Donor-Advised Fund Foundation to Acquire Salem Media

$31M buyout will take Christian multimedia giant private.

For-profit Christian multimedia company Salem Media Group may soon become the property of a 501(c)(3).

Salem Media Group / Google Street View

The Texas-based broadcaster — which owns the Salem Radio Network, the Salem Web Network, Salem Publishing, and conservative news websites RedState and Townhall — announced in a May press release that its board has approved a buyout by Waterstone, a Christian donor-advised fund foundation.

According to the press release, WaterStone will purchase all outstanding shares of Salem Media’s common stock for $1 each. That purchase, plus legal and closing expenses, will cost WaterStone more than $31 million, based on the 31,683,451 shares of outstanding common stock listed in Salem’s latest quarterly report.

The unanimously approved deal is expected to close in August, pending shareholder and regulatory approvals.

Salem’s Fight for Survival

The deal was struck shortly before Salem reported a $2.6 million first-quarter loss — an improvement over the $7.1 million loss in the first quarter of 2025, when the company underwent massive restructuring. During that time, Salem successfully climbed out of its $159 million debt by cutting costs and selling off properties, including offloading all its contemporary Christian music radio stations. Salem raised about a quarter of the money by issuing convertible preferred stock to WaterStone.

This quarter, a leaner Salem Media incurred lower operating expenses while achieving a 45% jump in political revenue and a $300,000 rise in spot advertising revenue compared with a year ago, but saw revenues fall in digital and publishing, according to Inside Radio.

“While much of the radio industry faced declining advertising revenue of -3.4% in the first quarter … Salem posted positive local radio growth of +2.8%, excluding the impact of recently sold stations, outperforming broader industry trends by more than six percentage points,” the statement said.

Salem positioned the $1-per-share price as “approximately a 250% premium over Salem’s recent trading price.” A review of the company’s recent stock trading history shows that share prices reached a high of $2.09 in April 2025, then hovered around $0.40 for most of 2026 before jumping to over $0.90 when the buyout was announced. As of June, Salem’s market cap was $29.94 million.

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The WaterStone Connection

The buyout formalizes the close relationship the two organizations have developed amid Salem’s financial struggles. WaterStone had already acquired 49.5% voting interest in the company, and last August WaterStone president Rick von Gnechten became chairman of Salem’s board.

“Over the last 18 months, Salem and WaterStone have worked together on several strategic initiatives tied to the company’s long-term growth and organizational vision,” the press release said.

A statement from von Gnechten emphasized the organizations’ shared mission.

“Salem has spent decades earning the trust of listeners, ministries, advertisers, and audiences by staying true to its mission. WaterStone believes deeply in that mission and in the people behind it,” von Gnechten said. “This partnership gives Salem additional strength and long-term stability while creating new opportunities to expand its reach for the future — which is why we are making this investment.”

Speaking to MinistryWatch, von Gnechten explained that the money for the acquisition will come from a donor-advised fund. By law, such funds must be used for a charitable purpose — but for-profit investments can be made so long as the profits go toward the legally defined purpose.

“One of our donors recommended this investment; so, it’s using funds a donor donated into a donor-advised fund with WaterStone,” von Gnechten said. “It’s standard practice for most donor-advised funds (DAF), including WaterStone, to permit their donors to advise on investments that are made in their DAF account until the funds are granted for charitable purposes — to a 501(c)(3) charity. These investments can include making private investments or setting up an investment account with a registered investment advisor for buying publicly traded stocks, bonds, mutual funds, money market funds or other securities based on an investment policy statement the DAF sets-up with the investment advisor. The purpose is to generate investment returns that can also be given for charitable purposes. In this case, the investment is in Salem Media.”

Von Gnechten foresees no major change to Salem’s operations following the buyout.

“WaterStone fully expects Salem Media to continue to operate as it has in the past,” he said. “The same management team will be running the company going forward, just without any debt (previously paid) or quarterly reporting requirements of a public company.”

WaterStone, also known as the Christian Community Foundation, describes itself as a “Christian foundation that comes alongside givers, advisors and ministries to provide trusted counsel and innovative giving strategies.” Founded in 1980, the Colorado-based nonprofit has a Donor Confidence Score of 73 (“Give With Confidence”) and an A grade in transparency.

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