What changed in this filing

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Item 1. Business

2023-03-16 compared with 2022-03-16 · 156 added, 136 removed, 658 unchanged (31% of the section changed)

We are a broadcast company primarily engaged in acquiring, developing and operating broadcast properties.

As of February 28, 2022, we owned seventy-nine FM, thirty-four AM radio stations and seventy-nine metro signals serving twenty-seven markets.

As of February 28, 2023, we owned seventy-nine FM, thirty-four AM radio stations and eighty metro signals serving twenty-seven markets.

Our principal executive offices are located at 73 Kercheval, Grosse Pointe Farms, Michigan 48236.

We are a Florida corporation, reorganized in 2020.

We were originally a Delaware corporation that was organized in 1986.

During 2022, our founder and Chief Executive Officer (“CEO”), Edward K.

Christian passed away.

As of the date of his passing, Mr.

Christian held approximately 65% of the combined voting power of the Company’s Common Stock.

His passing resulted in the conversion of his Class B Shares into Class A Shares that were transferred to an estate planning trust that now owns approximately 16% of the common stock outstanding.

We were also required to make certain payments to his estate as outlined in his employment agreement.

Our strategy is to operate top billing radio stations in mid-sized markets, which we define as markets ranked from 20 to 200 out of the markets summarized by Investing in Radio Market Report.

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Advertising expenditures, our primary source of revenue, is generally lowest in the first quarter.

Additionally, given the disruptions in economic activity caused by the COVID-19 pandemic, our quarterly results in 2021 are not necessarily indicative of results that may be achieved in the future.

Environmental Compliance

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Radio station licenses generally expire along with the licenses of all other radio stations in a given state.

The FCC accepts renewal applications for various groups of radio stations every two months, the current cycle having begun in June 2019 and will conclude for the Company’s stations in June 2022.

(when New York station licenses expire).

During the cycle, we have timely filed renewal applications, as required for the Company’s stations in Virginia, North Carolina, South Carolina, Florida, Tennessee, Kentucky, Arkansas, Ohio, Illinois, Wisconsin, Iowa and South Dakota, which applications have been granted.

Applications for renewal of license of our radio stations in Maine, Massachusetts, New Hampshire, Vermont and New York are pending.

The FCC accepts renewal applications for various groups of radio stations every two months.

The last cycle having begun in June 2019, concluded for the Company’s stations in June 2022.

All the Company’s renewal applications were routinely granted by the FCC.

In January 2018 and again in February 2022, the FCC designated the renewal applications of radio stations (not the Company’s) for hearing based on the stations’ records of extended periods of silence during and following their respective license renewal terms.

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Charleston, SC

Contemporary Country

December 1, 2027

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Charlottesville, VA

Contemporary Country

October 1, 2027

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Clarksville, TN/Hopkinsville, KY

Contemporary Country

August 1, 2028

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Greenfield, MA

Contemporary Country

April 1, 2030

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Hilton Head Island, SC

December 1, 2027

Hilton Head Island, SC

Soft Adult Contemporary

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December 1, 2027

Hilton Head Island, SC

Adult Variety Hits

December 1, 2027

Adult Contemporary

Contemporary Country

Contemporary Hits

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Jonesboro, AR

Contemporary Country

Jonesboro, AR

Adult Contemporary

Hot Adult Contemporary

April 1, 2030

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April 1, 2030

Contemporary Country

April 1, 2030

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December 1, 2028

Contemporary Country

April 1, 2029

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October 1, 2027

Contemporary Country

February 1, 2028

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April 1, 2030

Contemporary Country

April 1, 2030

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April 1, 2030

Contemporary Country

February 1, 2029

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Springfield, MA

Alternative Rock

April 1, 2030

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Springfield, IL

Contemporary Country

December 1, 2028

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December 1, 2028

Contemporary Country

April 1, 2029

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Clarksville, TN

Sports/Talk ESPN

August 1, 2028

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Greenfield, MA

Country Legends

April 1, 2030

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April 1, 2030

Country Legends

Classic Country

April 1, 2030

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Springfield, MA

Alternative Rock

April 1, 2030

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§73.210 for a definition of FM station class information, including effective radiated power [“ERP”] and antenna height.) WISE, KPSZ, KPUG, KGMI, KBAI, WNYY, WHCU, WINQ(AM) and WSVA operate with lower power at night than during daytime.

WYSE, WBCO, WQEZ, WKFN, WPVQ, WHBG, WZBK and WLZX(AM) are “Class D” stations that operate daytime only or with greatly reduced power at night.

(3) An application for renewal of license was timely filed and is pending.

WYSE, WBCO, WQEZ, WKFN, WHBG, WZBK and WLZX(AM) are “Class D” stations that operate daytime only or with greatly reduced power at night.

Ownership Matters.

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We are permitted to own an unlimited number of radio stations on a nationwide basis (subject to the local ownership restrictions described below).

Under the rules, the number of radio stations one party may own in a local Nielsen Audio-rated radio market is determined by the number of full-power commercial and noncommercial radio stations in the market as determined by Nielsen Audio and BIA Advisory Services, LLC d/b/a BIA/Kelsey.

Under the rules, the number of radio stations one party may own in a local Nielsen Audio-rated radio market is determined by the number of full-power commercial and noncommercial educational (“NCE”) radio stations in the market as determined by Nielsen Audio and BIA Advisory Services, LLC d/b/a BIA/Kelsey.

Radio markets that are not Nielsen Audio rated are determined by analysis of the broadcast coverage contours of the radio stations involved.

Under the Communications Act, and the FCC’s “Local Ownership Rule,” we are permitted to own radio stations (without regard to the audience shares of the stations) based upon the number of full-power commercial and noncommercial radio stations in the relevant radio market as follows:

Under the Communications Act, and the FCC’s “Local Radio Ownership Rule,” we are permitted to own radio stations (without regard to the audience shares of the stations) based upon the number of full-power commercial and NCE radio stations in the relevant radio market as follows:

Number of Stations

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Total of 8 stations, not more than 5 in the same service (AM or FM).

The Commission’s 2010/2014 Quadrennial Review Order on Reconsideration , 32 FCC Rcd 9802 (2017), modified the Commission’s media ownership rules by:

The FCC’s 2010/2014 Quadrennial Review Order on Reconsideration , 32 FCC Rcd 9802 (2017), modified the FCC’s media ownership rules by:

(1) eliminating the newspaper/broadcast cross-ownership and radio/television cross-ownership rules;

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1150 (2021), the U.

Supreme Court reversed a decision of the Court of Appeals for the Third Circuit which had vacated the Commission’s 2017 order.)

Supreme Court reversed a decision of the Court of Appeals for the Third Circuit which had vacated the FCC’s 2017 order.

The FCC is required by the Telecommunications Act of 1996 to review its media ownership rules every four years to determine whether they remain “necessary in the public interest as the result of competition.” On December 12, 2018, the FCC adopted a Notice of Proposed Rulemaking (“NPRM”) to initiate the 2018 Quadrennial Review proceeding.

On June 4, 2021, the FCC released a Public Notice seeking to refresh the record in the 2018 Quadrennial Review proceeding.

That proceeding remains pending.

On December 22, 2022, the FCC’s Media Bureau released a Public Notice commencing the 2022 Quadrennial Review of the FCC’s media ownership rules.

Although they remain subject to the ongoing 2018 Quadrennial Review proceeding, the three rules currently in place and subject to the 2022 review are the Local Radio Ownership Rule and the Local Television Ownership Rule—which limit ownership by a single entity of broadcast radio or television stations in local markets respectively—and the Dual Network Rule, which effectively prohibits mergers among the “Big Four” broadcast television networks (ABC, CBS, Fox, and NBC).

In the context of these three rules, as with prior reviews, the FCC is seeking information regarding the media marketplace, including ongoing trends or developments (e.g., consolidation, technological innovation, or the emergence of new video or audio options for consumers).

The Company cannot predict whether the FCC will adopt new or revise existing media ownership rules.

New rules that could be promulgated under the Communications Act may permit us to own, operate, control or have a cognizable interest in additional radio broadcast stations if the FCC determines that such ownership, operation, control or cognizable interest will result in an increase in the number of radio stations in operation.

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The Court and FCC proceedings are ongoing and we cannot predict what action, if any, the Court or the FCC may take to further modify its rules.

Due to changes in local radio markets, the ownership of some of our radio stations, in the future, could exceed the current ownership limits imposed by the Local Ownership Rule.

Due to changes in local radio markets, the ownership of some of our radio stations, in the future, could exceed the current ownership limits imposed by the Local Radio Ownership Rule.

Their current ownership structure is “grandfathered” by the FCC.

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The statements herein are based solely on the FCC’s multiple ownership rules in effect as of the date hereof and do not include any forward-looking statements concerning compliance with any future multiple ownership rules.

All commercial broadcasters were required to file a “biennial” ownership report by December 1, 2021, describing the ownership of their stations as of October 1, 2021.

All commercial broadcasters are required to file a “biennial” ownership report, the next report due by December 1, 2023, describing the ownership of their stations as of October 1, 2023.

The FCC eliminated the prior requirement to file with the FCC paper copies of certain agreements, corporate organization documents, and the like.

Instead, a broadcaster is required to upload copies of these documents to the station’s online public inspection file, or provide a list of such documents and make them available to a requesting party.

Instead, a broadcaster is required to upload copies of these documents to the station’s online public inspection file (“OPIF”), or provide a list of such documents and make them available to a requesting party.

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

In the case of corporations holding broadcast licenses, the interests of officers, directors and those who, directly or indirectly, have the right to vote 5% or more of the corporation’s stock (or 20% or more of such stock in the case of certain passive investors that are holding stock for investment purposes only) are generally attributable, as are positions of an officer or director of a corporate parent of a broadcast licensee.

Currently, none of our directors has an attributable interest or interests in companies applying for or licensed to operate broadcast stations other than us.

Currently, none of our directors has an attributable interest or interests in companies applying for or licensed to operate broadcast stations other than the Company.

The FCC’s ownership attribution rules (a) apply to limited liability companies and registered limited liability partnerships the same attribution rules that the FCC applies to limited partnerships;

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We could be prohibited from acquiring a financial interest in stations in markets where application of the EDP rule would result in us having an attributable interest in the stations.

In reconsidering its rules, the FCC also eliminated the “single majority shareholder exemption” which provides that minority voting shares in a corporation where one shareholder controls a majority of the voting stock are not attributable;

however, the FCC “suspended” the elimination of this exemption until the FCC resolved issues concerning cable television ownership.

The FCC announced in 2016 that it would address this issue, among others, in a subsequent decision, but the FCC has so far taken no action on the matters.

In addition to the FCC’s multiple ownership rules, the Antitrust Division of the United States Department of Justice and the Federal Trade Commission and some state governments have the authority to examine proposed transactions for compliance with antitrust statutes and guidelines.

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The FCC retained the requirement that stations maintain a local or toll-free telephone number to ensure consumers have ready access to their local stations.

The FCC’s rules require cable operators, direct satellite TV providers, broadcast radio licensees, and satellite radio licensees to post public inspection files to the FCC's online database (the “online public inspection file” or “OPIF”) rather than maintaining them in a local public inspection file.

The FCC’s rules require cable operators, direct satellite TV providers, broadcast radio licensees, and satellite radio licensees to post public inspection files to the FCC's online database (the “OPIF” referred to above) rather than maintaining them in a local public inspection file.

The FCC believes posting these files to the OPIF renders the materials more widely accessible to the public.

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The FCC has warned licensees of possible enforcement action if these files are found not to be in compliance at the time of license renewal.

Because of inadvertent untimely posting of certain political records at stations owned by one of the Company’s subsidiaries, that subsidiary was obliged to enter into a Consent Decree with the FCC (FCC Order , DA 201263, released October 26, 2020).

Because of inadvertent untimely posting to the OPIF of certain political records at stations owned by one of the Company’s subsidiaries, that subsidiary was obliged to enter into a Consent Decree with the FCC (FCC Order , DA 20-1263, released October 26, 2020).

The Consent Decree required Company employees responsible for performing, supervising, overseeing, or managing activities related to the maintenance of online political files to thoroughly understand the Company’s obligation to comply with laws regulating political broadcasting and to promptly report to the FCC any noncompliance with those laws.

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The FCC in 2020 revised its rules governing the publication of local notice of the filing of certain broadcast applications.

FCC licensees, like the Company, must maintain a tab on their station websites where the public can view the OPIF and a tab where notices describing pending applications must be posted, rather than printing such notices in local newspapers.

FCC licensees, like the Company’s subsidiaries, must maintain a tab on their station websites where the public can view the OPIF and a tab where notices describing pending applications must be posted, rather than printing such notices in local newspapers.

The Company is required to pay (1) FCC filing fees in connection with its applications and (2) annual regulatory fees determined by the number and character of the radio stations the Company owns as of October 1 of each prior year.

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In a Further NPRM (MB Docket No.

98-204), released July 23, 2021, the Commission sought to refresh the existing record regarding the statutorily mandated collection of data on the FCC Form 395-B, as contemplated by the Act.

98-204), released July 23, 2021, the FCC sought to refresh the existing record regarding the statutorily mandated collection of data on the FCC Form 395-B, as contemplated by the Act.

This employment report form is intended to gather workforce composition data from broadcasters on an annual basis but the form and data have not been collected for many years.

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Court of Appeals for the District of Columbia Circuit (D.C.

Circuit) vacating certain aspects of the Commission's Equal Employment Opportunity (EEO) requirements.

While the Commission in 2004 adopted revised regulations regarding the filing of Form 395-B and updated the form, the requirement that broadcasters once again submit the form to the Commission was suspended until issues were resolved regarding confidentiality of the employment data.

Circuit) vacating certain aspects of the FCC's Equal Employment Opportunity (EEO) requirements.

While the FCC in 2004 adopted revised regulations regarding the filing of Form 395-B and updated the form, the requirement that broadcasters once again submit the form to the FCC was suspended until issues were resolved regarding confidentiality of the employment data.

To date, those issues remain unresolved, and the filing of Form 395-B remains suspended.

The Commission is seeking “to refresh the record” regarding the collection of broadcaster workforce composition data and obtain further input on the legal, logistical, and technical issues surrounding FCC Form 395-B.

The Company cannot predict whether, or if changes may be made as a result of these NPRMs.

The FCC is seeking “to refresh the record” regarding the collection of broadcaster workforce composition data and obtain further input on the legal, logistical, and technical issues surrounding FCC Form 395-B.

On February 3, 2023, the FCC released a Public Notice, “Expanding Digital and Media Ownership Opportunities for Women and Minorities,”

announcing a symposium to explore the challenges as well as possible creative solutions to increasing ownership opportunities for women and people of color to achieve success and viewpoint diversity in all facets of media – TV, radio, cable, and streaming.The Company cannot predict whether, or if changes may be made as a result of these NPRMs and the symposium.

Time Brokerage Agreements .

As is common in the industry, we have previously entered into what have commonly been referred to as Time Brokerage Agreements (“TBAs”) which are sometimes termed “Local Marketing Agreements.” Such arrangements are an extension of the concept of agreements under which a licensee of a station sells blocks of time on its station to an entity or entities which purchase the blocks of time and which sell their own commercial advertising announcements during the time periods in question.

As is common in the industry, we have previously entered into what have commonly been referred to as Time Brokerage Agreements (“TBAs”) which are sometimes termed “Local Marketing Agreements.” Such arrangements are an extension of the concept of agreements under which a licensee of a station sells (or “leases”) blocks of time on its station to an entity or entities which purchase the blocks of time and use the time to broadcast material the lessee has produced, or which sell their own commercial advertising announcements during the time periods in question.

While these agreements may take varying forms, under a typical TBA, separately owned and licensed radio or television stations agree to enter into cooperative arrangements of varying sorts, subject to compliance with the requirements of antitrust laws and with the FCC’s rules and policies.

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One typical type of TBA is a programming agreement between two separately-owned radio or television stations serving a common service area, whereby the licensee of one station purchases substantial portions of the broadcast day on the other licensee’s station, subject to ultimate editorial and other controls being exercised by the latter licensee, and sells advertising time during such program segments.

The FCC’s rules provide that a station purchasing (brokering) time on another station serving the same market will be considered to have an attributable ownership interest in the brokered station for purposes of the FCC’s multiple ownership rules.

The FCC’s rules provide that a station purchasing (brokering or leasing) time on another station serving the same market will be considered to have an attributable ownership interest in the brokered station for purposes of the FCC’s multiple ownership rules.

As a result, under the rules, a broadcast station will not be permitted to enter into a time brokerage agreement giving it the right to purchase more than 15% of the broadcast time, on a weekly basis, of another local station that it could not own under the local ownership rules of the FCC’s multiple ownership rules.

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The Company cannot predict how the FCC may act on that petition.

The FCC has adopted rules that require the broadcast of a specific disclosure at the time of broadcast if material aired pursuant to a lease of time on a station has been sponsored, paid for, or furnished by a foreign governmental entity.

Consistent with the Communications Act and the FCC’s sponsorship identification rules, the Company’s stations are required to disclose political programming or programming involving the discussion of a controversial issue if such programming is provided by a foreign governmental entity for free, or for nominal compensation, as an inducement to air.

The rule requires the Company to exercise reasonable diligence (and obtain certifications from lessees) to ascertain whether the foreign sponsorship disclosure requirements apply at the time of the lease agreement and at any renewal thereof.

A station must place in its OPIF on a quarterly basis certain information if the station broadcasts such foreign-sponsored programming.

On October 6, 2022, the FCC released a Second NPRM, seeking comment on establishing a requirement that licensees require a lessee to use a specific certification form to disclose whether a lessee is or is not a foreign governmental entity and whether it knows of any entity or individual further back in the programming production or distribution chain that qualifies as a foreign governmental entity.

If adopted, the proposed rules would require the Company to upload the certifications to the OPIF whether or not the lessee has a connection to a foreign government.

The Company cannot predict whether such new rules will be adopted, and if so, the form they might take.

Other FCC Requirements .

Low Power FM Radio.

There exists a “low power radio service” on the FM band (“LPFM”) in which the FCC authorizes the construction and operation of noncommercial educational FM stations with up to 100 watts ERP with antenna height above average terrain (“HAAT”) at up to 30 meters (100 feet).

There exists a “low power radio service” on the FM band (“LPFM”) in which the FCC authorizes the construction and operation of NCE FM stations with up to 100 watts ERP with antenna height above average terrain (“HAAT”) at up to 30 meters (100 feet).

This combination is calculated to produce a service area radius of approximately 3.5 miles.

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Thus, absent a waiver, we could not own or program an LPFM station.

LPFM stations are allocated throughout the FM broadcast band, (i.e., 88.1 to 107.9 MHz), although they must operate with a noncommercial format.

LPFM stations are allocated throughout the FM broadcast band, (i.e., 88.1 to 107.9 MHz), although they must operate with a NCE format.

The FCC has established allocation rules that require FM stations to be separated by specified distances to other stations on the same frequency, and stations on frequencies on the first, second and third channels adjacent to the center frequency.

The FCC has granted construction permits and licenses for LPFM stations.

As required by the Local Community Radio Act of 2010, the FCC in 2012 modified its rules to maintain its existing minimum distance separation requirements for full-service FM stations, FM translator stations, and FM booster stations that broadcast radio reading services via an analog subcarrier frequency to avoid potential interference by LPFM stations;

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(3) allowing LPFM stations to own FM boosters;

and (4) permitting LPFM and Class D FM stations operating on the FM reserved band (channels 201 to 220) reserved band (channels 201 to 220) to propose facilities short-spaced to television stations operating on channel 6 (TV6) with the consent of the potentially affected stations.

and (4) permitting LPFM and Class D FM stations operating on the NCE FM reserved band (channels 201 to 220) to propose facilities short-spaced to television stations operating on channel 6 (TV6) with the consent of the potentially affected stations.

The FCC also took other less significant actions affecting the LPFM service.

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Although rule-compliant LPFM stations compete for audience with the Company’s full-power and FM translator stations, the Company cannot predict whether there will be future negative economic impact on its stations .

As part of the transition from analog to digital operations, the FCC sought comment in a 2014 NPRM on whether to allow LPTV stations (so-called “Franken FM” radio stations) on digital television channel 6 to continue to operate these analog FM radio-type services on an ancillary or supplementary basis.

In June 2021, by Public Notice , the FCC reminded LPTV and TV translator stations that, by July 13, 2021, all LPTV stations must terminate all analog television operations.

This could result in eliminating Franken FM stations.

The owner of several channel 6 Franken FM stations in major markets, has proposed a system that allows an analog subcarrier to be used on the main digital channel.

The FCC’s Video Division has granted special temporary authority to the owner of one of the Franken FM stations permitting the station to broadcast a Channel 6 analog signal until July 25, 2022.

As part of the transition of television stations from analog to digital operations, the FCC sought comment in a 2014 NPRM on whether to allow low power television (“LPTV”) stations (so-called “Franken FM” or “FM6” radio stations) on digital television channel 6 to continue to operate these analog FM radio-type services on an ancillary or supplementary basis.

On June 7, 2022 (MB Docket No.

03-185), the FCC released a Fifth NPRM seeking comment on whether FM6 operations serve the public interest and should be authorized to continue in any capacity.

The FCC limited the scope of FM6 operations to only those LPTV channel 6 stations with "active"

FM6 engineering special temporary authority on the release date of the Fifth NPRM .

This could result in eliminating or authorizing FM6 stations.

The Company cannot predict whether Franken FM stations will become licensed radio services.

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On January 7, 2021, the FCC’s Enforcement Bureau issued an “Enforcement Advisory” which highlighted EAS participants’ obligations, identified measures to improve the EAS, and warned that failure to comply with the EAS rules may subject a violator to sanctions including, but not limited to, substantial monetary forfeitures.

Our stations are required periodically to file with the FCC forms reporting on the results of EAS tests.

In September, 2022, the FCC adopted new EAS requirements directing EAS participants to check whether certain types of alerts are available in common alerting protocol (“CAP”) format and, if so, to transmit the CAP version of the alert rather than the legacy-formatted version.

The FCC also prescribed text that EAS participants must broadcast using plain language terms.

In an NPRM adopted October 27, 2022, the FCC proposed to require EAS participants to report to the FCC compromises of EAS equipment, communications systems, and services.

The FCC proposed to require EAS participants to annually certify to having a cybersecurity risk management plan in place and to employ sufficient security measures to ensure the confidentiality, integrity, and availability of their respective alerting systems.

Use of FM Boosters for Geo-Targeting .

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Through its NPRM, the FCC sought comment regarding changes to the booster station rules that could enable FM broadcasters to use FM booster stations to air “geo-targeted” content (e.g., news, weather, and advertisements) independent of the signals of the booster’s primary station within different portions of the primary station's protected service contour for a limited period of time during the broadcast hour.

The FCC has solicited public comment on tests of the proposed system.

The Company cannot predict whether the FCC will adopt the proposed rules, and if adopted, whether the Company would use FM booster stations in this manner.

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Terrestrial radio operators (including the Company) are also making their product available through the Internet.

Due to interference generated by their electric motors, some manufacturers of all-electric vehicles do not market vehicles that can receive AM broadcasts over the air (although AM broadcasts can be heard over digital streaming services, such as Tunein Radio).

To date, the Company has not perceived negative economic impact from DARS or Internet-streamed audio on the Company’s full-service stations and FM translators, possibly due, in part, to the possibility of confusion in the digital advertising market, but the Company cannot predict whether there will be future negative economic impact .

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HD radio technology can provide near CD-quality sound on FM channels and FM quality on AM channels.

HD radio technology also permits the transmission of up to three additional program streams over the radio stations (which streams do not count as separate radio stations under the multiple ownership rules.) At the present time, we are configured to broadcast in HD radio on 53 stations.

HD radio technology also permits the transmission of up to four additional program streams over FM stations and one over AM stations (which streams do not count as separate radio stations under the multiple ownership rules.) At the present time, we are configured to broadcast in HD radio on 52 stations.

On November 28, 2022, the FCC issued a Public Notice seeking comment on a petition for rulemaking requesting the Commission to adopt an updated formula to determine and increase FM digital sideband power levels for stations transmitting digital FM.

On October 28, 2020, the FCC released a Report and Order, in which it adopted rules (effective January 4, 2021) to allow AM radio stations to broadcast an all-digital signal using the HD Radio in-band on-channel (IBOC) mode termed “MA3.” In adopting the new rules, the FCC said that a voluntary conversion to all-digital broadcasting will benefit many AM stations and their listeners by improving reception quality and listenable coverage in stations' service areas.

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Some of the Company’s subsidiaries that are AM licensees, acquired FM translators during the filing window, and relocated them to their local markets to pair with some of the Company’s AM broadcast stations.

The FM translators so acquired must rebroadcast the related AM station for at least four years, not counting any periods of silence.

The FM translators so acquired were obligated to rebroadcast the related AM station for at least four years, not counting any periods of silence.

The FCC later opened two windows for the filing of applications for construction permits for new FM translators, the final window closing January 31, 2018.

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The Company filed applications in both windows and obtained some construction permits as a result.

If the Company should decide that a subsidiary should sell or suspend operations of an AM station with such an FM construction permit or license, the subsidiary would also be required to sell or suspend operations of the FM translator.

The FCC has adopted rules regarding FM translator interference (1) allowing FM translators to resolve interference issues by changing channels to any available same-band frequency using a minor modification application;

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The Company has no Class A AM radio stations, but has Class B, Class C and Class D AM radio stations, some of which might benefit if the FCC changes its rules as proposed.

The Company pays for the use of music broadcast on its stations by obtaining licenses from organizations called performing rights organizations ( e.g.

BMI, ASCAP, SESAC and GMR), which, in turn pay composers, authors and publishers for their works.

In 2018, the FCC issued a Notice of Inquiry on whether to issue an NPRM that could lead to creation of a new Class C4 FM station that would allow use of power of up to 12 kW ERP, but the matter remains pending before the FCC.

The Company pays for the use of music broadcast on its stations by obtaining licenses from organizations called performing rights organizations (“PRO”) ( e.g.

Broadcast Music, Inc., American Society of Composers, Authors and Publishers SESAC, LLC, and Global Music Rights LLC), which, in turn pay composers, authors and publishers for their works.

Federal law grants a performance right for sound recordings in favor of recording companies and performing artists for non-interactive digital transmissions and Internet radio.

As a result, users of music, including the Company, are required to pay royalties for these uses through Sound Exchange, a non-profit performance rights organization.

Periodically, bills have been introduced in Congress, that if passed, would have required the Company to pay additional fees to an organization called MusicFirst which would distribute the money to other entities.

(Other PROs could be formed, which could increase the royalties we pay.) Periodically, bills have been introduced in Congress, that if passed, would have required the Company to pay additional fees to an organization called MusicFirst which would distribute the money to other entities.

Efforts continue by certain organizations to persuade Congress to enact a law that would require such payments.

Periodically, bills have been introduced in Congress that, if adopted, would require the Company to pay additional fees to one or more organizations that would distribute the money to performers or other entities.

The American Music Fairness Act was introduced on February 2, 2023, in both the Senate and House of Representatives (118 th Congress).

(A similar Bill died in the 117 th Congress.) The Act would require radio stations to have an additional license to publicly perform certain sound recordings.

The Copyright Royalty Board would periodically determine the royalty rates for such a license.

Terrestrial broadcast stations, and the owners of such stations, that fall below certain revenue thresholds would pay certain flat fees, instead of the board-established rate, for a license.

In late 2018, Congress passed the “Music Modernization Act” which was signed into law by the President.

The law (1) improves compensation to songwriters and streamlining how their music is licensed;

The law (1) improves compensation to songwriters and streamlined how their music is licensed;

(2) enables legacy artists (who recorded music before 1972) to be paid royalties when their music is played on digital radio;

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The law creates a blanket license for digital music providers to make permanent downloads, limited downloads, and interactive streams, creates a collective to administer the blanket license, and makes various improvements to royalty rate proceedings.

This new law could impose an additional financial burden on the Company, but the extent of the burden would depend on how the fee payment requirement was structured.

The American Music Fairness Act was introduced on June 24, 2021, in the House of Representatives (117 th Congress) and would establish that the copyright holder of a sound recording would have the exclusive right to perform the sound recording through an audio transmission and addresses other related issues.

(Currently, the public performance right only covers performances through a digital audio transmission in certain instances, which means that nonsubscription terrestrial radio stations generally do not have to secure a license to publicly perform a copyright-protected sound recording.).

Under the bill, a nonsubscription broadcast transmission would be required to have a license to publicly perform such sound recordings.

The Copyright Royalty Board would periodically determine the royalty rates for such a license.

When determining the rates, the board would be required to base its decision on certain information presented by the parties, including the radio stations' effect on other streams of revenue related to the sound recordings.

Terrestrial broadcast stations, and the owners of such stations) that fall below certain revenue thresholds would pay certain flat fees, instead of the board-established rate, for a license to publicly perform copyright-protected sound recordings.

On January 3, 2013, the FCC released the Sixth Further Notice of Proposed Rulemaking , which sought comment on the requirement that persons with attributable interests in broadcast licensees and other entities filing an FCC Ownership Report provide an “FCC Registration Number” (“FRN”) linked to their social security numbers.

Questions had been raised about the security of the FCC’s Registration System where this data would be stored.

On January 20, 2016, the FCC released its Report and Order, Second Report and Order and Order on Reconsideration that implemented a Restricted Use FRN (RUFRN) that individuals may use solely for the purpose of broadcast ownership report filings.

The FCC stated its belief that the RUFRN would allow for sufficient unique identification of individuals listed on broadcast ownership reports without necessitating the disclosure to the FCC of individuals’ full Social Security Numbers (SSNs).

The FCC eliminated the availability of the Special Use FRN (SUFRN) for broadcast station ownership reports, except in very limited circumstances.

On January 4, 2017, the FCC’s Media Bureau issued an Order on Reconsideration denying petitions for reconsideration of the requirement, but on February 2, 2017, the FCC set aside the Order on Reconsideration and returned the petitions for reconsideration to pending status to be considered by the full FCC.

The FCC is also seeking comment on whether to expand the biennial ownership reporting requirement to include interests, entities and individuals that are not attributable because of (a) the single majority shareholder exemption and (b) the exemption for interests held in eligible entities pursuant to the higher EDP threshold.

The Company has utilized the single majority shareholder exemption in reporting ownership interests in the Company.

The Company cannot predict whether these proposals will be adopted, and if so, whether information provided by those persons with a reportable attributable interest in the Company will be secure.

This law could impose an additional financial burden on the Company, but the extent of the burden depends on how the fee payment requirement is structured.

Proposed Changes.

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Our current executive officers are:

President, Chief Executive Officer and Chairman;

Christopher S.

President, Chief Executive Officer;

Senior Vice President, Treasurer and Chief Financial Officer

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Senior Vice President/Finance, Chief Accounting Officer and Corporate Controller

Christopher S.

Senior Vice President of Operations

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Set forth below is information with respect to our executive officers.

Christian has been President, Chief Executive Officer and Chairman since our inception in 1986.

Forgy has been President and Chief Executive Officer since December 2022.

He was previously our Senior Vice President of Operations from May 2018 until his appointment to President and Chief Executice Officer.

He was President/General Manager of our Columbus, Ohio market from 2010 to 2018 and was Director of Sales of our Columbus, Ohio market from 1995 to 2006.

He has been with Saga for over 20 years..

Bush has been Senior Vice President since 2002 and Chief Financial Officer and Treasurer since September 1997.

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Bobinski is a certified public accountant.

Forgy has been Senior Vice President of Operations since May 2018.

He was President/General Manager of our Columbus, Ohio market from 2010 to 2018 and was Director of Sales of our Columbus, Ohio market from 1995 to 2006.

He has been with Saga for 20 years.

Leland was promoted to Senior Vice President of Operations effective January 2023.

He was President/General Manager of our Norfolk, Virginia market from 2011 to 2022.

He has been with Saga for 11 years and has been in the broadcasting industry since 1986.

Ris k Factors

The more prominent risks and uncertainties inherent in our business are described in more details below.

The more prominent risks and uncertainties inherent in our business are described in more detail below.

However, these are not the only risks and uncertainties we face.

Our business may also face additional risks and uncertainties that are unknown to us at this time.

Risks Related to the Economy

Global Economic Conditions and Uncertainties May Continue to Affect our Business

General Risks Related to the Economy

Continued Uncertain Financial and Economic Conditions, including Inflation, may have an Adverse Impact on our Business, Results of Operations or Financial Condition

We derive revenues from the sale of advertising and expenditures by advertisers tend to be cyclical and are reflective of economic conditions.

Periods of a slowing economy, recession or economic uncertainty may be accompanied by a decrease in advertising.

The global economic recession that began in 2008 caused a decline in advertising and marketing by our customers, which had an adverse effect on our revenue, profit margins and cash flows.

Global economic conditions were slow to recover and remain uncertain.

There can be no assurance that any of the economic improvements since the recession will be broad based and sustainable, especially in light of the further negative impact of the COVID-19 pandemic, or that they will enhance conditions in markets relevant to us.

If economic conditions do not continue to improve, economic uncertainty increases or economic conditions deteriorate again, global economic conditions may once again adversely impact our business.

Due to the continued uncertain pace of economic growth, we cannot predict future revenue trends.

Further, there can be no assurance that we will not experience future adverse effects that may be material to our cash flows, competitive position, financial condition, results of operations, or our ability to access capital.

The volatility in global financial markets may also limit our ability to access the capital markets at a time when we would like, or need, to do so, which could have an impact on our flexibility to react to changing economic and business conditions.

Accordingly, if the economy does not fully recover or worsens, our business, results of operations and financial condition could be materially and adversely affected.

Financial and economic conditions continue to be uncertain over the longer term and the continuation or worsening of such conditions, including prolonged or increased inflationary developments, could reduce consumer confidence and have an adverse effect on our business, results of operations and/or financial condition.

If consumer confidence were to decline, this decline could negatively affect our advertising customers' businesses and their advertising budgets.

In addition, volatile economic conditions could have a negative impact on our industry or the industries of our customers who advertise on our stations, resulting in reduced advertising sales.

Furthermore, it may be possible that actions taken by any governmental or regulatory body for the purpose of stabilizing the economy or financial markets will not achieve their intended effect.

In addition to any negative direct consequences to our business or results of operations arising from these financial and economic developments, some of these actions may adversely affect financial institutions, capital providers, advertisers or other consumers on whom we rely, including our access to future capital or financing arrangements necessary to support our business.

Our inability to obtain financing in amounts and at times necessary could make it more difficult or impossible to meet our obligations or otherwise take actions in our best interests.

Our Business and Operations Could be Adversley Affected by Health Epidemics, such as the COVID-19 Pandemic, Impacting the Markets and Communities in which we and our Partners, Advertisers, and Users Operate

We face various risks related to health epidemics, pandemics and similar outbreaks, such as the global outbreak of COVID-19.

The ongoing COVID-19 pandemic and the measures taken to address the public health concerns resulting from the pandemic have resulted in disruptions to our business activity, volatility in the equity markets and credit markets, and uncertainty in the U.S.

and global economic outlook.

Such measures include travel restrictions and national border closings, restrictions on the conduct of non-essential business, closures of workplaces and schools, quarantines, shelter-in-place orders and social distancing orders.

The measures have impacted and may further impact our business.

Recently implemented restrictions on business activity and uncertainty in the U.S.

and global economic outlook has caused advertisers to adjust their purchasing plans and a deterioration in economic conditions globally and in the markets in which we operate may cause advertisers to reduce further purchases of advertising.

Furthermore, this level of uncertainty may adversely affect our ability to develop information in order to prepare accurate financial forecasts.

In addition, restrictive measures imposed by federal, state and local authorities in the United States as well as health-related concerns related to working conditions, have had, and may continue to have an impact on our business operations.

While we are not currently anticipating any material impact to our internal ability to operate our business as a result of the COVID-19 pandemic, we may temporarily lose the services of employees or experience interruptions in the normal conduct of businesses or operations of our systems, which could lead to inefficiencies, and disruptions of our regular operations.

Although we have undertaken a number or steps to mitigate the impact of the COVID-19 pandemic on our business, including a series of initiatives to control or reduce costs, such cost control measures are unlikely to completely offset declines in revenues.

The extent to which COVID-19 impacts our business and financial position will depend on future developments, which are difficult to predict, including the severity and scope of the COVID-19 outbreak as well as types of measures imposed by governmental authorities to contain the virus or address its impact and the duration of those actions and measures.

The COVID-19 pandemic negatively impacted the economy, disrupted consumer spending and created significant volatility and disruption of financial markets.

We expect the COVID-19 global pandemic may continue to have an adverse impact on our business including our results of operations, financial condition and liquidity.

The extent of the impact of the COVID-19 global pandemic, or other health epidemics, pandemics and similar outbreaks in the future, on our business, including our ability to execute our near-term and long-term business strategies and initiatives in the expected time frame, will depend on numerous factors that we may not be able to accurately predict or assess, including the negative impact on the economy and economic activity, changes in advertising customers and consumer behavior, short and longer-term impact on the levels of consumer confidence;

actions governments, businesses and individuals take in response to such outbreaks, and any resulting macroeconomic conditions;

and how quickly economies recover after such outbreaks or pandemics subside.

The effects of COVID-19, or other health epidemics, pandemics and similar outbreaks in the future, may also impact financial markets and corporate credit markets which could adversely impact our access to financing or the terms of any such financing.

To the extent pandemics or outbreaks adversely affect our business and financial results, it may also have the effect of heightening many of the other risks described herein.

The Success of Our Business is Dependent Upon Advertising Revenues, which are Seasonal and Cyclical, and also Fluctuate as a Result of a Number of Factors, Some of Which are Beyond Our Control.

Our primary source of revenue is the sale of advertising.

Our ability to sell advertising depends, among other things, on:

● economic conditions in the areas where our stations are located and in the nation as a whole;

● national and local demand for radio and digital advertising;

● the popularity of our programming;

● changes in the population demographics in the areas where our stations are located;

● local and national advertising price fluctuations, which can be affected by the availability of programming, the popularity of programming, and the relative supply of and demand for commercial advertising;

● the capability and effectiveness of our sales organization;

● our competitors' activities, including increased competition from other advertising-based mediums;

● decisions by advertisers to withdraw or delay planned advertising expenditures for any reason;

● other factors beyond our control.

Our operations and revenues also tend to be seasonal in nature, with generally lower revenue generated in the first quarter of the year and generally higher revenue generated in the second and fourth quarters of the year.

This seasonality causes and will likely continue to cause a variation in our quarterly operating results.

Such variations could have a material effect on the timing of our cash flows.

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.

We Depend on Key Stations

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Generally, advertising declines during periods of economic recession or downturns in the economy.

Our revenue has been and is likely to be adversely affected during such periods, whether they occur on a global leve, national level or in the geographic markets in which we operate.

Our revenue has been and is likely to be adversely affected during such periods, whether they occur on a global level, national level or in the geographic markets in which we operate.

During such periods we may also be required to reduce our advertising rates in order to attract available advertisers.

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The ongoing supply chain and labor shortage issues could result in an adverse impact on our business due to our customer’s reduction in advertising spending as their businesses are negatively impacted by low inventories, product delays, and labor shortages resulting in reduced revenue.

The Russian invastion of Ukraine has created not only great devastation but also a worldwide instability that could impact economies across the globe.

The Russian invasion of Ukraine has created not only great devastation but also a worldwide instability that could impact economies across the globe.

While direct impacts to our business are limited, the indirect impacts to our customers could impact demand for advertising and other indirect impacts could arise.

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Risks Related to Our Financing

We Have Substantial Indebtedness and Debt Service Requirements

We May Have Substantial Indebtedness and Debt Service Requirements

While we currently have no debt outstanding at December 31, 2022 we have previously borrowed and may borrow to finance acquisitions and for other corporate purposes.

If we borrow in the future, our leverage could make us vulnerable to an increase in interest rates, a downturn in our operating performance, or a decline in general economic conditions.

If we borrow in the future, our leverage could make us vulnerable to an increase in interest rates, particularly related to the Secured Overnight Financing Rate (“SOFR”) as outlined in our new credit facility amendment, a downturn in our operating performance, or a decline in general economic conditions.

Our credit facility is subject to mandatory prepayment requirements, including but not limited to, certain sales of assets, certain insurance proceeds, certain debt issuances and certain sales of equity.

Any outstanding balance under the credit facility will be due on the maturity date of June 27, 2023.

Any outstanding balance under the credit facility will be due on the maturity date of December 19, 2027.

We believe that cash flows from operations will be sufficient to meet any debt service requirements for interest and scheduled payments of principal under the credit facility in the future.

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We cannot be sure that we would be able to affect any such transactions on favorable terms, if at all.

The expected London Inter-Bank Offered Rate (“LIBOR”) phase-out may have unpredictable impacts on contractual mechanics in the credit markets or the broader financial markets, which could have an adverse effect on our results of operations.

LIBOR will no longer be used to price new loans after December 31, 2021 although existing loans may continue to use LIBOR in determining loan interest rates until June 2023, which coincides with the maturity date of our current credit facility.

In the United States, the U.S.

Federal Reserve Board-led industry group, the Alternative Reference Rates Committee, selected the Secured Overnight Financing Rate ("SOFR") as an alternative to LIBOR for U.S.

dollar-denominated LIBOR-benchmarked obligations.

SOFR is a broad measure of the cost of borrowing cash in the overnight U.S treasury repo market, and the Federal Reserve Bank of New York has published the daily rate since 2018 and will likely be used in any future credit facilities entered into.

Variable-Rate Indebtedness Exposes us to Interest Rate Risk, which could Cause Our Debt Service Obligations to Increase Significantly.

Certain of our secured indebtedness, including borrowings under our existing credit facility, is or is expected to be, as applicable, subject to variable rates of interest and expose us to interest rate risk.

If interest rates increase, our debt service obligations on the variable-rate indebtedness would increase and our net loss would increase, even though the amount borrowed under the facility remained the same.

As of December 31, 2022, we had no outstanding variable-rate debt.

However, if and to the extent we borrow in the future, an unfavorable movement in interest rates, primarily SOFR, could result in higher interest expense and cash payments for us.

Although we may enter into interest rate hedges, involving the partial or full (i) exchange of floating for fixed-rate interest payments or (ii) obtaining an interest rate cap, to reduce interest rate volatility, we cannot provide assurance that we will enter into such arrangements or that they will successfully mitigate such interest rate volatility.

SOFR is a broad measure of the cost of borrowing cash in the overnight U.S treasury repo market, and the Federal Reserve Bank of New York has published the daily rate since 2018.

Our Debt Covenants Restrict our Financial and Operational Flexibility

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Audience ratings and market shares are subject to change, and any change in a particular market could have a material adverse effect on the revenue of our stations located in that market.

While we already compete in some of our markets with other stations with similar programming formats, if another radio station in a market were to convert its programming format to a format similar to one of our stations, if a new station were to adopt a comparable format or if an existing competitor were to strengthen its operations, our stations could experience a reduction in ratings and/or advertising revenue and could incur increased promotional and other expenses.

While we already compete in some of our markets with other stations with similar programming formats, if another radio station in a market were to convert its programming format to a format similar to one of our stations, or if a new station were to adopt a comparable format or if an existing competitor were to strengthen its operations, our stations could experience a reduction in ratings and/or advertising revenue and could incur increased promotional and other expenses.

Other radio broadcasting companies may enter into the markets in which we operate or may operate in the future.

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We Depend on Key Personnel

Our business is partially dependent upon the performance of certain key individuals, particularly Edward K.

Christian, our President and CEO.

Our business is partially dependent upon the performance of certain key individuals, particularly Christopher S.

Forgy, our President and CEO.

Although we have entered into employment and non-competition agreements with Mr.

Christian, which terminate on March 31, 2027, and certain other key personnel, including on-air personalities, we cannot be sure that such key personnel will remain with us.

Forgy, which terminate on December 7, 2025, and certain other key personnel, including on-air personalities, we cannot be sure that such key personnel will remain with us.

We can give no assurance that all or any of these employees will remain with us or will retain their audiences.

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On January 24, 2020, the President signed into law the “PIRATE” Act which authorizes the FCC to fine illegal broadcasters up to $2 million.

However, according to a January 4, 2021, Report from the FCC’s Enforcement Bureau, the FCC has received no funding to implement the PIRATE Act.

The Congressional Budget Office and the FCC both estimated that it would cost $11 million for the Commission to implement the Act, but the PIRATE Act itself contained no appropriation or other funding source to cover its implementation costs.

The current administration has included funding for PIRATE enforcement in the FCC’s budget for the current fiscal year.

Our Business is Subject to Extensive Federal Regulation

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Currently, we pay royalties to song composers, publishers, and performers indirectly through third parties.

Any proposed legislation that is adopted into law could add an additional layer of royalties to be paid directly to the record labels and artists.

While this proposed legislation did not become law, it has been the subject of considerable debate and activity by the broadcast industry and other parties affected by the legislation.

Any proposed legislation that becomes law could add an additional layer of royalties to be paid directly to the record labels and artists.

These proposed royalties have been the subject of considerable debate and activity by the broadcast industry and other parties affected by the legislation.

It is currently unknown what impact any potential required royalty payments would have on our results of operations, cash flows or financial position.

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Risks Related to the Ownership of Our Stock

The Company is Controlled by our President, Chief Executive Officer and Chairman

As of March 4, 2022, Edward K.

Christian, our President, Chief Executive Officer and Chairman, holds approximately 66% of the combined voting power of our Common Stock (not including options to acquire Class B Common Stock and based on Class B Common Stock generally being entitled to ten votes per share).

The Company is No Longer Controlled by our President, Chief Executive Officer and Chairman

Christian, our founder and former President, Chief Executive Officer and Chairman, passed away on August 19, 2022.

Christian held approximately 65% of the combined voting power of our Common Stock (based on Class B Common Stock generally being entitled to ten votes per share, with certain exceptions, but not including options to acquire Class B Common Stock).

As a result, Mr.

Christian generally is able to control the vote on most matters submitted to the vote of stockholders and, therefore, is able to direct our management and policies, except with respect to (i) the election of the two Class A directors, (ii) those matters where the shares of our Class B Common Stock are only entitled to one vote per share, and (iii) other matters requiring a class vote under the provisions of our certificate of incorporation, bylaws or applicable law.

For a description of the voting rights of our Common Stock, see Note 11 of the Notes to Consolidated Financial Statements included with this Form 10-K.

Without the approval of Mr.

Christian, we will be unable to consummate transactions involving an actual or potential change of control, including transactions in which stockholders might otherwise receive a premium for their shares over then-current market prices.

Christian was generally able to control the vote on most matters submitted to the vote of shareholders and, therefore, was able to direct our management and policies, except with respect to (i) the election of the two Class A directors, (ii) those matters where the shares of our Class B Common Stock are only entitled to one vote per share, and (iii) other matters requiring a class vote under the provisions of our certificate of incorporation, bylaws or applicable law.

Christian’s passing on August 19, 2022, his Class B shares were transferred into an estate planning trust and that transfer resulted in an automatic conversion of each Class B share he held into one fully paid and non-assessable Class A Share.

Those Class A Shares have the same voting rights as all other Class A Shares, and the estate has approximately 16% voting rights after the conversion of the shares from Class B Shares to Class A Shares.

As a result of the change in voting control, the Company has entered into a period of significant transition and is potentially more vulnerable to activist investors or hostile takeover attempts.

If the Company is unable to manage this transition effectively, it may have an adverse impact on the Company and its shareholders.

We May Experience Volatility in the Market Price of our Common Stock

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Investors should be aware that they could experience short-term volatility in our stock if such shareholders decide to sell all or a portion of their holdings of our common stock at once or within a short period of time.

We are a Smaller Reporting Company and Intend to Avail Ourselves of Certain Reduced Disclosure Requirements Applicable to Smaller Reporting Companies, which could make our Common Stock Less Attractive to Investors.

We are a smaller reporting company, as defined in the Exchange Act, and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not applicable to smaller reporting companies, including reduced disclosure obligations regarding executive compensation.

We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions.

If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

We intend to take advantage of certain of these reporting exemptions until we are no longer a smaller reporting company.

We will remain a smaller reporting company until the aggregate market value of our outstanding common stock held by non-affiliates as of the last business day of our most recently completed second fiscal quarter is $250 million or more.

Unresolved Staff Comments

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