The second quarter of 2024 is likely a period Salem Media Group is happy to have in the rearview mirror. The company reports total revenue dropped 7.8% during the quarter to $60.6 million. The results — which came without the traditional conference call for analysts and a barebones quarterly filing — show a mixed bag of results.
Salem says its broadcast revenue declined 5.2% during the quarter to $47.1 million, mainly due to weaker local spot sales. “Spot advertising revenue has been declining in the industry due to reduced time spent listening, particularly on AM radio stations,” it tells investors in a quarterly filing.
Salem says network revenue from its nationally syndicated programs decreased $800,000 during Q2 vs. a year ago. National and local block programming revenue fell $600,000 year-over-year, primarily on its news-talk stations. The decrease was partially offset by an $800,000 in political revenue during the quarter. On a same-station basis, Salem says net broadcast revenue decreased 3.3%, which the company says reflects the sale of some of its stations.
While broadcast weakened, Salem’s digital results strengthened. Digital sales grew 10% to $11.9 million. It credits an increase in digital subscription revenue from Eagle Financial Publications, including new subscriptions generated from DayTradeSPY and Gilder. Salem says the increase was partially offset by a $200,000 decrease in digital advertising revenue that it blames on Facebook algorithm changes that limit political content, as well as a growing use of browsers that block third-party cookies, limiting advertising. It also points to the overall state of the economy, which Salem says has weakened demand for advertising, resulting in a lower number of advertisements and a reduction in rates.
Publishing revenue plunged 70% to $1.6 million following Salem spinning off its Regnery Publishing division last December, as well as softness in its self-publishing business.
Salem says it continued to cut broadcast operating expenses by another $900,000, or 2% during the second quarter. That included a combination of layoffs and a continued suspending of the employer 401(k) match that started in July 2023. The result was Salem reported a net loss of $2.9 million for the quarter, but that was 76% less than its loss during the same period a year ago.
Salem ended the quarter with $164.6 million in long-term debt. But it has some time. Nearly all of that will come due in 2028. In the meantime, it is only required to pay $11.4 million per year in interest.
In the filing, Salem also disclosed that it has invested $1.5 million in a limited liability company that will own, distribute, and market a motion picture. Details of the film are still unknown, however. It is not the first time Salem has invested in the movie business. It earlier was an investor in movies and documentaries such as the “2000 Mules” film about the 2020 presidential election; “Border Battle,” described as “the true story about what is going on at America’s southern border,” and “Uncle Tom II: An American Odyssey” which is about how allegedly false racial tensions in America look to obtain power for the left and undermine capitalism.
It comes as Salem continues to sell off some of its radio stations. During the second quarter, it sold three radio stations in Nashville, and one in Honolulu, pocketing $5.7 million in the process.