   0.17   0.20   0.20   5.16   0.26   (0.01)  0.27 
Basic earnings per share $0.33  $0.52  $0.77  $0.82  $5.66  $0.92  $2.51  $0.84 
Weighted average common shares  5,795   5,751   5,803   5,754   5,807   5,755   5,815   5,785 
                                 
Diluted earnings per share                                
From continuing operations $0.18  $0.35  $0.57  $0.61  $0.50  $0.66  $2.52  $0.57 
From discontinued operations  0.15   0.17   0.20   0.20   5.16   0.26   (0.01)  0.27 
Diluted earnings per share $0.33  $0.52  $0.77  $0.81  $5.66  $0.92  $2.51  $0.84 
Weighted average common and common equivalent shares  5,808   5,759   5,806   5,763   5,807   5,764   5,815   5,797 

*Certain prior year amounts and March 31, 2017 quarterly data have been reclassified to conform with current presentation.

86

During the fourth quarter of 2022, we reviewed the fair value of the assets that are measured at fair value on a non-recurring basis and concluded that these assets were not impaired as the fair value of these assets equaled or exceeded their carrying values.

Saga Communications, Inc.During the fourth quarter of 2021, we reviewed the fair value of the assets that are measured at fair value on a non-recurring basis and concluded that these assets were not impaired as the fair value of these assets equaled or exceeded their carrying values.

​

14.    Quarterly Results of Operations (Unaudited)

Notes to Consolidated Financial Statements — (Continued)​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

March 31, 

 

June 30, 

 

September 30, 

 

December 31, 

​

    

2023

    

2022

    

2023

    

2022

    

2023

    

2022

    

2023

    

2022

​

 

(in thousands, except per share data)

Net operating revenue

​

$

25,304

​

$

24,967

​

$

29,175

​

$

29,821

​

$

29,149

​

$

29,980

​

$

29,145

​

$

30,125

Station operating expenses

​

 

21,703

​

 

20,568

​

 

22,407

​

 

21,786

​

 

22,760

​

 

22,295

​

 

23,329

​

 

22,888

Corporate G&A

​

 

2,616

​

 

2,694

​

 

2,472

​

 

2,609

​

 

2,852

​

 

6,667

​

 

3,026

​

 

2,330

Other operating expense (income), net

​

​

80

​

 

(5)

​

 

—

​

 

45

​

 

45

​

 

(37)

​

 

(5)

​

 

(17)

Operating income (loss)

​

 

905

​

 

1,710

​

 

4,296

​

 

5,381

​

 

3,492

​

 

1,055

​

 

2,795

​

 

4,924

Other (income) expenses:

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Interest expense

​

 

43

​

 

32

​

 

43

​

 

32

​

 

44

​

 

32

​

 

43

​

 

34

Interest (income)

​

 

(289)

​

 

(4)

​

 

(347)

​

 

(49)

​

 

(391)

​

 

(134)

​

 

(414)

​

 

(223)

Other (income) expense

​

 

(119)

​

 

(2)

​

 

—

​

 

—

​

 

—

​

 

(34)

​

 

—

​

 

(616)

Income before income taxes

​

 

1,270

​

 

1,684

​

 

4,600

​

 

5,398

​

 

3,839

​

 

1,191

​

 

3,166

​

 

5,729

Income tax provision (benefit)

​

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Current

​

​

280

​

​

400

​

​

905

​

​

1,260

​

​

835

​

​

730

​

​

970

​

​

1,475

Deferred

​

​

70

​

​

80

​

​

345

​

​

315

​

​

275

​

​

565

​

​

(305)

​

​

(25)

​

​

​

350

​

​

480

​

​

1,250

​

​

1,575

​

​

1,110

​

​

1,295

​

​

665

​

​

1,450

Net income (loss)

​

$

920

​

$

1,204

​

$

3,350

​

$

3,823

​

$

2,729

​

$

(104)

​

$

2,501

​

$

4,279

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Basic earnings(loss) per share

​

$

0.15

​

$

0.20

​

$

0.55

​

$

0.63

​

$

0.45

​

$

(0.01)

​

$

0.40

​

$

0.70

Weighted average common shares

​

 

6,028

​

 

5,948

​

 

6,032

​

 

5,952

​

 

6,032

​

 

5,961

​

 

6,030

​

 

6,013

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Diluted earnings (loss) per share

​

$

0.15

​

$

0.20

​

$

0.55

​

$

0.63

​

$

0.45

​

$

(0.01)

​

$

0.40

​

$

0.70

Weighted average common and common equivalent shares

​

 

6,028

​

 

5,948

​

 

6,032

​

 

5,952

​

 

6,032

​

 

5,961

​

 

6,030

​

 

6,013

​

​

15.

15.    Litigation

The Company is subject to various outstanding claims which arise in the ordinary course of business and to other legal proceedings. Management anticipates that any potential liability of the Company, which may arise out of or with respect to these matters, will not materially affect the Company’s financial statements.

83

Table of Contents

Saga Communications, Inc.

Notes to Consolidated Financial Statements — (Continued)

16. Other Income

   

16.Other Income

In 2012, Congress mandated that the FCC conduct an incentive auction of broadcast television spectrum as set forth in the Middle Class Tax Relief and Job Creation Act of 2012 ("Spectrum Act"). The Spectrum Act authorized the FCC to conduct incentive auctions in which licensees could voluntarily relinquish their spectrum usage rights in order to permit the assignment by auction of new initial licenses subject to flexible use service rules, in exchange for a portion of the resulting auction proceeds.  The Spectrum Act appropriated $1.75 billion to the TV Broadcaster Relocation Fund ("Reimbursement Fund") for costs reasonably incurred by Full Power and Class A broadcast television licensees reassigned to new channels ("repack"), as well as Multichannel Video Programming Distributors ("MVPDs") that incurred costs related to continuing to carry the signals of reassigned broadcast stations.  The 2018 Reimbursement Expansion Act appropriated $1 billon in additional funds for the Reimbursement Fund and expanded eligible entities for reimbursement to include FM stations affected by the repack.  During 2022, the Company received approximately $116,000 in reimbursement for our FM stations.  During the thirdfirst quarter of 2016,2023, we received approximately $115,000 in reimbursement for our FM stations.  Both of these reimbursements are recorded in other (income) expense, net in the Company’s Consolidated Statement of Operations.  We do not anticipate receiving any additional reimbursements related to this.

During the first quarter of 2022, there was fire damage to a transmission line in our Des Moines, Iowa market. The Company’s insurance policy provided coverage for removal and replacement of the transmission line and related equipment. As part of the insurance settlement during the fourth quarter of 2022, the Company sold a towerreceived cash proceeds of $445,000, resulting in our Norfolk, Virginia market for approximately $1,619,000 to SBA Towers IX, LLC (“SBA”). Subsequently, we entered into a ten year lease for tower space from SBA with three renewal periods of five years each. The transactions described have been accounted for as a sale-leaseback transaction. Accordingly, the Company recognized a gain on the sale of assets of approximately $1,415,000,$445,000 which is the amount of the gain on sale in excess of present value of future lease payments and will recognize the remaining approximately $65,000 in proportion to the related gross rental charged to expense over the term of the lease. The gain is recorded in the other operating (income) expense, net, in the Company’s Consolidated Statements of Income.

During the secondfirst quarter of 2015, two transmitters2021, there was weather-related damage to an antenna in our Victoria, Texas market were significantly damaged by lightning.Des Moines, Iowa market. The Company’s insurance policy provided coverage for theremoval and replacement cost of the transmitters. Theantenna and related equipment. As part of the initial insurance settlement was finalized during the secondfirst quarter andof 2021, the Company received cash proceeds of $777,000,$250,000, resulting in a $417,000 gain.gain of $250,000.  We received additional cash proceeds of $290,000 in the third quarter, resulting in a gain of $290,000. The total gain on insurance settlement represents the difference between the replacement cost and carrying value of the transmitters. The gain$540,000 is recorded in discontinued operations,other (income) expense, net, in the Company’s Consolidated Statements of Income.

17.17.    Subsequent Events

On February 28, 2018,7, 2024, the Company’s Board of Directors declared a regularquarterly cash dividend of $0.30$0.25 per share on its ClassesClass A and B Common Stock. This dividend, totaling approximately $1.8 million,$1,600,000, will be paid on March 30, 20188, 2024 to shareholders of record on February 20, 2024.

On March 6, 2024 the Company’s Board of Directors declared a variable cash dividend of $0.60 per share on its Class A Common Stock. This dividend, totaling approximately $3,800,000, will be paid on April 5, 2024 to shareholders of record on March 12, 2018.18, 2024.

​

​

84

Table of Contents

EXHIBIT INDEX

​

Exhibit No.

   

 Location

    

Description

 

 

 

 

 

3.1

 

5

 

Articles of Incorporation of Saga Communications Reincorporation, Inc.

3.2

 

5

 

Bylaws, as amended April 16, 2020.

4

 

14

 

Description of the Company’s Securities

10.1

 

1

 

Summary of Executive Insured Medical Reimbursement Plan.

10.2

 

2

 

Saga Communications, Inc. 2003 Employee Stock Option Plan.

10.3

 

5

 

Chief Executive Officer Annual Incentive Plan.

10.4

 

3

 

Second Amended and Restated Saga Communications, Inc. 2005 Incentive Compensation Plan

10.5

7

 

Form of Stock Option Agreement under the Second Amended and Restated Saga Communications, Inc. 2005 Incentive Compensation Plan.

10.6

 

7

 

Form of Restricted Stock Option Agreement under the Second Amended and Restated Saga Communications, Inc. 2005 Incentive Compensation Plan.

10.7

 

6

 

Employment Agreement of Edward K. Christian dated as of June 17, 2011.

10.8

 

4

 

Change in Control Agreement of Samuel D. Bush dated as of December 28, 2007.

10.9

 

9

 

Change in Control Agreement of Catherine A. Bobinski dated as of December 28, 2007.

10.10

 

8

 

Amendment to Employment Agreement of Edward K. Christian dated as of February 12, 2016.

10.11

 

10

 

Amendment to the Second Amendment and Restated Saga Communications, Inc. 2005 Incentive Compensation Plan as of April 16, 2018.

10.12

 

11

 

Letter of Employment for Christopher S. Forgy, Senior Vice President / Operations effective May 28, 2018.

10.13

 

12

 

Change in Control Agreement of Christopher Forgy dated as of September 28, 2018.

10.14

 

13

 

Amendment to Employment Agreement of Edward K. Christian dated as of February 26, 2019.

10.15

​

15

​

Change in Control Agreement of Eric Christian dated as of July 6, 2020.

10.16

​

16

​

Third Amendment to Employment Agreement dated January 25, 2022 between Saga Communications, Inc, and Edward K. Christian.

10.17

​

17

​

Letter of Agreement regarding employment of Warren S. Lada as Interim President and CEO dated August 21, 2022.

10.18

​

18

​

Employment Agreement of Christopher Forgy dated as of November 16, 2022.

10.19

​

18

​

Letter of Employment of Wayne Leland dated as of November 16, 2022.

10.20

​

19

​

Third Amendment to Credit Agreement dated December 19, 2022 between the Company and JPMorgan Chase Bank, N.A., and The Huntington National Bank.

10.21

​

20

​

Saga Communications, Inc. 2023 Incentive Compensation Plan

10.22

​

21

​

Form of Restricted Stock Option Agreement for Employees under the Saga Communications, Inc. 2023 Incentive Compensation Plan

10.23

​

21

​

Form of Restricted Stock Option Agreement for Directors under the Saga Communications, Inc. 2023 Incentive Compensation Plan

21

 

*

 

Subsidiaries.

23

 

*

 

Consent of UHY LLP.

31.1

 

*

 

Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

 

*

 

Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32

 

*

 

Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 and Rule 13-14(b) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

97.1

​

*

​

Saga Communications, Inc. Policy for Recovery of Erroneously Awarded Compensation

101.INS

 

*

 

Inline XBRL Instance Document

101.SCH

 

*

 

Inline XBRL Taxonomy Extension Schema Document

101.CAL

 

*

 

Inline XBRL Taxonomy Calculation Linkbase Document

85

Table of Contents

101.DEF

87

*

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

*

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

*

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

​

​

​

Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101)

​

​

*

Filed herewith.

1

Exhibit filed with the Company’s Registration Statement on Form S-1 (File No. 33-47238) filed on December 10, 1992 and incorporated by reference herein.

2

Exhibit filed with the Company’s Registration Statement on From 8-A (File No. 333-107686) filed on August 5, 2003 and incorporated by reference herein.

3

Exhibit filed as Appendix A to the Company’s Consent Solicitation (Filed No: 001-11588) filed on September 17, 2013 and incorporated by reference herein.

4

Exhibit filed with the Company’s Form 8-K filed on January 4, 2008 and incorporated by reference herein.

5

Exhibit filed with the Company’s Proxy Statement for the 2020 Annual Meeting of Stockholders and incorporated by reference herein.

6

Exhibit filed with the Company’s Form 10-Q for the quarter ended June 30, 2011 and incorporated by reference herein.

7

Exhibit filed with the Company’s Form 8-K filed on October 16, 2013 and incorporated by reference herein.

8

Exhibit filed with the Company’s Form 8-K/A filed on April 8, 2016 and incorporated by reference herein.

9

Exhibit filed with the Company’s Form 10-K for the year ended December 31, 2015 and incorporated by reference herein.

10

Exhibit filed as Appendix A to the Corporation’s Definitive Proxy Statement (File No. 001-11588) filed on April 16, 2018 and incorporated by reference herein.

11

Exhibit filed with the Company’s Form 10-Q for the quarter ended June 30, 2018 and incorporated by reference herein.

12

Exhibit filed with the Company’s Form 8-K filed on September 28, 2018 and incorporated by reference herein.

13

Exhibit filed with the Company’s Form 8-K filed on March 1, 2019 and incorporated by reference herein.

​

​

14

Exhibit filed with the Company’s Form 10-K for the year ended December 31, 2019 and incorporated by reference herein.

​

​

15

Exhibit filed with the Company’s Form 10-K for the year ended December 31, 2020 and incorporated by reference herein.

​

​

16

Exhibit filed with the Company’s Form 8-K filed on January 27, 2022 and incorporated by reference herein.

​

​

17

Exhibit filed with the Company’s Form 8-K filed on August 25, 2022 and incorporated by reference herein.

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18

Exhibits filed with the Company’s Form 8-K filed on November 16, 2022 and incorporated by reference herein.

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19

Exhibit filed wit the Company’s Form 10-K for the year ended December 31, 2022 and incorporated by reference herein.

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20

Exhibit filed with the Company’s Form S-8 filed on August 10, 2023 and incorporated by reference herein.

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21

Exhibits filed with the Company’s Form 10-Q for the quarter ended September 30, 2023 and incorporated by reference herein.

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23

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 13, 2018.15, 2024.

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SAGA COMMUNICATIONS, INC.

By:

/s/    Edward K. ChristianChristopher S. Forgy

Edward K. Christian

Christopher S. Forgy

President, Chief Executive Officer and Director

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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on March 13, 2018.15, 2024.

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Signatures

Signatures

/s/  Edward K. ChristianChristopher S. Forgy

President, Chief Executive Officer and

Edward K. Christian

Christopher S. Forgy

Chairman of the Board

Director

/s/  Samuel D. Bush

Senior Vice President,

Samuel D. Bush

Chief Financial Officer and Treasurer

/s/  Catherine A. Bobinski

Senior Vice President/Finance,

Catherine A. Bobinski

Chief Accounting Officer and

Corporate Controller

/s/ Clarke R. Brown, Jr.

Director

Clarke R. Brown, Jr.

/s/  Timothy J. Clarke

Director

Timothy J. Clarke

/s/  Roy F. Coppedge III

Director

Roy F. Coppedge

/s/  G. Dean PearceWarren Lada

Chairman of the Board and Director

G. Dean Pearce

Warren Lada

/s/  Gary G. Stevens

Director
Gary G. Stevens

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EXHIBIT INDEX

Exhibit No.Description
3(a)3Second Restated Certificate of Incorporation, restated as of December 12, 2003.
3(b)6Certificate of Amendment to the Second Restated Certificate of Incorporation.
3(c)4Bylaws, as amended May 23, 2007.
10(a)1Summary of Executive Insured Medical Reimbursement Plan.
10(b)2Saga Communications, Inc. 2003 Employee Stock Option Plan.
10(c)7Chief Executive Officer Annual Incentive Plan.
10(d)9Second Amended and Restated Saga Communications, Inc. 2005 Incentive Compensation Plan
10(e)10Form of Stock Option Agreement under the Second Amended and Restated Saga Communications, Inc. 2005 Incentive Compensation Plan.
10(f)10Form of Restricted Stock Option Agreement under the Second Amended and Restated Saga Communications, Inc. 2005 Incentive Compensation Plan.
10(g)8Employment Agreement of Edward K. Christian dated as of June 17, 2011.
10(h)5Change in Control Agreement of Samuel D. Bush dated as of December 28, 2007.
10(i)5Change in Control Agreement of Warren S. Lada dated as of December 28, 2007.
10(j)5Change in Control Agreement of  Marcia K. Lobaito dated as of December 28, 2007.

Director

10(k)

Marcia K. Lobaito

13Change in Control Agreement of Catherine A. Bobinski dated as of December 28, 2007

10(l)

12Amendment to Employment Agreement of Edward K. Christian dated as of February 12, 2016.

10(m)

/s/  Michael W. Schechter

11Credit Agreement dated August 18, 2015 entered into between the Company and JPMorgan Chase Bank, N.A., The Huntington National Bank and Citizens Bank.

Director

10(n)

Michael W. Schechter

14Asset Purchase Agreement by and among Saga Broadcasting, LLC, Saga Quad States Communications, LLC, Saga Communications, Inc. and Evening Telegram Company d/b/a Morgan Murphy Media, dated May 9, 2017.

10(o)

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14Asset Purchase Agreement by and among Apex Media Corporation, Pearce Development, LLC f/k/a Apex Real Property, LLC, Saga Quad States Communications, LLC and G. Dean Pearce, dated May 9, 2017.
21*Subsidiaries.
23*Consent of UHY LLP.
31.1*Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32*Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 and Rule 13-14(b) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*XBRL Instance Document
101.SCH*XBRL Taxonomy Extension Schema Document
101.CAL*XBRL Taxonomy Calculation Linkbase Document
101.DEF*XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*XBRL Taxonomy Extension Label Linkbase Document
101.PRE*XBRL Taxonomy Extension Presentation Linkbase Document

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89

88

*Filed herewith.
1Exhibit filed with Company’s Form 10-K for the year ended December 31, 1998 and incorporated by reference herein.
2Exhibit filed with the Company’s Registration Statement on From 8-A (File No.333-107686) filed on August 5, 2003 and incorporated by reference herein.
3Exhibit filed with the Company’s Registration Statement on Form 8-A (File No. 001-11588) filed on January 6, 2004 and incorporated by reference herein.
4Exhibit filed with the Company’s Form 10-K for the year ended December 31, 2007 and incorporated by reference herein.
5Exhibit filed with the Company’s Form 8-K filed on January 4, 2008 and incorporated by reference herein.
6Exhibit filed with the Company’s Form 8-K filed on January 29, 2009 and incorporated by reference herein.
7Exhibit filed with the Company’s Proxy Statement for the 2010 Annual Meeting of Stockholders and incorporated by reference herein.
8Exhibit filed with the Company’s Form 10-Q for the quarter ended June 30, 2011 and incorporated by reference herein.
9Exhibit filed as Appendix A to the Company’s Consent Solicitation (File No. 001-11588) filed on September 17, 2013 and incorporated by reference herein.
10Exhibit filed with the Company’s Form 8-K filed on October 16, 2013 and incorporated by reference herein.
11Exhibit filed with the Company’s Form 8-K filed on August 18, 2015 and incorporated by reference herein.
12Exhibit filed with the Company’s Form 8-K filed on February 17, 2016 and incorporated by reference herein.
13Exhibit filed with the Company’s Form 10-K for the year ended December 31, 2015 and incorporated by reference herein.
14Exhibit filed with the Company’s Form 8-K filed on May 10, 2017 and incorporated by reference herein.

90