Related Party Transactions | 12 Months Ended |
Dec. 31, 2013 |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
-13 | Related Party Transactions | | | |
Notes receivable from related parties totaling $2.3 million as of December 31, 2013 are due from Beasley Family Towers, LLC (“BFT”), which is controlled by George G. Beasley, Bruce G. Beasley, Caroline Beasley, Brian E. Beasley and other family members of George G. Beasley. On May 31, 2013, the interest rate on the notes receivable was discretionarily changed from 6.0% to 2.57%. The aggregate monthly payments of approximately $38,000 were unchanged, but due to the interest rate change the maturity date of the notes is now June 30, 2019. Interest income on the notes receivable from BFT was approximately $169,000 and $102,000 for the years ended December 31, 2012 and 2013, respectively. |
The Company leases radio towers for 24 radio stations under separate lease agreements from BFT. The lease agreements expire on various dates through December 28, 2020. Rental expense was approximately $559,000 and $561,000 for the years ended December 31, 2012 and 2013, respectively. |
The Company leases radio towers for two radio stations under separate lease agreements from BFT. The lease agreements expire on August 4, 2016. Lease payments are currently offset by the partial recognition of a deferred gain on sale from the sale of these towers to BFT in 2006, therefore no rental expense was reported for the years ended December 31, 2012 and 2013. |
The Company leases a radio tower in Augusta, GA from Wintersrun Communications, LLC, which is controlled by George G. Beasley, Bruce G. Beasley and Brian E. Beasley. The lease agreement expires on April 30, 2014. Rental expense was approximately $30,000 for each of the years ended December 31, 2012 and 2013. |
The Company leases property for its radio stations in Ft. Myers, FL from GGB Estero, LLC which is controlled by George G. Beasley. The lease agreement expires on August 31, 2014. Rental expense was approximately $163,000 for each of the years ended December 31, 2012 and 2013. |
The Company leases land for its radio stations in Augusta, GA from GGB Augusta, LLC which is controlled by George G. Beasley. The lease agreement expires on November 1, 2023. Rental expense was approximately $40,000 and $41,000 for the years ended December 31, 2012 and 2013, respectively. |
The Company leases its principal executive offices in Naples, FL from Beasley Broadcasting Management Corp., which is controlled by George G. Beasley. Rental expense was approximately $174,000 for the years ended December 31, 2012 and 2013. |
On May 28, 2010, the Company entered into an agreement to manage two radio stations in Las Vegas, NV for GGB Las Vegas, LLC, which is owned by George G. Beasley. The management agreement included an option to purchase the two managed radio stations. Management fees, reported in net revenue in the accompanying statements of comprehensive income, were approximately $137,000 and $69,000 for the years ended December 31, 2012 and 2013, respectively. |
On August 10, 2012, the Company completed the acquisition of KOAS-FM for $4.5 million. The Company acquired KOAS-FM to complement its current market cluster in Las Vegas, NV. The acquisition was financed with $2.0 million in cash and a $2.5 million note payable to GGB Las Vegas, LLC. The note carried interest at 3.5% and was repaid in full in the third quarter of 2012. The acquisition was accounted for as a combination between businesses under common control therefore the Company recorded the assets acquired at their carrying amounts as of the date of acquisition. The difference between the purchase price and the carrying amounts of the assets acquired was recorded as an adjustment to additional paid-in capital. The Company did not retrospectively adjust the financial statements to furnish comparative information for the periods under which the Company and GGB Las Vegas, LLC were under common control as the adjustments were considered immaterial to the financial statements and earnings per share for all periods presented. The operations of KOAS-FM have been included in the Company’s results of operations from its acquisition date. |
A summary of the carrying amounts of assets acquired and the adjustment to additional paid-in capital is as follows: |
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Property and equipment | | $ | 416,389 | |
FCC broadcasting license | | | 4,142,912 | |
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Carrying amount of assets acquired | | | 4,559,301 | |
Purchase price | | | 4,500,000 | |
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Adjustment to additional paid-in capital | | $ | 59,301 | |
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On September 1, 2013, the Company completed the acquisition of KVGS-FM in Las Vegas, NV from GGB Las Vegas, LLC, which is owned by George G. Beasley, for $4.0 million in cash. The Company acquired KVGS-FM to complement its current market cluster in Las Vegas, NV. The acquisition was accounted for as a combination between businesses under common control therefore the Company recorded the assets acquired at their carrying amounts as of the date of acquisition. The difference between the purchase price and the carrying amounts of the assets acquired was recorded as an adjustment, net of taxes, to additional paid-in capital. The Company did not retrospectively adjust the financial statements to furnish comparative information for the periods under which the Company and GGB Las Vegas, LLC were under common control as the adjustments were considered immaterial to all periods presented. The operations of KVGS-FM have been included in the Company’s results of operations from its acquisition date. |
A summary of the carrying amounts of assets acquired and the adjustment to additional paid-in capital is as follows: |
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| | | | |
Property and equipment | | $ | 384,118 | |
FCC broadcasting license | | | 2,806,982 | |
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Carrying amount of assets acquired | | | 3,191,100 | |
Purchase price | | | 4,000,000 | |
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Adjustment to additional paid-in capital | | $ | (808,900 | ) |
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During the fourth quarter of 2013, an amount of $185,916 was paid to GGB Las Vegas, LLC for unreimbursed management fee losses incurred by KVGS-FM during the term of the management agreement and an amount of $99,483 was paid to GGB Las Vegas, LLC to purchase property and equipment acquired by GGB Las Vegas, LLC for KVGS-FM during the term of the management agreement. |
On March 25, 2011, the Company contributed $250,000 to Digital PowerRadio, LLC in exchange for 25,000 units or approximately 20% of the outstanding units. The Company contributed an additional $62,500 on February 14, 2012, $104,167 on July 31, 2012, and $104,167 on April 10, 2013 which maintained its ownership interest at approximately 20% of the outstanding units. The Company may be called upon to make additional pro rata cash contributions to Digital PowerRadio, LLC in the future. Digital PowerRadio, LLC is managed by Fowler Radio Group, LLC which is partly-owned by Mark S. Fowler, an independent director of the Company. |
As of December 31, 2013, future minimum lease payments to related parties for the next five years and thereafter are summarized as follows: |
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| | | | |
2014 | | $ | 760,228 | |
2015 | | | 634,918 | |
2016 | | | 582,987 | |
2017 | | | 507,196 | |
2018 | | | 507,196 | |
Thereafter | | | 1,126,898 | |
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Total | | $ | 4,119,423 | |
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