Salem Media’s Q3 Turnaround: Promising Growth Continues
Salem Media’s latest quarterly report reveals signs of recovery.
A year of cost cuts and selloffs is coming into view on Salem Media Group’s balance sheet. The Texas-based broadcasting giant—among the few Christian publicly traded companies—reported a $6.6 million net loss in the third quarter, compared to -$31 million a year ago.
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Revenue declined 7.5% year-over-year to $58.7 million, reflecting brand divestitures and advertising volatility in its broadcast and publishing businesses. However, those losses were partially offset by a 9.5% revenue jump from its digital media segment.
Salem slashed over $36 million in operating expenses since the third quarter of 2023, falling from $99 million to $63 million. The company has sold several radio stations, land and transmitter sites, and media brands to pay down its debts this year. Its liabilities now total $309 million as of Sep. 30, down from $323 million last December.
The company entered into two more transactions last quarter: a $700,000 agreement to sell a radio station and two FM translators in Little Rock, plus a separate $1.6 million deal selling a different Arkansas radio station.
Salem’s stock (OTC: SALM) was trading at around $.25 when the results were released Friday afternoon. The price is now $0.23 as of this writing (Tuesday evening).
A three-month look at Salem’s stock performance (data as of Nov. 12 at 4:30 p.m.). Chart source: TradingView
Segment Performance
Salem Media’s core broadcasting business declined once again in Q3, following similar trends in the first and second quarters. This is Salem’s foundational segment, with the Salem Radio Network delivering satellite programming to 2,900 affiliated stations nationwide, the Salem Podcast Network receiving 11 million monthly downloads, and the SalemNOW streaming platform and Salem News Channel gaining popularity.
Broadcast revenue fell 5.9% to $46 million, with $3.7 million in net operating income (not including depreciation and amortization). The management discussion noted that this segment typically reports higher Q2 and Q4 advertising revenue than in Q1 and Q3, corresponding to seasonal fluctuations. However, the current election year supports increased demand for political ads.
Salem’s Q3 earnings (page 7)
Meanwhile, Salem’s digital media business, which includes several web brands, financial publications, and church product sites, posted a 9.5% jump in revenue to $10.9 million, with $1.3 million in operating income. Management’s narrative mentions the same seasonal trends as above, though digital media is also affected by the rates sites charge for ad time, impressions, product/ad sales, and digital subscriptions.
Salem’s publishing segment reported $1.7 million in revenue, down 61% from Q3 2023. Nearly $2 million in expenses led to a $242,000 net operating loss. The business, mainly comprising self-publishing services, has struggled to catch up after Salem sold its Regnery Publishing brand last December.
Broader Trends: Listening Habits, Desktop vs. Mobile + More
The management discussion cites several trends and uncertainties, including supply chain disruptions lingering from the pandemic and conflicts in Israel and Ukraine, inflation, and interest rates.
Salem’s lease expenses have increased amid changes in the core Consumer Price Index, which grew 3.3% in the past year (excluding food and energy categories). Inflation and energy prices have also impacted the company’s Common Area Maintenance charges.
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Beyond that, audience habits have hit Salem’s broadcast airtime sales, as listeners supplement traditional radio with audio streaming sites, podcasts, and satellite radio. Some automotive manufacturers are removing AM radio signals from new models, limiting Salem’s distribution reach. To stay competitive, it’s enhancing its digital assets to complement broadcast content. It sees an opportunity in the increased use of smart speakers to access AM and FM radio stations.
Although page views in Salem’s digital segment continue to grow overall, the number of desktop-delivered views has declined in favor of mobile devices, which host fewer ads per page and are generally sold at lower rates. The report also cited declines from algorithmic changes, including those limiting political content and third-party cookies.
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