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‘Ad Recession’ Hits Salem Media Group, Revenue Down 5% in Third Quarter

Revenue falls at Salem Media Group amid economic headwinds and an ongoing advertising slump. 

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Broadcasting giant Salem Media Group (NASDAQ: SALM), one of few publicly traded companies in the Christian media market, released its third-quarter 2023 earnings on Monday with $63.5 million in revenue, a decrease of 5% year-over-year.

In the earnings call, executives at the Texas-based company said the industry continues to face economic challenges and elevated interest rates. CEO Dave Santrella cited S&P Global’s recent media outlook, pointing to a persistent “ad recession.” Still, ongoing cost cuts have boosted the company’s free cash flow, and it is staying focused on operating efficiencies.

As of September, Salem Media has $471.3 million in total assets and $339 million in liabilities on its balance sheet. In the first nine months of 2023, the company’s revenue fell 2.7% year-over-year to $192.8 million. Its operating expenses grew 21.9% to $237.3 million compared to $194.6 million last year. It also reported an operating loss of $44.6 million, down from an operating income of $3.5 million in 2022.

On Tuesday afternoon, the company’s stock was trading at about $0.60, down 21%.

A five-day snapshot of Salem Media’s stock performance, via TradingView.

Broadcast Division

Salem Media, which owns or operates over 100 radio stations, reported a 4.2% decrease in broadcasting revenue this quarter, totaling $48.9 million. This brings its total year-to-date segment revenue to $147 million through September, down 3.3%.

In the earnings call, Santrella said drops in broadcasting revenue are tied to political comps and the impact of the ad recession.

Net advertising revenue in the broadcast division fell 9.6% to $12.7 million compared to $14 million last year. Political revenue accounts for part of that picture, generating $100,000 compared to $700,000 in Q3 2022. Spot advertising revenue is the biggest reason for the overall broadcast revenue decline, with national spots down 17.9% and local spots down 6.6%.

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Overall, advertising revenue is down 12.2% in 2023 to $38 million, driven by national and local spots. In its quarterly 10-Q filing with the Securities and Exchange Commission, the company explained that the first half of 2022 brought heightened demand as pandemic restrictions eased. However, trends shifted in late-2022 as advertisers reined in spending over concerns about inflation and the state of the economy.

Network revenue (the net of digital amounts) decreased by 10.1%, with a $900,000 drop from its nationally syndicated host programs offset by a $300,000 increase in political advertising.

Slower ad demand also hit digital revenue growth in the broadcasting division. Revenue fell 4.5%, partially due to lower demand for marketing services through Salem Surround and a slight reduction in streaming revenue and digital ad sales from its station websites.

Local and national block programming revenue remained relatively flat at $19.7 million in Q3, bringing the 2023 total to $58.6 million. Block programming rates are based on stations’ ability to attract audiences that contribute to or buy products from the program’s producers. This is a crucial category for Salem’s business model, representing 40% of its broadcast revenue and 31% of the total.

Meanwhile, broadcast operating expenses grew 2.4% to $42 million due to employee severance expenses and investments in the Salem News Channel and cluster market in Miami, which was acquired in early-2023. Losses from the two startup businesses have negatively impacted Salem’s leverage, though it expects performance will recover over the next few years.

Digital Media

Net digital media revenue decreased 2.2% in the third quarter to $9.9 million, claiming 15.7% of Salem’s total revenue. The report cited Facebook’s 2022 algorithm changes that limited political content, the growing use of browsers that block third-party cookies, and the recent non-renewal of the Bible Gateway representation agreement. The latter factor was partially offset by more revenue from its recent acquisition of George Gilder’s investment newsletters.


Publishing revenue decreased by 17.5% to $4.6 million, accounting for 7.2% of the quarter’s net revenue. Book sales fell 19.2%, primarily from Regnery Publishing, with a 54% drop in volume partially offset by a 36% increase in the average price per unit sold.

The earnings call cited a light book publishing schedule, with some declines tied to the softness in the overall economy affecting the self-publishing business.

So far this year, Salem’s publishing revenue has dropped by 2.7% to $14.4 million.

Main photo: Photo via Google Street View

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Shannon Cuthrell

Shannon Cuthrell is a journalist with a background covering business, technology and economic development. She has written for Business North Carolina magazine, WRAL TechWire, Charlotte Inno and EE Power, among other publications.