What changed in this filing

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Item 1. Business

2023-03-27 compared with 2022-02-23 · 63 added, 62 removed, 199 unchanged (39% of the section changed)

1 unchanged sentence

We offer local and national advertisers integrated marketing solutions across audio, digital and event platforms.

We own and operate radio stations in the following radio markets:

Atlanta, GA, Augusta, GA, Boston, MA, Charlotte, NC, Detroit, MI, Fayetteville, NC, Fort Myers-Naples, FL, Las Vegas, NV, Middlesex, NJ, Monmouth, NJ, Morristown, NJ, Philadelphia, PA, Tampa-Saint Petersburg, FL, West Palm Beach-Boca Raton, FL, and Wilmington, DE.

We refer to each group of radio stations in each radio market as a market cluster.

We own and operate stations in the following markets:

We refer to each group of stations in each market as a market cluster.

Beasley Broadcast Group, Inc., a Delaware corporation, was formed in 1999.

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We seek to secure and maintain a leadership position in the markets we serve by developing high quality local content, through our audio, digital and esports platforms, including events and experiences in the communities we serve and, in turn, offer advertisers access to a highly effective marketing platform to reach large and targeted local audiences.

We operate our radio stations in clusters to capture a variety of demographic listener groups, which we believe enhances our radio stations’ appeal to a wide range of advertisers.

Current FCC rules and regulations do not permit us to add more AM or FM radio stations to our Augusta, GA and Philadelphia, PA market clusters, or more FM radio stations to our Boston, MA, Charlotte, NC, Fayetteville, NC, Fort Myers-Naples, FL, and Tampa-Saint Petersburg, FL radio market clusters.

The primary source of revenue for our radio stations is the sale of advertising time to local, regional and national advertisers and national network advertisers who purchase commercials in varying lengths.

We operate our stations in clusters to capture a variety of demographic listener groups, which we believe enhances our stations’ appeal to a wide range of advertisers.

Current rules and regulations of the Federal Communications Commission (“FCC”) do not permit us to add more AM or FM stations to our Augusta, GA and Philadelphia, PA market clusters, or more FM stations to our Boston, MA, Charlotte, NC, Fayetteville, NC, Fort Myers-Naples, FL, Las Vegas, NV and Tampa-Saint Petersburg, FL market clusters.

The primary source of revenue for our stations is the sale of advertising time to local, regional and national advertisers and national network advertisers who purchase commercials in varying lengths.

A growing source of revenue is from station-related digital product suites, which allow for enhanced audience interaction and participation, and integrated digital advertising solutions.

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The radio broadcasting industry is highly competitive.

Our radio stations compete for listeners and advertising revenue with other radio stations within their respective markets.

In addition, our radio stations compete for audiences and advertising revenues with other media, including digital audio streaming, satellite radio, broadcast television, digital, satellite and cable television, newspapers and magazines, outdoor advertising, direct mail, wireless media alternatives, cellular phones and other forms of audio entertainment and advertisement.

Our stations compete for listeners and advertising revenue with other stations within their respective markets.

In addition, our stations compete for audiences and advertising revenues with other media, including digital audio streaming, satellite radio, broadcast television, digital, satellite and cable television, video streaming services, newspapers and magazines, outdoor advertising, direct mail, wireless media alternatives, cellular phones and other forms of audio entertainment and advertisement.

Competition for advertising revenues also comes directly from competitors such as Amazon, Apple, Facebook and Google.

The following are some of the factors that we believe are important to a radio station’s competitive position:

The following are some of the factors that we believe are important to a station’s competitive position:

(i) audience ratings;

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(v) audience characteristics;

and (vi) the number and characteristics of other radio stations and other advertising media in the market area.

We attempt to improve our competitive position with promotional campaigns aimed at the demographic groups targeted by our radio stations and by sales efforts designed to attract advertisers.

We conduct extensive market research in an effort to enhance our audience ratings and, in certain circumstances, to identify opportunities to reformat radio stations to reach underserved demographic groups and increase advertising revenue.

and (vi) the number and characteristics of other stations and other advertising media in the market area.

We attempt to improve our competitive position with promotional campaigns aimed at the demographic groups targeted by our stations and by sales efforts designed to attract advertisers.

We conduct extensive market research in an effort to enhance our audience ratings and, in certain circumstances, to identify opportunities to reformat stations to reach underserved demographic groups and increase advertising revenue.

Index to Financial Statements

Federal Regulation of Radio Broadcasting

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adopts and implements regulations and policies that directly or indirectly affect the ownership, operation, program content and employment practices of radio stations.

The FCC has the power to impose penalties for violations of its rules that are implemented pursuant to the Communications Act of 1934, as amended (the “Communications Act”), including the imposition of monetary forfeitures, the issuance of short-term licenses, the imposition of conditions on the renewal of a license, and, in egregious cases, non-renewal

of licenses and the revocation of licenses.

The following is a brief summary of some provisions of the Communications Act and of certain specific FCC rules and policies.

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Historically, FCC licenses have generally been renewed.

The most recent renewal cycle started in June 2019 and will conclude in April 2022.

The non-renewal

of one or more of our licenses could have a material adverse effect on our business.

The most recent renewal cycle started in June 2019 and concluded in April 2022.

All of our radio stations’ licenses were renewed for full eight-year terms.

The next renewal cycle will begin in June 2027.

The non-renewal, or renewal with substantial conditions or modification, of one or more of our licenses could have a material adverse effect on our business.

The FCC classifies each AM and FM radio station.

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Boosters operate on the same frequency as the station being retransmitted and translators operate on a different frequency.

Index to Financial Statements

An Order adopted by the FCC to revitalize the AM band implemented several rule changes impacting the technical operations of AM stations, including relaxation of the daytime community coverage requirements and elimination of the nighttime community coverage requirements for existing AM stations.

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Under these rules, full power stations may only bring an interference complaint if they experience interference in an area that is inside the station’s 45 dBu contour.

Rules to allow AM stations to voluntarily convert to all-digital

operations became effective in 2021.

Rules to allow AM stations to voluntarily convert to all-digital operations became effective in 2021.

The FCC has adopted rules establishing a low power radio service.

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The maximum permitted fine for an indecency violation is $479,945 per incident and $4,430,255 for any continuing violation arising from a single act or failure to act.

Because the FCC may investigate indecency complaints prior to notifying a licensee of the existence of a

complaint, a licensee may not have knowledge of a complaint unless and until the complaint results in the issuance of a formal FCC letter of inquiry or notice of apparent liability for forfeiture.

Because the FCC may investigate indecency complaints prior to notifying a licensee of the existence of a complaint, a licensee may not have knowledge of a complaint unless and until the complaint results in the issuance of a formal FCC letter of inquiry or notice of apparent liability for forfeiture.

The FCC has advised that it will continue to pursue enforcement actions in egregious cases while it conducts its review of its indecency policies generally.

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We cannot predict whether Congress will consider or adopt further legislation in this area.

FCC regulations require a radio station to include an on-air

announcement that identifies the sponsor of all advertisements and other content broadcast by any radio station for which any money, service or other valuable consideration is received.

FCC regulations require a radio station to include an on-air announcement that identifies the sponsor of all advertisements and other content broadcast by any radio station for which any money, service or other valuable consideration is received.

Fines for such violations can be substantial as they are dependent on the number of times a particular advertisement is broadcast.

In April 2021 the FCC adopted rules that would require radio stations to disclose when foreign governmental entities have paid a station, directly or indirectly, to broadcast programming under a lease time agreement.

Radio stations will be required to take certain actions to determine if an entity leasing airtime from it is covered by the new rules.

The National Association of Broadcasters has filed an appeal of the new rules and a request that they be stayed pending appeal.

Unless the effectiveness of the new rules is stayed by the court considering the appeal, they will become effective upon approval by the Office of Management and Budget.

In April 2021, the FCC adopted rules that require broadcast stations to disclose when foreign governmental entities have paid a station, directly or indirectly, to broadcast programming under a lease time agreement.

Radio stations are required to take certain actions to determine if an entity leasing airtime from it is covered by the new rules.

The National Association of Broadcasters (the “NAB”) filed an appeal of the new rules, and in July 2021, the DC Circuit Court of Appeals struck down one aspect of the new rules that would have required stations to independently check certain government databases to determine if entities leasing programming were listed.

In October 2021, the FCC adopted a new rulemaking proceeding that would require broadcasters to follow a revised procedure to determine whether entities leasing airtime are foreign governmental entities and to upload certifications to their online public files.

The NAB and others have opposed the revised proposal, which is currently pending.

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Transfers or Assignment of License.

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The FCC generally applies its ownership limits to attributable interests held by an individual, corporation, partnership or other entity.

An “attributable” interest for purposes of the FCC’s broadcast ownership rules generally

An “attributable” interest for purposes of the FCC’s broadcast ownership rules generally includes:

(i) equity and debt interests which combined exceed 33% of a licensee’s total assets, if the interest holder supplies more than 15% of the licensee’s total weekly programming, or has an attributable same-market media interest, whether television or radio;

(ii) a 5% or greater direct or indirect voting stock interest, including certain interests held in trust, unless the holder is a qualified passive investor in which case the threshold is a 20% or greater voting stock interest;

(ii) a 5% or greater direct or indirect voting

Index to Financial Statements

stock interest, including certain interests held in trust, unless the holder is a qualified passive investor in which case the threshold is a 20% or greater voting stock interest;

(iii) any equity interest in a limited liability company or a partnership, including a limited partnership, unless properly “insulated” from management activities;

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The rules also specify how public companies should monitor foreign ownership compliance and provide for remedial provisions in the event a public company determines that it has exceeded its foreign ownership limits.

foreign investor identified in the petition to increase its equity and/or voting interest in a parent entity at a future time up to 49.9 percent.

The streamlined rules permit a broadcast licensee to file a petition with the FCC seeking approval for a proposed foreign investor to own up to 100% of the controlling parent entity and for a non-controlling foreign investor identified in the petition to increase its equity and/or voting interest in a parent entity at a future time up to 49.9 percent.

In October 2020, the FCC adopted rules to streamline the timeline for the required review of these requests by Executive Branch agencies and to require licensees to respond to a standardized set of national security and law enforcement questions.

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The FCC’s rules provide that a radio station that brokers more than 15% of the weekly broadcast time on another radio station serving the same market or sells more than 15% of the other station’s advertising time per week will be considered to have an attributable ownership interest in the other radio station for purposes of the FCC’s local radio ownership limits.

either through common ownership of the two radio stations or through a time brokerage agreement, were eliminated in October 2020.

FCC rules that had also prohibited a broadcast station from duplicating more than 25% of its programming on another radio station serving substantially the same area in the same broadcast service, that is AM-AM or FM-FM, either through common ownership of the two radio stations or through a time brokerage agreement, were eliminated in October 2020.

A Petition asking the FCC to reconsider the elimination of the rule for simulcasts of two commonly owned or operated FM stations serving substantially the same area is pending.

Quadrennial Review of Ownership Rules .

The FCC is required to review quadrennially the media ownership rules to modify, repeal, or retain any rules as it determines to be in the public interest.

In August 2016, the FCC released an Order in a proceeding that combined the 2010 and 2014 quadrennial reviews which retained most of the existing multiple ownership rules.

The FCC adopted one change that applies to radio stations in “embedded” markets – smaller markets within the boundaries of larger markets.

Previously, such stations had to comply with the local radio multiple ownership rules in both the smaller and larger markets.

Under the revised rules, such stations could request that application of the rules to the larger market be waived if the larger market does not accurately reflect the competition faced by stations in the embedded market.

Several parties filed petitions requesting the FCC to reconsider its August 2016 Order.

The FCC is required to review quadrennially the media ownership rules and determine if the rules remain necessary in the public interest as a result of competition.

In August 2016, the FCC released an Order in a proceeding that combined the 2010 and 2014 quadrennial reviews

Index to Financial Statements

which retained most of the existing multiple ownership rules.

In November 2017, the FCC released an Order on Reconsideration that eliminated the newspaper-broadcast and television-radio cross ownership rules, relaxed the local television ownership rule and eliminated the attribution of JSAs between television stations.

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Following the denial, in November 2019, a mandate reinstating the newspaper-broadcast and radio-television cross-ownership rules was issued.

In April 2021, the Supreme Court in a unanimous decision reinstated the FCC’s 2017 Reconsideration Order which resulted in the elimination of the newspaper-broadcast and radio television cross-ownership rules and

changes to the local television ownership rule.

In April 2021, the Supreme Court in a unanimous decision reinstated the FCC’s 2017 Reconsideration Order, which resulted in the elimination of the newspaper-broadcast and radio television cross-ownership rules and changes to the local television ownership rule.

In June 2021, the FCC’s Media Bureau issued an Order formally implementing the changes reflected in the November 2017 Reconsideration Order.

In December 2018, the FCC released a Notice of Proposed Rulemaking to launch its 2018 quadrennial review of multiple ownership rules.

Because of the rule changes implemented as a result of the Supreme Court decision, the Media Bureau asked parties to update the record in the currently pending 2018 quadrennial review.

Because of the rule changes implemented as a result of the Supreme Court decision, in 2021, the Media Bureau asked parties to update the record in the currently pending 2018 quadrennial review.

Although the 2018 quadrennial review is still pending, in December 2022, the FCC issued a public notice to begin its statutorily mandated 2022 quadrennial review.

The FCC has requested comments to address the impact of the local radio multiple ownership rule as well as the local TV ownership rule on competition and whether the rules continue to be in the public interest.

Programming and Operations.

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Copyright owners of musical compositions most often rely on intermediaries known as performing rights organizations (“PROs”) to negotiate licenses with copyright users for the public performance of their compositions, collect royalties under such licenses and distribute them to copyright owners.

We have obtained public performance licenses from, and pay license fees to, the four major PROs in the U.S., which are the American Society of Composers, Authors and Publishers (“ASCAP”), Broadcast Music, Inc.

We have obtained public performance licenses from, and pay license fees to, the four major PROs in the U.S., which are the American Society of

Index to Financial Statements

Composers, Authors and Publishers (“ASCAP”), Broadcast Music, Inc.

(“BMI”), SESAC LLC (“SESAC”) and Global Music Rights LLC (“GMR”).

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The rates at which we pay royalties to copyright owners are privately negotiated or set pursuant to a regulatory process.

Increased royalty rates could significantly increase our expenses, which could adversely affect our business There is no guarantee that the licenses and associated royalty rates that currently are available to us will be available to us in the future.

Increased royalty rates could significantly increase our expenses, which could adversely affect our business.

There is no guarantee that the licenses and associated royalty rates that currently are available to us will be available to us in the future.

In addition, Congress may consider and adopt legislation that would require us to pay royalties to sound recording copyright owners for broadcasting those recordings on our terrestrial radio stations.

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proposals in legislation to strengthen protections against online infringement of intellectual property that would impose criminal penalties on content providers, including broadcasters, that fail to comply with legal requirements to file reports regarding internet streaming in a timely manner.

Index to Financial Statements

The FCC has also adopted procedures for the auction of broadcast spectrum in circumstances where two or more parties have filed for new or major change applications that are mutually exclusive.

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Any failure on our part to comply with these laws may subject us to significant liabilities.

For example, the California Consumer Privacy Act (“CCPA”) establishes a new privacy framework that expands the definition of personal information, establishes new data privacy rights for consumers residing in the State of California, imposes special rules on the collection of consumer data from minors, creates new notice obligations and new limits on the sale of personal information, and creates a new and potentially severe statutory

damages framework for (i) violations of the CCPA and (ii) businesses that fail to implement reasonable security procedures and practices to prevent data breaches.

Our websites are also subject to regulation relating to acquisition of personal information from children under the age of 13, including the federal Child Online Privacy Protection Act (“COPPA”) and the federal Controlling the Assault of Non-Solicited

Pornography and Marketing Act (“CAN-SPAM”).

federal, state and, territorial laws and regulations may be adopted with respect to the Internet or other online services, covering such issues as user privacy, child safety, data security, advertising, pricing, content, copyrights and trademarks, access by persons with disabilities, distribution, taxation and characteristics and quality of products and services.

The FCC selected In-Band

technology as the exclusive technology for the introduction of terrestrial digital operations by AM and FM radio stations.

Additional federal, state, and territorial laws and regulations may be adopted with respect

Index to Financial Statements

to the Internet or other online services, covering such issues as user privacy, child safety, data security, advertising, pricing, content, copyrights and trademarks, access by persons with disabilities, distribution, taxation and characteristics and quality of products and services.

Several years ago, the FCC selected In-Band On-Channel technology as the exclusive technology for the introduction of terrestrial digital operations by AM and FM radio stations.

The technology is also known as “HD Radio.” The advantages of digital audio broadcasting over traditional analog broadcasting technology include improved sound quality, the ability to broadcast additional channels, and the ability to offer a greater variety of auxiliary services.

We currently utilize HD Radio digital technology on most of our stations.

In November 2022, the FCC released a Public Notice seeking public comment on petitions for rulemaking requesting it to adopt rule changes that would improve digital FM signal quality and coverage while minimizing harmful interference to adjacent-channel stations.

We filed comments supporting the proposals.

Seasonal revenue fluctuations are common in the radio broadcasting industry and are due primarily to fluctuations in advertising expenditures.

Our net revenues are typically lowest in the first calendar quarter of the year.

Our net revenues are typically lowest in the first quarter and generally higher in the second and fourth quarters of the year.

In addition, our revenues tend to fluctuate between years, consistent with, among other things, increased advertising expenditures in even-numbered years by political candidates, political parties and special interest groups.

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Human Capital Resources

As of February 16, 2022, we had a staff of 811 full-time employees and 349 part-time employees.

As of March 17, 2023, we had a staff of 738 full-time employees and 355 part-time employees.

We are a party to two separate collective bargaining agreements with the American Federation of Television and Radio Artists.

Both agreements automatically renew for successive

periods unless either party gives a notice of proposed termination at least sixty days prior to a renewal date.

Both agreements automatically renew for successive one-year periods unless either party gives a notice of proposed termination at least sixty days prior to a renewal date.

We are also a party to a collective bargaining agreement with the United Electrical, Radio and Machine Workers of America Local 262.

This agreement applies only to certain of our employees at one radio station in Boston.

The initial term of the collective bargaining agreement expired on July 16, 2021 however, it automatically renews for successive

periods unless either party gives a notice of proposed modification or termination at least sixty days prior to the expiration date or a subsequent renewal date.

This agreement applies only to certain of our employees at one station in Boston.

The initial term of the collective bargaining agreement expired on July 16, 2021 however, it automatically renews for successive one-year periods unless either party gives a notice of proposed modification or termination at least sixty days prior to the expiration date or a subsequent renewal date.

We consider our relations with our employees to be good.

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Our internet address is www.bbgi.com.

You may obtain through our website, free of charge, copies of our annual reports on Form 10-K,

quarterly reports on Form 10-Q,

current reports on Form 8-K,

and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

You may obtain through our website, free of charge, copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

These reports will be available as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the Securities and Exchange Commission (the “SEC”).

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The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, www.sec.gov.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business