Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | May 08, 2018 | Jun. 30, 2017 | |
Entity Registrant Name | SPANISH BROADCASTING SYSTEM INC | ||
Entity Central Index Key | 927,720 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | SBSAA | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Class A common stock | |||
Entity Public Float | $ 4,700,000 | ||
Entity Common Stock, Shares Outstanding | 4,216,991 | ||
Class B common stock | |||
Entity Public Float | $ 403 | ||
Entity Common Stock, Shares Outstanding | 2,340,353 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 16,141 | $ 23,835 |
Receivables: | ||
Trade | 32,046 | 32,952 |
Barter | 288 | 270 |
Total Receivables | 32,334 | 33,222 |
Less allowance for doubtful accounts | 1,529 | 745 |
Net receivables | 30,805 | 32,477 |
Prepaid expenses and other current assets | 8,055 | 6,597 |
Total current assets | 55,001 | 62,909 |
Property and equipment, net | 23,464 | 26,406 |
FCC broadcasting licenses | 322,197 | 323,961 |
Goodwill | 32,806 | 32,806 |
Other intangible assets, net of accumulated amortization of $1,212 in 2017 and $1,116 in 2016 | 1,336 | 1,432 |
Assets held for sale | 409 | 1,377 |
Other assets | 691 | 384 |
Total assets | 435,904 | 449,275 |
Current liabilities: | ||
Accounts payable and accrued expenses | 18,763 | 12,733 |
Accrued interest | 1,797 | 7,290 |
Unearned revenue | 715 | 1,325 |
Other liabilities | 11 | 4 |
12.5% senior secured notes, net of unamortized discount of $0 in 2017 and $629 in 2016 and net of deferred financing costs of $0 in 2017 and $1,138 in 2016. | 260,274 | 273,233 |
Current portion of other long-term debt | 4,616 | |
10 3/4% Series B cumulative exchangeable redeemable preferred stock outstanding and dividends outstanding, $0.01 par value, liquidation value $1,000 per share. Authorized 280,000 shares: 90,549 shares issued and outstanding at December 31, 2017 and 2016 and $75,032 and $65,299 of dividends payable as of December 31, 2017 and 2016, respectively. | 165,581 | 155,848 |
Total current liabilities | 447,141 | 455,049 |
Other liabilities, less current portion | 3,406 | 2,955 |
Derivative instruments | 17 | |
Deferred tax liabilities | 81,271 | 107,039 |
Total liabilities | 531,818 | 565,060 |
Commitments and contingencies (Note 13, 15 and 16) | ||
Stockholders’ deficit: | ||
Additional paid-in capital | 526,147 | 525,999 |
Accumulated other comprehensive loss, net | (102) | |
Accumulated deficit | (622,065) | (641,686) |
Total stockholders’ deficit | (95,914) | (115,785) |
Total liabilities and stockholders’ deficit | 435,904 | 449,275 |
Series C convertible preferred stock | ||
Stockholders’ deficit: | ||
Series C convertible preferred stock, $0.01 par value and liquidation value. Authorized 600,000 shares; 380,000 shares issued and outstanding at December 31, 2017 and 2016, respectively | $ 4 | $ 4 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Other intangible assets, accumulated amortization | $ 1,212 | $ 1,116 |
12.5% Senior Secured Notes | ||
Interest rate on Senior secured notes | 12.50% | 12.50% |
Senior secured notes, unamortized discount, current | $ 0 | $ 629 |
Deferred financing costs, current | $ 0 | $ 1,138 |
Series B Preferred Stock | ||
Cumulative exchangeable redeemable preferred stock dividend rate | 10.75% | 10.75% |
Preferred stock par value per share | $ 0.01 | $ 0.01 |
Preferred stock, liquidation value per share | $ 1,000 | $ 1,000 |
Preferred stock, shares authorized | 280,000 | 280,000 |
Preferred stock, shares issued | 90,549 | 90,549 |
Preferred stock, shares outstanding | 90,549 | 90,549 |
Preferred Stock, dividends outstanding | $ 75,032 | $ 65,299 |
Convertible preferred stock, liquidation value per share | $ 1,000 | |
Series C convertible preferred stock | ||
Convertible preferred stock, par value | 0.01 | $ 0.01 |
Convertible preferred stock, liquidation value per share | $ 0.01 | $ 0.01 |
Convertible preferred stock, shares authorized | 600,000 | 600,000 |
Convertible preferred stock, shares issued | 380,000 | 380,000 |
Convertible preferred stock, shares outstanding | 380,000 | 380,000 |
Class A common stock | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 4,166,991 | 4,166,991 |
Common stock, shares outstanding | 4,166,991 | 4,166,991 |
Class B common stock | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 2,340,353 | 2,340,353 |
Common stock, shares outstanding | 2,340,353 | 2,340,353 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | ||
Net revenue | $ 134,709 | $ 144,619 |
Operating expenses: | ||
Engineering and programming | 30,474 | 31,112 |
Selling, general and administrative | 58,826 | 56,106 |
Corporate expenses | 10,403 | 10,588 |
Depreciation and amortization | 4,349 | 4,692 |
Total operating expenses | 104,052 | 102,498 |
Gain on the disposal of assets | (15,894) | (11) |
Recapitalization costs | 6,021 | |
Other operating gains | (37) | |
Other operating income | (3) | |
Operating income | 40,533 | 42,169 |
Other (expense) income: | ||
Interest expense | (35,850) | (40,162) |
Dividends on Series B preferred stock classified as interest expense | (9,733) | (9,734) |
Interest income | 13 | 13 |
Loss before income tax | (5,037) | (7,714) |
Income tax (benefit) expense | (24,658) | 8,628 |
Net income (loss) | $ 19,621 | $ (16,342) |
Net income (loss) per common share: | ||
Basic | $ 2.70 | $ (2.25) |
Diluted | $ 2.70 | $ (2.25) |
Weighted average common shares outstanding: | ||
Basic | 7,267 | 7,267 |
Diluted | 7,267 | 7,267 |
Net income (loss) | $ 19,621 | $ (16,342) |
Other comprehensive income, net of taxes- unrealized gain on derivative instrument | 102 | 118 |
Total comprehensive income (loss) | $ 19,723 | $ (16,224) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Deficit - USD ($) $ in Thousands | Total | Preferred StockSeries C convertible preferred stock | Common StockClass A common stock | Common StockClass B common stock | Additional paid-in capital | Accumulated other comprehensive loss, net | Accumulated deficit |
Beginning Balance at Dec. 31, 2015 | $ (100,216) | $ 4 | $ 525,344 | $ (220) | $ (625,344) | ||
Beginning Balance, Shares at Dec. 31, 2015 | 380,000 | 4,166,991 | 2,340,353 | ||||
Stock-based compensation | 655 | 655 | |||||
Net income (loss) | (16,342) | (16,342) | |||||
Unrealized gain on derivative instrument | 118 | 118 | |||||
Ending Balance at Dec. 31, 2016 | (115,785) | $ 4 | 525,999 | (102) | (641,686) | ||
Ending Balance, Shares at Dec. 31, 2016 | 380,000 | 4,166,991 | 2,340,353 | ||||
Stock-based compensation | 148 | 148 | |||||
Net income (loss) | 19,621 | 19,621 | |||||
Unrealized gain on derivative instrument | 102 | $ 102 | |||||
Ending Balance at Dec. 31, 2017 | $ (95,914) | $ 4 | $ 526,147 | $ (622,065) | |||
Ending Balance, Shares at Dec. 31, 2017 | 380,000 | 4,166,991 | 2,340,353 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 19,621 | $ (16,342) |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | ||
Dividends on Series B preferred stock classified as interest expense | 9,733 | 9,734 |
Gain on the disposal of assets | (15,894) | (11) |
Other operating gains | (37) | |
Stock-based compensation | 148 | 655 |
Depreciation and amortization | 4,349 | 4,692 |
Net barter income | (207) | (482) |
Provision (benefit) for trade doubtful accounts | 853 | (51) |
Amortization of deferred financing costs | 1,138 | 3,397 |
Amortization of original issued discount | 629 | 1,980 |
Deferred income taxes | (25,683) | 7,992 |
Unearned revenue-barter | (421) | 972 |
Changes in operating assets and liabilities: | ||
Trade receivables | 719 | 627 |
Prepaid expenses and other current assets | (1,340) | (1,078) |
Other assets | (307) | 147 |
Accounts payable and accrued expenses | 5,881 | (3,454) |
Accrued interest | (5,493) | 96 |
Other liabilities | 458 | (40) |
Net cash (used in) provided by operating activities | (5,816) | 8,797 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (1,504) | (2,202) |
Proceeds from the sale of spectrum assets | 5,073 | |
Proceeds from the sale of property and equipment | 13,895 | |
Cash payment related to station exchange | (1,897) | |
Net cash provided by (used in) investing activities | 17,464 | (4,099) |
Cash flows from financing activities: | ||
Payments of other long-term debt | (4,616) | (306) |
Net cash used in financing activities | (19,342) | (306) |
Net (decrease) increase in cash and cash equivalents | (7,694) | 4,392 |
Cash and cash equivalents at beginning of year | 23,835 | 19,443 |
Cash and cash equivalents at end of year | 16,141 | 23,835 |
Supplemental cash flows information: | ||
Interest paid | 39,575 | 34,668 |
Income tax paid, net | 28 | 395 |
Noncash investing and financing activities: | ||
Nonmonetary asset exchange | 2,794 | |
Unrealized gain on derivative instruments | 102 | $ 118 |
12.5% Senior Secured Notes | ||
Cash flows from financing activities: | ||
Paydown of 12.5% senior secured notes | $ (14,726) |
Organization and Nature of Busi
Organization and Nature of Business | 12 Months Ended |
Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Nature of Business | (1) Organization and Nature of Business Spanish Broadcasting System, Inc., a Delaware corporation, and its subsidiaries owns 17 radio stations in the Los Angeles, New York, Puerto Rico, Chicago, Miami and San Francisco markets. In addition, we own and operate six television stations, which operate as one television operation, branded as “MegaTV.” We also have various MegaTV broadcasting outlets under affiliation or programming agreements. As part of our operating business, we produce live concerts and events and maintain multiple bilingual websites, including www.LaMusica.com Our primary source of revenue is the sale of advertising time on our stations to local and national advertisers. Our revenue is affected primarily by the advertising rates that our stations are able to charge, as well as the overall demand for advertising time in each respective market. Seasonal net broadcasting revenue fluctuations are common in the broadcasting industry and are due to fluctuations in advertising expenditures by local and national advertisers. Typically for the broadcasting industry, the first calendar quarter generally produces the lowest revenue. The broadcasting industry is subject to extensive federal regulation which, among other things, requires approval by the Federal Communications Commission (“FCC”) for the issuance, renewal, transfer and assignment of broadcasting station operating licenses and limits the number of broadcasting properties we may acquire. |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Related Matters | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies and Related Matters | (2) Summary of Significant Accounting Policies and Related Matters (a) Basis of Presentation The Company adopted FASB ASU No. 2014-15, Presentation of Financial Statements- Going Concern Our consolidated financial statements have been prepared assuming we will continue as a going-concern, and do not include any adjustments that might result if we were unable to do so, and contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. However, we have concluded that there is substantial doubt about our ability to continue as a going concern as discussed under Part II, Item 7. “Critical Accounting Policies—Going Concern.” As of December 31, 2017 and December 31, 2016, we had a working capital deficit due primarily to the classification of our 10¾% Series B Cumulative Exchangeable Redeemable Preferred Stock (the “Series B preferred stock”) as a current liability and the classification of our 12.5% Senior Secured Notes due 2017 (the “Notes”) as a current liability. Under Delaware law, our state of incorporation, the Series B preferred stock is deemed equity. Because the holders of the Series B preferred stock are not creditors, they do not have rights of, or remedies available to, creditors. Delaware law does not recognize a right of preferred stockholders to force redemptions or repurchases where the corporation does not have funds legally available. Currently, we do not have sufficient funds legally available to be able to redeem or repurchase the Series B preferred stock and its accumulated unpaid dividends. If we are successful in repaying or refinancing our Notes, and are able to generate legally available funds under Delaware law, we may be required to pay all or a portion of the accumulated preferred dividends and redeem all or a portion of the Series B preferred stock, to extent of the funds legally available. In addition, the Company has experienced negative cash flows from operating activities of $5.8 million for the year ended December 31, 2017 and is currently involved in litigation with some holders of the Series B preferred stock. See Note 11 elsewhere in these Notes to the consolidated financial statements for additional detail regarding the Series B preferred stock litigation. As further discussed below, both of these recent developments could adversely affect our ability to continue as a going concern. As discussed in Note 9, the Notes became due on April 15, 2017. Cash from operations and proceeds from the sale of assets and the FCC spectrum auction were not sufficient to repay the Notes when they became due. We have worked and continue to work with our advisors regarding a consensual recapitalization or restructuring of our balance sheet, including through the issuance of new debt or equity to raise the necessary funds to repay the Notes. The Series B preferred stock litigation and the foreign ownership issue have complicated our efforts at a successful refinancing of the Notes. The resolution of the recapitalization or restructuring of our balance sheet, the litigation with the purported holders of our Series B preferred stock and the foreign ownership issue are subject to several factors currently beyond our control. Our efforts to effect a consensual refinancing of the Notes, the Series B preferred stock litigation and the foreign ownership issue will likely continue to have a material adverse effect on us if they are not successfully resolved. The Company has incurred $6.0 million, for the twelve-months ended December 31, 2017, of recapitalization costs, primarily due to professional fees. Also included in these amounts are the consent fees paid to the certain holders of the Notes who entered into the Forbearance Agreement with the Company, which we summarize in Note 9 as well as the legal and financial advisory fees incurred by such holders. In the event we are unsuccessful in these efforts and one or more Noteholders seek to exercise remedies against us or our assets, we may be required to seek protection under Chapter 11 of the U.S. Bankruptcy Code, among other things, in order to maximize the value of our company for all of our constituents. While we believe that a Chapter 11 filing may create an avenue to successfully execute on our strategy, such a filing may also have several negative consequences to our business, including the costs and negative publicity that surrounds such a filing, reduced advertising revenue due to the uncertainty surrounding the filing, the potential need to sell assets (including the equity of our subsidiaries that own our FCC licenses) under distressed circumstances and the risk that we are unable to execute on a successful plan of reorganization or restructuring. As a result of generating negative cash flows from operations for the twelve-month period ended December 31, 2017, management has evaluated its cash requirements for the next twelve-month period after the date of these consolidated financial statements and determined that it anticipates generating sufficient cash flows, together with cash on hand, to meet its obligations through the ordinary course operating activities. The promissory note relating to the acquisition of the Miami studio building was paid on January 3, 2017. Management is responsible for evaluating whether there is substantial doubt about the organization’s ability to continue as a going concern and to provide related footnote disclosures, in accordance with the going concern accounting standard adopted in 2016. Although the Company expects to maintain cash on hand sufficient to meet its operating obligations, its inability to obtain financing in adequate amounts and on acceptable terms necessary to operate our business, repay our Notes, redeem or refinance our Series B preferred stock, obtain a favorable resolution to the Series B preferred stock litigation, or finance future acquisitions negatively impacts our business, financial condition, results of operations and cash flows and raises substantial doubt about our ability to continue as a going concern. The financial statements do not include adjustments, if any, that might arise from the outcome of this uncertainty. (b) Revision of Prior Period Consolidated Financial Statements During the fourth quarter of 2017, the Company determined that there was an ownership change on October 15, 2013 causing the pre-ownership change net operating loss (“NOL”) carry-forwards to be limited under Section 382 of the Internal Revenue Code of 1986, as amended (“Section 382”) and not available to offset future taxable income before they expire. The Company’s accounting policy is to not record the amount of NOL carry-forwards that will expire due to Section 382 limitations. As a result of the aforementioned ownership change, the Company identified a $1.7 million adjustment related to the prior period partial release of its valuation allowance in the amount of $2.4 million for two of its subsidiaries’ NOL deferred tax assets. The release of this valuation allowance was recorded in 2015 Consolidated Statements of Change in Stockholders’ Deficit as a decrease to beginning accumulated deficit balance. The release of valuation allowance was overstated by $1.7 million because the related NOL deferred tax assets were not available for future use due to Section 382 limitations resulting from the 2013 ownership change. In order to assess materiality with respect to the adjustments, the Company considered Staff Accounting Bulletin (“SAB”) 99, Materiality and SAB 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, and determined that the impact of the adjustments on prior period consolidated financial statements was immaterial. Therefore, the cumulative adjustment has been recorded as an adjustment of $1.7 million to the balance of accumulated deficit as of December 31, 2015. Due to jurisdictional netting rules, this adjustment was reflected as a decrease to the deferred tax asset of $1.6 million and an increase to the deferred tax liability of $0.1 million. The $1.6 million deferred tax assets and $0.1 deferred tax liability relate to the US Licensing entities. The impact of the adjustments on the Consolidated Statements of Changes in Stockholders’ Deficit at December 31, 2015 and 2016 is as follows: Previously Reported Adjustment As Revised (In thousands) Changes to accumulated deficit Balance at December 31, 2015 $ (623,676 ) $ (1,668) $ (625,344 ) Balance at December 31, 2016 (640,018 ) (1,668) (641,686 ) Additionally, the impact of the adjustment on the December 31, 2016 Consolidated Balance Sheet is as follows: December 31, 2016 Previously Reported Adjustment As Revised (In thousands) Deferred tax assets $ 1,615 $ (1,615) $ — Total assets 450,890 (1,615) 449,275 Deferred tax liabilities 106,986 $ 53 107,039 Total liabilities 565,007 53 565,060 Accumulated deficit (640,018 ) (1,668) (641,686 ) Total deficit (114,117 ) (1,668) (115,785 ) Total liabilities and deficit 450,890 (1,615) 449,275 The Company also identified that the consolidated NOL carry-forward deferred tax assets and the related valuation allowance were therefore overstated in the prior period income tax footnote disclosures by the deferred tax assets associated with the NOL carry-forwards subject to Section 382 limitations and were adjusted. Adjustments were made to the current year income tax footnote to reflect the reduction in beginning balances of NOL deferred tax assets and valuation allowance by $71.6 million and $69.9 million respectively. Net deferred tax assets were reduced and net deferred tax liabilities were increased by $1.7 million as of December 31, 2016. The impact of the adjustment on the income tax footnote deferred tax balances at December 31, 2016 is as follows: December 31, 2016 Previously Reported Adjustment As Revised (In thousands) Deferred tax assets: Federal and state NOL carry-forwards $ 116,227 $ (71,578 ) $ 44,649 Total gross deferred tax assets 161,037 (71,578 ) 89,459 Less valuation allowance (158,081 ) $ 69,910 (88,171 ) Net deferred tax assets 2,956 (1,668 ) 1,288 Net deferred tax liability 105,371 1,668 107,039 Additionally, the disclosure of NOLs available for future use at December 31, 2016 was adjusted to reflect the reduced federal and state NOL carry-forward of $106.8 million and $105.4 million, respectively. The Consolidated Statements of Operations for the year ended December 31, 2016 has not been adjusted as there is no impact on net loss to those consolidated financial statements. In considering whether the Company should amend its previously filed Form 10-K 2016, the Company’s evaluation of SAB 99 considered that the aggregate impact of the adjustment did not impact the Company’s loss before income taxes and was not material to the Company’s net loss, had no impact on operating cash flows, and had an insignificant impact on the Consolidated Balance Sheets. In aggregate, the Company does not believe it is probable that the views of a reasonable investor would have changed by this adjustment in the 2016 consolidated financial statements to warrant an amended Form 10-K. Accordingly, the adjustment was made to the December 31, 2016 Consolidated Balance Sheet and the opening balance of accumulated deficit in the Consolidated Statement of Changes in Stockholders’ Deficit for the year then ended as described above using the SAB 108 approach. (c) Revenue Recognition We recognize broadcasting revenue as advertisements are aired on our stations, subject to meeting certain conditions, such as persuasive evidence that an agreement exists, a fixed or determinable price and reasonable assurance of collection. Our revenue is presented net of agency commissions. Agency commissions are calculated based on a stated percentage applied to gross billing revenue. Advertisers remit the gross billing amount to the agency, and then the agency remits gross billings less their commission to us when the advertisement is not placed directly by the advertiser. We recognize special events revenue from ticket sales, as well as profit-sharing arrangements, as concerts and events are conducted and occur. Payments received in advance of being earned are recorded as customer advances, which are included in accounts payable and accrued expenses. (d) Valuation of Accounts Receivable We review accounts receivable to determine which accounts are doubtful of collection. In making the determination of the appropriate allowance for doubtful accounts, we consider our history of write-offs, relationships with our customers, age of the invoices and the overall creditworthiness of our customers. For each of the years ended December 31, 2017 and 2016, we incurred bad debt expense of $0.9 million and generated income from the recovery of previously recognized bad debt expense of $0.1 million, respectively. Changes in the credit worthiness of customers, general economic conditions and other factors may impact the level of future write-offs. (e) Property and Equipment Property and equipment, including capital leases, are stated at historical cost, less accumulated depreciation and amortization. We depreciate the cost of our property and equipment using the straight-line method over the respective estimated useful lives (see Note 7). Leasehold improvements are amortized on a straight-line basis over the shorter of the remaining life of the lease or the useful life of the improvements. Maintenance and repairs are charged to expense as incurred; improvements are capitalized. When items are retired or are otherwise disposed of, the related costs and accumulated depreciation and amortization are removed from the accounts and any resulting gains or losses are credited or charged to operating income. (f) Assets Held for Sale Long lived assets or asset groups that have met the initial criteria to be classified as held for sale (disposal group) and have not yet been sold are measured at the lower of their carrying amount or fair value less cost to sell. Long-lived asset classified as held for sale shall not be depreciated (amortized) while classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale shall continue to be accrued. (g) Impairment or Disposal of Long-Lived Assets Accounting for impairment or disposal of long-lived assets requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. (h) FCC Broadcasting Licenses Our indefinite-lived intangible assets consist of FCC broadcasting licenses. FCC broadcasting licenses are granted to stations for up to eight years under the Telecommunications Act of 1996 (“the Act”). The Act requires the FCC to renew a broadcast license if: (i) it finds that the station has served the public interest, convenience and necessity; (ii) there have been no serious violations of either the Communications Act of 1934 or the FCC’s rules and regulations by the licensee; and (iii) there have been no other serious violations, which taken together, constitute a pattern of abuse. We intend to renew our licenses indefinitely and evidence supports our ability to do so. Historically, there has been no material challenge to our license renewals. In addition, the technology used in broadcasting is not expected to be replaced by another technology any time in the foreseeable future. The weighted-average period before the next renewal of our FCC broadcasting licenses is 2.9 years. We do not amortize our FCC broadcasting licenses. We test these indefinite-lived intangible assets for impairment at least annually or when an event occurs that may indicate that impairment may have occurred. We test our FCC broadcasting licenses for impairment at the market cluster level. We apply the guidance of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350-30-35, Unit of Accounting for Purposes of Testing for Impairment of Intangible Assets Not Subject to Amortization During 2016, we initiated a change in accounting principle and changed the date of our annual impairment test for indefinite-lived intangible assets from December 31 to November 30. The change from year-end to such earlier date was preferable to management to facilitate interactions with third party valuation specialists and in order to complete the year-end closing process in a more timely fashion. Management has assessed that the change had no impact on the results of operations in 2017 or 2016. Our valuations principally use the discounted cash flow methodology. This income approach consists of a quantitative model, which assumes the FCC broadcasting licenses are acquired and operated by a third-party. The valuation method used is based on the premise that the only asset that the unbuilt start-up station would possess is the FCC broadcasting license. The valuation method isolates the income attributable to a FCC broadcasting license by modeling a hypothetical greenfield build-up to a normalized enterprise that, by design, lacks inherent goodwill and whose only other assets have essentially been paid for as part of the build-up process. Consequently, the resulting accretion in value is solely attributed to the FCC broadcasting license. In the discounted cash flow projections, a period of ten years was determined to be an appropriate time horizon for the analysis. The yearly streams of cash flows are adjusted to present value using an after-tax discount rate calculated for the broadcast industry as of November 30 of each year. Additionally, it is necessary to project the terminal value at the end of the ten-year projection period. The terminal value represents the hypothetical value of the licenses at the end of a ten-year period. An estimated amount of taxes are deducted from the assumed terminal value, which accordingly is discounted to net present value. The key assumptions incorporated in the discounted cash flow model are market revenue projections, market revenue share projections, anticipated operating profit margins and risk adjusted discount rates. These assumptions vary based on the market size, type of broadcast of signal, media competition and audience share. These assumptions primarily reflect industry norms for similar stations/broadcast signals, as well as historical performance and trends of the markets. In the preparation of the FCC broadcasting license appraisals, estimates and assumptions are made that affect the valuation of the intangible asset. These estimates and assumptions could differ from actual results and could have a material impact on our consolidated financial statements in the future. These key assumptions are subject to such factors as: overall advertising demand, station listenership and viewership, audience tastes, technology, fluctuation in preferred advertising media and the estimated cost of capital. Since a number of factors may influence the determination of the fair value of our FCC broadcasting licenses, we are unable to predict whether impairments will occur in the future. We also consider additional market valuation approaches in assessing whether any impairment may exist at reporting units. Based on consideration of these factors, during the year ended December 31, 2017, we determined that there were no impairments at the reporting units. Any significant change in these factors will result in a modification of the key assumptions, which may result in an additional impairment. (i) Goodwill Goodwill consists of the excess of the purchase price over the fair value of tangible and identifiable intangible net assets acquired in business combinations. We test goodwill for impairment at least annually at the reporting unit level. We have determined that we have two reporting units, Radio and Television. We currently only have goodwill in our radio reporting unit. We have aggregated our operating components (radio stations) into a single radio reporting unit based upon the similarity of their economic characteristics. Our evaluation included consideration of factors, such as regulatory environment, business model, gross margins, nature of services and the process for delivering these services. The Company assesses qualitative factors to determine whether it is necessary to perform a quantitative assessment for its radio reporting unit. If the quantitative assessment is necessary, the Company will determine the fair value of its radio reporting unit. If the fair value of its radio reporting unit is less than the carrying amount, the Company will recognize an impairment charge for the amount by which the carrying amount exceeds the fair value. The loss recognized will not exceed the total amount of goodwill. For the years-ended December 31, 2017 and 2016, we performed interim and/or annual impairment reviews of our goodwill, as of November 30, and determined that there was no impairment of goodwill. The estimated enterprise value of our radio reporting unit exceeded its carrying value during our impairment testing. When evaluating our estimated enterprise value, we utilized an income approach which uses assumptions and estimates which among others include the aggregated expected revenues and operating margins generated by our FCC broadcasting licenses (i.e. our stations) and use of a risk adjusted discount rate. We did not find reconciliation to our current market capitalization meaningful in the determination of our enterprise value given current factors that impact our market capitalization, including but not limited to: limited trading volume; and the significant voting control of our Chairman and Chief Executive Officer. During 2016, we initiated a change in accounting principle and changed the date of our annual goodwill impairment test from December 31 to November 30. The change from year-end to such earlier date was preferable to Management to facilitate interactions with third party valuation specialists and in order to complete the year-end closing process in a more timely fashion. Management has assessed that the change had no impact on the results of operations in 2017 or 2016. (j) Other Intangible Assets, Net Other intangible assets, net, consist of favorable leases and agreements acquired. Gross other intangible assets total $2.5 million as of December 31, 2017 and 2016. These assets are being amortized over the lives of the leases; however, not to exceed 40 years. Amortization expense amounted to $0.1 million and $0.1 million for the years ended December 31, 2017 and 2016, respectively. Estimated amortization expense for the five years subsequent to December 31, 2017 is as follows (in thousands): Year ending December 31: 2018 $ 96 2019 96 2020 96 2021 96 2022 96 (k) Deferred Financing Costs Deferred financing costs relates to our Notes (see Note 9). Deferred financing costs are amortized to interest expense over the term of the related debt using the effective interest method. During the first quarter of 2016, we adopted an accounting standard related to simplifying the presentation of debt issuance costs, which we applied retrospectively. This new standard required that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, and not recorded as separate assets. In 2016, the deferred financing costs of $1.1 million were presented as a reduction to the current liability caption, 12.5% senior secured notes, in accordance with the adopted standard. There was no deferred financing cost remaining to be amortized as of December 31, 2017 which would be netted against the carrying amount of the debt liability. (l) Barter Transactions Barter transactions represent advertising time exchanged for noncash goods and/or services, such as promotional items, advertising, supplies, equipment and services. Revenue from barter transactions are recognized as income when advertisements are broadcasted. Expenses are recognized when goods or services are received or used. We record barter transactions at the fair value of goods or services received or advertising surrendered, whichever is more readily determinable. Barter revenue amounted to $6.3 million and $7.4 million for the years ended December 31, 2017 and 2016, respectively. Barter expense amounted to $6.1 million and $6.9 million for the years ended December 31, 2017 and 2016, respectively. Unearned revenue consists of the excess of the aggregate fair value of goods or services received by us, over the aggregate fair value of advertising time delivered by us on certain barter customers. (m) Cash and Cash Equivalents Cash and cash equivalents consist of cash and money market accounts at various commercial banks. All cash equivalents have original maturities of 90 days or less. (n) Income Taxes We file a consolidated federal income tax return for substantially all of our domestic operations. We are also subject to foreign taxes on our Puerto Rico operations. We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled and are respectively classified as noncurrent assets or noncurrent liabilities. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. If the realization of deferred tax assets in the future is considered more likely than not, an adjustment to the deferred tax assets would increase net income in the period such determination is made. Based upon the level of historical taxable income and projections for future taxable income over the periods which the deferred tax assets are deductible, at this time, management believes it is more likely than not that we will not realize the benefits of the majority of these deductible differences. As a result, we have established and maintained a valuation allowance for that portion of the deferred tax assets we believe will not be realized. The Company’s accounting policy is to not record the amount of NOL carry-forwards that will expire due to Section 382 limitations. We account for uncertain tax positions which require that a position taken or expected to be taken in a tax return be recognized in the financial statements when it is more likely than not (a likelihood of more than 50%) that the position would be sustained upon examination by tax authorities. A recognized tax position is then measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. Interest and penalties on tax liabilities, if any, would be recorded in interest expense and other noninterest expense, respectively (see Note 14). (o) Advertising Costs We incur advertising costs to add and maintain listeners. These costs are charged to expense in the period incurred. Cash advertising costs amounted to $0.2 million and $0.2 million in the years ended December 31, 2017 and 2016, respectively. (p) Contingent Liabilities and Gains Accounting standards require that an estimated loss from a loss contingency shall be accrued when information available prior to the issuance of the financial statements indicate that it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and when the amount of the loss can be reasonably estimated. Accounting for contingencies such as legal and income tax matters requires us to use our judgment. We believe that our accruals for these matters are adequate. Contingencies that might result in gains are disclosed but not reflected in the financial statements until realization has occurred. (q) Use of Estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include the allowance for doubtful accounts, the realization of deferred tax assets, the useful lives and future cash flows used for testing the recoverability of property and equipment, the recoverability of FCC broadcasting licenses, goodwill and other intangible assets, the fair value of Level 2 and Level 3 financial instruments, production tax credits, contingencies and litigation. These estimates and assumptions are based on management’s best judgments. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. Management adjusts such estimates and assumptions as facts and circumstances dictate. Illiquid credit markets, volatile equity markets and reductions in advertising spending have combined to increase the uncertainty inherent in such estimates and assumptions. Actual results could differ from these estimates. (r) Concentration of Business and Credit Risks Financial instruments that potentially subject us to concentrations of risk include primarily cash, trade receivables and financial instruments used in hedging activities. We place our cash with highly rated credit institutions. Although we try to limit the amount of credit exposure with any one financial institution, we do in the normal course of business maintain cash balances in excess of federally insured limits. Our operations are conducted in several markets across the United States, including Puerto Rico. Our New York, Los Angeles, and Miami markets accounted for more than 60% of net revenue for the years ended December 31, 2017 and 2016. Our credit risk is spread across a large number of diverse customers in a number of different industries, thus spreading the trade credit risk. We do not normally require collateral on credit sales; however, a credit analysis is performed before extending substantial credit to any customer and occasionally we request payment in advance. We establish an allowance for doubtful accounts based on customers’ payment history and perceived credit risks. (s) Basic and Diluted Net Loss Per Common Share Basic net income (loss) per common share was computed by dividing net income (loss) available to common stockholders by the weighted average number of shares of common stock and convertible preferred stock outstanding for each period presented. Diluted net income (loss) per common share is computed by giving effect to common stock equivalents as if they were outstanding for the entire period. The following table summarizes the net income (loss) applicable to common stockholders and the net income (loss) per common share for the years ended December 31, 2017 and 2016 (in thousands, except per share data): 2017 2016 Net income (loss) $ 19,621 $ (16,342 ) Net income (loss) per common share: Basic $ 2.70 $ (2.25 ) Diluted $ 2.70 $ (2.25 ) Weighted average common shares outstanding: Basic 7,267 7,2 |
Related Party Transaction - CEO
Related Party Transaction - CEO Waiver of Performance Bonus | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transaction - CEO Waiver of Performance Bonus | (3) Related Party Transactions CEO Waiver of Performance Bonus Pursuant to his Employment Agreement, our Chief Executive Officer (CEO) was entitled to receive a bonus for 2016 if the Company met certain performance metrics for the year. Based on the Company’s performance, our CEO would have been entitled to receive a bonus in the amount of $750,000 for 2016 which was recorded as part of our corporate expenses. Our CEO decided to waive his right to receive the bonus during the fourth quarter of 2016 and notified the Compensation Committee of such decision. The Compensation Committee accepted our CEO’s waiver and the Company recognized a gain on forgiveness of related party liability of $750,000 which was recorded as a benefit to corporate expenses. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2017 | |
Prepaid Expense And Other Assets Current [Abstract] | |
Prepaid Expenses and Other Current Assets | (4) Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets at December 31, 2017 and 2016 consist of the following (in thousands): December31, 2017 December 31, 2016 Production tax credits $ 5,161 $ 3,716 Prepaid expenses 1,884 2,287 Other current assets 1,010 594 $ 8,055 $ 6,597 |
Assets Held for Sale
Assets Held for Sale | 12 Months Ended |
Dec. 31, 2017 | |
Assets Of Disposal Group Including Discontinued Operation [Abstract] | |
Assets Held for Sale | (5) Assets Held for Sale During 2016, the Company entered into listing agreements with brokers to sell two buildings and related improvements in New York City and Los Angeles which are part of our radio segment. The two properties have been reclassified from land, building and building improvements, as well as furniture and fixtures to assets held for sale as these assets were approved for immediate sale in their present condition, were expected to be sold within one year and management was actively working to locate buyers for these buildings and related improvements. As of December 31, 2016, the land, buildings and related improvements had a net book value of $1.4 million. On June 9, 2017, we closed on the sale of our Los Angeles facilities which had carrying values of $0.9 million of land and $0.1 million of property and equipment. The purchase price under the agreement was $14.7 million from which the Company recognized a gain of $12.8 million, net of closing costs. Additionally, the sale of the Los Angeles facilities resulted in net proceeds of $10.3 million to the Company, as defined by the Indenture governing our outstanding Notes, which is calculated differently than the recognized gain of $12.8 million for financial reporting purposes. Pursuant to an agreement entered into by the Company, as of September 12, 2017, with 26 W. 56 LLC, the Company expects to sell its New York facilities with a carrying value of $0.4 million for $14.0 million, exclusive of closing costs, and is expected to close during the third quarter of 2018. The Company will repay a portion of the outstanding Notes with the resulting net proceeds, as defined by the indenture governing our Notes (the “Indenture”). The net proceeds are calculated differently than the gain that will be recognized for financial reporting purposes at the time of closing. As related to the Los Angeles and New York asset sales, and in order to arrive at net proceeds as defined by the Indenture, the Company is permitted to hold back certain amounts related to taxes, relocation expenses and capital expenditures that are expected to become payable in the future. The net proceeds are used to repay a portion of the outstanding indebtedness on our Notes. A summary of assets held for sale as of December 31, 2017 and December 31, 2016 is as follows (in thousands): December31, 2017 December 31, 2016 Land $ — $ 850 Property and equipment, net 409 527 $ 409 $ 1,377 |
Asset Exchange
Asset Exchange | 12 Months Ended |
Dec. 31, 2017 | |
Asset Exchange [Abstract] | |
Asset Exchange | (6) Asset Exchange On January 4, 2016, the Company completed an asset exchange with International Broadcasting Corp. under which the Company agreed to exchange certain assets used or useful in the operations of WIOA-FM, WIOC-FM, and WZET-FM in Puerto Rico for certain assets used or useful in the operations of WTCV (DT), WVEO (DT), and WVOZ (TV) in Puerto Rico previously owned and operated by International Broadcasting Corp. The asset exchange was accounted for as a non-monetary exchange in accordance with ASC-845 Nonmonetary Transactions Business Combinations |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, Net | (7) Property and Equipment, Net Property and equipment, net consists of the following at December 31, 2017 and 2016 (in thousands): 2017 2016 Estimated useful lives Land $ 6,456 $ 6,456 — Building and building improvements 22,160 22,161 7–20 years Tower and antenna systems 5,623 5,986 10 years Studio and technical equipment 23,680 25,416 5–10 years Furniture and fixtures 3,972 4,819 5–10 years Transmitter equipment 8,637 9,108 10 years Leasehold improvements 2,794 2,781 1–20 years Computer equipment and software 9,617 9,362 3–5 years Other 2,027 2,052 3–5 years 84,966 88,141 Less accumulated depreciation (61,502 ) (61,735 ) $ 23,464 $ 26,406 During the years ended December 31, 2017 and 2016, depreciation of property and equipment totaled $4.3 and $4.6 million, respectively. During the fourth quarter of 2017, the Company wrote off $1.1 million of fully depreciated property and equipment located in Puerto Rico that was destroyed by Hurricane Maria in September 2017. The Company carries property damage insurance and has not reached a final settlement with its insurance carrier to rebuild, repair or replace the damaged property and equipment and no assurances can be given that we will be able to recover all our hurricane related losses through our claims. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 12 Months Ended |
Dec. 31, 2017 | |
Payables And Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | (8) Accounts Payable and Accrued Expenses Accounts payable and accrued expenses at December 31, 2017 and 2016 consist of the following (in thousands): 2017 2016 Accounts payable – trade $ 2,762 $ 1,774 Accrued compensation and commissions 5,866 5,962 Accrued professional fees 2,669 1,038 Accrued step-up leases 246 284 Accrued franchise and rent tax 1,178 97 Other accrued expenses 6,042 3,578 $ 18,763 $ 12,733 |
12.5% Senior Secured Notes due
12.5% Senior Secured Notes due 2017 | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
12.5% Senior Secured Notes due 2017 | (9) 12.5% Senior Secured Notes due 2017 On February 7, 2012 we closed our offering of $275 million in aggregate principal amount of our Notes, at an issue price of 97% of the principal amount. The Notes were offered solely by means of a private placement either to qualified institutional buyers in the United States pursuant to Rule 144A under the Securities Act, or to certain persons outside the United States pursuant to Regulation S under the Securities Act. We used the net proceeds from the offering, together with some cash on hand, to repay and terminate the senior credit facility term loan, and to pay the transaction costs related to the offering. The Notes matured on April 15, 2017. Because we did not have sufficient cash on hand and did not generate sufficient cash from operations or asset sales, we did not repay the Notes at their maturity, as a result of which there was an event of default under the Indenture on April 17, 2017 (being the payment date following the Saturday, April 15, 2017 maturity date). At December 31, 2017, there is $260.3 million in principal amount of Notes outstanding. As a result, there has been and remains an event of default under the Indenture which gives the holders of our Notes the right to demand repayment of the Notes and, subject to the terms of the Indenture, to foreclose on our assets that serve as collateral for the Notes. The collateral constitutes substantially all of our assets. We continue to pay interest on the Notes at their current rate of 12.5% per year on a monthly basis. We have sold our Los Angeles real estate for $14.7 million and expect to sell our New York real estate for $14.0 million in the third quarter of 2018, whose net proceeds from the sale of the Los Angeles real estate we used and we expect to use the net proceeds from the sale of the New York real estate to repay the Notes. In addition, one of our limited liability companies had not become a guarantor when formed in 2013, as required by a covenant under the Indenture and therefore we were in default under the Indenture from the formation of the limited liability company until we subsequently submitted documentation to the trustee to have the limited liability company become an additional guarantor in April 2017. We were also required to amend the limited liability operating agreement to permit the trustee to more adequately perfect its security interest in the equity of the company. This default has subsequently been cured. On May 8, 2017, the Company, and certain of its subsidiaries entered into a Forbearance Agreement with the certain Noteholders, owning more than 75% the principal amount of the outstanding Notes. These Noteholders agreed to forbear from exercising any of their rights and remedies under the Indenture, with respect to certain defaults from the effective date of the Forbearance Agreement until the earliest to occur of (a) the occurrence of any event of termination and (b) May 31, 2017. As part of the Forbearance Agreement, the Company agreed to make monthly interest payments of $2,864,583 on the Notes for the 30 day periods ending on May 15, 2017 and June 15, 2017, rather than on a semi-annual basis as required by the Indenture. The Company also agreed to pay a consent fee to these Noteholders equal to 0.35% of the principal amount of the Notes held by such parties and to pay the legal fees and financial advisor due diligence fees of these Noteholders. The Forbearance Agreement expired and has not been extended. As of the date of the filing of these financial statements, the Company had made all of the payments required to be made under the Forbearance Agreement and has continued to make monthly interest payments on the Notes on the 15th day of each month and continued to pay the monthly legal and financial advisor due diligence fees of these Noteholders. On July 21, 2017, the Company received cash proceeds for the sale of television spectrum and used the net proceeds to pay down a portion of the outstanding indebtedness on our Notes. On August 23, 2017, net proceeds of $4.4 million were delivered directly to the trustee in order to pay down our Notes. These monies were subsequently distributed to the Noteholders, by the trustee, on September 25, 2017. A summary of the outstanding balance of our Notes, as of December 31, 2016 and changes through the year ended December 31, 2017, is presented below (in thousands and net of unamortized discount and deferred financing costs). Redemptions listed below were made with the net proceeds of asset sales described above. 12.5% Senior Notes due 2017, net, as of December 31, 2016 $ 273,233 Amortization of discount and deferred financing cost 1,767 Redemption of Notes (June 9, 2017) (10,336) Redemption of Notes (August 23, 2017) (4,390) 12.5% Senior Notes due 2017, net, as of December 31, 2017 $ 260,274 (a) Interest The Notes accrue interest at a rate of 12.5% per year. Since April 17, 2017, interest has been payable on demand. We have been paying interest monthly since that date. Additional interest will be payable at a rate of 2.00% per annum (the “Additional Interest”) on (i) the unpaid principal amount of the Notes plus (ii) any amount of Additional Interest payable but unpaid in any prior interest period, to be paid in cash, at our election, on any acceleration of the Notes and any redemption of the Notes; provided that no Additional Interest will be payable if, for the applicable fiscal period, either (a) we record positive consolidated station operating income for our television segment for the most recent twelve-month period ending either June 30 or December 31, or (b) our secured leverage ratio on a consolidated basis is less than 4.75 to 1.00. Although our secured leverage ratio was greater than 4.75 to 1.00, we recorded positive consolidated station operating income for our television segment for the twelve-month period ended December 31, 2017. (b) Collateral and Ranking The Notes and the guarantees are secured on a first-priority basis by a security interest in certain of the Company’s and the guarantors’ existing and future tangible and intangible assets (other than Excluded Assets (as defined in the Indenture)), which constitutes substantially all of the Company’s assets. The Notes and the guarantees are structurally subordinated to the obligations of our non-guarantor subsidiaries. The Notes and guarantees are senior to all of the Company’s and the guarantors’ existing and future unsecured indebtedness to the extent of the value of the collateral. The Indenture permits us, under specified circumstances, to incur additional debt; however, the occurrence and continuance of the Voting Rights Triggering Event (as defined in Note 11 to the audited consolidated financial statements) currently prevents us from incurring any such additional debt. The Notes are senior secured obligations of the Company that rank equally with all of our existing and future senior indebtedness and senior to all of our existing and future subordinated indebtedness. Subject to certain exceptions, the Notes are fully and unconditionally guaranteed by each of our existing wholly owned domestic subsidiaries (which excludes (i) our existing and future subsidiaries formed in Puerto Rico (the “Puerto Rican Subsidiaries”), (ii) our future subsidiaries formed under the laws of foreign jurisdictions and (iii) our existing and future subsidiaries, whether domestic or foreign, of the Puerto Rican Subsidiaries or foreign subsidiaries) and our other domestic subsidiaries that guarantee certain of our other debt. The Notes and guarantees are structurally subordinated to all existing and future liabilities (including trade payables) of our non-guarantor subsidiaries. (c) Covenants and Other Matters The Indenture contains covenants that, among other things, limit our ability and the ability of the guarantors to: • incur or guarantee additional indebtedness; • pay dividends or make other distributions, repurchase or redeem our capital stock and make certain restricted investments and make other restricted payments; • sell assets; • incur liens; • enter into transactions with affiliates; • engage into sale and leaseback transactions; • alter the businesses we conduct; • enter into agreements restricting our subsidiaries’ ability to pay dividends, make loans and sell assets to the Company and other restricted subsidiaries; • enter into change of control transactions; • manage our FCC licenses and broadcast license subsidiaries; and • consolidate, merge or sell all or substantially all of our assets. As a result of our failure to pay the Notes at maturity, an event of default under the Indenture has occurred and is continuing. |
Other Long-Term Debt
Other Long-Term Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Other Long-Term Debt | (10) Other Long-Term Debt Other long-term debt consists of the following at December 31, 2017 and 2016 (in thousands): 2017 2016 Promissory note payable, due in monthly principal installments of $26, plus interest at 6.31%, commencing January 2007, with balance due on January 2017 — 4,616 Less current portion — (4,616 ) $ — $ — |
10 3_4% Series A and B Cumulati
10 3/4% Series A and B Cumulative Exchangeable Redeemable Preferred Stock | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
10 3/4% Series A and B Cumulative Exchangeable Redeemable Preferred Stock | (11) 10 3/4% Series A and B Cumulative Exchangeable Redeemable Preferred Stock On October 30, 2003, we partially financed the purchase of a radio station with proceeds from the sale, through a private placement, of 75,000 shares of our 10 3/4% Series A cumulative exchangeable redeemable preferred stock, par value $0.01 per share, with a liquidation preference of $1,000 per share (the “Series A preferred stock”), without a specified maturity date. The gross proceeds from the issuance of the Series A preferred stock amounted to $75.0 million. On February 18, 2004, we commenced an offer to exchange registered shares of our 10 3/4% Series B cumulative exchangeable redeemable preferred stock, par value $0.01 per share and liquidation preference of $1,000 per share for any and all shares of our outstanding unregistered Series A preferred stock. On April 5, 2004, we completed the exchange offer and exchanged 76,702 shares of our Series B preferred stock for all of our then outstanding shares of Series A preferred stock. Holders of the Series B preferred stock have customary protective provisions. The Certificate of Designations governing the Series B preferred stock (the “Certificate of Designations”) contains covenants that, among other things, limit our ability to: (i) pay dividends, purchase junior securities and make restricted investments other restricted payments; (ii) incur indebtedness, including refinancing indebtedness; (iii) merge or consolidate with other companies or transfer all or substantially all of our assets; and (iv) engage in transactions with affiliates. Upon a change of control, we will be required to make an offer to purchase these shares at a price of 101% of the aggregate liquidation preference of these shares plus accumulated and unpaid dividends to, but excluding the purchase date. We had the option to redeem all or some of the registered Series B preferred stock for cash on or after October 15, 2009 at 103.583%, October 15, 2010 at 101.792% and October 15, 2011 and thereafter at 100%, plus accumulated and unpaid dividends to the redemption date. On October 15, 2013, each holder of Series B preferred stock had the right to request that we repurchase (subject to the legal availability of funds under Delaware General Corporate Law) all or a portion of such holder’s shares of Series B preferred stock at a purchase price equal to 100% of the liquidation preference of such shares, plus all accumulated and unpaid dividends (as described in more detail below) on those shares to the date of repurchase. Under the terms of our Series B preferred stock, we are required to pay dividends at a rate of 10 3/4% per year of the $1,000 liquidation preference per share of Series B preferred stock. From October 30, 2003 to October 15, 2008, we had the option to pay these dividends in either cash or additional shares of Series B preferred stock. During October 15, 2003 to October 30, 2008, we increased the carrying amount of the Series B preferred stock by approximately $17.3 million for stock dividends, which were accreted using the effective interest method. Since October 15, 2008, we have been required to pay the dividends on our Series B preferred stock in cash. On October 15, 2013, holders of shares of our Series B preferred stock requested that we repurchase 92,223 shares of Series B preferred stock for an aggregate repurchase price of $126.9 million, which included accumulated and unpaid dividends on these shares as of October 15, 2013. We did not have sufficient funds legally available to repurchase all of the Series B preferred stock for which we received requests and instead used the limited funds legally available to us to repurchase 1,800 shares for a purchase price of approximately $2.5 million, which included accrued and unpaid dividends. Consequently, a “Voting Rights Triggering Event” occurred (the “Voting Rights Triggering Event”). During the continuation of a Voting Rights Triggering Event, certain of the covenants summarized above become more restrictive by their terms including (i) a prohibition on our ability to incur additional indebtedness, (ii) restrictions on our ability to make restricted payments and (iii) restrictions on our ability to merge or consolidate with other companies or transfer all or substantially all of our assets. In addition, the holders of the Series B preferred stock have the right to elect two members to our Board of Directors. At our Annual Meeting of Stockholders in 2014, the holders of the Series B preferred stock nominated and elected Alan Miller and Gary Stone to serve as the Series B preferred stock directors who remained on the Board of Directors until their resignation on August 17, 2017. The holders of the Series B preferred stock have the right to elect two new directors to the Board of Directors to fill the seats vacated by Messrs. Miller and Stone for their unexpired terms at a special meeting of the holders of the Series B preferred stock. As of the date of these Consolidated Financial Statements, the holders of the Series B preferred stock have not elected any new directors to fill the vacated seats. The two vacancies on the Board of Directors will remain unfilled until such time as the holders of the Series B preferred stock appoint two new directors. The Voting Rights Triggering Event shall continue until (i) all dividends in arrears shall have been paid in full and (ii) all other failures, breaches or defaults giving rise to such Voting Rights Triggering Event are remedied or waived by the holders of at least a majority of the shares of the then outstanding Series B preferred stock. We do not currently have sufficient funds legally available to be able to satisfy the conditions for terminating the Voting Rights Triggering Event. The terms of our Series B preferred stock require us, in the event of a change of control, to offer to repurchase all or a portion of a holder’s shares at an offer price in cash equal to 101% of the liquidation preference of the shares, plus an amount in cash equal to all accumulated and unpaid dividends on those shares up to but excluding the date of repurchase. We do not currently have sufficient funds legally available to be able to satisfy the conditions for terminating the Rights Triggering Event or for repurchasing the shares in the event of a change of control. During the continuation of the Voting Rights Triggering Event, the Indenture governing our Notes prohibits us from paying dividends or from repurchasing the Series B preferre Persons claiming to own 94.16% of our Series B preferred stock filed a complaint against us in the Delaware Court of Chancery, in Cedarview Opportunities Master Fund, L.P., et al. v. Spanish Broadcasting System, Inc. For additional detail regarding the Series B preferred stock litigation, see Note 16, Litigation, of the Notes to the Consolidated Financial Statements. Given the information that was disclosed to us in the Preferred Holder Complaint regarding the purported ownership of a majority of the Series B preferred stock by foreign entities, we were required to take immediate remedial action in order to ensure that any violations of the Communications Act and our Charter resulting from that ownership did not adversely affect our FCC broadcast licenses and ability to continue our business operations. Accordingly, on November 28, 2017, consistent with our obligations and authority provided to us under the Communications Act and by Article X of our Charter, we notified holders of our Series B preferred stock that we were suspending all rights, effective immediately, of the holders of the Series B preferred stock, other than their right to transfer their shares to a citizen of the United States. Additionally, on November 13, 2017, the Company filed a notification with the FCC to apprise the FCC of the possible non-compliance with the Communications Act’s limits on foreign ownership. On December 4, 2017, the Company also filed a petition with the FCC for declaratory ruling with respect to the potential excess foreign ownership. The FCC responded to the petition by sending a letter to the Company detailing the information the FCC would need regarding the identities and nature of the purported foreign ownership of the Series B preferred stock to make a determination regarding the Company’s petition and establishing a deadline for the disclosure of that information. The purported Series B preferred stockholders were therefore required to provide to the Company sufficient information about the extent and nature of their foreign ownership to enable the Company to supplement the petition for declaratory ruling with this additional information. On March 23, 2018, counsel for the purported holders of most of the Series B preferred stock filed a letter with the FCC supplying a significant portion of the information requested. The Company has reviewed this information in order determine whether it is complete, true and correct, as required by the FCC’s rules, and has requested some additional information from the Series B preferred shareholders. The Company’s petition therefore remains pending before the FCC, and cannot be acted upon until complete ownership information is submitted and has been certified by the Company as true and correct. In addition, on March 26, 2018, we issued a press release and filed a Current Report on Form 8-K with the SEC that disclosed the foreign ownership issue we summarize above, in part, to warn innocent investors of possible attempted, fraudulent transfers of the Series B preferred stock and our request to The Depository Trust Company (“DTC”) to suspend trading in the Series B preferred stock pending the resolution of who validly owns these shares, among other things. Subsequent to that press release, we believe, based on conversations with DTC, that DTC will not impose a global lock and chill on Series B preferred stock held by its participants. As of the date of these financial statements, there remain genuine questions regarding valid ownership, or good title, to the Series B preferred stock by these foreign investors. As a result, we intend to remain vigilant regarding compliance with the Communications Act and our Charter and will continue to evaluate information provided to us by the purported holders of the Series B preferred stock. Because we have not yet received all of the requisite information from the purported holders, we have been unable to effectively determine whether to withdraw the suspension of their rights as owners of such preferred stock or the extent of any additional remedial action by the Company that may be necessary. Quarterly Dividends Under the terms of our Series B preferred stock, the holders of the outstanding shares of the Series B preferred stock are entitled to receive, when, as and if declared by the Board of Directors out of funds of the Company legally available therefor, dividends on the Series B preferred stock at a rate of 10 3/4% per year, of the $1,000 liquidation preference per share. All dividends are cumulative, whether or not earned or declared, and are payable quarterly in arrears on specified dividend payment dates. While the Voting Rights Triggering Event continues, we cannot pay dividends on the Series B preferred stock without causing a breach of covenants under the Indenture governing our Notes. As of December 31, 2017, the aggregate cumulative unpaid dividends on the outstanding shares of the Series B preferred stock was approximately $75.0 million, which is accrued on our consolidated balance sheet as 10 ¾% Series B cumulative exchangeable redeemable preferred stock. Accounting Treatment of the Preferred Stock In accordance with ASC 480, the Series B preferred stock was re-measured subsequently from the initial measurement date as the amount of cash that would be paid under the conditions specified in the contract, as if the settlement occurred at December 31, 2013, because the final settlement amount to be paid on the Series B preferred stock was uncertain due to its continual accruing quarterly dividends and its uncertain settlement date. The resulting change in that amount from the previous reporting date (i.e. initial measurement date) was recognized as interest expense. Therefore, we recorded an $87.6 million adjustment to increase the Series B preferred stock liability to the contract settlement value as of December 31, 2013. Going forward, the Series B preferred stock will be measured at subsequent reporting dates at the amount of cash that would be paid under the conditions specified in the contract, as if the settlement occurred at the reporting date, recognizing the resulting change in that amount from the previous reporting date as interest expense. Therefore, the 10 ¾% accruing quarterly dividends will be recorded as interest expense (i.e. “Dividends on Series B preferred stock classified as interest expense”) as required by ASC 480. During the years 2017 and 2016, we recorded $9.7 million as dividends on Series B preferred stock classified as interest expense. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | (12) Stockholders’ Equity (a) Series C Convertible Preferred Stock On December 23, 2004, in connection with the closing of the merger agreement, dated October 5, 2004, with CBS Radio (formerly known as Infinity Media Corporation, CBS Radio), a division of CBS Corporation, Infinity Broadcasting Corporation of San Francisco (“Infinity SF”) and SBS Bay Area, LLC, a wholly owned subsidiary of SBS, pursuant to which SBS acquired the FCC license of Infinity SF (the “CBS Radio Merger”), we issued to CBS Radio an aggregate of 380,000 shares of Series C convertible preferred stock, $0.01 par value per share (the “Series C preferred stock”). Each share of Series C preferred Stock is convertible at the option of the holder into two fully paid and non-assessable shares of the Class A common stock. The shares of Series C preferred stock issued at the closing of the CBS Radio Merger are convertible into 760,000 shares of Class A common stock, subject to certain adjustments. In connection with the CBS Radio Merger, we also entered into a registration rights agreement with CBS Radio, pursuant to which CBS Radio may instruct us to file up to three registration statements, on a best efforts basis, with the SEC, providing for the registration for resale of the Class A common stock issuable upon conversion of the Series C preferred stock. In connection with the issuance of the Series C preferred stock, we entered into a Stockholder Agreement, dated October 5, 2004, with CBS Radio and Mr. Alarcón. Pursuant to the terms of the Stockholder Agreement, CBS Radio was given a right of first negotiation with respect to any radio station that we control in the New York and Miami markets after the date of such agreement. The negotiation right is required to stay open for a period of ten (10) business days. In addition, CBS Radio was also given a right to match any offer received by us with respect to any Miami radio station. Such matching right expired one year after the date of the Stockholder Agreement. We are required to pay holders of Series C preferred stock dividends on parity with our Class A common stock and Class B common stock, and each other class or series of our capital stock created after December 23, 2004. The Series C preferred stock holders have the same voting rights and powers as our Class A common stock on an as-converted basis, subject to certain adjustments. The Certificate of Designations for the Series C preferred stock does not contain a voting rights triggering event provision like the one found in the Certificate of Designations for the Series B preferred stock. Each holder of Series C preferred stock (i) has preemptive rights to purchase its pro rata share of any equity securities we may offer, subject to certain conditions, and (ii) may, at their option, convert each share of Series C preferred stock into two (2) shares of Class A common stock, subject to certain adjustments. The terms of the Certificate of Designations for our Series C preferred stock limits our ability to (i) enter into transactions with affiliates and certain merger transactions and (ii) create or adopt any shareholders rights plan. On August 8, 2016 CBS Radio entered into a Stock Purchase Agreement with us, AAA Trust and Mr. Alarcón (the “Stock Purchase Agreement”) to sell and assign its rights related to its 380,000 shares of Series C preferred stock to the AAA Trust for $3.8 million. AAA Trust is a Florida trust, of which Mr. Alarcón is the trustee. Mr. Alarcón is also the beneficial owner of all the shares of Series C preferred stock held in the AAA Trust. Pursuant to the Stock Purchase Agreement, CBS Radio agreed to assign the rights under the registration rights agreement and Stockholder Agreement to the AAA Trust, which now holds such registration rights The parties closed on the Stock Purchase Agreement on August 18, 2016. (b) Class A and B Common Stock The rights of the Class A common stockholders and Class B common stockholders are identical except with respect to their voting rights and conversion provisions. The Class A common stock is entitled to one vote per share and the Class B common stock is entitled to ten votes per share. The Class B common stock is convertible to Class A common stock on a share-for-share basis at the option of the holder at any time, or automatically upon a transfer of the Class B common stock to a person or entity which is not a permitted transferee (as described in our Charter). Holders of each class of common stock are entitled to receive dividends and, upon liquidation or dissolution, are entitled to receive all assets available for distribution to stockholders. Neither the holders of the Class A common stock nor the holders of the Class B common stock have preemptive or other subscription rights, and there are no redemption or sinking fund provisions with respect to such shares. Each class of common stock is subordinate to our Series B preferred stock. The Series B preferred stock has a liquidation preference of $1,000 per share and is on parity with the Series C preferred stock with respect to dividend rights and rights upon liquidation, winding up and dissolution of SBS. (c) Share-Based Compensation Plans and Other Share Based Compensation 2006 Omnibus Equity Compensation Plan In July 2006, we adopted an omnibus equity compensation plan (the “Omnibus Plan”) in which grants of Class A common stock can be made to participants in any of the following forms: (i) incentive stock options, (ii) nonqualified stock options, (iii) stock appreciation rights, (iv) stock units, (v) stock awards, (vi) dividend equivalents, and (vii) other stock-based awards. The Omnibus Plan authorizes up to 350,000 shares of our Class A common stock for issuance, subject to adjustment in certain circumstances. The Omnibus Plan provides that the maximum aggregate number of shares of Class A common stock units, stock awards and other stock-based awards that may be granted, other than dividend equivalents, to any individual during any calendar year is 100,000 shares, subject to adjustments. The Omnibus Plan expired on July 17, 2016 and no further options can be granted under this plan. 1999 Stock Option Plans In September 1999, we adopted an employee incentive stock option plan (the “1999 ISO Plan”) and a nonemployee director stock option plan (the “1999 NQ Plan”, and together with the 1999 ISO Plan, the “1999 Stock Option Plans”). Options granted under the 1999 ISO Plan vest according to the terms determined by the compensation committee of our Board of Directors, and have a contractual life of up to ten years from the date of grant. Options granted under the 1999 NQ Plan vest 20% upon grant and 20% each year for the first four years from the date of grant. All options granted under the 1999 ISO Plan and the 1999 NQ Plan vest immediately upon a change in control of SBS, as defined therein. A total of 300,000 shares and 30,000 shares of Class A common stock were reserved for issuance under the 1999 ISO Plan and the 1999 NQ Plan, respectively. In September 2009, our 1999 Stock Option Plans expired; therefore, no more options can be granted under these plans. Other Share-Based Compensation In February 2016, the Company issued options to purchase 75,000 shares of the Company’s Class A Common Stock to an individual as an inducement to his taking a position with the Company. The options vest over a three-year period and have a ten-year term commencing on their vesting dates. If the employee is terminated without cause or resigns after a change in control, the options automatically vest. The grant was outside of the Company’s 2006 Omnibus Plan in accordance with the then applicable NASDAQ Stock Market rules. Accounting for Share-Based Compensation We recognize share-based compensation expense based on the estimated grant date fair value method using the Black-Scholes option pricing model. For these awards, we have recognized compensation expense using a straight-line amortization method (prorated). Share-based compensation expense is based on awards that are ultimately expected to vest. Share-based compensation for the years ended December 31, 2017 and 2016 was reduced for estimated forfeitures. When estimating forfeitures, we consider voluntary termination behaviors, as well as trends of actual option forfeitures. For the years ended December 31, 2017 and 2016, share-based compensation totaled $148 thousand and $655 thousand, respectively. As of December 31, 2017, there was $18 thousand of total unrecognized compensation costs related to nonvested stock-based compensation arrangements granted under all of our plans. The cost is expected to be recognized over a weighted average period of approximately 1.0 years. Accounting standards require that cash flows resulting from excess tax benefits be classified as a part of cash flows from financing activities. Excess tax benefits are realized tax benefits related to tax deductions for exercised options in excess of the deferred tax asset attributable to stock compensation costs for such options. During the years ended December 31, 2017 and 2016, no stock options were exercised; therefore, no cash payments were received. In addition, during the years ended December 31, 2017 and 2016 we did not recognize a tax benefit on our stock-based compensation expense due to our valuation allowance on substantially all of our deferred tax assets. Valuation Assumptions We calculated the fair value of each option award on the date of grant using the Black-Scholes option pricing model. There were no stock options granted during 2017. The per share weighted average fair value of the stock options granted to employees during 2016 was $2.63. The following weighted average assumptions were used for each respective period: 2016 Expected term 7 Dividends to common stockholders None Risk-free interest rate 1.45% Expected volatility 115.39 Our computation of expected volatility for the year ended December 31, 2016 was based on a combination of historical and market-based implied volatility from traded options on our stock. Our computation of expected term in 2016 was 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 information provided above results from the behavior patterns of separate groups of employees that have similar historical experience. The interest rate for periods within the contractual life of the award is based on the U.S. Treasury yield curve in effect at the time of grant. Stock Options and Nonvested Shares Activity Stock options have only been granted to employees or directors. Our stock options have various vesting schedules and are subject to the employees’ continuing service. A summary of the status of our stock options, as of December 31, 2017 and 2016, and changes during the years ended December 31, 2017 and 2016, is presented below (in thousands, except per share data and contractual life): Weighted Weighted Average Average Aggregate Remaining Exercise Intrinsic Contractual Shares Price Value Life (Years) Outstanding at December 31, 2015 128 11.25 Granted 315 3.06 Exercised — — Forfeited (35 ) 18.31 Outstanding at December 31, 2016 408 $ 4.32 Granted — — Exercised — — Forfeited (15 ) 26.07 Outstanding at December 31, 2017 393 $ 3.48 $ — 7.5 Exercisable at December 31, 2017 343 $ 3.56 $ — 7.0 The following table summarizes information about our stock options outstanding and exercisable at December 31, 2017 (in thousands, except per share data and contractual life): Weighted Weighted Average Weighted Average Remaining Average Vested Unvested Exercise Contractual Options Exercise Range of Exercise Prices Options Options Price Life (Years) Exercisable Price $1.03 - 2.99 45 50 $ 2.68 8.4 45 $ 2.33 3.00 - 4.99 273 — 3.21 7.6 273 3.21 5.00 - 9.99 20 — 7.50 2.3 20 7.50 10.00 - 17.90 5 — 17.90 2.4 5 17.90 343 50 $ 3.48 7.5 343 $ 3.56 Nonvested shares (restricted stock) are awarded to employees under our Omnibus Plan. In general, nonvested shares vest over two to five years and are subject to the employees’ continuing service. The cost of nonvested shares is determined using the fair value of our common stock on the date of grant. The compensation expense is recognized over the vesting period. As of December 31, 2017 and 2016, there were no nonvested shares outstanding, respectively. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments | (13) Commitments (a) Leases We lease office space and facilities and certain equipment under operating leases that expire at various dates through 2082. Certain leases provide for base rental payments plus escalation charges for real estate taxes and operating expenses. At December 31, 2017, future minimum lease payments under such leases are as follows (in thousands): Operating leases Year ending December 31: 2018 3,037 2019 2,321 2020 2,067 2021 2,021 2022 1,684 Thereafter 13,758 Total minimum lease payments $ 24,888 In connection with an operating lease, we have a standby letter of credit of $0.1 million, which was required under the lease terms and will expire in 2018. Total rent expense for each of the years ended December 31, 2017 and 2016 amounted to $3.4 and $3.3 million, respectively. We have agreements to sublease our radio frequencies and portions of our tower sites and buildings. Such agreements provide for payments through 2038. The future minimum rental income to be received under these agreements as of December 31, 2017 is as follows (in thousands): Year ending December 31: 2018 $ 1,304 2019 966 2020 694 2021 652 2022 345 Thereafter — $ 3,961 (b) Employment and Service Agreements At December 31, 2017, we are committed to employment and service contracts for certain executives, on-air talent, general managers, and others expiring through 2021. Future payments under such contracts are as follows (in thousands): Year ending December 31: 2018 $ 7,445 2019 2,571 2020 1,663 2021 375 2022 — Thereafter — $ 12,054 Subsequent to year end, December 31, 2017, the Company entered into an additional employee agreement of $2.1 million for the years ended December 31, 2018 through 2023. The total future payments from employment and service agreements will increase by $2.1 million from $12.1 million to $14.2 million. Certain employees’ contracts provide for additional amounts to be paid if station ratings or cash flow targets are met. (c) 401(k) Profit-Sharing Plan In September 1999, we adopted a tax-qualified employee savings and retirement plan (the “401(k) Plan”). We can make matching and/or profit-sharing contributions to the 401(k) Plan on behalf of all participants at our sole discretion. All full-time employees are eligible to voluntarily participate in the 401(k) Plan after their 90 day introductory period. To date, we have not made contributions to this plan. (d) Other Commitments At December 31, 2017, we have commitments to vendors that provide us with goods or services. These commitments included services for rating services, programming contracts, software contracts and others. Future payments under such commitments are as follows (in thousands): Year ending December 31: 2018 $ 9,792 2019 6,625 2020 5,930 2021 630 2022 592 Thereafter — $ 23,569 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | (14) Income Taxes Total income tax (benefit) expense, from continuing operations, for the years ended December 31, 2017 and 2016 were as follows (in thousands): 2017 2016 Income tax (benefit) expense $ (24,658 ) $ 8,628 For the years ended December 31, 2017 and 2016, loss before income tax (benefit) expense consists of the following (in thousands): 2017 2016 U.S. operations $ (9,202 ) $ (7,481 ) Foreign operations 4,165 (233 ) $ (5,037 ) $ (7,714 ) The components of the provision for income tax (benefit) expense from continuing operations included in the consolidated statements of operations are as follows for the years ended December 31, 2017 and 2016 (in thousands): 2017 2016 Current: Federal $ 177 $ 271 State and local, net of federal income tax benefit 68 65 Foreign 780 300 1,025 636 Deferred: Federal (31,714 ) 7,296 State and local, net of federal income tax benefit 6,031 696 Foreign — — (25,683 ) 7,992 Total income tax (benefit) expense, from continuing operations $ (24,658 ) $ 8,628 For the year ended December 31, 2017 and 2016, approximately $5.1 million and $3.1 million, respectively, of Puerto Rico NOL carry-forwards were utilized. For the year ended December 31, 2017 and 2016, $0.4 million and $0.4 million, respectively, federal NOL carry-forwards were utilized. The tax effect of temporary differences and carry-forwards that give rise to deferred tax assets and deferred tax liabilities at December 31, 2017 and 2016 are as follows (in thousands): 2017 2016 Deferred tax assets: Federal and state NOL carry-forwards $ 25,462 $ 44,649 Foreign NOL carry-forwards 9,420 11,354 FCC licenses 6,282 6,396 Allowance for doubtful accounts 764 1,017 Unearned revenue 214 373 AMT credit 1,215 1,248 Derivatives and hedging instruments — 7 Property and equipment 1,855 3,253 Accrued foreign withholding 2,376 2,238 Production costs 7,671 11,123 Stock-based compensation 142 345 Intercompany expenses 6,037 4,830 Accrued Vacation/Bonus/Payroll 597 950 Other 1,889 1,676 Total gross deferred tax assets 63,924 89,459 Less valuation allowance (62,688 ) (88,171 ) Net deferred tax assets 1,236 1,288 Deferred tax liabilities: FCC licenses and goodwill 82,507 108,327 Total gross deferred tax liabilities 82,507 108,327 Net deferred tax liability $ 81,271 $ 107,039 The net change in the total valuation allowance for the years ended December 31, 2017 and 2016 was a decrease of $25.5 million and an increase of $6.8 million, respectively. The valuation allowance at 2017 and 2016 was primarily related to domestic and foreign NOL carry-forwards and future deductible amounts related to the excess tax basis over the book basis of certain FCC broadcasting licenses. In 2017, the overall decrease in the valuation allowance was a result of the adjustment of NOLs due to limitations under Section 382 and re-measurement of deferred tax assets and liabilities due to the enactment of the Tax Legislation. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Management also considered the company’s going concern as part of their assessment. As of December 31, 2017, the valuation allowance is comprised of $39.3 million in the US and $23.4 million in Puerto Rico. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, at this time, management believes it is more likely than not that we will not realize the benefits of the majority of these deductible differences. As a result, we have established and maintained a valuation allowance for that portion of the deferred tax assets we believe will not be realized. At December 31, 2017, we have federal and state NOL carry-forwards available of approximately $86.4 million and $85.4 million, respectively. These NOL carry-forwards are available to offset future taxable income and expire from the years 2019 through 2037. In addition, at December 31, 2017, we have foreign NOL carry-forwards of approximately $28.6 million available to offset future taxable income expiring from the years 2018 through 2024. The Company underwent ownership changes (pursuant to Section 382) in 2013 and 2017. As a result of the 2017 ownership change, the Company reduced its NOL carry-forwards by $32.8 million as of December 31, 2017 because of ownership changes under Section 382, all of which was adjusted against the corresponding valuation allowance. Therefore there was no impact to our income statement or balance sheet. The conclusions as to the ownership changes in this Note 14 are based on applicable provisions of the Internal Revenue Code, related Treasury Regulations for Section 382. Based solely on these provisions, the Company believes that a 2017 ownership change has occurred. Therefore available NOL carry-forwards have been reported in the Consolidated Financial Statements reflecting such a change. This determination was made based on different provisions, laws and regulations than the separate and different conclusion the Company made regarding valid ownership of its capital stock in 2017 for purposes of its Charter and the Communications Act, as described above under “Part 1. Item 1. Business — — tly available and may reevaluate the conclusion regarding the occurrence of a 2017 ownership change for income tax and financial statement purposes based on additional facts and developments in the future. The NOL’s that are subject to the 2017 ownership change do have a full valuation allowance against them. Therefore, if the Company subsequently determined it did not experience this additional ownership change in August 2017, there would be no impact to the Company’s financial position and results of operations. Total income tax (benefit) expense from continuing operations differed from the amounts computed by applying the U.S. federal income tax rate of 35.0% for the years ended December 31, 2017 and 2016, as a result of the following: 2017 2016 Computed “expected” tax (benefit) expense (35.0 ) % (35.0 ) % Impacts from Tax Legislation (688.4 ) — State and local income taxes, net of federal benefit 28.7 3.0 Foreign tax differential (1.3 ) (1.6 ) Impacts from IRC Section 382 ownership change 228.3 — Current year change in valuation allowance (152.8 ) 92.2 Nondeductible expenses 48.9 10.5 Nondeductible interest expense 67.6 44.2 Change in effective rate 8.3 (9.4 ) Return to provision (0.8 ) 1.7 Other 7.0 6.3 (489.5 ) % 111.9 % On December 22, 2017, H.R. 1 formerly known as the “Tax Cuts and Jobs Act,” was enacted into law. The Tax Legislation includes changes to existing tax law, including a permanent reduction in the federal corporate income tax rate from 35% to 21%. The rate reduction takes effect on January 1, 2018. At December 31, 2017, we have not completed our accounting for the tax effects of enactment of the Act; however, we have made reasonable estimate of the effects on our existing deferred tax balances. We recognized a net tax benefit of $34.7 million, which is net of valuation allowance on the deferred tax assets, primarily due to re-measurement of deferred tax assets and liabilities associated with the enactment of the Tax Legislation. These amounts are included as components of income tax expense from continuing operations in the fourth quarter of 2017 and had a 688.4% impact on our annual effective income tax rate. The SEC has issued Staff Accounting Bulletin (“SAB”) No. 118, which permits the recording of provision amounts related to the impact of the Tax Legislation during a measurement period, which is not to exceed one year from the enactment date of the Tax Legislation. The Company has recorded provisional amounts of $0 for the other provisions of the Tax Legislation, including the one-time transition tax, as the Company continues to analyze the impacts of the Tax Legislation. The Company is still validating the historical deficit earnings of its foreign subsidiaries to determine the impact of the one-time transition tax. Guidance on state income tax implications of the Tax Legislation are still forth coming. The Company is still analyzing the existing officer’s compensation plans for 2017 to determine if they qualify for the grandfathering rules with respect to DTAs on the books (for plans in existence as of November 2, 2017). The Company is also still analyzing the impacts of Global Intangible Low-Taxed Income (“GILTI”) on their foreign operations and has not made a policy election to treat this as a period cost or timing item. U.S. Federal jurisdiction and the jurisdictions of Florida, New York, California, Illinois, Texas and Puerto Rico are the major tax jurisdictions where we file income tax returns. The tax years that remain subject to assessment of additional liabilities by the federal, state and local tax authorities are 2010 through 2017. The tax years that remain subject to assessment of additional liabilities by the Puerto Rico tax authority are 2012 through 2017. For the years ended December 31, 2017 and 2016, we did not have any unrecognized tax benefits as a result of tax positions taken during a prior period or during the current period. No interest or penalties have been recorded as a result of tax uncertainties. Our evaluation was performed for the tax years ended December 31, 2010 through December 31, 2017, which are the tax years that remain subject to examination by the tax jurisdictions as of December 31, 2017. We do not expect any unrecognized tax benefits to significantly change over the next twelve months. |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Contingencies | (15) Contingencies Grupo Radio Centro LA, LLC Complaint On February 11, 2016, SBS filed a multi-million dollar lawsuit against Grupo Radio Centro, LLC (“Grupo”) in the United States District Court for the Central District of California immediately after Grupo hired an on-air radio personality from SBS's KLAX-FM in Los Angeles, alleging: (i) intentional interference with contractual relations; (ii) inducement of breach of contract; and (iii) unfair competition in violation of Cal. Bus. & Prof. Code § 17200 et seq. (“California Lawsuit”). In December 2017, SBS settled its lawsuit against Grupo. The settlement resolved all pending legal proceedings between the parties and did not have a adverse effect on the business. State Tax Assessment The Company is periodically subject to state tax audits. Currently, the Company is under audit by a State tax authority, which is challenging the Company’s allocation of subsidiary capital and attributable liabilities, for the tax years from December 31, 2010 through 2013. The Company has accrued $0.6 million for the liability expected to be paid. The audit, related to franchise taxes, has been settled for a lower amount. Local Tax Assessment The Company received an audit assessment (the “Assessment”) wherein it was proposed that the Company underpaid a local tax for the tax periods between June 1, 2005 and May 31, 2015 totaling $1,439,452 in underpaid tax, applicable interest and penalties. The Company disagrees with the assessment and related calculations but is developing a settlement strategy to discuss and pursue with the taxing jurisdiction with the hope of avoiding a lengthy litigation process. While we are uncertain as to whether the jurisdiction will accept this offer, an accrual of $391,000, based upon our current best estimate of probable loss, was charged to operations in the second quarter of 2016. However, if the settlement offer is not accepted by the jurisdiction, the amount of the ultimate loss to the Company, if any, may equal the entire amount of the Assessment sought by the taxing jurisdiction. |
Litigation
Litigation | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Litigation | (16) Litigation From time to time, we are involved in various routine legal and administrative proceedings and litigation incidental to the conduct of our business, such as contractual matters and employee-related matters. In recent years, we have been subject to administrative proceedings and lawsuits, including class action lawsuits, alleging violations of federal and state law regarding workplace, wage-hour and employment discrimination matters. In the opinion of management, such litigation is not likely to have a material adverse effect on our business, operating results or financial condition. Series B Preferred Stock Litigation Persons claiming to own 94.16% of our Series B preferred stock filed a complaint against us in the Delaware Court of Chancery, in Cedarview Opportunities Master Fund, L.P., et al. v. Spanish Broadcasting System, Inc Gutierrez-Ortiz Lawsuit We are a defendant in Aida Ivette Gutiérrez Ortiz et al. v. Municipio Autónomo de Bayamón, et al., a lawsuit involving the death of a man who was shot and killed at a concert co-promoted by us. Plaintiffs allege that we were negligent because we did not provide the necessary security to prevent the entry of firearms in the concert venue or its surrounding areas. Plaintiffs also allege we did not provide the necessary measures to control the venue and allege that we were negligent because we failed to provide the necessary medical assistance to aid the victim. Plaintiffs are seeking an estimated $3.5 million as indemnity. We intend to defend our self vigorously against this claim. The Pretrial Conference was held on August 14, 2017 and a hearing to mark the evidence was scheduled for October 13th, but due to the passage of Hurricanes Irma and María, said hearing was cancelled until further notice. The trial dates previously scheduled for October 23 through November 2, 2017 were also cancelled until further notice from the Court. On February 16, 2018 the court held a status conference hearing to schedule the trial dates. The trial was set to begin on August 16, 2018 for a two day trial. At this stage, an estimate of loss cannot be made, however, we believe we have good defenses and it is not probable that the outcome of the litigation will result in a material loss or liability to us. Telephone Consumer Protection Act Class Action Complaint On August 24, 2017, Adam Bugbee filed a putative class action against us in the United States District Court, for the Northern District of Illinois, alleging violations of the Telephone Consumer Protection Act (the “TCPA”) and related regulations, particularly the National Do-Not-Call provisions. The complaint asserted a violation of the TCPA for allegedly sending unsolicited automated telemarketing messages to the cellular telephones of the plaintiff and others, thereby invading their privacy. The complaint sought class certification and statutory damages. In addition, the plaintiff sought injunctive relief prohibiting the challenged conduct in the future. On March 6, 2018, the parties filed with the Court their Stipulation of Dismissal With Prejudice, and on March 20, 2018 an Order of Dismissal With Prejudice was entered and the case was closed. |
Fair Value Measurement Disclosu
Fair Value Measurement Disclosures | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement Disclosures | (17) Fair Value Measurement Disclosures (a) Fair Value of Financial Instruments Cash and cash equivalents, receivables, as well as accounts payable and accrued expenses, and other current liabilities, as reflected in the consolidated financial statements, approximate fair value because of the short-term maturity of these instruments. The estimated fair value of our other long-term debt instruments, approximate their carrying amounts as the interest rates approximate our current borrowing rate for similar debt instruments of comparable maturity, or have variable interest rates. Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. The fair value of the Notes is estimated using market quotes from a major financial institution taking into consideration the most recent activity and are considered Level 2 measurements within the fair value hierarchy. The fair value of the Series B cumulative exchangeable redeemable preferred stock was based upon a weighted average analysis using the Black-Scholes method, an income approach, and the yield method resulting in a Level 3 classification. The Black-Scholes method utilized an estimate of the fair value of the SBS equity, volatility, an estimate of the time to liquidity, and a risk free rate in the determination of the SBS preferred fair value. Key assumptions for the income and yield methods included the expected yield on preferred stock, accrued dividends, the principal amount of the Series B preferred stock, and an estimate of the time to liquidity. A discount for lack of marketability of the preferred stock was also utilized in the analysis. The outcome of the Series B preferred stock litigation may impact the fair value of the Series B preferred stock going forward. The estimated fair values of our financial instruments are as follows (in millions): December 31, 2017 2016 Fair Value Carrying Fair Carrying Fair Description Hierarchy Amount Value Amount Value 12.5% senior secured notes Level 2 $ 260.3 269.1 $ 275.0 275.5 10 3 4 preferred stock Level 3 165.6 38.1 155.8 60.5 Promissory note payable, included in other long-term debt Level 3 — — 4.6 4.7 The fair value estimates of these financial instruments were based upon either: (a) market quotes from a major financial institution taking into consideration the most recent market activity, or (b) a discounted cash flow analysis taking into consideration current rates. The Notes traded at approximately 103.38% at year- end 2017 and were trading at approximately 104.17% on May 8, 2018; however, there can be no guarantees that the Notes will continue trading above their carrying amount. |
Segment Data
Segment Data | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Data | (18) Segment Data The following summary table presents separate financial data for each of our operating segments. The accounting applied to determine the segment information are generally the same as those described in the summary of significant accounting polices (see Note 2(v)). We evaluate the performance of our operating segments based on separate financial data for each operating segment as provided below (in thousands): Year Ended December 31, 2017 2016 Net revenue: Radio $ 119,493 $ 129,544 Television 15,216 15,075 Consolidated $ 134,709 $ 144,619 Engineering and programming expenses: Radio $ 23,542 $ 23,514 Television 6,932 7,598 Consolidated $ 30,474 $ 31,112 Selling, general and administrative expenses: Radio $ 53,108 $ 49,418 Television 5,718 6,688 Consolidated $ 58,826 $ 56,106 Corporate expenses: $ 10,403 $ 10,588 Depreciation and amortization: Radio $ 1,834 $ 1,905 Television 2,218 2,378 Corporate 297 409 Consolidated $ 4,349 $ 4,692 Gain on the disposal of assets, net: Radio $ (12,558 ) $ (11 ) Television (3,319 ) — Corporate (17 ) — Consolidated $ (15,894 ) $ (11 ) Recapitalization costs: Radio $ — $ — Television — — Corporate 6,021 — Consolidated $ 6,021 $ — Other operating gains: Radio $ — $ — Television — — Corporate — (37 ) Consolidated $ — $ (37 ) Other operating income: Radio $ — $ — Television — — Corporate (3 ) — Consolidated $ (3 ) $ — Operating income (loss): Radio $ 53,567 $ 54,718 Television 3,667 (1,589 ) Corporate (16,701 ) (10,960 ) Consolidated $ 40,533 $ 42,169 Year Ended December 31, 2017 2016 Capital expenditures: Radio $ 1,134 $ 1,421 Television 228 539 Corporate 142 242 Consolidated $ 1,504 $ 2,202 December 31, December 31, 2017 2016 Total Assets: Radio $ 378,472 $ 391,817 Television 54,836 56,554 Corporate 2,596 904 Consolidated $ 435,904 $ 449,275 |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2017 | |
Valuation And Qualifying Accounts [Abstract] | |
Valuation and Qualifying Accounts | SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES Consolidated Financial Statement Schedule – Valuation and Qualifying Accounts Years Ended December 31, 2017 and 2016 (In thousands) Balance at Charged to Charged beginning of cost and to other Balance at Description year expense accounts Deductions (1) end of year Year ended December 31, 2016: Allowance for doubtful accounts $ 1,431 (51 ) — (635 ) 745 Valuation allowance on deferred taxes 81,363 6,723 85 — 88,171 Year ended December 31, 2017: Allowance for doubtful accounts $ 745 853 — (69 ) 1,529 Valuation allowance on deferred taxes 88,171 (25,483 ) — — 62,688 (1) Cash write-offs, net of recoveries. |
Summary of Significant Accoun26
Summary of Significant Accounting Policies and Related Matters (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | (a) Basis of Presentation The Company adopted FASB ASU No. 2014-15, Presentation of Financial Statements- Going Concern Our consolidated financial statements have been prepared assuming we will continue as a going-concern, and do not include any adjustments that might result if we were unable to do so, and contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. However, we have concluded that there is substantial doubt about our ability to continue as a going concern as discussed under Part II, Item 7. “Critical Accounting Policies—Going Concern.” As of December 31, 2017 and December 31, 2016, we had a working capital deficit due primarily to the classification of our 10¾% Series B Cumulative Exchangeable Redeemable Preferred Stock (the “Series B preferred stock”) as a current liability and the classification of our 12.5% Senior Secured Notes due 2017 (the “Notes”) as a current liability. Under Delaware law, our state of incorporation, the Series B preferred stock is deemed equity. Because the holders of the Series B preferred stock are not creditors, they do not have rights of, or remedies available to, creditors. Delaware law does not recognize a right of preferred stockholders to force redemptions or repurchases where the corporation does not have funds legally available. Currently, we do not have sufficient funds legally available to be able to redeem or repurchase the Series B preferred stock and its accumulated unpaid dividends. If we are successful in repaying or refinancing our Notes, and are able to generate legally available funds under Delaware law, we may be required to pay all or a portion of the accumulated preferred dividends and redeem all or a portion of the Series B preferred stock, to extent of the funds legally available. In addition, the Company has experienced negative cash flows from operating activities of $5.8 million for the year ended December 31, 2017 and is currently involved in litigation with some holders of the Series B preferred stock. See Note 11 elsewhere in these Notes to the consolidated financial statements for additional detail regarding the Series B preferred stock litigation. As further discussed below, both of these recent developments could adversely affect our ability to continue as a going concern. As discussed in Note 9, the Notes became due on April 15, 2017. Cash from operations and proceeds from the sale of assets and the FCC spectrum auction were not sufficient to repay the Notes when they became due. We have worked and continue to work with our advisors regarding a consensual recapitalization or restructuring of our balance sheet, including through the issuance of new debt or equity to raise the necessary funds to repay the Notes. The Series B preferred stock litigation and the foreign ownership issue have complicated our efforts at a successful refinancing of the Notes. The resolution of the recapitalization or restructuring of our balance sheet, the litigation with the purported holders of our Series B preferred stock and the foreign ownership issue are subject to several factors currently beyond our control. Our efforts to effect a consensual refinancing of the Notes, the Series B preferred stock litigation and the foreign ownership issue will likely continue to have a material adverse effect on us if they are not successfully resolved. The Company has incurred $6.0 million, for the twelve-months ended December 31, 2017, of recapitalization costs, primarily due to professional fees. Also included in these amounts are the consent fees paid to the certain holders of the Notes who entered into the Forbearance Agreement with the Company, which we summarize in Note 9 as well as the legal and financial advisory fees incurred by such holders. In the event we are unsuccessful in these efforts and one or more Noteholders seek to exercise remedies against us or our assets, we may be required to seek protection under Chapter 11 of the U.S. Bankruptcy Code, among other things, in order to maximize the value of our company for all of our constituents. While we believe that a Chapter 11 filing may create an avenue to successfully execute on our strategy, such a filing may also have several negative consequences to our business, including the costs and negative publicity that surrounds such a filing, reduced advertising revenue due to the uncertainty surrounding the filing, the potential need to sell assets (including the equity of our subsidiaries that own our FCC licenses) under distressed circumstances and the risk that we are unable to execute on a successful plan of reorganization or restructuring. As a result of generating negative cash flows from operations for the twelve-month period ended December 31, 2017, management has evaluated its cash requirements for the next twelve-month period after the date of these consolidated financial statements and determined that it anticipates generating sufficient cash flows, together with cash on hand, to meet its obligations through the ordinary course operating activities. The promissory note relating to the acquisition of the Miami studio building was paid on January 3, 2017. Management is responsible for evaluating whether there is substantial doubt about the organization’s ability to continue as a going concern and to provide related footnote disclosures, in accordance with the going concern accounting standard adopted in 2016. Although the Company expects to maintain cash on hand sufficient to meet its operating obligations, its inability to obtain financing in adequate amounts and on acceptable terms necessary to operate our business, repay our Notes, redeem or refinance our Series B preferred stock, obtain a favorable resolution to the Series B preferred stock litigation, or finance future acquisitions negatively impacts our business, financial condition, results of operations and cash flows and raises substantial doubt about our ability to continue as a going concern. The financial statements do not include adjustments, if any, that might arise from the outcome of this uncertainty. |
Revision of Prior Period Consolidated Financial Statements | (b) Revision of Prior Period Consolidated Financial Statements During the fourth quarter of 2017, the Company determined that there was an ownership change on October 15, 2013 causing the pre-ownership change net operating loss (“NOL”) carry-forwards to be limited under Section 382 of the Internal Revenue Code of 1986, as amended (“Section 382”) and not available to offset future taxable income before they expire. The Company’s accounting policy is to not record the amount of NOL carry-forwards that will expire due to Section 382 limitations. As a result of the aforementioned ownership change, the Company identified a $1.7 million adjustment related to the prior period partial release of its valuation allowance in the amount of $2.4 million for two of its subsidiaries’ NOL deferred tax assets. The release of this valuation allowance was recorded in 2015 Consolidated Statements of Change in Stockholders’ Deficit as a decrease to beginning accumulated deficit balance. The release of valuation allowance was overstated by $1.7 million because the related NOL deferred tax assets were not available for future use due to Section 382 limitations resulting from the 2013 ownership change. In order to assess materiality with respect to the adjustments, the Company considered Staff Accounting Bulletin (“SAB”) 99, Materiality and SAB 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, and determined that the impact of the adjustments on prior period consolidated financial statements was immaterial. Therefore, the cumulative adjustment has been recorded as an adjustment of $1.7 million to the balance of accumulated deficit as of December 31, 2015. Due to jurisdictional netting rules, this adjustment was reflected as a decrease to the deferred tax asset of $1.6 million and an increase to the deferred tax liability of $0.1 million. The $1.6 million deferred tax assets and $0.1 deferred tax liability relate to the US Licensing entities. The impact of the adjustments on the Consolidated Statements of Changes in Stockholders’ Deficit at December 31, 2015 and 2016 is as follows: Previously Reported Adjustment As Revised (In thousands) Changes to accumulated deficit Balance at December 31, 2015 $ (623,676 ) $ (1,668) $ (625,344 ) Balance at December 31, 2016 (640,018 ) (1,668) (641,686 ) Additionally, the impact of the adjustment on the December 31, 2016 Consolidated Balance Sheet is as follows: December 31, 2016 Previously Reported Adjustment As Revised (In thousands) Deferred tax assets $ 1,615 $ (1,615) $ — Total assets 450,890 (1,615) 449,275 Deferred tax liabilities 106,986 $ 53 107,039 Total liabilities 565,007 53 565,060 Accumulated deficit (640,018 ) (1,668) (641,686 ) Total deficit (114,117 ) (1,668) (115,785 ) Total liabilities and deficit 450,890 (1,615) 449,275 The Company also identified that the consolidated NOL carry-forward deferred tax assets and the related valuation allowance were therefore overstated in the prior period income tax footnote disclosures by the deferred tax assets associated with the NOL carry-forwards subject to Section 382 limitations and were adjusted. Adjustments were made to the current year income tax footnote to reflect the reduction in beginning balances of NOL deferred tax assets and valuation allowance by $71.6 million and $69.9 million respectively. Net deferred tax assets were reduced and net deferred tax liabilities were increased by $1.7 million as of December 31, 2016. The impact of the adjustment on the income tax footnote deferred tax balances at December 31, 2016 is as follows: December 31, 2016 Previously Reported Adjustment As Revised (In thousands) Deferred tax assets: Federal and state NOL carry-forwards $ 116,227 $ (71,578 ) $ 44,649 Total gross deferred tax assets 161,037 (71,578 ) 89,459 Less valuation allowance (158,081 ) $ 69,910 (88,171 ) Net deferred tax assets 2,956 (1,668 ) 1,288 Net deferred tax liability 105,371 1,668 107,039 Additionally, the disclosure of NOLs available for future use at December 31, 2016 was adjusted to reflect the reduced federal and state NOL carry-forward of $106.8 million and $105.4 million, respectively. The Consolidated Statements of Operations for the year ended December 31, 2016 has not been adjusted as there is no impact on net loss to those consolidated financial statements. In considering whether the Company should amend its previously filed Form 10-K 2016, the Company’s evaluation of SAB 99 considered that the aggregate impact of the adjustment did not impact the Company’s loss before income taxes and was not material to the Company’s net loss, had no impact on operating cash flows, and had an insignificant impact on the Consolidated Balance Sheets. In aggregate, the Company does not believe it is probable that the views of a reasonable investor would have changed by this adjustment in the 2016 consolidated financial statements to warrant an amended Form 10-K. Accordingly, the adjustment was made to the December 31, 2016 Consolidated Balance Sheet and the opening balance of accumulated deficit in the Consolidated Statement of Changes in Stockholders’ Deficit for the year then ended as described above using the SAB 108 approach. |
Revenue Recognition | (c) Revenue Recognition We recognize broadcasting revenue as advertisements are aired on our stations, subject to meeting certain conditions, such as persuasive evidence that an agreement exists, a fixed or determinable price and reasonable assurance of collection. Our revenue is presented net of agency commissions. Agency commissions are calculated based on a stated percentage applied to gross billing revenue. Advertisers remit the gross billing amount to the agency, and then the agency remits gross billings less their commission to us when the advertisement is not placed directly by the advertiser. We recognize special events revenue from ticket sales, as well as profit-sharing arrangements, as concerts and events are conducted and occur. Payments received in advance of being earned are recorded as customer advances, which are included in accounts payable and accrued expenses. |
Valuation of Accounts Receivable | (d) Valuation of Accounts Receivable We review accounts receivable to determine which accounts are doubtful of collection. In making the determination of the appropriate allowance for doubtful accounts, we consider our history of write-offs, relationships with our customers, age of the invoices and the overall creditworthiness of our customers. For each of the years ended December 31, 2017 and 2016, we incurred bad debt expense of $0.9 million and generated income from the recovery of previously recognized bad debt expense of $0.1 million, respectively. Changes in the credit worthiness of customers, general economic conditions and other factors may impact the level of future write-offs. |
Property and Equipment | (e) Property and Equipment Property and equipment, including capital leases, are stated at historical cost, less accumulated depreciation and amortization. We depreciate the cost of our property and equipment using the straight-line method over the respective estimated useful lives (see Note 7). Leasehold improvements are amortized on a straight-line basis over the shorter of the remaining life of the lease or the useful life of the improvements. Maintenance and repairs are charged to expense as incurred; improvements are capitalized. When items are retired or are otherwise disposed of, the related costs and accumulated depreciation and amortization are removed from the accounts and any resulting gains or losses are credited or charged to operating income. |
Assets Held for Sale | (f) Assets Held for Sale Long lived assets or asset groups that have met the initial criteria to be classified as held for sale (disposal group) and have not yet been sold are measured at the lower of their carrying amount or fair value less cost to sell. Long-lived asset classified as held for sale shall not be depreciated (amortized) while classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale shall continue to be accrued. |
Impairment or Disposal of Long-Lived Assets | (g) Impairment or Disposal of Long-Lived Assets Accounting for impairment or disposal of long-lived assets requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. |
FCC Broadcasting Licenses | (h) FCC Broadcasting Licenses Our indefinite-lived intangible assets consist of FCC broadcasting licenses. FCC broadcasting licenses are granted to stations for up to eight years under the Telecommunications Act of 1996 (“the Act”). The Act requires the FCC to renew a broadcast license if: (i) it finds that the station has served the public interest, convenience and necessity; (ii) there have been no serious violations of either the Communications Act of 1934 or the FCC’s rules and regulations by the licensee; and (iii) there have been no other serious violations, which taken together, constitute a pattern of abuse. We intend to renew our licenses indefinitely and evidence supports our ability to do so. Historically, there has been no material challenge to our license renewals. In addition, the technology used in broadcasting is not expected to be replaced by another technology any time in the foreseeable future. The weighted-average period before the next renewal of our FCC broadcasting licenses is 2.9 years. We do not amortize our FCC broadcasting licenses. We test these indefinite-lived intangible assets for impairment at least annually or when an event occurs that may indicate that impairment may have occurred. We test our FCC broadcasting licenses for impairment at the market cluster level. We apply the guidance of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350-30-35, Unit of Accounting for Purposes of Testing for Impairment of Intangible Assets Not Subject to Amortization During 2016, we initiated a change in accounting principle and changed the date of our annual impairment test for indefinite-lived intangible assets from December 31 to November 30. The change from year-end to such earlier date was preferable to management to facilitate interactions with third party valuation specialists and in order to complete the year-end closing process in a more timely fashion. Management has assessed that the change had no impact on the results of operations in 2017 or 2016. Our valuations principally use the discounted cash flow methodology. This income approach consists of a quantitative model, which assumes the FCC broadcasting licenses are acquired and operated by a third-party. The valuation method used is based on the premise that the only asset that the unbuilt start-up station would possess is the FCC broadcasting license. The valuation method isolates the income attributable to a FCC broadcasting license by modeling a hypothetical greenfield build-up to a normalized enterprise that, by design, lacks inherent goodwill and whose only other assets have essentially been paid for as part of the build-up process. Consequently, the resulting accretion in value is solely attributed to the FCC broadcasting license. In the discounted cash flow projections, a period of ten years was determined to be an appropriate time horizon for the analysis. The yearly streams of cash flows are adjusted to present value using an after-tax discount rate calculated for the broadcast industry as of November 30 of each year. Additionally, it is necessary to project the terminal value at the end of the ten-year projection period. The terminal value represents the hypothetical value of the licenses at the end of a ten-year period. An estimated amount of taxes are deducted from the assumed terminal value, which accordingly is discounted to net present value. The key assumptions incorporated in the discounted cash flow model are market revenue projections, market revenue share projections, anticipated operating profit margins and risk adjusted discount rates. These assumptions vary based on the market size, type of broadcast of signal, media competition and audience share. These assumptions primarily reflect industry norms for similar stations/broadcast signals, as well as historical performance and trends of the markets. In the preparation of the FCC broadcasting license appraisals, estimates and assumptions are made that affect the valuation of the intangible asset. These estimates and assumptions could differ from actual results and could have a material impact on our consolidated financial statements in the future. These key assumptions are subject to such factors as: overall advertising demand, station listenership and viewership, audience tastes, technology, fluctuation in preferred advertising media and the estimated cost of capital. Since a number of factors may influence the determination of the fair value of our FCC broadcasting licenses, we are unable to predict whether impairments will occur in the future. We also consider additional market valuation approaches in assessing whether any impairment may exist at reporting units. Based on consideration of these factors, during the year ended December 31, 2017, we determined that there were no impairments at the reporting units. Any significant change in these factors will result in a modification of the key assumptions, which may result in an additional impairment. |
Goodwill | (i) Goodwill Goodwill consists of the excess of the purchase price over the fair value of tangible and identifiable intangible net assets acquired in business combinations. We test goodwill for impairment at least annually at the reporting unit level. We have determined that we have two reporting units, Radio and Television. We currently only have goodwill in our radio reporting unit. We have aggregated our operating components (radio stations) into a single radio reporting unit based upon the similarity of their economic characteristics. Our evaluation included consideration of factors, such as regulatory environment, business model, gross margins, nature of services and the process for delivering these services. The Company assesses qualitative factors to determine whether it is necessary to perform a quantitative assessment for its radio reporting unit. If the quantitative assessment is necessary, the Company will determine the fair value of its radio reporting unit. If the fair value of its radio reporting unit is less than the carrying amount, the Company will recognize an impairment charge for the amount by which the carrying amount exceeds the fair value. The loss recognized will not exceed the total amount of goodwill. For the years-ended December 31, 2017 and 2016, we performed interim and/or annual impairment reviews of our goodwill, as of November 30, and determined that there was no impairment of goodwill. The estimated enterprise value of our radio reporting unit exceeded its carrying value during our impairment testing. When evaluating our estimated enterprise value, we utilized an income approach which uses assumptions and estimates which among others include the aggregated expected revenues and operating margins generated by our FCC broadcasting licenses (i.e. our stations) and use of a risk adjusted discount rate. We did not find reconciliation to our current market capitalization meaningful in the determination of our enterprise value given current factors that impact our market capitalization, including but not limited to: limited trading volume; and the significant voting control of our Chairman and Chief Executive Officer. During 2016, we initiated a change in accounting principle and changed the date of our annual goodwill impairment test from December 31 to November 30. The change from year-end to such earlier date was preferable to Management to facilitate interactions with third party valuation specialists and in order to complete the year-end closing process in a more timely fashion. Management has assessed that the change had no impact on the results of operations in 2017 or 2016. |
Other Intangible Assets, Net | (j) Other Intangible Assets, Net Other intangible assets, net, consist of favorable leases and agreements acquired. Gross other intangible assets total $2.5 million as of December 31, 2017 and 2016. These assets are being amortized over the lives of the leases; however, not to exceed 40 years. Amortization expense amounted to $0.1 million and $0.1 million for the years ended December 31, 2017 and 2016, respectively. Estimated amortization expense for the five years subsequent to December 31, 2017 is as follows (in thousands): Year ending December 31: 2018 $ 96 2019 96 2020 96 2021 96 2022 96 |
Deferred Financing Costs | (k) Deferred Financing Costs Deferred financing costs relates to our Notes (see Note 9). Deferred financing costs are amortized to interest expense over the term of the related debt using the effective interest method. During the first quarter of 2016, we adopted an accounting standard related to simplifying the presentation of debt issuance costs, which we applied retrospectively. This new standard required that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, and not recorded as separate assets. In 2016, the deferred financing costs of $1.1 million were presented as a reduction to the current liability caption, 12.5% senior secured notes, in accordance with the adopted standard. There was no deferred financing cost remaining to be amortized as of December 31, 2017 which would be netted against the carrying amount of the debt liability. |
Barter Transactions | (l) Barter Transactions Barter transactions represent advertising time exchanged for noncash goods and/or services, such as promotional items, advertising, supplies, equipment and services. Revenue from barter transactions are recognized as income when advertisements are broadcasted. Expenses are recognized when goods or services are received or used. We record barter transactions at the fair value of goods or services received or advertising surrendered, whichever is more readily determinable. Barter revenue amounted to $6.3 million and $7.4 million for the years ended December 31, 2017 and 2016, respectively. Barter expense amounted to $6.1 million and $6.9 million for the years ended December 31, 2017 and 2016, respectively. Unearned revenue consists of the excess of the aggregate fair value of goods or services received by us, over the aggregate fair value of advertising time delivered by us on certain barter customers. |
Cash and Cash Equivalents | (m) Cash and Cash Equivalents Cash and cash equivalents consist of cash and money market accounts at various commercial banks. All cash equivalents have original maturities of 90 days or less. |
Income Taxes | (n) Income Taxes We file a consolidated federal income tax return for substantially all of our domestic operations. We are also subject to foreign taxes on our Puerto Rico operations. We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled and are respectively classified as noncurrent assets or noncurrent liabilities. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. If the realization of deferred tax assets in the future is considered more likely than not, an adjustment to the deferred tax assets would increase net income in the period such determination is made. Based upon the level of historical taxable income and projections for future taxable income over the periods which the deferred tax assets are deductible, at this time, management believes it is more likely than not that we will not realize the benefits of the majority of these deductible differences. As a result, we have established and maintained a valuation allowance for that portion of the deferred tax assets we believe will not be realized. The Company’s accounting policy is to not record the amount of NOL carry-forwards that will expire due to Section 382 limitations. We account for uncertain tax positions which require that a position taken or expected to be taken in a tax return be recognized in the financial statements when it is more likely than not (a likelihood of more than 50%) that the position would be sustained upon examination by tax authorities. A recognized tax position is then measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. Interest and penalties on tax liabilities, if any, would be recorded in interest expense and other noninterest expense, respectively (see Note 14). |
Advertising Costs | (o) Advertising Costs We incur advertising costs to add and maintain listeners. These costs are charged to expense in the period incurred. Cash advertising costs amounted to $0.2 million and $0.2 million in the years ended December 31, 2017 and 2016, respectively. |
Contingent Liabilities and Gains | (p) Contingent Liabilities and Gains Accounting standards require that an estimated loss from a loss contingency shall be accrued when information available prior to the issuance of the financial statements indicate that it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and when the amount of the loss can be reasonably estimated. Accounting for contingencies such as legal and income tax matters requires us to use our judgment. We believe that our accruals for these matters are adequate. Contingencies that might result in gains are disclosed but not reflected in the financial statements until realization has occurred. |
Use of Estimates | (q) Use of Estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include the allowance for doubtful accounts, the realization of deferred tax assets, the useful lives and future cash flows used for testing the recoverability of property and equipment, the recoverability of FCC broadcasting licenses, goodwill and other intangible assets, the fair value of Level 2 and Level 3 financial instruments, production tax credits, contingencies and litigation. These estimates and assumptions are based on management’s best judgments. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. Management adjusts such estimates and assumptions as facts and circumstances dictate. Illiquid credit markets, volatile equity markets and reductions in advertising spending have combined to increase the uncertainty inherent in such estimates and assumptions. Actual results could differ from these estimates. |
Concentration of Business and Credit Risks | (r) Concentration of Business and Credit Risks Financial instruments that potentially subject us to concentrations of risk include primarily cash, trade receivables and financial instruments used in hedging activities. We place our cash with highly rated credit institutions. Although we try to limit the amount of credit exposure with any one financial institution, we do in the normal course of business maintain cash balances in excess of federally insured limits. Our operations are conducted in several markets across the United States, including Puerto Rico. Our New York, Los Angeles, and Miami markets accounted for more than 60% of net revenue for the years ended December 31, 2017 and 2016. Our credit risk is spread across a large number of diverse customers in a number of different industries, thus spreading the trade credit risk. We do not normally require collateral on credit sales; however, a credit analysis is performed before extending substantial credit to any customer and occasionally we request payment in advance. We establish an allowance for doubtful accounts based on customers’ payment history and perceived credit risks. |
Basic and Diluted Net Loss Per Common Share | (s) Basic and Diluted Net Loss Per Common Share Basic net income (loss) per common share was computed by dividing net income (loss) available to common stockholders by the weighted average number of shares of common stock and convertible preferred stock outstanding for each period presented. Diluted net income (loss) per common share is computed by giving effect to common stock equivalents as if they were outstanding for the entire period. The following table summarizes the net income (loss) applicable to common stockholders and the net income (loss) per common share for the years ended December 31, 2017 and 2016 (in thousands, except per share data): 2017 2016 Net income (loss) $ 19,621 $ (16,342 ) Net income (loss) per common share: Basic $ 2.70 $ (2.25 ) Diluted $ 2.70 $ (2.25 ) Weighted average common shares outstanding: Basic 7,267 7,267 Diluted 7,267 7,267 The following is a reconciliation of the shares used in the computation of basic and diluted net income (loss) per share for the years ended December 31, 2017 and 2016 (in thousands, except per share data): 2017 2016 Basic weighted average shares outstanding $ 7,267 $ 7,267 Effect of dilutive equity instruments — — Dilutive weighted average shares outstanding $ 7,267 $ 7,267 Options to purchase shares of common stock and other stock- based awards outstanding which are not included in the calculation of diluted net income (loss) per share because their impact is anti-dilutive 393 389 |
Fair Value Measurement | (t) Fair Value Measurement We determine the fair value of assets and liabilities using a fair value hierarchy that distinguishes between market participant assumptions developed based on market data obtained from sources independent of the reporting entity, and the reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price (see Note 17). The levels of the fair value hierarchy are: • Level 1: inputs are quoted prices, unadjusted, in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. • Level 2: inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. A Level 2 input must be observable for substantially the full term of the asset or liability. • Level 3: inputs are unobservable and reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability. |
Share-based Compensation Expense | (u) Share-Based Compensation Expense We account for our share-based compensation expense based on the estimated grant date fair value method using the Black-Scholes option pricing model. For these awards, we have recognized compensation expense using a straight-line amortization method (prorated). Share-based compensation expense is based on awards that are ultimately expected to vest. Share-based compensation for the years ended December 31, 2017 and 2016 were reduced for estimated forfeitures. When estimating forfeitures, we consider voluntary termination behaviors, as well as trends of actual option forfeitures. |
Leasing (Operating Leases) | (v) Leasing (Operating Leases) We recognize rent expense for operating leases with periods of free rent (including construction periods), step rent provisions and escalation clauses on a straight line basis over the applicable lease term. We consider lease renewals in the useful life of related leasehold improvements when such renewals are reasonably assured. We take these provisions into account when calculating minimum aggregate rental commitments under noncancelable operating leases (see Note 13). From time to time, we receive capital improvement funding from our lessors. These amounts are recorded as deferred liabilities and amortized over the remaining lease term as a reduction of rent expense. |
Segment Reporting | (w) Segment Reporting Accounting standards establish the way public business enterprises report information about operating segments in annual financial statements and require those enterprises to report selected information about operating segments in interim financial reports issued to stockholders. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and in assessing performance. |
Comprehensive Loss | (x) Comprehensive Loss Our comprehensive loss consists of net loss and other items recorded directly to the equity accounts. The objective is to report a measure of all changes in equity of an enterprise that result from transactions and other economic events during the period. Our comprehensive loss consists of net loss and gains (losses) on our derivative instrument that qualifies for cash flow hedge treatment. |
Recently Issued Accounting Pronouncements | (y) Recently Issued Accounting Pronouncements In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (SEC Update), 1. Measurement of certain income tax effects is complete—Entities must reflect the tax effects of the Tax Legislation for which the accounting is complete; 2. Measurement of certain income tax effects can be reasonably estimated—Entities must report provisional amounts for those specific income tax effects of the Tax Legislation for which the accounting is incomplete but a reasonable estimate can be determined. Provisional amounts or adjustments to provisional amounts identified in the measurement period, as defined, should be included as an adjustment to tax expense or benefit from continuing operations in the period the amounts are determined; and 3. Measurement of certain income tax effects cannot be reasonably estimated—Entities are not required to report provisional amounts for any specific income tax effects of the Tax Legislation for which a reasonable estimate cannot be determined, and would continue to apply Topic 740 based on the provisions of the tax laws that were in effect immediately prior to the enactment of the Tax Legislation. Entities are to report the provisional amounts of the tax effects of the Tax Legislation in the first reporting period in which a reasonable estimate can be determined. SAB 118 further provides that the measurement period is complete when an entity’s accounting is complete and in no circumstances should the measurement period extend beyond one year from the enactment date. The Company may be able to complete the accounting for some provisions earlier than others. As a result, the Company may need to apply all three scenarios in determining the accounting for the Tax Legislation based on the information that is available. The ultimate impact of the Act on the Company’s consolidated financial statements and related disclosures for 2017 and beyond may differ from current estimates, possibly materially, due to, among other things, changes in interpretations and assumptions we have made, guidance that may be issued, and other actions we may take as a result of the Tax Legislation that differ from those presently contemplated. For additional information, see Note 14 to the financial statements. In February 2018, the FASB issued ASU No. 2018-03, Technical Corrections and Improvements to Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation (Topic 718), In February 2017, the FASB issued ASU No. 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20), In January 2017, the FASB issued ASU No. 2017-04, Intangibles — Goodwill and Other (Topic 350) In January 2017, the FASB issued ASU No. 2017-03, Accounting Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323): Amendments to SEC Paragraphs Pursuant to Staff Announcements at the September 22, 2016 and November 17, 2016 EITF Meetings In January 2017, the FASB issued ASU No. 2017-01 , Business Combinations (Topic 805). In October 2016, the FASB issued ASU No. 2016-16, – Income Taxes (Topic 740) In August 2016, the FASB issued ASU No. 2016-15, Statements of Cash Flows (Topic 230). In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). In January 2016, the FASB issued ASU No. 2016-01, Accounting for Financial Instruments – Recognition and Measurement. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). |
Summary of Significant Accoun27
Summary of Significant Accounting Policies and Related Matters (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Impact of Adjustments on Consolidated Statements of Changes in Stockholders' Deficit, Consolidated Balance Sheet and Income Tax Footnote Deferred Tax Balances | The impact of the adjustments on the Consolidated Statements of Changes in Stockholders’ Deficit at December 31, 2015 and 2016 is as follows: Previously Reported Adjustment As Revised (In thousands) Changes to accumulated deficit Balance at December 31, 2015 $ (623,676 ) $ (1,668) $ (625,344 ) Balance at December 31, 2016 (640,018 ) (1,668) (641,686 ) Additionally, the impact of the adjustment on the December 31, 2016 Consolidated Balance Sheet is as follows: December 31, 2016 Previously Reported Adjustment As Revised (In thousands) Deferred tax assets $ 1,615 $ (1,615) $ — Total assets 450,890 (1,615) 449,275 Deferred tax liabilities 106,986 $ 53 107,039 Total liabilities 565,007 53 565,060 Accumulated deficit (640,018 ) (1,668) (641,686 ) Total deficit (114,117 ) (1,668) (115,785 ) Total liabilities and deficit 450,890 (1,615) 449,275 The impact of the adjustment on the income tax footnote deferred tax balances at December 31, 2016 is as follows: December 31, 2016 Previously Reported Adjustment As Revised (In thousands) Deferred tax assets: Federal and state NOL carry-forwards $ 116,227 $ (71,578 ) $ 44,649 Total gross deferred tax assets 161,037 (71,578 ) 89,459 Less valuation allowance (158,081 ) $ 69,910 (88,171 ) Net deferred tax assets 2,956 (1,668 ) 1,288 Net deferred tax liability 105,371 1,668 107,039 |
Summary of Estimated Amortization Expense | Amortization expense amounted to $0.1 million and $0.1 million for the years ended December 31, 2017 and 2016, respectively. Estimated amortization expense for the five years subsequent to December 31, 2017 is as follows (in thousands): Year ending December 31: 2018 $ 96 2019 96 2020 96 2021 96 2022 96 |
Summary of Net Income (Loss) Available to Common Stockholders and the Net Income (Loss) Per Common Share | Basic net income (loss) per common share was computed by dividing net income (loss) available to common stockholders by the weighted average number of shares of common stock and convertible preferred stock outstanding for each period presented. Diluted net income (loss) per common share is computed by giving effect to common stock equivalents as if they were outstanding for the entire period. The following table summarizes the net income (loss) applicable to common stockholders and the net income (loss) per common share for the years ended December 31, 2017 and 2016 (in thousands, except per share data): 2017 2016 Net income (loss) $ 19,621 $ (16,342 ) Net income (loss) per common share: Basic $ 2.70 $ (2.25 ) Diluted $ 2.70 $ (2.25 ) Weighted average common shares outstanding: Basic 7,267 7,267 Diluted 7,267 7,267 |
Reconciliation of the Shares Used in the Computation of Basic and Diluted Net Income (Loss) Per Share | The following is a reconciliation of the shares used in the computation of basic and diluted net income (loss) per share for the years ended December 31, 2017 and 2016 (in thousands, except per share data): 2017 2016 Basic weighted average shares outstanding $ 7,267 $ 7,267 Effect of dilutive equity instruments — — Dilutive weighted average shares outstanding $ 7,267 $ 7,267 Options to purchase shares of common stock and other stock- based awards outstanding which are not included in the calculation of diluted net income (loss) per share because their impact is anti-dilutive 393 389 |
Prepaid Expenses and Other Cu28
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Prepaid Expense And Other Assets Current [Abstract] | |
Summary of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets at December 31, 2017 and 2016 consist of the following (in thousands): December31, 2017 December 31, 2016 Production tax credits $ 5,161 $ 3,716 Prepaid expenses 1,884 2,287 Other current assets 1,010 594 $ 8,055 $ 6,597 |
Assets Held for Sale (Tables)
Assets Held for Sale (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Assets Of Disposal Group Including Discontinued Operation [Abstract] | |
Summary of Assets Held for Sale | A summary of assets held for sale as of December 31, 2017 and December 31, 2016 is as follows (in thousands): December31, 2017 December 31, 2016 Land $ — $ 850 Property and equipment, net 409 527 $ 409 $ 1,377 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment, net consists of the following at December 31, 2017 and 2016 (in thousands): 2017 2016 Estimated useful lives Land $ 6,456 $ 6,456 — Building and building improvements 22,160 22,161 7–20 years Tower and antenna systems 5,623 5,986 10 years Studio and technical equipment 23,680 25,416 5–10 years Furniture and fixtures 3,972 4,819 5–10 years Transmitter equipment 8,637 9,108 10 years Leasehold improvements 2,794 2,781 1–20 years Computer equipment and software 9,617 9,362 3–5 years Other 2,027 2,052 3–5 years 84,966 88,141 Less accumulated depreciation (61,502 ) (61,735 ) $ 23,464 $ 26,406 |
Accounts Payable and Accrued 31
Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Payables And Accruals [Abstract] | |
Summary of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses at December 31, 2017 and 2016 consist of the following (in thousands): 2017 2016 Accounts payable – trade $ 2,762 $ 1,774 Accrued compensation and commissions 5,866 5,962 Accrued professional fees 2,669 1,038 Accrued step-up leases 246 284 Accrued franchise and rent tax 1,178 97 Other accrued expenses 6,042 3,578 $ 18,763 $ 12,733 |
12.5% Senior Secured Notes du32
12.5% Senior Secured Notes due 2017 (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Summary of Outstanding Notes Balance | A summary of the outstanding balance of our Notes, as of December 31, 2016 and changes through the year ended December 31, 2017, is presented below (in thousands and net of unamortized discount and deferred financing costs). Redemptions listed below were made with the net proceeds of asset sales described above. 12.5% Senior Notes due 2017, net, as of December 31, 2016 $ 273,233 Amortization of discount and deferred financing cost 1,767 Redemption of Notes (June 9, 2017) (10,336) Redemption of Notes (August 23, 2017) (4,390) 12.5% Senior Notes due 2017, net, as of December 31, 2017 $ 260,274 |
Other Long-Term Debt (Tables)
Other Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Summary of Other Long-Term Debt | Other long-term debt consists of the following at December 31, 2017 and 2016 (in thousands): 2017 2016 Promissory note payable, due in monthly principal installments of $26, plus interest at 6.31%, commencing January 2007, with balance due on January 2017 — 4,616 Less current portion — (4,616 ) $ — $ — |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Summary of Weighted Average Assumptions Used for Calculating Per Share Weighted Average Fair Value of Stock Options | We calculated the fair value of each option award on the date of grant using the Black-Scholes option pricing model. There were no stock options granted during 2017. The per share weighted average fair value of the stock options granted to employees during 2016 was $2.63. The following weighted average assumptions were used for each respective period: 2016 Expected term 7 Dividends to common stockholders None Risk-free interest rate 1.45% Expected volatility 115.39 |
Summary of Stock Options | Stock options have only been granted to employees or directors. Our stock options have various vesting schedules and are subject to the employees’ continuing service. A summary of the status of our stock options, as of December 31, 2017 and 2016, and changes during the years ended December 31, 2017 and 2016, is presented below (in thousands, except per share data and contractual life): Weighted Weighted Average Average Aggregate Remaining Exercise Intrinsic Contractual Shares Price Value Life (Years) Outstanding at December 31, 2015 128 11.25 Granted 315 3.06 Exercised — — Forfeited (35 ) 18.31 Outstanding at December 31, 2016 408 $ 4.32 Granted — — Exercised — — Forfeited (15 ) 26.07 Outstanding at December 31, 2017 393 $ 3.48 $ — 7.5 Exercisable at December 31, 2017 343 $ 3.56 $ — 7.0 |
Summary of Stock Options Outstanding and Exercisable | The following table summarizes information about our stock options outstanding and exercisable at December 31, 2017 (in thousands, except per share data and contractual life): Weighted Weighted Average Weighted Average Remaining Average Vested Unvested Exercise Contractual Options Exercise Range of Exercise Prices Options Options Price Life (Years) Exercisable Price $1.03 - 2.99 45 50 $ 2.68 8.4 45 $ 2.33 3.00 - 4.99 273 — 3.21 7.6 273 3.21 5.00 - 9.99 20 — 7.50 2.3 20 7.50 10.00 - 17.90 5 — 17.90 2.4 5 17.90 343 50 $ 3.48 7.5 343 $ 3.56 |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Summary of Future Minimum Lease Payments | At December 31, 2017, future minimum lease payments under such leases are as follows (in thousands): Operating leases Year ending December 31: 2018 3,037 2019 2,321 2020 2,067 2021 2,021 2022 1,684 Thereafter 13,758 Total minimum lease payments $ 24,888 |
Summary of Future Minimum Rental Income through Sublease | The future minimum rental income to be received under these agreements as of December 31, 2017 is as follows (in thousands): Year ending December 31: 2018 $ 1,304 2019 966 2020 694 2021 652 2022 345 Thereafter — $ 3,961 |
Summary of Future Payments under Employment and Service Contracts | At December 31, 2017, we are committed to employment and service contracts for certain executives, on-air talent, general managers, and others expiring through 2021. Future payments under such contracts are as follows (in thousands): Year ending December 31: 2018 $ 7,445 2019 2,571 2020 1,663 2021 375 2022 — Thereafter — $ 12,054 |
Summary of Future Payments under Vendor Agreements | Future payments under such commitments are as follows (in thousands): Year ending December 31: 2018 $ 9,792 2019 6,625 2020 5,930 2021 630 2022 592 Thereafter — $ 23,569 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Summary of Total Income Tax (Benefit) Expense From Continuing Operations | Total income tax (benefit) expense, from continuing operations, for the years ended December 31, 2017 and 2016 were as follows (in thousands): 2017 2016 Income tax (benefit) expense $ (24,658 ) $ 8,628 The components of the provision for income tax (benefit) expense from continuing operations included in the consolidated statements of operations are as follows for the years ended December 31, 2017 and 2016 (in thousands): 2017 2016 Current: Federal $ 177 $ 271 State and local, net of federal income tax benefit 68 65 Foreign 780 300 1,025 636 Deferred: Federal (31,714 ) 7,296 State and local, net of federal income tax benefit 6,031 696 Foreign — — (25,683 ) 7,992 Total income tax (benefit) expense, from continuing operations $ (24,658 ) $ 8,628 |
Loss before Income Tax (Benefit) Expense | For the years ended December 31, 2017 and 2016, loss before income tax (benefit) expense consists of the following (in thousands): 2017 2016 U.S. operations $ (9,202 ) $ (7,481 ) Foreign operations 4,165 (233 ) $ (5,037 ) $ (7,714 ) |
Schedule of Deferred Tax Assets and Deferred Tax Liabilities | The tax effect of temporary differences and carry-forwards that give rise to deferred tax assets and deferred tax liabilities at December 31, 2017 and 2016 are as follows (in thousands): 2017 2016 Deferred tax assets: Federal and state NOL carry-forwards $ 25,462 $ 44,649 Foreign NOL carry-forwards 9,420 11,354 FCC licenses 6,282 6,396 Allowance for doubtful accounts 764 1,017 Unearned revenue 214 373 AMT credit 1,215 1,248 Derivatives and hedging instruments — 7 Property and equipment 1,855 3,253 Accrued foreign withholding 2,376 2,238 Production costs 7,671 11,123 Stock-based compensation 142 345 Intercompany expenses 6,037 4,830 Accrued Vacation/Bonus/Payroll 597 950 Other 1,889 1,676 Total gross deferred tax assets 63,924 89,459 Less valuation allowance (62,688 ) (88,171 ) Net deferred tax assets 1,236 1,288 Deferred tax liabilities: FCC licenses and goodwill 82,507 108,327 Total gross deferred tax liabilities 82,507 108,327 Net deferred tax liability $ 81,271 $ 107,039 |
Summary of Income Tax (Benefit) Expense From Continuing Operations | Total income tax (benefit) expense from continuing operations differed from the amounts computed by applying the U.S. federal income tax rate of 35.0% for the years ended December 31, 2017 and 2016, as a result of the following: 2017 2016 Computed “expected” tax (benefit) expense (35.0 ) % (35.0 ) % Impacts from Tax Legislation (688.4 ) — State and local income taxes, net of federal benefit 28.7 3.0 Foreign tax differential (1.3 ) (1.6 ) Impacts from IRC Section 382 ownership change 228.3 — Current year change in valuation allowance (152.8 ) 92.2 Nondeductible expenses 48.9 10.5 Nondeductible interest expense 67.6 44.2 Change in effective rate 8.3 (9.4 ) Return to provision (0.8 ) 1.7 Other 7.0 6.3 (489.5 ) % 111.9 % |
Fair Value Measurement Disclo37
Fair Value Measurement Disclosures (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Estimated Fair Values of Financial Instruments | The estimated fair values of our financial instruments are as follows (in millions): December 31, 2017 2016 Fair Value Carrying Fair Carrying Fair Description Hierarchy Amount Value Amount Value 12.5% senior secured notes Level 2 $ 260.3 269.1 $ 275.0 275.5 10 3 4 preferred stock Level 3 165.6 38.1 155.8 60.5 Promissory note payable, included in other long-term debt Level 3 — — 4.6 4.7 |
Segment Data (Tables)
Segment Data (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Summary of Operating Segments | The following summary table presents separate financial data for each of our operating segments. The accounting applied to determine the segment information are generally the same as those described in the summary of significant accounting polices (see Note 2(v)). We evaluate the performance of our operating segments based on separate financial data for each operating segment as provided below (in thousands): Year Ended December 31, 2017 2016 Net revenue: Radio $ 119,493 $ 129,544 Television 15,216 15,075 Consolidated $ 134,709 $ 144,619 Engineering and programming expenses: Radio $ 23,542 $ 23,514 Television 6,932 7,598 Consolidated $ 30,474 $ 31,112 Selling, general and administrative expenses: Radio $ 53,108 $ 49,418 Television 5,718 6,688 Consolidated $ 58,826 $ 56,106 Corporate expenses: $ 10,403 $ 10,588 Depreciation and amortization: Radio $ 1,834 $ 1,905 Television 2,218 2,378 Corporate 297 409 Consolidated $ 4,349 $ 4,692 Gain on the disposal of assets, net: Radio $ (12,558 ) $ (11 ) Television (3,319 ) — Corporate (17 ) — Consolidated $ (15,894 ) $ (11 ) Recapitalization costs: Radio $ — $ — Television — — Corporate 6,021 — Consolidated $ 6,021 $ — Other operating gains: Radio $ — $ — Television — — Corporate — (37 ) Consolidated $ — $ (37 ) Other operating income: Radio $ — $ — Television — — Corporate (3 ) — Consolidated $ (3 ) $ — Operating income (loss): Radio $ 53,567 $ 54,718 Television 3,667 (1,589 ) Corporate (16,701 ) (10,960 ) Consolidated $ 40,533 $ 42,169 Year Ended December 31, 2017 2016 Capital expenditures: Radio $ 1,134 $ 1,421 Television 228 539 Corporate 142 242 Consolidated $ 1,504 $ 2,202 December 31, December 31, 2017 2016 Total Assets: Radio $ 378,472 $ 391,817 Television 54,836 56,554 Corporate 2,596 904 Consolidated $ 435,904 $ 449,275 |
Organization and Nature of Bu39
Organization and Nature of Business - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2017RadioStationTelevisionStationTelevisionOperation | |
Radio | |
Organization and Nature of Business (Textual) [Abstract] | |
Number of stations owned | RadioStation | 17 |
Television | |
Organization and Nature of Business (Textual) [Abstract] | |
Number of stations owned | TelevisionStation | 6 |
Number of operations operated | TelevisionOperation | 1 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies and Related Matters - Additional Information (Details) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017USD ($) | Dec. 31, 2017USD ($)Segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Summary of Significant Accounting Policies and Related Matters (Textual) [Abstract] | ||||
Cash flows from operating activities | $ (5,816,000) | $ 8,797,000 | ||
Recapitalization costs | 6,021,000 | |||
Prior period adjustment | $ 1,700,000 | |||
Stockholders’ deficit | (95,914,000) | (95,914,000) | (115,785,000) | $ (100,216,000) |
Deferred tax assets | 63,924,000 | 63,924,000 | 89,459,000 | |
Deferred tax liability | 82,507,000 | 82,507,000 | 108,327,000 | |
NOL deferred tax assets | 25,462,000 | 25,462,000 | 44,649,000 | |
Deferred tax assets valuation allowance | (62,688,000) | (62,688,000) | (88,171,000) | |
Net deferred tax assets | 1,236,000 | 1,236,000 | 1,288,000 | |
Net deferred tax liabilities | 81,271,000 | 81,271,000 | 107,039,000 | |
Federal NOL carry-forwards | 86,400,000 | 86,400,000 | 106,800,000 | |
State NOL carry-forwards | 85,400,000 | 85,400,000 | 105,400,000 | |
Provision (recovery) of bad debt expense | $ 853,000 | (51,000) | ||
FCC Broadcasting license period | 8 years | |||
Weighted-average period before the next renewal of FCC broadcasting licenses | 2 years 10 months 24 days | |||
FCC Broadcasting license cash flow projection period | 10 years | |||
Number of reporting segment units | Segment | 2 | |||
Impairment of goodwill | $ 0 | 0 | ||
Gross other intangible asset | 2,500,000 | $ 2,500,000 | 2,500,000 | |
Other finite lived intangible asset amortization period | 40 years | |||
Finite lived intangible asset amortization expense | $ 100,000 | 100,000 | ||
Barter revenue amount | 6,300,000 | 7,400,000 | ||
Barter expense amount | $ 6,100,000 | 6,900,000 | ||
Recognized tax position | Largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. | |||
Cash advertising costs | $ 200,000 | $ 200,000 | ||
Percentage revenue accounted by certain domestic markets | 60.00% | 60.00% | ||
FCC Broadcasting License | ||||
Summary of Significant Accounting Policies and Related Matters (Textual) [Abstract] | ||||
Impairment of intangible asset | $ 0 | |||
Domestic Tax Authority | Earliest Tax Year | ||||
Summary of Significant Accounting Policies and Related Matters (Textual) [Abstract] | ||||
NOL carry-forwards expiration year | 2,019 | 2,019 | ||
Domestic Tax Authority | Latest Tax Year | ||||
Summary of Significant Accounting Policies and Related Matters (Textual) [Abstract] | ||||
NOL carry-forwards expiration year | 2,037 | 2,037 | ||
Adjustment | ||||
Summary of Significant Accounting Policies and Related Matters (Textual) [Abstract] | ||||
Stockholders’ deficit | $ (1,668,000) | |||
Deferred tax assets | (1,600,000) | $ (1,600,000) | (71,578,000) | |
Deferred tax liability | 100,000 | 100,000 | ||
NOL deferred tax assets | (71,578,000) | |||
Deferred tax assets valuation allowance | 69,910,000 | |||
Net deferred tax assets | (1,668,000) | |||
Net deferred tax liabilities | 1,668,000 | |||
Adjustment | Domestic Tax Authority | ||||
Summary of Significant Accounting Policies and Related Matters (Textual) [Abstract] | ||||
Deferred tax assets | (1,600,000) | (1,600,000) | ||
Deferred tax liability | 100,000 | 100,000 | ||
Accumulated Deficit | ||||
Summary of Significant Accounting Policies and Related Matters (Textual) [Abstract] | ||||
Stockholders’ deficit | (622,065,000) | $ (622,065,000) | (641,686,000) | (625,344,000) |
Accumulated Deficit | Adjustment | ||||
Summary of Significant Accounting Policies and Related Matters (Textual) [Abstract] | ||||
Stockholders’ deficit | $ (1,668,000) | $ (1,668,000) | ||
Ownership Changes in 2013 | NOL Carry-forwards | ||||
Summary of Significant Accounting Policies and Related Matters (Textual) [Abstract] | ||||
Partial release of valuation allowance | $ 2,400,000 | |||
Promissory Note | ||||
Summary of Significant Accounting Policies and Related Matters (Textual) [Abstract] | ||||
Interest rate on Senior secured notes | 6.31% | 6.31% | ||
SBS Miami Broadcast Center | Promissory Note | ||||
Summary of Significant Accounting Policies and Related Matters (Textual) [Abstract] | ||||
Promissory note issued by SBS Miami Broadcast Center, repaid date | Jan. 3, 2017 | |||
Series B Preferred Stock | ||||
Summary of Significant Accounting Policies and Related Matters (Textual) [Abstract] | ||||
Cumulative exchangeable redeemable preferred stock dividend rate | 10.75% | 10.75% | ||
12.5% Senior Secured Notes due 2017 | ||||
Summary of Significant Accounting Policies and Related Matters (Textual) [Abstract] | ||||
Interest rate on Senior secured notes | 12.50% | 12.50% | 12.50% | |
Senior secured notes, maturity date | Apr. 15, 2017 | |||
Deferred financing costs, current | $ 1,100,000 | |||
Deferred financing costs, debt liability | $ 0 | $ 0 |
Summary of Significant Accoun41
Summary of Significant Accounting Policies and Related Matters - Impact of Adjustments on Consolidated Statements of Changes in Stockholders' Deficit (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Revision Of Prior Period Consolidated Financial Statements [Line Items] | |||
Stockholders’ deficit | $ (95,914) | $ (115,785) | $ (100,216) |
Accumulated Deficit | |||
Revision Of Prior Period Consolidated Financial Statements [Line Items] | |||
Stockholders’ deficit | $ (622,065) | (641,686) | (625,344) |
Previously Reported | |||
Revision Of Prior Period Consolidated Financial Statements [Line Items] | |||
Stockholders’ deficit | (114,117) | ||
Previously Reported | Accumulated Deficit | |||
Revision Of Prior Period Consolidated Financial Statements [Line Items] | |||
Stockholders’ deficit | (640,018) | (623,676) | |
Adjustment | |||
Revision Of Prior Period Consolidated Financial Statements [Line Items] | |||
Stockholders’ deficit | (1,668) | ||
Adjustment | Accumulated Deficit | |||
Revision Of Prior Period Consolidated Financial Statements [Line Items] | |||
Stockholders’ deficit | $ (1,668) | $ (1,668) |
Summary of Significant Accoun42
Summary of Significant Accounting Policies and Related Matters - Impact of Adjustment on Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Revision Of Prior Period Consolidated Financial Statements [Line Items] | |||
Total assets | $ 435,904 | $ 449,275 | |
Deferred tax liabilities | 81,271 | 107,039 | |
Total liabilities | 531,818 | 565,060 | |
Accumulated deficit | (622,065) | (641,686) | |
Total deficit | (95,914) | (115,785) | $ (100,216) |
Total liabilities and deficit | $ 435,904 | 449,275 | |
Previously Reported | |||
Revision Of Prior Period Consolidated Financial Statements [Line Items] | |||
Deferred tax assets | 1,615 | ||
Total assets | 450,890 | ||
Deferred tax liabilities | 106,986 | ||
Total liabilities | 565,007 | ||
Accumulated deficit | (640,018) | ||
Total deficit | (114,117) | ||
Total liabilities and deficit | 450,890 | ||
Adjustment | |||
Revision Of Prior Period Consolidated Financial Statements [Line Items] | |||
Deferred tax assets | (1,615) | ||
Total assets | (1,615) | ||
Deferred tax liabilities | 53 | ||
Total liabilities | 53 | ||
Accumulated deficit | (1,668) | ||
Total deficit | (1,668) | ||
Total liabilities and deficit | $ (1,615) |
Summary of Significant Accoun43
Summary of Significant Accounting Policies and Related Matters - Impact of Adjustment on Income Tax Footnote Deferred Tax Balances (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Federal and state NOL carry-forwards | $ 25,462 | $ 44,649 |
Total gross deferred tax assets | 63,924 | 89,459 |
Less valuation allowance | (62,688) | (88,171) |
Net deferred tax assets | 1,236 | 1,288 |
Net deferred tax liability | 81,271 | 107,039 |
Previously Reported | ||
Deferred tax assets: | ||
Federal and state NOL carry-forwards | 116,227 | |
Total gross deferred tax assets | 161,037 | |
Less valuation allowance | (158,081) | |
Net deferred tax assets | 2,956 | |
Net deferred tax liability | 105,371 | |
Adjustment | ||
Deferred tax assets: | ||
Federal and state NOL carry-forwards | (71,578) | |
Total gross deferred tax assets | $ (1,600) | (71,578) |
Less valuation allowance | 69,910 | |
Net deferred tax assets | (1,668) | |
Net deferred tax liability | $ 1,668 |
Summary of Significant Accoun44
Summary of Significant Accounting Policies and Related Matters - Summary of Estimated Amortization Expense (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Summary of estimated amortization expense | |
2,018 | $ 96 |
2,019 | 96 |
2,020 | 96 |
2,021 | 96 |
2,022 | $ 96 |
Summary of Significant Accoun45
Summary of Significant Accounting Policies and Related Matters - Summary of Net Income (Loss) Available to Common Stockholders and the Net Income (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Summary of net income available to common stockholders and the net income per common share | ||
Net income (loss) | $ 19,621 | $ (16,342) |
Net income (loss) per common share: | ||
Basic | $ 2.70 | $ (2.25) |
Diluted | $ 2.70 | $ (2.25) |
Weighted average common shares outstanding: | ||
Basic | 7,267 | 7,267 |
Diluted | 7,267 | 7,267 |
Summary of Significant Accoun46
Summary of Significant Accounting Policies and Related Matters - Reconciliation of the Shares Used in the Computation of Basic and Diluted Net Income (Loss) Per Share (Details) - shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of the shares used in the computation of basic and diluted net income per share | ||
Basic weighted average shares outstanding | 7,267 | 7,267 |
Dilutive weighted average shares outstanding | 7,267 | 7,267 |
Options to purchase shares of common stock and other stock- based awards outstanding which are not included in the calculation of diluted net income (loss) per share because their impact is anti-dilutive | 393 | 389 |
Related Party Transaction - C47
Related Party Transaction - CEO Waiver of Performance Bonus - Additional Information (Details) - CEO | 3 Months Ended |
Dec. 31, 2016USD ($) | |
Related Party Transaction [Line Items] | |
Cash bonus due to CEO | $ 750,000 |
Gain recognized on forgiveness of related party liability | $ 750,000 |
Prepaid Expenses and Other Cu48
Prepaid Expenses and Other Current Assets - Summary of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Prepaid Expense And Other Assets Current [Abstract] | ||
Production tax credits | $ 5,161 | $ 3,716 |
Prepaid expenses | 1,884 | 2,287 |
Other current assets | 1,010 | 594 |
Prepaid expenses and other current assets | $ 8,055 | $ 6,597 |
Assets Held for Sale - Addition
Assets Held for Sale - Additional Information (Details) $ in Thousands | Sep. 12, 2017USD ($) | Jun. 09, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($)Building |
Long Lived Assets Held For Sale [Line Items] | ||||
Land, building and improvements, net book value | $ 409 | $ 1,377 | ||
Carrying value of facilities | $ 409 | $ 527 | ||
Assets held for sale | ||||
Long Lived Assets Held For Sale [Line Items] | ||||
Number of properties held for sale | Building | 2 | |||
Land, building and improvements, net book value | $ 1,400 | |||
Purchase price under agreement | $ 14,700 | |||
Recognized gain, net of closing costs | 12,800 | |||
Recognized gain on financial reporting | 12,800 | |||
Assets held for sale | Los Angeles Facilities | ||||
Long Lived Assets Held For Sale [Line Items] | ||||
Sale of land at carrying value | 900 | |||
Sale of property and equipment at carrying value | 100 | |||
Net proceeds from sale of facility | $ 10,300 | |||
Assets held for sale | New York Facilities | ||||
Long Lived Assets Held For Sale [Line Items] | ||||
Changes to plan of facilities sale, description | Pursuant to an agreement entered into by the Company, as of September 12, 2017, with 26 W. 56 LLC, the Company expects to sell its New York facilities with a carrying value of $0.4 million for $14.0 million, exclusive of closing costs, and is expected to close during the third quarter of 2018. The Company will repay a portion of the outstanding Notes with the resulting net proceeds, as defined by the indenture governing our Notes (the “Indenture”). The net proceeds are calculated differently than the gain that will be recognized for financial reporting purposes at the time of closing. | |||
Carrying value of facilities | $ 400 | |||
Agreement entered date for sale of facilities | Sep. 12, 2017 | |||
Expected proceeds from sale of facilities, excluding closing costs | $ 14,000 |
Assets Held for Sale - Summary
Assets Held for Sale - Summary of Assets Held for Sale (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Discontinued Operations And Disposal Groups [Abstract] | ||
Land | $ 850 | |
Property and equipment, net | $ 409 | 527 |
Assets held for sale | $ 409 | $ 1,377 |
Asset Exchange - Additional Inf
Asset Exchange - Additional Information (Details) - USD ($) $ in Thousands | Jul. 21, 2017 | Jan. 04, 2016 | Dec. 31, 2017 | Jan. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Asset Exchange [Line Items] | ||||||
Fair value of assets received in asset exchange | $ 2,794 | |||||
Additional cash payments | $ 1,897 | |||||
Cash proceeds from sale of spectrum | $ 5,073 | |||||
Puerto Rico | ||||||
Asset Exchange [Line Items] | ||||||
Cash proceeds from sale of spectrum | $ 5,500 | |||||
Gain on relinquishment of spectrum | $ 3,300 | |||||
FCC Broadcast Incentive Auction | Puerto Rico | ||||||
Asset Exchange [Line Items] | ||||||
Cash proceeds from sale of spectrum | $ 4,700 | |||||
Assets held for exchange | International Broadcasting Corp | ||||||
Asset Exchange [Line Items] | ||||||
Fair value of assets received in asset exchange | $ 2,900 | |||||
Additional cash payments | 1,900 | |||||
Assets held for exchange | International Broadcasting Corp | FCC Broadcasting License | ||||||
Asset Exchange [Line Items] | ||||||
Fair value difference of assets exchanged | $ 1,800 |
Property and Equipment, Net - S
Property and Equipment, Net - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Summary of property and equipment | ||
Property and equipment, Gross | $ 84,966 | $ 88,141 |
Less accumulated depreciation | (61,502) | (61,735) |
Property and equipment, Net | 23,464 | 26,406 |
Land | ||
Summary of property and equipment | ||
Property and equipment, Gross | 6,456 | 6,456 |
Building and building improvements | ||
Summary of property and equipment | ||
Property and equipment, Gross | $ 22,160 | 22,161 |
Building and building improvements | Minimum | ||
Summary of property and equipment | ||
Property and Equipment, Estimated useful lives | 7 years | |
Building and building improvements | Maximum | ||
Summary of property and equipment | ||
Property and Equipment, Estimated useful lives | 20 years | |
Tower and antenna systems | ||
Summary of property and equipment | ||
Property and equipment, Gross | $ 5,623 | 5,986 |
Tower and antenna systems | Maximum | ||
Summary of property and equipment | ||
Property and Equipment, Estimated useful lives | 10 years | |
Studio and technical equipment | ||
Summary of property and equipment | ||
Property and equipment, Gross | $ 23,680 | 25,416 |
Studio and technical equipment | Minimum | ||
Summary of property and equipment | ||
Property and Equipment, Estimated useful lives | 5 years | |
Studio and technical equipment | Maximum | ||
Summary of property and equipment | ||
Property and Equipment, Estimated useful lives | 10 years | |
Furniture and fixtures | ||
Summary of property and equipment | ||
Property and equipment, Gross | $ 3,972 | 4,819 |
Furniture and fixtures | Minimum | ||
Summary of property and equipment | ||
Property and Equipment, Estimated useful lives | 5 years | |
Furniture and fixtures | Maximum | ||
Summary of property and equipment | ||
Property and Equipment, Estimated useful lives | 10 years | |
Transmitter equipment | ||
Summary of property and equipment | ||
Property and equipment, Gross | $ 8,637 | 9,108 |
Transmitter equipment | Maximum | ||
Summary of property and equipment | ||
Property and Equipment, Estimated useful lives | 10 years | |
Leasehold improvements | ||
Summary of property and equipment | ||
Property and equipment, Gross | $ 2,794 | 2,781 |
Leasehold improvements | Minimum | ||
Summary of property and equipment | ||
Property and Equipment, Estimated useful lives | 1 year | |
Leasehold improvements | Maximum | ||
Summary of property and equipment | ||
Property and Equipment, Estimated useful lives | 20 years | |
Computer equipment and software | ||
Summary of property and equipment | ||
Property and equipment, Gross | $ 9,617 | 9,362 |
Computer equipment and software | Minimum | ||
Summary of property and equipment | ||
Property and Equipment, Estimated useful lives | 3 years | |
Computer equipment and software | Maximum | ||
Summary of property and equipment | ||
Property and Equipment, Estimated useful lives | 5 years | |
Other | ||
Summary of property and equipment | ||
Property and equipment, Gross | $ 2,027 | $ 2,052 |
Other | Minimum | ||
Summary of property and equipment | ||
Property and Equipment, Estimated useful lives | 3 years | |
Other | Maximum | ||
Summary of property and equipment | ||
Property and Equipment, Estimated useful lives | 5 years |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property Plant And Equipment [Line Items] | |||
Depreciation of property and equipment | $ 4.3 | $ 4.6 | |
Puerto Rico | Hurricane Maria | |||
Property Plant And Equipment [Line Items] | |||
Depreciation of property and equipment | $ 1.1 |
Accounts Payable and Accrued 54
Accounts Payable and Accrued Expenses - Summary of Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Summary of accounts payable and accrued expenses | ||
Accounts payable – trade | $ 2,762 | $ 1,774 |
Accrued compensation and commissions | 5,866 | 5,962 |
Accrued professional fees | 2,669 | 1,038 |
Accrued step-up leases | 246 | 284 |
Accrued franchise and rent tax | 1,178 | 97 |
Other accrued expenses | 6,042 | 3,578 |
Total accounts payable and accrued expenses | $ 18,763 | $ 12,733 |
12.5% Senior Secured Notes du55
12.5% Senior Secured Notes due 2017 - Additional Information (Details) - 12.5% Senior Secured Notes due 2017 - USD ($) | Aug. 23, 2017 | May 08, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Feb. 07, 2012 |
Debt Instrument [Line Items] | |||||
Notes issued principal amount | $ 275,000,000 | ||||
Issue price percentage of principal amount | 97.00% | ||||
Senior secured notes, maturity date | Apr. 15, 2017 | ||||
Debt instrument, event of default description | On April 17, 2017 (being the payment date following the Saturday, April 15, 2017 maturity date). | ||||
Notes outstanding | $ 260,300,000 | ||||
Interest rate on Senior secured notes | 12.50% | 12.50% | |||
Additional interest rate | 2.00% | ||||
Redemption of Notes August 23, 2017 | |||||
Debt Instrument [Line Items] | |||||
Pay down of senior secured notes | $ 4,400,000 | $ 4,390,000 | |||
Minimum | |||||
Debt Instrument [Line Items] | |||||
Secured leverage ratio | 4.75% | ||||
Maximum | |||||
Debt Instrument [Line Items] | |||||
Secured leverage ratio | 4.75% | ||||
Forbearance Agreement | |||||
Debt Instrument [Line Items] | |||||
Frequency of interest payment | monthly | ||||
Debt instrument, periodic payment, interest | $ 2,864,583 | ||||
Debt instrument payment period | As part of the Forbearance Agreement, the Company agreed to make monthly interest payments of $2,864,583 on the Notes for the 30 day periods ending on May 15, 2017 and June 15, 2017, rather than on a semi-annual basis as required by the Indenture. | ||||
Percentage of principal amount agreed to pay as consent fee | 0.35% | ||||
Forbearance Agreement | Minimum | |||||
Debt Instrument [Line Items] | |||||
Percentage of outstanding senior notes holders agreed to forbear from exercising rights | 75.00% | ||||
Los Angeles | |||||
Debt Instrument [Line Items] | |||||
Proceeds from sale of real estate | $ 14,700,000 | ||||
Pay down of senior secured notes | 14,700,000 | ||||
New York | |||||
Debt Instrument [Line Items] | |||||
Expected proceeds from sale of real estate | 14,000,000 | ||||
Expected repayments of debt | $ 14,000,000 |
12.5% Senior Secured Notes - Su
12.5% Senior Secured Notes - Summary of Outstanding Notes Balance (Details) - USD ($) $ in Thousands | Aug. 23, 2017 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
12.5% Senior Notes due 2017, net, as of December 31, 2016 | $ 273,233 | |
12.5% Senior Notes due 2017, net, as of December 31, 2017 | 260,274 | |
12.5% Senior Secured Notes due 2017 | ||
Debt Instrument [Line Items] | ||
12.5% Senior Notes due 2017, net, as of December 31, 2016 | 273,233 | |
Amortization of discount and deferred financing cost | 1,767 | |
12.5% Senior Notes due 2017, net, as of December 31, 2017 | 260,274 | |
12.5% Senior Secured Notes due 2017 | Redemption of Notes June 9, 2017 | ||
Debt Instrument [Line Items] | ||
Redemption of Notes | (10,336) | |
12.5% Senior Secured Notes due 2017 | Redemption of Notes August 23, 2017 | ||
Debt Instrument [Line Items] | ||
Redemption of Notes | $ (4,400) | $ (4,390) |
Other Long-Term Debt - Summary
Other Long-Term Debt - Summary of Other Long-Term Debt (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Debt Instrument [Line Items] | |
Less current portion | $ (4,616) |
Promissory Note | |
Debt Instrument [Line Items] | |
Other long-term debt, Total | $ 4,616 |
Other Long-Term Debt - Summar58
Other Long-Term Debt - Summary of Other Long-Term Debt (Parenthetical) (Details) - Promissory Note $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Debt Instrument [Line Items] | |
Debt Instrument annual principal installment amount | $ 26 |
Debt Instrument annual principal installment commencement month year | 2007-01 |
Debt Instrument due in annual principal installment , maturity month year | 2017-01 |
Notes issued, interest rate | 6.31% |
10 3_4% Series A and B Cumula59
10 3/4% Series A and B Cumulative Exchangeable Redeemable Preferred Stock - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 02, 2017 | Oct. 15, 2013 | Oct. 15, 2011 | Oct. 15, 2010 | Oct. 15, 2009 | Apr. 05, 2004 | Oct. 30, 2003 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2013 | Oct. 30, 2008 | Feb. 18, 2004 |
Class Of Stock [Line Items] | ||||||||||||
Series B preferred stock adjustment to contract settlement value at reporting date classified as interest expense | $ 9,700 | $ 9,700 | $ 87,600 | |||||||||
Series B Preferred Stock Litigation | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Claiming percentage of litigation | 94.16% | |||||||||||
Series A Preferred Stock | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Preferred stock par value per share | $ 0.01 | |||||||||||
Liquidation preference per share | $ 1,000 | |||||||||||
Gross proceeds from the issuance of Series A preferred Stock | $ 75,000 | |||||||||||
Series A Preferred Stock | Private Placement | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Preferred stock, shares issued | 75,000 | |||||||||||
Series B Preferred Stock | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Preferred stock, shares issued | 90,549 | 90,549 | ||||||||||
Preferred stock par value per share | $ 0.01 | |||||||||||
Liquidation preference per share | $ 1,000 | $ 1,000 | ||||||||||
Shares of Series B preferred stock exchanged for Series A preferred stock | 76,702 | |||||||||||
Purchase price percentage as of aggregate liquidation preference | 101.00% | |||||||||||
Rate of redemption of Preferred stock for cash | 100.00% | 101.792% | 103.583% | |||||||||
Rate of redemption of Preferred stock at purchase price | 100.00% | |||||||||||
Dividends on the Series B preferred stock | 10.75% | 10.75% | ||||||||||
Increase in carrying value of preferred stock | $ 17,300 | |||||||||||
Stock requested to be repurchased | 92,223 | |||||||||||
Purchase price of stock requested to be repurchased | $ 126,900 | |||||||||||
Stock repurchased | 1,800 | |||||||||||
Purchase price of stock repurchased | $ 2,500 | |||||||||||
Offer price in cash as percentage of liquidation preference | 101.00% | |||||||||||
Aggregate cumulative unpaid dividends on outstanding shares | $ 75,032 | $ 65,299 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) | Aug. 08, 2016USD ($)shares | Feb. 29, 2016shares | Dec. 31, 2017USD ($)RegistrationStatements$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Jul. 30, 2006shares | Dec. 23, 2004$ / sharesshares | Feb. 18, 2004$ / shares |
Class Of Stock [Line Items] | |||||||
Number of registration statements filled | RegistrationStatements | 3 | ||||||
Number of options granted | 315,000 | ||||||
Option Granted, Vesting period | 3 years | ||||||
Term of award | 10 years | ||||||
Stock-based compensation | $ | $ 148,000 | $ 655,000 | |||||
Unrecognized compensation costs related to nonvested | $ | $ 18,000 | ||||||
Weighted average period over which unrecognized compensation is expected to be recognized | 1 year | ||||||
Stock options exercised | $ | $ 0 | 0 | |||||
Tax benefit from stock -based compensation expense | $ | 0 | 0 | |||||
Cash payments received | $ | $ 0 | $ 0 | |||||
Stock options granted, weighted average fair value, per share | $ / shares | $ 2.63 | ||||||
Nonvested shares outstanding | 50,000 | ||||||
2006 Omnibus Equity Compensation Plan | |||||||
Class Of Stock [Line Items] | |||||||
Omnibus Plan authorizes shares of Class A common stock for issuance, subject to adjustment in certain circumstances | 350,000 | ||||||
Omnibus Plan provides that the maximum aggregate number of shares of Class A common stock units, stock awards and other stock-based awards that may be granted, other than dividend equivalent | 100,000 | ||||||
Omnibus Plan expiration date | Jul. 17, 2016 | ||||||
Number of options granted | 0 | ||||||
2006 Omnibus Equity Compensation Plan | Restricted Stock | |||||||
Class Of Stock [Line Items] | |||||||
Nonvested shares outstanding | 0 | 0 | |||||
2006 Omnibus Equity Compensation Plan | Minimum | Restricted Stock | |||||||
Class Of Stock [Line Items] | |||||||
Option Granted, Vesting period | 2 years | ||||||
2006 Omnibus Equity Compensation Plan | Maximum | Restricted Stock | |||||||
Class Of Stock [Line Items] | |||||||
Option Granted, Vesting period | 5 years | ||||||
1999 NQ Plan | |||||||
Class Of Stock [Line Items] | |||||||
Option Granted, Vesting period | 4 years | ||||||
Options granted vesting percentage | 20.00% | ||||||
1999 NQ Plan vesting rights | 20% each year for the first four years from the date of grant. | ||||||
1999 NQ Plan | Share-based Compensation Award, Tranche One | |||||||
Class Of Stock [Line Items] | |||||||
Options granted vesting percentage | 20.00% | ||||||
1999 NQ Plan | Share-based Compensation Award, Tranche Two | |||||||
Class Of Stock [Line Items] | |||||||
Options granted vesting percentage | 20.00% | ||||||
1999 NQ Plan | Share-based Compensation Award, Tranche Three | |||||||
Class Of Stock [Line Items] | |||||||
Options granted vesting percentage | 20.00% | ||||||
1999 NQ Plan | Share-based Compensation Award, Tranche Four | |||||||
Class Of Stock [Line Items] | |||||||
Options granted vesting percentage | 20.00% | ||||||
1999 ISO Plan | |||||||
Class Of Stock [Line Items] | |||||||
Shares reserve for issuance | 300,000 | ||||||
Contractual life of option | 10 years | ||||||
1999 Stock Option Plans | |||||||
Class Of Stock [Line Items] | |||||||
Number of options granted | 0 | ||||||
Series C convertible preferred stock | |||||||
Class Of Stock [Line Items] | |||||||
Preferred stock par value per share | $ / shares | $ 0.01 | ||||||
Preferred Stock issued to CBS Radio | 380,000 | 380,000 | |||||
Common stock shares to be issued to CBS Radio | 760,000 | ||||||
Liquidation preference per share | $ / shares | $ 0.01 | $ 0.01 | |||||
Series C convertible preferred stock | CBS Radio | |||||||
Class Of Stock [Line Items] | |||||||
Preferred Stock issued to CBS Radio | 380,000 | ||||||
Preferred Stock, shares issuable upon conversion | 2 | ||||||
Series C convertible preferred stock | CBS Radio | Stock Purchase Agreement | |||||||
Class Of Stock [Line Items] | |||||||
Number of shares sold | 380,000 | ||||||
Number of shares sold, value | $ | $ 3,800,000 | ||||||
Series C convertible preferred stock | Stockholder Agreement | CBS Radio | |||||||
Class Of Stock [Line Items] | |||||||
Negotiation right open period | 10 days | ||||||
Matching right expiration period | 1 year | ||||||
Series B Preferred Stock | |||||||
Class Of Stock [Line Items] | |||||||
Preferred stock par value per share | $ / shares | $ 0.01 | ||||||
Liquidation preference per share | $ / shares | $ 1,000 | $ 1,000 | |||||
Class A common stock | |||||||
Class Of Stock [Line Items] | |||||||
Common stock voting right | one vote per share | ||||||
Number of options granted | 75,000 | ||||||
Class A common stock | 1999 NQ Plan | |||||||
Class Of Stock [Line Items] | |||||||
Shares reserve for issuance | 30,000 | ||||||
Class B common stock | |||||||
Class Of Stock [Line Items] | |||||||
Common stock voting right | ten votes per share |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Weighted Average Assumptions Used for Calculating Per Share Weighted Average Fair Value of Stock Options (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of weighted average assumptions used for calculating per share weighted average fair value of stock options | |
Expected term | 7 years |
Dividends to common stockholders | 0.00% |
Risk-free interest rate | 1.45% |
Expected volatility | 115.39% |
Stockholders' Equity - Summar62
Stockholders' Equity - Summary of Stock Options (Details) - $ / shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Summary of stock options | ||
Shares, Outstanding, Beginning Balance | 408 | 128 |
Stock Options Outstanding, Granted | 315 | |
Stock Options Outstanding, Forfeited | (15) | (35) |
Shares, Outstanding, Ending Balance | 393 | 408 |
Shares, Exercisable at December 31, 2017 | 343 | |
Weighted Average Exercise Price, Outstanding, Beginning Balance | $ 4.32 | $ 11.25 |
Weighted Average Exercise Price, Granted | 3.06 | |
Weighted Average Exercise Price, Forfeited | 26.07 | 18.31 |
Weighted Average Exercise Price, Outstanding, Ending Balance | 3.48 | $ 4.32 |
Weighted Average Exercise Price, Exercisable at December 31, 2017 | $ 3.56 | |
Weighted Average Remaining Contractual Life (Years), Outstanding | 7 years 6 months | |
Weighted Average Remaining Contractual Life (Years), Exercisable at December 31, 2017 | 7 years |
Stockholders' Equity - Summar63
Stockholders' Equity - Summary of Stock Options Outstanding and Exercisable (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock options outstanding and exercisable | |||
Stock options outstanding, Vested Options | 343 | ||
Stock options outstanding, Unvested Options | 50 | ||
Stock options outstanding, Weighted Average Exercise Price | $ 3.48 | $ 4.32 | $ 11.25 |
Weighted Average Remaining Contractual Life (Years), Outstanding | 7 years 6 months | ||
Stock options, Number Exercisable | 343 | ||
Stock options, Exercisable, Weighted Average Exercise Price | $ 3.56 | ||
1.03 - 2.99 | |||
Stock options outstanding and exercisable | |||
Range of Exercise Price, Lower Range | 1.03 | ||
Range of Exercise Price, Upper Range | $ 2.99 | ||
Stock options outstanding, Vested Options | 45 | ||
Stock options outstanding, Unvested Options | 50 | ||
Stock options outstanding, Weighted Average Exercise Price | $ 2.68 | ||
Weighted Average Remaining Contractual Life (Years), Outstanding | 8 years 4 months 24 days | ||
Stock options, Number Exercisable | 45 | ||
Stock options, Exercisable, Weighted Average Exercise Price | $ 2.33 | ||
3.00 - 4.99 | |||
Stock options outstanding and exercisable | |||
Range of Exercise Price, Lower Range | 3 | ||
Range of Exercise Price, Upper Range | $ 4.99 | ||
Stock options outstanding, Vested Options | 273 | ||
Stock options outstanding, Weighted Average Exercise Price | $ 3.21 | ||
Weighted Average Remaining Contractual Life (Years), Outstanding | 7 years 7 months 6 days | ||
Stock options, Number Exercisable | 273 | ||
Stock options, Exercisable, Weighted Average Exercise Price | $ 3.21 | ||
5.00 - 9.99 | |||
Stock options outstanding and exercisable | |||
Range of Exercise Price, Lower Range | 5 | ||
Range of Exercise Price, Upper Range | $ 9.99 | ||
Stock options outstanding, Vested Options | 20 | ||
Stock options outstanding, Weighted Average Exercise Price | $ 7.50 | ||
Weighted Average Remaining Contractual Life (Years), Outstanding | 2 years 3 months 18 days | ||
Stock options, Number Exercisable | 20 | ||
Stock options, Exercisable, Weighted Average Exercise Price | $ 7.50 | ||
10.00 - 17.90 | |||
Stock options outstanding and exercisable | |||
Range of Exercise Price, Lower Range | 10 | ||
Range of Exercise Price, Upper Range | $ 17.90 | ||
Stock options outstanding, Vested Options | 5 | ||
Stock options outstanding, Weighted Average Exercise Price | $ 17.90 | ||
Weighted Average Remaining Contractual Life (Years), Outstanding | 2 years 4 months 24 days | ||
Stock options, Number Exercisable | 5 | ||
Stock options, Exercisable, Weighted Average Exercise Price | $ 17.90 |
Commitments - Summary of Future
Commitments - Summary of Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Operating lease | |
2,018 | $ 3,037 |
2,019 | 2,321 |
2,020 | 2,067 |
2,021 | 2,021 |
2,022 | 1,684 |
Thereafter | 13,758 |
Total minimum lease payments | $ 24,888 |
Commitments - Additional Inform
Commitments - Additional Information (Details) - USD ($) $ in Thousands | 4 Months Ended | 12 Months Ended | |
Apr. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Commitments And Contingencies [Line Items] | |||
Standby letter of credit related to operating lease | $ 100 | ||
Lease expire year | 2,018 | ||
Rent expense | $ 3,400 | $ 3,300 | |
Total future payments from employment and service agreements | $ 12,054 | ||
Condition to participate in 401(k) plan | All full-time employees are eligible to voluntarily participate in the 401(k) Plan after their 90 day introductory period. | ||
Subsequent Event | |||
Commitments And Contingencies [Line Items] | |||
Increase in total future payments from employment and service agreements | $ 2,100 | ||
Total future payments from employment and service agreements | $ 14,200 |
Commitments - Summary of Futu66
Commitments - Summary of Future Minimum Rental Income through Sublease (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Summary of future minimum rental income through sublease | |
2,018 | $ 1,304 |
2,019 | 966 |
2,020 | 694 |
2,021 | 652 |
2,022 | 345 |
Total future minimum rental income through sublease | $ 3,961 |
Commitments - Summary of Futu67
Commitments - Summary of Future Payments under Employment and Service Contracts (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Summary of future payments under employment and service contracts | |
2,018 | $ 7,445 |
2,019 | 2,571 |
2,020 | 1,663 |
2,021 | 375 |
Contractual, Total | $ 12,054 |
Commitments - Summary of Futu68
Commitments - Summary of Future Payments under Vendor Agreements (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Summary of future payments under vendor agreements | |
2,018 | $ 9,792 |
2,019 | 6,625 |
2,020 | 5,930 |
2,021 | 630 |
2,022 | 592 |
Other Commitment, Total | $ 23,569 |
Income Taxes - Summary of Total
Income Taxes - Summary of Total Income Tax (Benefit) Expense From Continuing Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income from continuing operations income tax expense | ||
Income tax (benefit) expense | $ (24,658) | $ 8,628 |
Income Taxes - Loss before Inco
Income Taxes - Loss before Income Tax (Benefit) Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Loss before income tax (benefit) expense | ||
U.S. operations | $ (9,202) | $ (7,481) |
Foreign operations | 4,165 | (233) |
Loss before income tax | $ (5,037) | $ (7,714) |
Income Taxes - Summary of Compo
Income Taxes - Summary of Components of the Provision for Income Tax (Benefit) Expense From Continuing Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Current: | ||
Federal | $ 177 | $ 271 |
State and local, net of federal income tax benefit | 68 | 65 |
Foreign | 780 | 300 |
Total | 1,025 | 636 |
Deferred: | ||
Federal | (31,714) | 7,296 |
State and local, net of federal income tax benefit | 6,031 | 696 |
Total | (25,683) | 7,992 |
Total income tax (benefit) expense, from continuing operations | $ (24,658) | $ 8,628 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Loss Carryforwards [Line Items] | |||
Federal NOL carry-forwards | $ 400,000 | $ 400,000 | |
Increase (decrease) in valuation allowance | (25,500,000) | 6,800,000 | |
Valuation allowance | 62,688,000 | 88,171,000 | |
Federal NOL carry-forwards | 86,400,000 | 106,800,000 | |
State NOL carry-forwards | 85,400,000 | $ 105,400,000 | |
Foreign NOL carryforwards | $ 28,600,000 | ||
U.S. federal income tax rate | 35.00% | 35.00% | |
Provisional net tax benefit recognized associated with enactment of Tax Legislation | $ 34,700,000 | ||
Impact on annual effective income tax rate | 688.40% | ||
Tax Cuts And Jobs Act incomplete acccounting description | we have not completed our accounting for the tax effects of enactment of the Act; however, we have made reasonable estimate of the effects on our existing deferred tax balances. | ||
Provisional amounts for other provisions of Tax Legislation, including one-time transition tax | $ 0 | ||
Interest or penalties as result of tax uncertainties | 0 | $ 0 | |
Unrecognized tax benefits as a result of tax positions taken | 0 | $ 0 | |
Scenario, Plan | |||
Operating Loss Carryforwards [Line Items] | |||
U.S. federal income tax rate | 21.00% | ||
Ownership Changes in 2013 and 2017 | NOL Carry-forwards | |||
Operating Loss Carryforwards [Line Items] | |||
Reduction in NOL carry-forwards available against corresponding valuation allowance | $ 32,800,000 | ||
Domestic Tax Authority | Latest Tax Year | |||
Operating Loss Carryforwards [Line Items] | |||
NOL carryforwards expiration | 2,037 | 2,037 | |
Domestic Tax Authority | Earliest Tax Year | |||
Operating Loss Carryforwards [Line Items] | |||
NOL carryforwards expiration | 2,019 | 2,019 | |
Foreign Tax Authority | Latest Tax Year | |||
Operating Loss Carryforwards [Line Items] | |||
NOL carryforwards expiration | 2,024 | ||
Foreign Tax Authority | Earliest Tax Year | |||
Operating Loss Carryforwards [Line Items] | |||
NOL carryforwards expiration | 2,018 | ||
Puerto Rico | |||
Operating Loss Carryforwards [Line Items] | |||
Federal NOL carry-forwards | $ 5,100,000 | $ 3,100,000 | |
Valuation allowance | 23,400,000 | ||
UNITED STATES | |||
Operating Loss Carryforwards [Line Items] | |||
Valuation allowance | $ 39,300,000 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Deferred Tax Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Federal and state NOL carry-forwards | $ 25,462 | $ 44,649 |
Foreign NOL carry-forwards | 9,420 | 11,354 |
FCC licenses | 6,282 | 6,396 |
Allowance for doubtful accounts | 764 | 1,017 |
Unearned revenue | 214 | 373 |
AMT credit | 1,215 | 1,248 |
Derivatives and hedging instruments | 7 | |
Property and equipment | 1,855 | 3,253 |
Accrued foreign withholding | 2,376 | 2,238 |
Production costs | 7,671 | 11,123 |
Stock-based compensation | 142 | 345 |
Intercompany expenses | 6,037 | 4,830 |
Accrued Vacation/Bonus/Payroll | 597 | 950 |
Other | 1,889 | 1,676 |
Total gross deferred tax assets | 63,924 | 89,459 |
Less valuation allowance | (62,688) | (88,171) |
Net deferred tax assets | 1,236 | 1,288 |
Deferred tax liabilities: | ||
FCC licenses and goodwill | 82,507 | 108,327 |
Total gross deferred tax liabilities | 82,507 | 108,327 |
Net deferred tax liability | $ 81,271 | $ 107,039 |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Tax (Benefit) Expense From Continuing Operations (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Summary of income tax rate | ||
Computed “expected” tax (benefit) expense | (35.00%) | (35.00%) |
Impacts from Tax Legislation | (688.40%) | |
State and local income taxes, net of federal benefit | 28.70% | 3.00% |
Foreign tax differential | (1.30%) | (1.60%) |
Impacts from IRC Section 382 ownership change | 228.30% | |
Current year change in valuation allowance | (152.80%) | 92.20% |
Nondeductible expenses | 48.90% | 10.50% |
Nondeductible interest expense | 67.60% | 44.20% |
Change in effective rate | 8.30% | (9.40%) |
Return to provision | (0.80%) | 1.70% |
Other | 7.00% | 6.30% |
Total | (489.50%) | 111.90% |
Contingencies - Additional Info
Contingencies - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2017 | |
Loss Contingencies [Line Items] | ||
Income tax examination, liability expected to be paid | $ 600,000 | |
State Tax Assessment | ||
Loss Contingencies [Line Items] | ||
Tax assessment period, beginning date | Dec. 31, 2010 | |
Tax assessment period, ending year | 2,013 | |
Local Tax Assessment | ||
Loss Contingencies [Line Items] | ||
Tax assessment period, beginning date | Jun. 1, 2005 | |
Tax assessment period, ending date | May 31, 2015 | |
Proposed underpaid tax, applicable interest and penalties amount | $ 1,439,452 | |
Local tax assessment, estimated probable loss | $ 391,000 |
Litigation - Additional Informa
Litigation - Additional Information (Details) - USD ($) $ in Thousands | Nov. 02, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Loss Contingencies [Line Items] | |||
Redemption of Series B preferred stock at face value plus accrued dividends | $ 165,581 | $ 155,848 | |
Series B Preferred Stock Litigation | |||
Loss Contingencies [Line Items] | |||
Claiming percentage of litigation | 94.16% | ||
Loss contingency, description of damages sought | The complaint requests relief including, among other things, an order interpreting and enforcing the Certificate of Designations, preventing us from making any additional payments on the Notes and requiring us to redeem the Series B preferred stock at face value plus accrued dividends (or approximately $165.6 million as of December 31, 2017), as well as unspecified money damages and a declaration that Section 10.4 of the Charter is invalid. | ||
Redemption of Series B preferred stock at face value plus accrued dividends | $ 165,600 | ||
Gutierrez-Ortiz Lawsuit | |||
Loss Contingencies [Line Items] | |||
Damages sought value | $ 3,500 |
Fair Value Measurement Disclo77
Fair Value Measurement Disclosures - Estimated Fair Values of Financial Instruments (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Carrying Amount | Significant other observable inputs (Level 2) | 12.5% Senior Secured Notes | ||
Estimated fair values of financial instruments | ||
12.5% senior secured notes | $ 260.3 | $ 275 |
Carrying Amount | Significant unobservable inputs (Level 3) | ||
Estimated fair values of financial instruments | ||
Promissory note payable, included in other long- term debt | 4.6 | |
Fair Value | Significant other observable inputs (Level 2) | 12.5% Senior Secured Notes | ||
Estimated fair values of financial instruments | ||
12.5% senior secured notes | 269.1 | 275.5 |
Fair Value | Significant unobservable inputs (Level 3) | ||
Estimated fair values of financial instruments | ||
Promissory note payable, included in other long- term debt | 4.7 | |
Series B Preferred Stock | Carrying Amount | Significant unobservable inputs (Level 3) | ||
Estimated fair values of financial instruments | ||
10 3/4% Series B cumulative exchangeable redeemable preferred stock | 165.6 | 155.8 |
Series B Preferred Stock | Fair Value | Significant unobservable inputs (Level 3) | ||
Estimated fair values of financial instruments | ||
10 3/4% Series B cumulative exchangeable redeemable preferred stock | $ 38.1 | $ 60.5 |
Fair Value Measurement Disclo78
Fair Value Measurement Disclosures - Additional Information (Details) - 12.5% Senior Secured Notes Due 2017 | May 08, 2018 | Dec. 31, 2017 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Notes trading percentage | 103.38% | |
Subsequent Event | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Notes trading percentage | 104.17% |
Segment Data - Summary of Opera
Segment Data - Summary of Operating Segments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Net revenue: | ||
Net revenue | $ 134,709 | $ 144,619 |
Engineering and programming expenses: | ||
Engineering and programming expenses | 30,474 | 31,112 |
Selling, general and administrative expenses: | ||
Selling, general and administrative expenses | 58,826 | 56,106 |
Corporate expenses | 10,403 | 10,588 |
Depreciation and amortization: | ||
Depreciation and amortization | 4,349 | 4,692 |
Gain on the disposal of assets, net: | ||
Gain on the disposal of assets, net | (15,894) | (11) |
Recapitalization costs: | ||
Recapitalization costs | 6,021 | |
Other operating gains: | ||
Other operating gains | (37) | |
Other operating income: | ||
Other operating income | (3) | |
Operating income (loss): | ||
Operating income (loss) | 40,533 | 42,169 |
Capital expenditures: | ||
Capital expenditures | 1,504 | 2,202 |
Assets | ||
Total Assets | 435,904 | 449,275 |
Operating Segments | Radio | ||
Net revenue: | ||
Net revenue | 119,493 | 129,544 |
Engineering and programming expenses: | ||
Engineering and programming expenses | 23,542 | 23,514 |
Selling, general and administrative expenses: | ||
Selling, general and administrative expenses | 53,108 | 49,418 |
Depreciation and amortization: | ||
Depreciation and amortization | 1,834 | 1,905 |
Gain on the disposal of assets, net: | ||
Gain on the disposal of assets, net | (12,558) | (11) |
Operating income (loss): | ||
Operating income (loss) | 53,567 | 54,718 |
Capital expenditures: | ||
Capital expenditures | 1,134 | 1,421 |
Assets | ||
Total Assets | 378,472 | 391,817 |
Operating Segments | Television | ||
Net revenue: | ||
Net revenue | 15,216 | 15,075 |
Engineering and programming expenses: | ||
Engineering and programming expenses | 6,932 | 7,598 |
Selling, general and administrative expenses: | ||
Selling, general and administrative expenses | 5,718 | 6,688 |
Depreciation and amortization: | ||
Depreciation and amortization | 2,218 | 2,378 |
Gain on the disposal of assets, net: | ||
Gain on the disposal of assets, net | (3,319) | |
Operating income (loss): | ||
Operating income (loss) | 3,667 | (1,589) |
Capital expenditures: | ||
Capital expenditures | 228 | 539 |
Assets | ||
Total Assets | 54,836 | 56,554 |
Corporate, Non-Segment | ||
Selling, general and administrative expenses: | ||
Corporate expenses | 10,403 | 10,588 |
Depreciation and amortization: | ||
Depreciation and amortization | 297 | 409 |
Gain on the disposal of assets, net: | ||
Gain on the disposal of assets, net | (17) | |
Recapitalization costs: | ||
Recapitalization costs | 6,021 | |
Other operating gains: | ||
Other operating gains | (37) | |
Other operating income: | ||
Other operating income | (3) | |
Operating income (loss): | ||
Operating income (loss) | (16,701) | (10,960) |
Capital expenditures: | ||
Capital expenditures | 142 | 242 |
Assets | ||
Total Assets | $ 2,596 | $ 904 |
Valuation and Qualifying Acco80
Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Allowance for doubtful accounts | ||
Valuation And Qualifying Accounts Disclosure [Line Items] | ||
Balance at beginning of year | $ 745 | $ 1,431 |
Charged to cost and expense | 853 | (51) |
Deductions | (69) | (635) |
Balance at end of year | 1,529 | 745 |
Valuation allowance on deferred taxes | ||
Valuation And Qualifying Accounts Disclosure [Line Items] | ||
Balance at beginning of year | 88,171 | 81,363 |
Charged to cost and expense | (25,483) | 6,723 |
Charged to other accounts | 0 | 85 |
Balance at end of year | $ 62,688 | $ 88,171 |