Salem Media Starts 2025 Fresh, Repaying $159M in Debt

Exits contemporary Christian music format and adds new investor to cover outstanding debt.

In a significant financial milestone, broadcasting giant Salem Media Group has paid off its long-term debt by selling its contemporary Christian music stations and drawing a new investor. These transactions allowed it to repurchase all $159.4 million of its outstanding 2028 senior secured notes at a $37-million discount.

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Boasting a strengthened financial position, Salem’s stock (OTCQX: SALM) soared 242% in the five days following the announcement on Dec. 31. The rally reversed its 52-week low of $.15 into a high of $.85. As of this writing (mid-afternoon Jan. 7), shares were trading at about $.70.

Five-day stock performance (as of Jan. 6, mid-afternoon). Source: Yahoo Finance

In late December, the company entered an $80-million deal to sell seven contemporary Christian music-formatted stations in Atlanta, Los Angeles, Dallas, Sacramento, Portland, Cleveland, and Colorado Springs. The buyer, Tennessee-headquartered nonprofit Educational Media Foundation (EMF), runs the genre’s largest networks, Air1 and K-LOVE, with over 1,000 broadcast signals nationwide. Salem also inked a separate $10-million advertising and marketing agreement with EMF, which will start operating the stations in February.

In addition to the station sales, Salem raised $40 million by issuing convertible preferred stock to WaterStone, a Colorado-based foundation with a history of supporting over 7,500 charities since 1980, according to the organization’s website. An early leader in donor advised funds, WaterStone provides business owners and family wealth funds with giving strategies, charitable trusts, and other fund services.

These transactions follow over a year of cost cuts and divestitures to ease Salem’s debt burden, including offloading several radio stations, media brands, land and transmitter sites, and entering a sale-leaseback agreement for its California headquarters. Although these measures have steadily bolstered its financial turnaround, the three recent transactions finally placed the company on a debt-free track.

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In a statement, Salem Chief Executive Officer David Santrella said the recent transactions would significantly improve the company’s balance sheet and capital structure, clearing all outstanding debts except its revolving credit arrangement with Siena Lending Group. The asset-based loan facility was extended for another year last month.

Santrella added that Salem’s new strategic investor is “expected to bring significant new opportunities to the company as well as offer incredible expertise in the area of digital media.”

Salem’s digital media segment comprises several news and informational outlets, church product websites, newsletters, and other online content. Although digital generated nearly 19% of its revenue in the first nine months of 2024, broadcast still remains its core business with a 78% share, according to its latest earnings report.

Santrella’s statement concluded, “As a result of these transactions, our ability to service our national ministry partners and listeners with the important content provided by Salem has been greatly enhanced.”

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