Salem Media’s Q1 Revenue Dips, but Operating Losses Soften
Catch up on Salem Media’s financial position in our latest earnings analysis.
Publicly traded Christian broadcasting giant Salem Media Group (OTCQX: SALM) reported a $2 million operating loss in its first-quarter earnings last Thursday, a significant improvement from $4.1 million a year ago.
Salem’s Texas HQ. Photo via Google Street View
Like many players in the media industry, Salem is selling assets and cutting costs to pay off its debts and cushion the blow of a declining ad market. The company slashed about $7 million in operating expenses over the last year.
Still, Salem’s revenue fell 7.6% year-over-year to $58.6 million, with its publishing segment taking the biggest hit. Its net loss remains virtually unchanged at $5.1 million.
Salem’s stock dropped slightly after the earnings announcement, from $.36 Friday morning to $.33 by Monday. It is currently trading at $.38 as of May 14.
A year-to-date snapshot of Salem’s stock performance. Source: Google Finance
The news comes after a slew of sales and divestitures over the last year. Salem sold its Church Products business for $30 million and four contemporary music stations in Nashville and Hawaii for $7 million. It also entered a land sale agreement in Florida for $9.5 million (closing is expected in late 2024).
Salem recently sold its former headquarters in Camarillo, California, through a $5.5 million sale-leaseback deal. Salem will pay $400,000 annually to rent the office for five years. The 41,500-square-foot building was its home for decades before moving to Irving, Texas, in 2021. The company plans to use the proceeds to pay down part of its $168.6 million in long-term debt.
Caption: Photo source: Loopnet)
Revenue Shift: Broadcasting & Publishing Down, Digital Media Rises
Salem’s broadcast segment, which represents 76% of its total revenue, declined 4.6% year-over-year to $46 million due to a drop in local spot advertising revenue. The earnings report called this an industry-wide trend owing to “reduced time spent listening, particularly on AM radio stations.”
Political revenue partially offset those losses, surging 78.7% to nearly $1 million thanks to election year timing. Salem owns political programming in the Salem Podcast Network and Salem News Channel.
Publishing revenue registered the largest shift of all segments, down 61% to $1.8 million. The company cited the recent sale of its Regnery Publishing business and a “softness in the overall economy” affecting its self-publishing brand, Salem Author Services.
Digital media, which accounts for about one-fifth of the company’s revenue, rose by 1.9% to $10.7 million due to subscriptions from Eagle Financial Publications and DayTradeSPY. However, advertising revenue declined, with Salem citing third-party cookie blockers, Facebook’s new algorithms limiting political content, and overall economic conditions weakening advertising demand, thus lowering rates.
Cost-Cutting Moves
As we’ve covered in previous editions of this series, Salem has been in a rush to eliminate inefficiencies across its operations. Its publishing segment, for example, reduced expenses by 68% (or $3.7 million) in the first quarter, including the sale of Regnery Publishing last year.
Broadcast and digital media expenses remained relatively flat, though some decreases were attributed to workforce reductions and suspended employee benefits. Salem ended its 401(k) employer matching program last summer.
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