Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 07, 2019 | |
Entity Registrant Name | SPANISH BROADCASTING SYSTEM INC | |
Entity Central Index Key | 0000927720 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | SBSAA | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity File Number | 000-27823 | |
Entity Tax Identification Number | 13-3827791 | |
Entity Address, Address Line One | 7007 NW 77th Ave. | |
Entity Address, City or Town | Miami | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33166 | |
City Area Code | (305) | |
Local Phone Number | 441-6901 | |
Entity Interactive Data Current | Yes | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Class A common stock | ||
Entity Common Stock, Shares Outstanding | 4,241,991 | |
Class B common stock | ||
Entity Common Stock, Shares Outstanding | 2,340,353 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 18,924 | $ 22,468 |
Receivables: | ||
Trade | 32,331 | 32,769 |
Barter | 205 | 431 |
Total Receivables | 32,536 | 33,200 |
Less allowance for doubtful accounts | 949 | 1,649 |
Net receivables | 31,587 | 31,551 |
Prepaid expenses and other current assets | 4,444 | 7,480 |
Total current assets | 54,955 | 61,499 |
Property and equipment, net of accumulated depreciation of $62,268 in 2019 and $60,446 in 2018 | 23,209 | 22,414 |
FCC broadcasting licenses | 321,714 | 321,714 |
Goodwill | 32,806 | 32,806 |
Other intangible assets, net of accumulated amortization of $1,308 in 2018 | 1,239 | |
Operating lease right-of-use assets | 16,859 | |
Other assets | 5,633 | 4,640 |
Total assets | 455,176 | 444,312 |
Current liabilities: | ||
Accounts payable and accrued expenses | 18,260 | 20,370 |
Accrued interest | 1,513 | 1,513 |
Unearned revenue | 774 | 798 |
Other liabilities | 9 | |
Operating lease liabilities | 1,163 | |
12.5% senior secured notes (note 10) | 249,864 | 249,864 |
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 September 30, 2019 and December 31, 2018 and $92,067 and $84,766 of dividends payable as of September 30, 2019 and December 31, 2018, respectively (note 11) | 182,616 | 175,315 |
Total current liabilities | 454,190 | 447,869 |
Other liabilities, less current portion | 2,701 | 3,598 |
Operating lease liabilities - net of current portion | 15,958 | |
Deferred tax liabilities | 67,743 | 72,224 |
Total liabilities | 540,592 | 523,691 |
Commitments and contingencies (note 8) | ||
Stockholders’ deficit: | ||
Additional paid-in capital | 526,200 | 526,191 |
Accumulated deficit | (611,620) | (605,574) |
Total stockholders’ deficit | (85,416) | (79,379) |
Total liabilities and stockholders’ deficit | 455,176 | 444,312 |
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 September 30, 2019 and December 31, 2018 | $ 4 | $ 4 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Property and equipment, accumulated depreciation | $ 62,268 | $ 60,446 |
Other intangible assets, accumulated amortization | $ 1,308 | |
12.5% Senior Secured Notes | ||
Interest rate on Senior secured notes | 12.50% | 12.50% |
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 | $ 92,067 | $ 84,766 |
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 | 4,241,991 | 4,241,991 |
Common stock, shares outstanding | 4,241,991 | 4,241,991 |
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 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Net revenue | $ 36,261 | $ 34,038 | $ 110,547 | $ 102,724 |
Operating expenses: | ||||
Engineering and programming | 7,270 | 6,368 | 21,357 | 19,425 |
Selling, general and administrative | 15,344 | 14,444 | 49,508 | 42,458 |
Corporate expenses | 2,961 | 2,132 | 8,510 | 8,175 |
Depreciation and amortization | 899 | 910 | 2,671 | 2,906 |
Total operating expenses | 26,474 | 23,854 | 82,046 | 72,964 |
Loss (gain) loss on disposal of assets, net of disposal costs | 131 | (12,671) | 92 | (12,721) |
Recapitalization costs | 1,915 | 2,286 | 5,289 | 4,727 |
Executive severance expenses | 1,844 | |||
Impairment charges | 483 | |||
Other operating loss (income) | 1 | (16) | ||
Operating income | 7,740 | 20,569 | 21,292 | 37,271 |
Other expense: | ||||
Interest expense, net | (7,807) | (7,748) | (23,419) | (24,013) |
Dividends on Series B preferred stock classified as interest expense (note 11) | (2,434) | (2,434) | (7,301) | (7,301) |
(Loss) income before income tax | (2,501) | 10,387 | (9,428) | 5,957 |
Income tax (benefit) expense | (2,156) | 1,722 | (3,382) | 2,659 |
Net (loss) income | $ (345) | $ 8,665 | $ (6,046) | $ 3,298 |
Class A and B net income (loss) per common share (note 4) | ||||
Basic | $ (0.05) | $ 1.18 | $ (0.82) | $ 0.45 |
Diluted | $ (0.05) | $ 1.18 | $ (0.82) | $ 0.45 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (6,046) | $ 3,298 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||
Dividends on Series B preferred stock classified as interest expense (note 11) | 7,301 | 7,301 |
Loss (gain) on the disposal of assets, net of disposal costs | 161 | (12,541) |
Gain on insurance proceeds received for damage to equipment | (69) | (180) |
Impairment charges | 483 | |
Stock-based compensation | 9 | 39 |
Depreciation and amortization | 2,671 | 2,906 |
Net barter income | (716) | (86) |
Provision for trade doubtful accounts | 569 | 268 |
Deferred income taxes | (4,481) | 961 |
Unearned revenue | 471 | 192 |
Changes in operating assets and liabilities: | ||
Trade receivables | (844) | 2,906 |
Prepaid expenses and other current assets | 3,121 | (1,809) |
Other assets | (993) | (304) |
Accounts payable and accrued expenses | (1,464) | 473 |
Accrued interest | (304) | |
Other liabilities | 148 | 164 |
Net cash (used in) provided by operating activities | (162) | 3,767 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (3,251) | (1,746) |
Net payments towards FCC repack assets | (201) | |
Proceeds from the sale of property and equipment | 1 | 12,950 |
Insurance proceeds received for damage to equipment | 69 | 297 |
Net cash (used in) provided by investing activities | (3,382) | 11,501 |
Cash flows from financing activities: | ||
Net cash used in financing activities | (10,410) | |
Net (decrease) increase in cash and cash equivalents | (3,544) | 4,858 |
Cash and cash equivalents at beginning of period | 22,468 | 16,141 |
Cash and cash equivalents at end of period | 18,924 | 20,999 |
Supplemental cash flows information: | ||
Interest paid | 23,434 | 24,336 |
Income tax paid | $ 2,113 | 1,197 |
12.5% Senior Secured Notes | ||
Cash flows from financing activities: | ||
Paydown of 12.5% senior secured notes | $ (10,410) |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | 1. Basis of Presentation The unaudited condensed consolidated financial statements include the accounts of Spanish Broadcasting System, Inc. and its subsidiaries (the Company, we, us, our or SBS). All intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements as of September 30, 2019 and December 31, 2018 and for the three- and nine-month periods ended September 30, 2019 and 2018 have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. They do not include all information and notes required by U.S. GAAP for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with our consolidated financial statements as of, and for the fiscal year ended December 31, 2018, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 as filed by the Company on April 1, 2019 (the “Annual Report”). In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, which are all of a normal and recurring nature, necessary for a fair presentation of the results of the interim periods. Additionally, we evaluated subsequent events after the balance sheet date of September 30, 2019 through the financial statements issuance date. The results of operations for the nine-months ended September 30, 2019 are not necessarily indicative of the results for the entire year ending December 31, 2019, or for any other future interim or annual periods. 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. As of September 30, 2019 and December 31, 2018, 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 the extent of the funds legally available. The Company is currently involved in litigation with some holders of the Series B preferred stock. See Note 8 elsewhere in these Notes to the Unaudited Condensed Consolidated Financial Statements for additional detail regarding the Series B preferred stock litigation. As discussed in Note 10, 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 $1.9 million and $5.3 million, respectively, for the three- and nine-months ended September 30, 2019 of recapitalization costs, primarily due to professional fees and costs directly related to our recapitalization efforts. Also included in these amounts are the legal and financial advisory fees incurred by the holders of the Notes. The Company used $0.2 million of net cash from operating activities during the nine-month period ended September 30, 2019, management has evaluated its cash requirements for the next twelve-month period after the date of the filing of this quarterly report on Form 10-Q and determined that it anticipates generating sufficient cash flows, together with cash on hand, to meet its obligations regarding ordinary course operating activities. 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 repay our Notes and 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. Changes in Accounting Policies – Leases In February 2016, the FASB issued ASU No. 2016-02 Leases (Topic 842) Codification Improvements to Topic 842, Leases Leases (Topic 842) – Targeted improvements Recently Issued Accounting Pronouncements In March 2019, the FASB issued ASU No. 2019-02, Entertainment—Films—Other Assets—Film Costs (Subtopic 926-20) and Entertainment—Broadcasters—Intangibles—Goodwill and Other (Subtopic 920-350): Improvements to Accounting for Costs of Films and License Agreements for Program Materials In August 2018, the FASB issued ASU No. 2018-15 Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) Customers Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, In August 2018, the FASB issued ASU No. 2018-13 Fair Value Measurement (Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, In June 2018, the FASB issued ASU No. 2018-07 Compensation—Stock Compensation (Topic 718) Improvements to Nonemployee Share-Based Payment Accounting, In June 2016, the FASB issued ASU No. 2016-13 Financial Instruments—Credit Losses (Topic 326)—Measurement of Credit Losses on Financial Instruments |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | 2. Revenue In accordance with ASC 606, revenue is recognized when a customer obtains control of promised services. The amount of revenue recognized and reported reflects the consideration to which the Company expects to be entitled to receive in exchange for these services and entitled under the contract. Substantially all deferred revenue is recognized within twelve months of the payment date. To achieve this core principle, the Company applies the following five steps: 1) Identify the contract with a customer, 2) Identify the performance obligations in the contract, 3) Determine the transaction price, 4) Allocate the transaction price to performance obligations in the contract, and 5) Recognize revenue when or as the Company satisfies a performance obligation. Disaggregation of Revenue The following table summarizes revenue from contracts with customers for the three- and nine-months ended September 30, 2019 and 2018 (in thousands): Three-Months Ended Nine-Months Ended September 30, September 30, 2019 2018 2019 2018 Local, national, digital and network $ 37,932 $ 35,870 $ 107,407 $ 101,825 Special events 444 53 8,158 6,766 Barter 1,965 1,770 5,945 4,042 Other 1,329 1,594 4,484 5,068 Gross revenue 41,670 39,287 125,994 117,701 Less: Agency commissions and other 5,409 5,249 15,447 14,977 Net revenue $ 36,261 $ 34,038 $ 110,547 $ 102,724 Nature of Products and Services (a) Local, national, digital and network advertising Local and digital revenues generally consist of advertising airtime sold in a station’s local market, the Company’s La Musica application or its websites either directly to the advertiser or through an advertiser’s agency. Local revenue includes local spot sales, integrated sales, sponsorship sales and paid-programming (or infomercials). National revenue generally consists of advertising airtime sold to agencies purchasing advertising for multiple markets. National sales are generally facilitated by an outside national representation firm, which serves as an agent in these transactions. Revenues from national advertisers are presented as net of agency commissions as this is the amount that the Company expects to be entitled to receive in exchange for these services and entitled to under the contract. Network revenue generally consists of advertising airtime sold on the AIRE Radio Networks platform by network sales staff. A contract for local, national, digital and network advertising exists only at the time commercial substance is present. For each contract, the Company considers the promise to air or display advertisements, each of which is distinct, to be the identified performance obligation. The price as specified on a customer purchase order is considered the standalone selling price as it is an observable input which depicts the price as if sold to a similar customer in similar circumstances. Revenue is recognized when control is transferred to the customer (i.e., when the Company’s performance obligation is satisfied), which typically occurs as an advertisement airs or appears. (b) Special events Special events revenue is generated from ticket sales, as well as through profit-sharing arrangements for producing or co-producing live concerts and events promoted by radio and television stations. In addition to ticket sales, the Company enters into profit-sharing arrangements to produce or co-produce live concerts and events with partners which may also purchase various production services from the company. These contracts include multiple promises that the Company evaluates to determine if the promises are separate performance obligations. Once the Company determines the performance obligations and the transaction price, including estimating the amount of variable consideration, the Company then allocates the transaction price to each performance obligation in the contract based on a relative stand-alone selling price method or using the variable consideration allocation exception if the required criteria are met. The corresponding revenues are recognized as the related performance obligations are satisfied, which may occur over time (i.e. term of agreement) or at a point in time (i.e. event completion). In order to determine if revenue should be reported gross as principal or net as agent, the Company considers indicators such as if it is the party primarily responsible for fulfillment, has inventory risk, and has discretion in establishing price to determine control. When management determines it controls an event, it is acting as the principal and records revenue gross. When management determines it does not control an event, it is acting as an agent and records revenue net. (c) Barter advertising Barter sales agreements are used to reduce cash paid for operating costs and expenses by exchanging advertising airtime for goods or services. A contract for barter advertising exists only at the time commercial substance is present. For each contract, the Company considers the promise to air or display advertisements, each of which is distinct, to be the identified performance obligation. The price as specified on a counterparty’s purchase order is considered the standalone selling price as it is an observable input which depicts the price as if sold to a similar customer in similar circumstances. Revenue is recognized when control is transferred to the customer (i.e., when the Company’s performance obligation is satisfied), which typically occurs as an advertisement airs or displays. For the three-months ended September 30, 2019 and 2018, barter revenue of $2.0 million and $1.8 million, respectively, was offset by barter expense of $1.8 million and $1.9 million, respectively. For the nine-months ended September 30, 2019 and 2018, barter revenue of $5.9 million and $4.0 million, respectively, was offset by barter expense of $5.7 million and $3.9 million, respectively. (d) Other revenue Other revenue consists of syndication revenue, subscriber revenue and other revenue. Syndication revenue is recognized from licensing various MegaTV content and is payable on a usage-based model. Subscriber revenue is payable in a per subscriber form from cable and satellite providers. Other revenue consists primarily of renting available tower space or sub-channels. The Company considers signed license or subscriber agreements to be the contract with a customer for the sale of syndicated or subscriber related content. For each contract, the Company considers making content available to the customer to be the identified performance obligation. The price as specified on a counterparty’s agreement, which is generally stated on a per user basis, is considered the standalone selling price as it is an observable input which depicts the price as if sold to a similar customer in similar circumstances. Revenue is recognized when control is transferred to the customer (i.e., when the Company’s performance obligation is satisfied), which typically occurs on a month-to-month basis. Other revenues related to renting tower space are recognized in accordance with ASC 842 - Leases. Significant Judgments As part of its consideration of the existence of contracts, the Company evaluates certain factors including the customer’s ability to pay (or credit risk). Advertising contracts are for one year or less. In determining the transaction price the Company evaluates whether the price is subject to refund or adjustment to determine the net consideration to which the Company expects to be entitled. In determining whether control has transferred, the Company considers if there is a present right to payment and legal title, along with risks and rewards of ownership having transferred to the customer. Contract Balances During the three-months ended September 30, 2019 there were no local, national, digital and network revenue recognized that were included in the unearned revenue balances at the beginning of the period and $0.3 million of local, national, digital and network revenue was recognized during the nine-months ended September 30, 2019, that was included in the unearned revenue balances at the beginning of the period. During the three-months ended September 30, 2019, there were no special events revenue recognized that were included in the unearned balances at the beginning of period and $0.1 million of special events revenue recognized during the nine-months ended September 30, 2019 that were included in the unearned balances at the beginning of period. During the three-months ended September 30, 2019 barter revenue recognized that were included in the unearned revenue balances at the beginning of the period were not significant and $0.4 million of barter revenue was recognized during the nine-months ended September 30, 2019, that was included in the unearned revenue balances at the beginning of the period. Other revenue recognized during the three- and nine-months ended September 30, 2019 that were included in unearned revenue balances at the beginning of the period were not significant. At September 30, 2019 there was $1.4 million of variable consideration in the form of agency based volume discounts accrued as contract liabilities within accrued expenses as compared to $1.0 million and $2.1 million for the quarter-ended June 30, 2019 and the year-ended December 30, 2018, respectively. Variable consideration in the form of agency based volume discounts of $0.4 million and $1.3 million were recognized and recorded as contract liabilities within accrued expenses during the three- and nine-months ended September 30, 2019, respectively. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | 3. Leases The Company has commitments under operating leases for office space and radio tower sites used in its operations. Our leases have initial lease terms that expire between 2019 and 2082, most of which include options to extend or renew the leases. Currently, we do not have finance leases. Our annual rental expenses can range from less than $3 thousand up to $0.5 million. The Company determines if an arrangement is a lease at contract inception. A lease exists when a contract conveys to the customer the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. The definition of a lease embodies two conditions: (1) there is an identified asset in the contract that is land or a depreciable asset (i.e., property, plant, and equipment), and (2) the customer has the right to control the use of the identified asset. Certain rental agreements for office space and radio towers contain non-lease components such as common area maintenance and utilities. The Company elected to apply the practical expedient that permits lessees to make an accounting policy election to account for each separate lease component of an office space and radio tower lease contract and its associated non-lease components as a single lease component. Certain rental agreements for office space and radio towers also include taxes and insurance which are not considered lease components. Consideration for office space and radio tower site leases generally includes fixed monthly payments. The lease term begins at the commencement date and is determined on that date based on the term of the lease, together with periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option. When evaluating whether the Company is reasonably certain to exercise an option to renew the lease, the Company is required to assess all relevant factors that create an economic incentive for the Company to exercise the renewal. The various discount rates are based on the Company’s incremental borrowing rate due to the rate implicit in the leases being not readily determinable. The Company’s incremental borrowing rate is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The Company used publicly available information about low-grade debt, adjusted for the effects of collateralization, to determine the various rates it would pay to finance transactions over similar time periods. The Company elected to apply a package of practical expedients that allows it not to reassess (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases, and (iii) initial direct costs for any expired or existing leases. The following table summarizes the components of lease cost for the three- and nine-months ended September 30, 2019 (in thousands): Three-Months Ended Nine-Months Ended September 30, 2019 September 30, 2019 Operating lease cost $ 1,006 $ 3,167 Sublease income (387 ) (1,460 ) Total lease cost $ 619 $ 1,707 Lease costs for the three- and nine-months ended September 30, 2018 include minimum rental payments under operating leases recognized on a straight-line basis over the term of the lease including any periods of free rent. Rental expense for operating leases during the three- and nine-months ended September 30, 2018 amounted to $1.1 million and $2.8 million, respectively. At September 30, 2019, amounts reported in the Consolidated Balance Sheet are as follows (in thousands): Nine-Months Ended Operating Leases: September 30, 2019 Operating lease right-of-use assets $ 16,859 Operating lease liabilities 1,163 Operating lease liabilities - net of current portion 15,958 Total operating lease liabilities $ 17,121 Other information Operating cash flows from operating leases $ 1,280 Right-of-use assets obtained in exchange for new lease liabilities $ 4,488 Weighted-average remaining lease term 11.4 years Weighted average discount rate 12.7% Future minimum lease payments under operating leases as of September 30, 2019 are as follows (in thousands): Year ending December 31: 2019 (excluding the nine-months ended September 30, 2019) $ 885 2020 3,067 2021 2,839 2022 2,820 2023 2,726 Thereafter 22,791 Total undiscounted lease payments $ 35,128 Less: imputed interest 18,007 Total lease liabilities $ 17,121 At December 31, 2018, future minimum lease payments under such leases are as follows (in thousands): Year ending December 31: 2019 $ 3,766 2020 2,545 2021 2,280 2022 2,249 2023 2,113 Thereafter 15,554 Total minimum lease payments $ 28,507 As of September 30, 2019, the Company has entered into an additional operating lease that has not yet commenced of approximately $5.8 million. The lease is expected to commence in 2019 and has a lease term of 15.5 years. We have agreements to sublease our radio frequencies and portions of our tower sites and buildings. Such agreements provide for payments through 2024. Future minimum rental income to be received under these agreement as of September 30, 2019 is as follows: Year ending December 31: 2019 (excluding the nine-months ended September 30, 2019) $ 349 2020 939 2021 479 2022 354 2023 140 Thereafter 17 Total undiscounted lease payments $ 2,278 |
Basic and Diluted Net (Loss) In
Basic and Diluted Net (Loss) Income Per Common Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net (Loss) Income Per Common Share | 4. Basic and Diluted Net (Loss) Income Per Common Share In calculating net (loss) income per share, the Company follows the two-class method, which distinguishes between classes of securities based on the proportionate participation rights of each security type in the Company’s undistributed net loss. The Company’s Class A common stock, Class B common stock and Series C convertible preferred stock share equally on an as-converted basis with respect to net (loss) income. Basic net (loss) income per share is computed by dividing net (loss) income applicable to stockholders by the weighted average number of shares for each period on an as-converted basis. Diluted net (loss) income per common share is computed by giving effect to common stock equivalents as if they were outstanding for the entire period. The following tables set forth the computation of basic and diluted net (loss) income available to stockholders for the three- and nine-month periods ended September 30, 2019 and 2018 (in thousands): Three-Months Ended September 30, 2019 2018 Class A Class B Series C Class A Class B Series C Basic net (loss) income per share: Numerator Allocation of undistributed (losses) earnings $ (199 ) (110 ) (36 ) $ 5,002 2,765 898 Denominator Number of shares used in per share computation (as converted) 4,242 2,340 760 4,234 2,340 760 Basic net (loss) income per share $ (0.05 ) (0.05 ) (0.05 ) $ 1.18 1.18 1.18 Diluted net (loss) income per share: Numerator Allocation of undistributed (losses) earnings $ (199 ) (110 ) (36 ) $ 5,002 2,765 898 Denominator Number of shares used in basic computation 4,242 2,340 760 4,234 2,340 760 Weighted-average impact of dilutive equity instruments — — — 9 — — Number of shares used in per share computation (as converted) 4,242 2,340 760 4,243 2,340 760 Diluted net (loss) income per share $ (0.05 ) (0.05 ) (0.05 ) $ 1.18 1.18 1.18 Common stock equivalents excluded from calculation of diluted net (loss) income per share as the effect would have been anti-dilutive: 445 — — 380 — — Nine-Months Ended September 30, 2019 2018 Class A Class B Series C Class A Class B Series C Basic net (loss) income per share: Numerator Allocation of undistributed (losses) earnings $ (3,493 ) $ (1,927 ) $ (626 ) $ 1,901 $ 1,055 $ 342 Denominator Number of shares used in per share computation (as converted) 4,242 2,340 760 4,217 2,340 760 Basic net (loss) income per share $ (0.82 ) $ (0.82 ) $ (0.82 ) $ 0.45 $ 0.45 $ 0.45 Diluted net (loss) income per share: Numerator Allocation of undistributed (losses) earnings $ (3,493 ) $ (1,927 ) $ (626 ) $ 1,901 $ 1,055 $ 342 Denominator Number of shares used in basic computation 4,242 2,340 760 4,217 2,340 760 Weighted-average impact of dilutive equity instruments — — — — — — Number of shares used in per share computation (as converted) 4,242 2,340 760 4,217 2,340 760 Diluted net (loss) income per share $ (0.82 ) $ (0.82 ) $ (0.82 ) $ 0.45 $ 0.45 $ 0.45 Common stock equivalents excluded from calculation of diluted net (loss) income per share as the effect would have been anti-dilutive: 445 — — 380 — — |
Stockholders_ Deficit
Stockholders’ Deficit | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Stockholders’ Deficit | 5. Stockholders’ Deficit The changes in stockholders' deficit for the three- and nine-month periods ended September 30, 2019 and 2018 are as follows: Three-Months Ended Nine-Months Ended September 30, September 30, 2019 2018 2019 2018 Beginning balance $ (85,073 ) $ (101,248 ) $ (79,379 ) $ (95,914 ) Net income (loss) (345 ) 8,665 (6,046 ) 3,298 Stock-based compensation 2 6 9 39 Ending balance $ (85,416 ) $ (92,577 ) $ (85,416 ) $ (92,577 ) |
Operating Segments
Operating Segments | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Operating Segments | 6. Operating Segments We have two reportable segments: radio and television. The following summary table presents separate financial data for each of our operating segments (in thousands): Three-Months Ended Nine-Months Ended September 30, September 30, 2019 2018 2019 2018 Net revenue: Radio $ 32,493 $ 30,255 $ 99,564 $ 90,785 Television 3,768 3,783 10,983 11,939 Consolidated $ 36,261 $ 34,038 $ 110,547 $ 102,724 Engineering and programming expenses: Radio $ 5,688 $ 5,303 $ 16,370 $ 16,016 Television 1,582 1,065 4,987 3,409 Consolidated $ 7,270 $ 6,368 $ 21,357 $ 19,425 Selling, general and administrative expenses: Radio $ 13,778 $ 13,191 $ 44,621 $ 37,228 Television 1,566 1,253 4,887 5,230 Consolidated $ 15,344 $ 14,444 $ 49,508 $ 42,458 Corporate expenses: $ 2,961 $ 2,132 $ 8,510 $ 8,175 Depreciation and amortization: Radio $ 400 $ 420 $ 1,174 $ 1,256 Television 447 432 1,341 1,473 Corporate 52 58 156 177 Consolidated $ 899 $ 910 $ 2,671 $ 2,906 Loss (gain) on disposal of assets, net of disposal costs: Radio $ (7 ) $ (159 ) $ (46 ) $ (171 ) Television 138 29 138 (9 ) Corporate — (12,541 ) — (12,541 ) Consolidated $ 131 $ (12,671 ) $ 92 $ (12,721 ) Recapitalization costs: Radio $ — $ — $ — $ — Television — — — — Corporate 1,915 2,286 5,289 4,727 Consolidated $ 1,915 $ 2,286 $ 5,289 $ 4,727 Executive severance expenses Radio $ — $ — $ — $ — Television — — — — Corporate — — 1,844 — Consolidated $ — $ — $ 1,844 $ — Impairment charges: Radio $ — $ — $ — $ — Television — — — 483 Corporate — — — — Consolidated $ — $ — $ — $ 483 Other operating loss (income): Radio $ 1 $ — $ (16 ) $ — Television — — — — Corporate — — — — Consolidated $ 1 $ — $ (16 ) $ — Operating income: Radio $ 12,633 $ 11,500 $ 37,461 $ 36,456 Television 35 1,004 (370 ) 1,353 Corporate (4,928 ) 8,065 (15,799 ) (538 ) Consolidated $ 7,740 $ 20,569 $ 21,292 $ 37,271 Three-Months Ended Nine-Months Ended September 30, September 30, 2019 2018 2019 2018 Capital expenditures: Radio $ 802 $ 588 $ 1,828 $ 1,461 Television 187 76 986 150 Corporate 136 101 437 135 Consolidated $ 1,125 $ 765 $ 3,251 $ 1,746 September 30, December 31, 2019 2018 Total Assets: Radio $ 396,261 $ 386,303 Television 56,573 55,052 Corporate 2,342 2,957 Consolidated $ 455,176 $ 444,312 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. Income Taxes We are calculating our effective income tax rate using an estimated annual effective tax rate with the exception of jurisdictions where losses have a full valuation allowance against them and jurisdictions with indefinite lived deferred tax liabilities for which their deferred tax assets are also subject to a full valuation allowance. In assessing the realizability of the deferred tax assets, management considers whether it is more likely than not that some portion or the entire deferred tax assets will not be realized. The ultimate realization of the 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. During the third quarter 2019, the Company recorded an out of period adjustment releasing the valuation allowance related to our Florida NOL deferred tax asset. The $0.5 million adjustment reduces our deferred tax liability through the release of the valuation allowance and increases our income tax benefit. We determined, through the review of quantitative and qualitative factors, that the adjustment was not material to the current or any prior periods. Due to the continued pre-tax operating losses reported through the third quarter of 2019, management has not changed its valuation allowance position as of September 30, 2019 from December 31, 2018. Our income tax expense differs from the statutory federal tax rate of 21% and related statutory state tax rates primarily due to the winding down of tax amortization on certain indefinite-lived intangible assets that do not have any valuation allowance, offset by the deferred tax asset continued creation of disallowed interest as a result of tax laws changes from the Tax Legislation, and other changes in the valuation allowance. 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 2015 through 2018. The tax years that remain subject to assessment of additional liabilities by the Puerto Rico tax authority are 2012 through 2018. Based on our evaluation, we have concluded that there are no material uncertain tax positions requiring recognition in our consolidated financial statements as of September 30, 2019 and December 31, 2018. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. Commitments and Contingencies We are subject to certain legal proceedings and claims that have arisen in the ordinary course of business and have not been fully adjudicated. In our opinion, we do not have a potential liability related to any current legal proceedings and claims that would individually or in the aggregate have a material adverse effect on our financial condition or operating results. However, the results of legal proceedings cannot be predicted with certainty. Should we fail to prevail in any of these legal matters or should all of these legal matters be resolved against us in the same reporting period, the operating results of a particular reporting period could be materially adversely affected. 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 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 $1.4 million 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 $0.4 million, 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. |
Fair Value Measurement Disclosu
Fair Value Measurement Disclosures | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement Disclosures | 9. 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. 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): September 30, 2019 December 31, 2018 Fair Value Carrying Fair Carrying Fair Description Hierarchy Amount Value Amount Value 12.5% Senior Secured Notes due 2017 (note 10) Level 2 $ 249.9 262.6 $ 249.9 258.6 10 3 4 redeemable preferred stock (note 11) Level 3 182.6 51.9 175.3 37.8 |
12.5% Senior Secured Notes due
12.5% Senior Secured Notes due 2017 | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
12.5% Senior Secured Notes due 2017 | 10. 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). On May 8, 2017, the Company, and certain of its subsidiaries entered into a Forbearance Agreement with certain Noteholders, owning more than 75% of 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. At September 30, 2019, there was $249.9 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. See Note 1 elsewhere in these financial statements for additional detail regarding our continued recapitalization and restructuring efforts and our failure to repay the Notes at maturity. 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 most recent twelve-month period ending June 30, 2019. 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 of the Notes to the Unaudited Condensed 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. 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; • enter 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. |
10 3_4% Series B Cumulative Exc
10 3/4% Series B Cumulative Exchangeable Redeemable Preferred Stock | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
10 3/4% Series B Cumulative Exchangeable Redeemable Preferred Stock | 11. 10 3 Voting Rights Triggering Event 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 or 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 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 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 Voting 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 We are currently in litigation with persons claiming to own 94.16% of our Series B preferred stock as described above in Note 8, Commitments and Contingencies 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 potential 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 the purported 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. Such suspension of rights was meant from the outset to be a temporary and reasonable measure, intended to elicit the information necessary to determine which Series B preferred stock sales were valid under the Charter. The Company pledged to restore the suspended rights to each shareholder that demonstrated it was neither an alien nor a representative of an alien or upon a showing that its ownership of Series B preferred stock (including stakes held by any non-U.S. entities) complies with Section 310(b) of the Communications Act and the Charter. 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 (the “Petition”) with respect to the potential excess foreign ownership. The Company filed the Petition not because it had concluded that an affirmative FCC public interest ruling regarding recognized foreign ownership was required, but at the suggestion of FCC staff to ensure the Company had prophylactically availed itself of the “safe harbor” protections of Section 1.5004(f)(4) of the FCC’s Rules, in the event such a declaratory ruling ultimately proved necessary. This suggestion came after the Company had previously notified the FCC of a possible Section 310(b) foreign ownership issue triggered by the filing of the Preferred Holder Complaint. 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 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 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 reviewed this information in order to determine whether it was complete, true and correct, as required by the FCC’s rules, and requested some additional information from the Series B preferred stockholders. The purported Series B preferred stockholders did not provide any additional information regarding the timing of their alleged purchases of Series B preferred stock until December 5, 2018. On that date, such stockholders filed responses to the Company’s interrogatories in the Series B Preferred Stock Litigation. These responses contained a significant portion of the pending information that was originally solicited on November 2017 and January 2018, respectively. The new information mainly consisted of the trading information in the Series B preferred stock, including dates of acquisition, the number of shares purportedly acquired in each transaction and, to the extent available, seller information. On December 6, 2018, the Company received a letter from the Enforcement Bureau of the Investigations and Hearings Division (the “Bureau”) of the FCC advising the Company that it was under investigation for potential violations of Section 310(b) of the Communications Act related to excess foreign ownership of broadcast stations. As part of its investigation, the Bureau requested of the Company detailed information and supporting documentation about the identities of the Series B preferred stockholders, the potential for a foreign ownership violation, the dates that the Company became aware of the situation, and the steps it took to address the situation. The Company timely filed its response to the Bureau’s letter of inquiry on February 8, 2019. As of the date of this filing, we have not received a response or any additional inquiries from the Bureau regarding this investigation. Previously, on April 27, 2018, the Company had announced publicly that the purported foreign ownership excess did not exist. On this date, the Company issued Notices of Ineffective Purported Purchase of Series B Preferred Stock (the “Notices”) to each of West Face Long Term Opportunities Global Master L.P., Stornoway Recovery Fund LP, Stonehill Master Fund Ltd. and Ravensource Fund (collectively, the “Prohibited Foreign Purchasers”) notifying these investors that their claimed purchases of Series B preferred stock would be treated as void and non-existent because these investors attempted to acquire these shares in transactions that, if given effect, would have violated the SBS Charter. In the Notices, the Company invited these investors to demonstrate facts to the contrary supported by relevant documentation. As of the date of these financial statements, these investors have not provided the Company with any facts or provided any documentation that would result in a different legal conclusion. As stated above, the Company takes the position that certain of the purported non-U.S. preferred stockholders do not currently hold valid equity interests in the Company, with the result that there is no foreign ownership excess. For this reason, the Company did not claim in its Petition or any supplement thereto that it would be in the public interest for the relevant entities to hold aggregate interests exceeding the 25 percent foreign ownership benchmark. As stated in the original Petition, the Company then recognized that its showing “is not yet complete with respect to the FCC’s ability to render a decision regarding the … public interest inquiry.” Because the share transfers that gave rise to some or all of the Series B preferred stock ownership claims of several purported non-U.S. preferred stockholders are invalid, there would be no need for such a showing unless a court first determines that the suspect transactions must be honored. Accordingly, both the Company and the purported Series B preferred stockholders have suggested that the FCC should consider simply holding the Petition in abeyance until the Series B Preferred Stock Litigation is resolved. On July 9, 2019, counsel to the Prohibited Foreign Purchasers sent a letter to the FCC requesting that it review the Company’s equity as mandated by seminal FCC precedent and conclude that the holders of the Series B preferred stock, including the Prohibited Foreign Purchasers, did not and do not cause the Company to exceed the 25 percent foreign ownership benchmark. According to the letter, the Prohibited Foreign Purchasers disagree with the Company’s calculations of its foreign equity ownership. The Company disagreed with the contents of this letter and on August 6, 2019 filed a timely response with the FCC detailing its objection to the Prohibited Foreign Purchasers position and again requesting that the FCC defer the issue to the pending Chancery Court proceeding. On August 26, 2019, counsel to the Prohibited Foreign Purchasers responded to our August 6 letter, largely reiterating their claims in the July 9 letter. The Company does not plan to respond to the August 26 letter and one is not required. As of the date of these financial statements, the FCC has not communicated with the Company regarding these letters. As of the date of these financial statements, the Company believes that 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 ¾% 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 Indenture governing our Notes As of September 30, 2019, the aggregate cumulative unpaid dividends on the outstanding shares of the Series B preferred stock was approximately $92.1 million, which is accrued on our condensed consolidated balance sheet as 10 ¾% Series B cumulative exchangeable redeemable preferred stock. Accounting Treatment of the Preferred Stock 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. For the three-months ended September 30, 2019 and 2018, we recorded $2.4 million as dividends on Series B preferred stock classified as interest expense and $7.3 million for the nine-months ended September 30, 2019 and 2018. |
Retirement of Senior Executive
Retirement of Senior Executive Vice President and Chief Financial Officer | 9 Months Ended |
Sep. 30, 2019 | |
Compensation And Retirement Disclosure [Abstract] | |
Retirement of Senior Executive Vice President and Chief Financial Officer | 12. Retirement of Senior Executive Vice President and Chief Financial Officer On May 31, 2019, the Company entered into a Separation Agreement (the “Separation Agreement”) with our former Senior Executive Vice President and Chief Financial Officer (“SEVP/CFO”). Pursuant to the Separation Agreement, effective May 31, 2019 (the “Separation Date”), the former SEVP/CFO resigned as an officer and employee of the Company, but will continue to serve as a director of the Company. Under the Separation Agreement, the former SEVP/CFO received his earned base salary and expenses through the Separation Date, plus $1,750,000 in cash severance. The cash severance amount represents two times his base salary (that he was entitled to receive under his employment agreement with the Company plus an additional $700,000, and the cash severance will be paid out over a 12 month period. The former SEVP/CFO’s vested stock options will also remain exercisable following the Separation Date, until the expiration of the applicable option term. The former SEVP/CFO is also entitled to continue to participate in the Company’s group health plan for six months following the Separation Date at the Company’s expense. Thereafter, the former SEVP/CFO may elect COBRA continuation coverage (subject to eligibility and timely election). If he elects such coverage, the Company will pay him a cash lump sum amount equivalent to 18 months of monthly COBRA premiums for the coverage elected. For the nine-months ended September 30, 2019, we expensed $1.8 million as executive severance expenses which includes severance pay, future benefits and other expenses. As of September 30, 2019, within accounts payable and accrued expenses, there is approximately $1.2 million that remains accrued related to the executive severance expense. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Changes in Accounting Policies – Leases | Changes in Accounting Policies – Leases In February 2016, the FASB issued ASU No. 2016-02 Leases (Topic 842) Codification Improvements to Topic 842, Leases Leases (Topic 842) – Targeted improvements |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In March 2019, the FASB issued ASU No. 2019-02, Entertainment—Films—Other Assets—Film Costs (Subtopic 926-20) and Entertainment—Broadcasters—Intangibles—Goodwill and Other (Subtopic 920-350): Improvements to Accounting for Costs of Films and License Agreements for Program Materials In August 2018, the FASB issued ASU No. 2018-15 Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) Customers Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, In August 2018, the FASB issued ASU No. 2018-13 Fair Value Measurement (Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, In June 2018, the FASB issued ASU No. 2018-07 Compensation—Stock Compensation (Topic 718) Improvements to Nonemployee Share-Based Payment Accounting, In June 2016, the FASB issued ASU No. 2016-13 Financial Instruments—Credit Losses (Topic 326)—Measurement of Credit Losses on Financial Instruments |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Revenue from Contracts with Customers | The following table summarizes revenue from contracts with customers for the three- and nine-months ended September 30, 2019 and 2018 (in thousands): Three-Months Ended Nine-Months Ended September 30, September 30, 2019 2018 2019 2018 Local, national, digital and network $ 37,932 $ 35,870 $ 107,407 $ 101,825 Special events 444 53 8,158 6,766 Barter 1,965 1,770 5,945 4,042 Other 1,329 1,594 4,484 5,068 Gross revenue 41,670 39,287 125,994 117,701 Less: Agency commissions and other 5,409 5,249 15,447 14,977 Net revenue $ 36,261 $ 34,038 $ 110,547 $ 102,724 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Summary of Components of Lease Cost | The following table summarizes the components of lease cost for the three- and nine-months ended September 30, 2019 (in thousands): Three-Months Ended Nine-Months Ended September 30, 2019 September 30, 2019 Operating lease cost $ 1,006 $ 3,167 Sublease income (387 ) (1,460 ) Total lease cost $ 619 $ 1,707 |
Operating Leases, Summary of Amounts Reported in Consolidated Balance Sheet | At September 30, 2019, amounts reported in the Consolidated Balance Sheet are as follows (in thousands): Nine-Months Ended Operating Leases: September 30, 2019 Operating lease right-of-use assets $ 16,859 Operating lease liabilities 1,163 Operating lease liabilities - net of current portion 15,958 Total operating lease liabilities $ 17,121 Other information Operating cash flows from operating leases $ 1,280 Right-of-use assets obtained in exchange for new lease liabilities $ 4,488 Weighted-average remaining lease term 11.4 years Weighted average discount rate 12.7% |
Summary of Future Minimum Lease Payments under Operating Leases | Future minimum lease payments under operating leases as of September 30, 2019 are as follows (in thousands): Year ending December 31: 2019 (excluding the nine-months ended September 30, 2019) $ 885 2020 3,067 2021 2,839 2022 2,820 2023 2,726 Thereafter 22,791 Total undiscounted lease payments $ 35,128 Less: imputed interest 18,007 Total lease liabilities $ 17,121 |
Summary of Future Minimum Lease Payments | At December 31, 2018, future minimum lease payments under such leases are as follows (in thousands): Year ending December 31: 2019 $ 3,766 2020 2,545 2021 2,280 2022 2,249 2023 2,113 Thereafter 15,554 Total minimum lease payments $ 28,507 |
Summary of Future Minimum Rental Income through Sublease | Future minimum rental income to be received under these agreement as of September 30, 2019 is as follows: Year ending December 31: 2019 (excluding the nine-months ended September 30, 2019) $ 349 2020 939 2021 479 2022 354 2023 140 Thereafter 17 Total undiscounted lease payments $ 2,278 |
Basic and Diluted Net (Loss) _2
Basic and Diluted Net (Loss) Income Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Summary of Computation of Basic and Diluted Net (Loss) Income Available to Stockholders | The following tables set forth the computation of basic and diluted net (loss) income available to stockholders for the three- and nine-month periods ended September 30, 2019 and 2018 (in thousands): Three-Months Ended September 30, 2019 2018 Class A Class B Series C Class A Class B Series C Basic net (loss) income per share: Numerator Allocation of undistributed (losses) earnings $ (199 ) (110 ) (36 ) $ 5,002 2,765 898 Denominator Number of shares used in per share computation (as converted) 4,242 2,340 760 4,234 2,340 760 Basic net (loss) income per share $ (0.05 ) (0.05 ) (0.05 ) $ 1.18 1.18 1.18 Diluted net (loss) income per share: Numerator Allocation of undistributed (losses) earnings $ (199 ) (110 ) (36 ) $ 5,002 2,765 898 Denominator Number of shares used in basic computation 4,242 2,340 760 4,234 2,340 760 Weighted-average impact of dilutive equity instruments — — — 9 — — Number of shares used in per share computation (as converted) 4,242 2,340 760 4,243 2,340 760 Diluted net (loss) income per share $ (0.05 ) (0.05 ) (0.05 ) $ 1.18 1.18 1.18 Common stock equivalents excluded from calculation of diluted net (loss) income per share as the effect would have been anti-dilutive: 445 — — 380 — — Nine-Months Ended September 30, 2019 2018 Class A Class B Series C Class A Class B Series C Basic net (loss) income per share: Numerator Allocation of undistributed (losses) earnings $ (3,493 ) $ (1,927 ) $ (626 ) $ 1,901 $ 1,055 $ 342 Denominator Number of shares used in per share computation (as converted) 4,242 2,340 760 4,217 2,340 760 Basic net (loss) income per share $ (0.82 ) $ (0.82 ) $ (0.82 ) $ 0.45 $ 0.45 $ 0.45 Diluted net (loss) income per share: Numerator Allocation of undistributed (losses) earnings $ (3,493 ) $ (1,927 ) $ (626 ) $ 1,901 $ 1,055 $ 342 Denominator Number of shares used in basic computation 4,242 2,340 760 4,217 2,340 760 Weighted-average impact of dilutive equity instruments — — — — — — Number of shares used in per share computation (as converted) 4,242 2,340 760 4,217 2,340 760 Diluted net (loss) income per share $ (0.82 ) $ (0.82 ) $ (0.82 ) $ 0.45 $ 0.45 $ 0.45 Common stock equivalents excluded from calculation of diluted net (loss) income per share as the effect would have been anti-dilutive: 445 — — 380 — — |
Stockholders_ Deficit (Tables)
Stockholders’ Deficit (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Schedule of Changes in Stockholders' Deficit | The changes in stockholders' deficit for the three- and nine-month periods ended September 30, 2019 and 2018 are as follows: Three-Months Ended Nine-Months Ended September 30, September 30, 2019 2018 2019 2018 Beginning balance $ (85,073 ) $ (101,248 ) $ (79,379 ) $ (95,914 ) Net income (loss) (345 ) 8,665 (6,046 ) 3,298 Stock-based compensation 2 6 9 39 Ending balance $ (85,416 ) $ (92,577 ) $ (85,416 ) $ (92,577 ) |
Operating Segments (Tables)
Operating Segments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Summary of Operating Segments | The following summary table presents separate financial data for each of our operating segments (in thousands): Three-Months Ended Nine-Months Ended September 30, September 30, 2019 2018 2019 2018 Net revenue: Radio $ 32,493 $ 30,255 $ 99,564 $ 90,785 Television 3,768 3,783 10,983 11,939 Consolidated $ 36,261 $ 34,038 $ 110,547 $ 102,724 Engineering and programming expenses: Radio $ 5,688 $ 5,303 $ 16,370 $ 16,016 Television 1,582 1,065 4,987 3,409 Consolidated $ 7,270 $ 6,368 $ 21,357 $ 19,425 Selling, general and administrative expenses: Radio $ 13,778 $ 13,191 $ 44,621 $ 37,228 Television 1,566 1,253 4,887 5,230 Consolidated $ 15,344 $ 14,444 $ 49,508 $ 42,458 Corporate expenses: $ 2,961 $ 2,132 $ 8,510 $ 8,175 Depreciation and amortization: Radio $ 400 $ 420 $ 1,174 $ 1,256 Television 447 432 1,341 1,473 Corporate 52 58 156 177 Consolidated $ 899 $ 910 $ 2,671 $ 2,906 Loss (gain) on disposal of assets, net of disposal costs: Radio $ (7 ) $ (159 ) $ (46 ) $ (171 ) Television 138 29 138 (9 ) Corporate — (12,541 ) — (12,541 ) Consolidated $ 131 $ (12,671 ) $ 92 $ (12,721 ) Recapitalization costs: Radio $ — $ — $ — $ — Television — — — — Corporate 1,915 2,286 5,289 4,727 Consolidated $ 1,915 $ 2,286 $ 5,289 $ 4,727 Executive severance expenses Radio $ — $ — $ — $ — Television — — — — Corporate — — 1,844 — Consolidated $ — $ — $ 1,844 $ — Impairment charges: Radio $ — $ — $ — $ — Television — — — 483 Corporate — — — — Consolidated $ — $ — $ — $ 483 Other operating loss (income): Radio $ 1 $ — $ (16 ) $ — Television — — — — Corporate — — — — Consolidated $ 1 $ — $ (16 ) $ — Operating income: Radio $ 12,633 $ 11,500 $ 37,461 $ 36,456 Television 35 1,004 (370 ) 1,353 Corporate (4,928 ) 8,065 (15,799 ) (538 ) Consolidated $ 7,740 $ 20,569 $ 21,292 $ 37,271 Three-Months Ended Nine-Months Ended September 30, September 30, 2019 2018 2019 2018 Capital expenditures: Radio $ 802 $ 588 $ 1,828 $ 1,461 Television 187 76 986 150 Corporate 136 101 437 135 Consolidated $ 1,125 $ 765 $ 3,251 $ 1,746 September 30, December 31, 2019 2018 Total Assets: Radio $ 396,261 $ 386,303 Television 56,573 55,052 Corporate 2,342 2,957 Consolidated $ 455,176 $ 444,312 |
Fair Value Measurement Disclo_2
Fair Value Measurement Disclosures (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Estimated Fair Values of Financial Instruments | The estimated fair values of our financial instruments are as follows (in millions): September 30, 2019 December 31, 2018 Fair Value Carrying Fair Carrying Fair Description Hierarchy Amount Value Amount Value 12.5% Senior Secured Notes due 2017 (note 10) Level 2 $ 249.9 262.6 $ 249.9 258.6 10 3 4 redeemable preferred stock (note 11) Level 3 182.6 51.9 175.3 37.8 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Jan. 01, 2019 | |
Basis Of Presentation [Line Items] | ||||||
Recapitalization costs | $ 1,915 | $ 2,286 | $ 5,289 | $ 4,727 | ||
Net cash from operating activities | (162) | $ 3,767 | ||||
Operating lease right-of-use assets | 16,859 | 16,859 | ||||
Operating lease, liability | $ 17,121 | $ 17,121 | ||||
ASU 842 | ||||||
Basis Of Presentation [Line Items] | ||||||
Operating lease right-of-use assets | $ 13,900 | |||||
Operating lease, liability | $ 13,900 | |||||
Series B Preferred Stock | ||||||
Basis Of Presentation [Line Items] | ||||||
Cumulative exchangeable redeemable preferred stock dividend rate | 10.75% | 10.75% | ||||
12.5% Senior Secured Notes due 2017 | ||||||
Basis Of Presentation [Line Items] | ||||||
Interest rate on Senior secured notes | 12.50% | 12.50% | 12.50% | |||
Senior secured notes, maturity date | Apr. 15, 2017 |
Revenue - Summary of Revenue fr
Revenue - Summary of Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation Of Revenue [Line Items] | ||||
Gross revenue | $ 41,670 | $ 39,287 | $ 125,994 | $ 117,701 |
Less: Agency commissions and other | 5,409 | 5,249 | 15,447 | 14,977 |
Net revenue | 36,261 | 34,038 | 110,547 | 102,724 |
Local, National, Digital and Network | ||||
Disaggregation Of Revenue [Line Items] | ||||
Gross revenue | 37,932 | 35,870 | 107,407 | 101,825 |
Special Events | ||||
Disaggregation Of Revenue [Line Items] | ||||
Gross revenue | 444 | 53 | 8,158 | 6,766 |
Barter | ||||
Disaggregation Of Revenue [Line Items] | ||||
Gross revenue | 1,965 | 1,770 | 5,945 | 4,042 |
Other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Gross revenue | $ 1,329 | $ 1,594 | $ 4,484 | $ 5,068 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2019 | Dec. 31, 2018 | |
Disaggregation Of Revenue [Line Items] | ||||||
Barter revenue amount | $ 41,670,000 | $ 39,287,000 | $ 125,994,000 | $ 117,701,000 | ||
Revenue recognized | 400,000 | 1,300,000 | ||||
Variable consideration form agency based volume discounts accrued as contract liabilities within accrued expense | 774,000 | 774,000 | $ 798,000 | |||
Accrued Expenses | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Variable consideration form agency based volume discounts accrued as contract liabilities within accrued expense | 1,400,000 | 1,400,000 | $ 1,000,000 | $ 2,100,000 | ||
Barter | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Barter revenue amount | 1,965,000 | 1,770,000 | 5,945,000 | 4,042,000 | ||
Barter expense amount | 1,800,000 | 1,900,000 | 5,700,000 | 3,900,000 | ||
Revenue recognized | 400,000 | |||||
Local, National, Digital and Network | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Barter revenue amount | 37,932,000 | 35,870,000 | 107,407,000 | 101,825,000 | ||
Revenue recognized | 0 | 300,000 | ||||
Special Events | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Barter revenue amount | 444,000 | $ 53,000 | 8,158,000 | $ 6,766,000 | ||
Revenue recognized | $ 0 | $ 100,000 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Lessee Lease Description [Line Items] | |||
Operating lease, description | The Company has commitments under operating leases for office space and radio tower sites used in its operations. Our leases have initial lease terms that expire between 2019 and 2082, most of which include options to extend or renew the leases. | ||
Lessee, operating lease, existence of option to extend | true | ||
Operating lease, options to extend | Our leases have initial lease terms that expire between 2019 and 2082, most of which include options to extend or renew the leases. | ||
Rental expenses | $ 1,100 | $ 2,800 | |
Additional operating leases liability | $ 5,800 | ||
Additional operating leases expected to commence | 15 years 6 months | ||
Minimum | |||
Lessee Lease Description [Line Items] | |||
Initial lease term | 2019 | ||
Rental expenses | $ 3 | ||
Maximum | |||
Lessee Lease Description [Line Items] | |||
Initial lease term | 2082 | ||
Rental expenses | $ 500 |
Leases - Summary of Components
Leases - Summary of Components of Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Lease Cost [Abstract] | ||
Operating lease cost | $ 1,006 | $ 3,167 |
Sublease income | (387) | (1,460) |
Total lease cost | $ 619 | $ 1,707 |
Leases - Operating Leases, Summ
Leases - Operating Leases, Summary of Amounts Reported in Consolidated Balance Sheet (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Operating Leases: | |
Operating lease right-of-use assets | $ 16,859 |
Operating lease liabilities | 1,163 |
Operating lease liabilities - net of current portion | 15,958 |
Total operating lease liabilities | 17,121 |
Other information | |
Operating cash flows from operating leases | 1,280 |
Right-of-use assets obtained in exchange for new lease liabilities | $ 4,488 |
Weighted-average remaining lease term | 11 years 4 months 24 days |
Weighted average discount rate | 12.70% |
Leases - Summary of Future Mini
Leases - Summary of Future Minimum Lease Payments under Operating Leases (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Lessee Disclosure [Abstract] | |
2019 (excluding the nine-months ended September 30, 2019) | $ 885 |
2020 | 3,067 |
2021 | 2,839 |
2022 | 2,820 |
2023 | 2,726 |
Thereafter | 22,791 |
Total undiscounted lease payments | 35,128 |
Less: imputed interest | 18,007 |
Operating lease, liability | $ 17,121 |
Leases - Summary of Future Mi_2
Leases - Summary of Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Operating Leases Future Minimum Payments Due [Abstract] | |
2019 | $ 3,766 |
2020 | 2,545 |
2021 | 2,280 |
2022 | 2,249 |
2023 | 2,113 |
Thereafter | 15,554 |
Total minimum lease payments | $ 28,507 |
Leases - Summary of Future Mi_3
Leases - Summary of Future Minimum Rental Income through Sublease (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Lessor Operating Lease Payments Fiscal Year Maturity [Abstract] | |
2019 (excluding the nine-months ended September 30, 2019) | $ 349 |
2020 | 939 |
2021 | 479 |
2022 | 354 |
2023 | 140 |
Thereafter | 17 |
Total undiscounted lease payments | $ 2,278 |
Basic and Diluted Net (Loss) _3
Basic and Diluted Net (Loss) Income Per Common Share - Summary of Computation of Basic and Diluted Net (Loss) Income Available to Stockholders (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Basic net (loss) income per share: | ||||
Basic net (loss) income per share | $ (0.05) | $ 1.18 | $ (0.82) | $ 0.45 |
Diluted net (loss) income per share: | ||||
Diluted net (loss) income per share | $ (0.05) | $ 1.18 | $ (0.82) | $ 0.45 |
Class A common stock | ||||
Basic net (loss) income per share: | ||||
Allocation of undistributed (losses) earnings | $ (199) | $ 5,002 | $ (3,493) | $ 1,901 |
Number of shares used in per share computation (as converted) | 4,242 | 4,234 | 4,242 | 4,217 |
Basic net (loss) income per share | $ (0.05) | $ 1.18 | $ (0.82) | $ 0.45 |
Diluted net (loss) income per share: | ||||
Allocation of undistributed (losses) earnings | $ (199) | $ 5,002 | $ (3,493) | $ 1,901 |
Weighted-average impact of dilutive equity instruments | 9 | |||
Number of shares used in per share computation (as converted) | 4,242 | 4,243 | 4,242 | 4,217 |
Diluted net (loss) income per share | $ (0.05) | $ 1.18 | $ (0.82) | $ 0.45 |
Common stock equivalents excluded from calculation of diluted net (loss) income per share as the effect would have been anti-dilutive: | 445 | 380 | 445 | 380 |
Class B common stock | ||||
Basic net (loss) income per share: | ||||
Allocation of undistributed (losses) earnings | $ (110) | $ 2,765 | $ (1,927) | $ 1,055 |
Number of shares used in per share computation (as converted) | 2,340 | 2,340 | 2,340 | 2,340 |
Basic net (loss) income per share | $ (0.05) | $ 1.18 | $ (0.82) | $ 0.45 |
Diluted net (loss) income per share: | ||||
Allocation of undistributed (losses) earnings | $ (110) | $ 2,765 | $ (1,927) | $ 1,055 |
Number of shares used in per share computation (as converted) | 2,340 | 2,340 | 2,340 | 2,340 |
Diluted net (loss) income per share | $ (0.05) | $ 1.18 | $ (0.82) | $ 0.45 |
Series C convertible preferred stock | ||||
Basic net (loss) income per share: | ||||
Allocation of undistributed (losses) earnings | $ (36) | $ 898 | $ (626) | $ 342 |
Number of shares used in per share computation (as converted) | 760 | 760 | 760 | 760 |
Basic net (loss) income per share | $ (0.05) | $ 1.18 | $ (0.82) | $ 0.45 |
Diluted net (loss) income per share: | ||||
Allocation of undistributed (losses) earnings | $ (36) | $ 898 | $ (626) | $ 342 |
Number of shares used in per share computation (as converted) | 760 | 760 | 760 | 760 |
Diluted net (loss) income per share | $ (0.05) | $ 1.18 | $ (0.82) | $ 0.45 |
Schedule of Changes in Stockhol
Schedule of Changes in Stockholders' Deficit (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Equity [Abstract] | ||||
Beginning balance | $ (85,073) | $ (101,248) | $ (79,379) | $ (95,914) |
Net income (loss) | (345) | 8,665 | (6,046) | 3,298 |
Stock-based compensation | 2 | 6 | 9 | 39 |
Ending balance | $ (85,416) | $ (92,577) | $ (85,416) | $ (92,577) |
Operating Segments - Additional
Operating Segments - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2019Segment | |
Segment Reporting [Abstract] | |
Number of reporting segment units | 2 |
Operating Segments - Summary of
Operating Segments - Summary of Operating Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Net revenue: | |||||
Net revenue | $ 36,261 | $ 34,038 | $ 110,547 | $ 102,724 | |
Engineering and programming expenses: | |||||
Engineering and programming expenses | 7,270 | 6,368 | 21,357 | 19,425 | |
Selling, general and administrative expenses: | |||||
Selling, general and administrative expenses | 15,344 | 14,444 | 49,508 | 42,458 | |
Corporate expenses | 2,961 | 2,132 | 8,510 | 8,175 | |
Depreciation and amortization: | |||||
Depreciation and amortization | 899 | 910 | 2,671 | 2,906 | |
Loss (gain) on disposal of assets, net of disposal costs: | |||||
Loss (gain) on disposal of assets, net of disposal costs | 131 | (12,671) | 92 | (12,721) | |
Recapitalization costs: | |||||
Recapitalization costs | 1,915 | 2,286 | 5,289 | 4,727 | |
Executive severance expenses | |||||
Executive severance expenses | 1,844 | ||||
Impairment charges: | |||||
Impairment charges | 483 | ||||
Other operating loss (income): | |||||
Other operating loss (income) | 1 | (16) | |||
Operating income: | |||||
Operating income | 7,740 | 20,569 | 21,292 | 37,271 | |
Capital expenditures: | |||||
Capital expenditures | 1,125 | 765 | 3,251 | 1,746 | |
Assets | |||||
Total Assets | 455,176 | 455,176 | $ 444,312 | ||
Operating Segments | Radio | |||||
Net revenue: | |||||
Net revenue | 32,493 | 30,255 | 99,564 | 90,785 | |
Engineering and programming expenses: | |||||
Engineering and programming expenses | 5,688 | 5,303 | 16,370 | 16,016 | |
Selling, general and administrative expenses: | |||||
Selling, general and administrative expenses | 13,778 | 13,191 | 44,621 | 37,228 | |
Depreciation and amortization: | |||||
Depreciation and amortization | 400 | 420 | 1,174 | 1,256 | |
Loss (gain) on disposal of assets, net of disposal costs: | |||||
Loss (gain) on disposal of assets, net of disposal costs | (7) | (159) | (46) | (171) | |
Other operating loss (income): | |||||
Other operating loss (income) | 1 | (16) | |||
Operating income: | |||||
Operating income | 12,633 | 11,500 | 37,461 | 36,456 | |
Capital expenditures: | |||||
Capital expenditures | 802 | 588 | 1,828 | 1,461 | |
Assets | |||||
Total Assets | 396,261 | 396,261 | 386,303 | ||
Operating Segments | Television | |||||
Net revenue: | |||||
Net revenue | 3,768 | 3,783 | 10,983 | 11,939 | |
Engineering and programming expenses: | |||||
Engineering and programming expenses | 1,582 | 1,065 | 4,987 | 3,409 | |
Selling, general and administrative expenses: | |||||
Selling, general and administrative expenses | 1,566 | 1,253 | 4,887 | 5,230 | |
Depreciation and amortization: | |||||
Depreciation and amortization | 447 | 432 | 1,341 | 1,473 | |
Loss (gain) on disposal of assets, net of disposal costs: | |||||
Loss (gain) on disposal of assets, net of disposal costs | 138 | 29 | 138 | (9) | |
Impairment charges: | |||||
Impairment charges | 483 | ||||
Operating income: | |||||
Operating income | 35 | 1,004 | (370) | 1,353 | |
Capital expenditures: | |||||
Capital expenditures | 187 | 76 | 986 | 150 | |
Assets | |||||
Total Assets | 56,573 | 56,573 | 55,052 | ||
Corporate, Non-Segment | |||||
Selling, general and administrative expenses: | |||||
Corporate expenses | 2,961 | 2,132 | 8,510 | 8,175 | |
Depreciation and amortization: | |||||
Depreciation and amortization | 52 | 58 | 156 | 177 | |
Loss (gain) on disposal of assets, net of disposal costs: | |||||
Loss (gain) on disposal of assets, net of disposal costs | (12,541) | (12,541) | |||
Recapitalization costs: | |||||
Recapitalization costs | 1,915 | 2,286 | 5,289 | 4,727 | |
Executive severance expenses | |||||
Executive severance expenses | 1,844 | ||||
Operating income: | |||||
Operating income | (4,928) | 8,065 | (15,799) | (538) | |
Capital expenditures: | |||||
Capital expenditures | 136 | $ 101 | 437 | $ 135 | |
Assets | |||||
Total Assets | $ 2,342 | $ 2,342 | $ 2,957 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Income Tax [Line Items] | ||
Valuation allowance adjustment | $ 500,000 | |
U.S. federal income tax rate | 21.00% | |
Significant of uncertain tax positions requiring recognition | $ 0 | $ 0 |
Federal | ||
Income Tax [Line Items] | ||
Open tax year | 2015 2016 2017 2018 | |
State and Local | ||
Income Tax [Line Items] | ||
Open tax year | 2015 2016 2017 2018 | |
Puerto Rico Tax Authorities | ||
Income Tax [Line Items] | ||
Open tax year | 2012 2013 2014 2015 2016 2017 2018 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Thousands | Nov. 02, 2017 | Jun. 30, 2016 | Sep. 30, 2019 | Dec. 31, 2018 |
Commitments And Contingencies [Line Items] | ||||
Redemption of Series B preferred stock at face value plus accrued dividends | $ 182,616 | $ 175,315 | ||
Local Tax Assessment | ||||
Commitments And 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 | $ 1,400 | |||
Local tax assessment, estimated probable loss | $ 400 | |||
Series B Preferred Stock Litigation | ||||
Commitments And Contingencies [Line Items] | ||||
Claiming percentage of litigation | 94.16% | |||
Redemption of Series B preferred stock at face value plus accrued dividends | $ 182,600 | |||
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 (of approximately $182.6 million as of September 30, 2019, as well as unspecified money damages and a declaration that Section 10.4 of the Charter is invalid. |
Fair Value Measurement Disclo_3
Fair Value Measurement Disclosures - Estimated Fair Values of Financial Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Carrying Amount | Significant other observable inputs (Level 2) | 12.5% Senior Secured Notes due 2017 | ||
Estimated fair values of financial instruments | ||
12.5% Senior Secured Notes due 2017 (note 10) | $ 249.9 | $ 249.9 |
Carrying Amount | Series B Preferred Stock | Significant unobservable inputs (Level 3) | ||
Estimated fair values of financial instruments | ||
10 3/4% Series B cumulative exchangeable redeemable preferred stock | 182.6 | 175.3 |
Fair Value | Significant other observable inputs (Level 2) | 12.5% Senior Secured Notes due 2017 | ||
Estimated fair values of financial instruments | ||
12.5% Senior Secured Notes due 2017 (note 10) | 262.6 | 258.6 |
Fair Value | Series B Preferred Stock | Significant unobservable inputs (Level 3) | ||
Estimated fair values of financial instruments | ||
10 3/4% Series B cumulative exchangeable redeemable preferred stock | $ 51.9 | $ 37.8 |
12.5% Senior Secured Notes du_2
12.5% Senior Secured Notes due 2017 - Additional Information (Details) - 12.5% Senior Secured Notes due 2017 - USD ($) | May 08, 2017 | Sep. 30, 2019 | Dec. 31, 2018 | 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 | $ 249,900,000 | |||
Interest rate on Senior secured notes | 12.50% | 12.50% | ||
Additional interest rate | 2.00% | |||
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 $2,864,583 on the Notes for the 30 day periods ending on May 15, 2017 and June 15, 2017, rather than on a semi-annual basis as required by the Indenture. | |||
Percentage of principal amount agreed to pay as consent fee | 0.35% | |||
Forbearance Agreement | Minimum | ||||
Debt Instrument [Line Items] | ||||
Percentage of outstanding senior notes holders agreed to forbear from exercising rights | 75.00% |
10 3_4% Series B Cumulative E_2
10 3/4% Series B Cumulative Exchangeable Redeemable Preferred Stock - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 09, 2019 | Apr. 27, 2018 | Nov. 02, 2017 | Oct. 15, 2013 | Oct. 15, 2011 | Oct. 15, 2010 | Oct. 15, 2009 | Apr. 05, 2004 | Oct. 30, 2003 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | 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 | $ 2,400 | $ 2,400 | $ 7,300 | $ 7,300 | ||||||||||||
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 | 90,549 | |||||||||||||
Preferred stock par value per share | $ 0.01 | |||||||||||||||
Liquidation preference per share | $ 1,000 | $ 1,000 | $ 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 | $ 92,067 | $ 92,067 | $ 84,766 | |||||||||||||
Series B Preferred Stock | Minimum | ||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||
Percentage of ownership on outstanding equity to be held by foreign entities | 25.00% | |||||||||||||||
Series B Preferred Stock | Maximum | ||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||
Percentage of ownership on outstanding equity to be held by foreign entities | 25.00% |
Retirement of Senior Executiv_2
Retirement of Senior Executive Vice President and Chief Financial Officer - Additional Information - (Details) - USD ($) | May 31, 2019 | Sep. 30, 2019 |
Compensation And Retirement Disclosure [Abstract] | ||
Cash severance | $ 1,750,000 | |
Cash severance payment period | 12 months | |
Additional amount included in cash severance | $ 700,000 | |
Description of severance agreement amount | The cash severance amount represents two times his base salary (that he was entitled to receive under his employment agreement with the Company plus an additional $700,000, and the cash severance will be paid out over a 12 month period. | |
Executive severance expenses | $ 1,800,000 | |
Accrued executive severance expenses | $ 1,200,000 |