Salem Media Reports $46M Operating Loss in 2023
Declining ad revenue, divestitures, real estate sales, and cost cuts are the key themes of Salem’s year-end report
Broadcasting giant Salem Media Group (OTCQX: SALM), one of the only Christian publicly traded companies, closed 2023 with $258 million in revenue—down $8 million from 2022, driven by falling ad sales. In its latest annual report, the Texas-based company reported a $46 million operating loss with nearly $305 million in expenses. It totaled $455 million in assets, compared to $505 million a year earlier.
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Salem has struggled to turn a profit amid changing audience behaviors, declining broadcasting revenue, and a broader economic downturn. In its third-quarter earnings call last November, executives cited the media industry’s ongoing “ad recession” as a critical challenge.
The company instituted several cost-cutting measures over the last year, most recently selling its headquarters for $6.2 million to pay down debt. It divested millions in assets since early-2022, including 9.3 acres of land at a transmitter site in Colorado for $8.2 million, three South Carolina radio stations for $6.8 million, another three stations in Kentucky for $4 million, and its Regnery Publishing business for $3 million. Last month, Salem agreed to sell three Tennessee stations and one in Hawaii for $7 million.
Salem listed several pending transactions slated to close this year, including a $1.5 million investment in an undisclosed motion picture and an $8.5 million land sale in Florida. Notably, a $30 million deal to sell its Salem Church Products business recently fell through because the buyer, Colorado-based Gloo, couldn’t secure acquisition financing.
Salem’s stock performance has trended down since 2022. For much of last year, its value hovered well below the NASDAQ’s $1 minimum bid requirement, prompting the recent decision to delist from the NASDAQ. The move ended the requirement to hold quarterly investor calls, unlocking $1.2 million in annual cost savings, per Noble Capital Markets. In January, Salem started trading as an over-the-counter security on the OTCQX platform, which requires a $0.25 minimum bid threshold. It’s currently sitting at around $.38 per share (as of April 3), with an $8.2 million market cap.
Several institutional investors and hedge funds recently acquired new positions in Salem, now representing 10% of the stock’s ownership. According to StockNews, Dimensional Fund Advisors upped its holdings by 75% and Vanguard Group added 9.7%.
Salem Media stock chart dating back to 1999 (screenshot taken on April 3. Source: OTC Markets)
Here’s a quick revenue breakdown for Salem’s three operating segments:
Broadcast
About 76% of Salem’s total revenue comes from broadcasting, which fell 3.7% last year to $197.6 million. This comes amid an industry-wide decline in spot advertising, whereby local and national buyers purchase airtime for commercials. Salem also noted that audiences are spending less time listening, especially on AM radio stations.
Political revenue dropped 61.5% to $2.3 million, but the year’s $3.6 million in losses were partly offset by a 4% jump in digital sales from the Salem Podcast Network, Salem News Channel, and Salem Surround marketing agency.
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Around a quarter of Salem’s broadcasting revenue relies on ads. It’s particularly dependent on stations in the Dallas and Los Angeles markets, which generated over 32% of the segment’s ad revenue in 2023.
Digital Media
Digital media revenue, which accounts for 16% of Salem’s total earnings, reported a minimal 0.7% drop last year to $41.9 million. The company cited Facebook’s algorithm changes that limit political content, the increased use of third-party cookie blockers, and a broader weakening in demand from the state of the economy.
Salem also took a hit from Bible Gateway opting not to renew its representation agreement, effective last June. However, increased digital subscription revenue from Eagle Financial Publications, including the newly acquired George Gilder Report and DayTradeSPY brands, offset those losses.
Publishing
Publishing, representing a 7% slice of Salem’s revenue, fell nearly 5% last year to $19 million. The company cited a scaled-back schedule and declines in self-publishing driven by softening economic conditions. Reduced demand affected sales for foreign translation and audiobook titles from its former Regnery Publishing business, which was sold to Skyhorse Publishing in December.
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