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Item 1. Business

2024-03-15 compared with 2023-03-16 · 110 added, 72 removed, 742 unchanged (20% of the section changed)

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

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

We are a media company primarily engaged in acquiring, developing and operating broadcast properties including opportunities complimentary to our core radio business including digital, e-commerce and non-traditional revenue initiatives.

As of February 29, 2024, we owned seventy-nine FM, thirty-three 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.

We were originally organized as a Delaware corporation in 1986.

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

Christian passed away.

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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.

Programming and marketing are key components in our strategy to achieve top ratings in our radio operations.

Our strategy is to operate top billing radio stations, including opportunities complimentary to our core radio business including digital, e-commerce and non-traditional revenue initiatives, 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.

Local programming and marketing are key components in our strategy to achieve top ratings in our radio operations.

In many of our markets, the three or four most highly rated radio stations receive a disproportionately high share of the market’s advertising revenues.

As a result, a station’s revenue is dependent upon its ability to maximize its number of listeners/viewers within an advertiser’s given demographic parameters.

As a result, a station’s revenue is dependent upon its ability to maximize its number of listeners within an advertiser’s given demographic parameters.

In certain cases we use attributes other than specific market listener data for sales activities.

In those markets where sufficient alternative data is available, we do not subscribe to an independent listener rating service.

The radio stations that we own and/or operate employ a variety of programming formats, including Classic Hits, Adult Hits, Top 40, Country, Country Legends, Mainstream/Hot/Soft Adult Contemporary, Pure Oldies, Classic Rock, and News/Talk.

We also use our strong local presence and community involvement to develop strong relationships with our listeners, advertising clients and community organizations.

The radio stations that we own and/or operate employ a variety of programming formats, including Classic Hits, Country, Classic Country, Hot/Soft/Urban Adult Contemporary, Oldies, Classic Rock, Rock and News/Talk.

We regularly perform extensive market research, including music evaluations, focus groups and strategic vulnerability studies.

Our stations also employ audience promotions to further develop and secure a loyal following.

We concentrate on the development of strong decentralized local management, which is responsible for the day-to-day operations of the stations we own and/or operate.

We compensate local management based on the station’s financial performance, as well as other performance factors that are deemed to affect the long-term ability of the stations to achieve financial performance objectives.

We concentrate on the development of strong decentralized local management, which is responsible for the day-to-day operations, including local community development, of the stations we own and/or operate.

Corporate management is responsible for long-range planning, establishing policies and procedures, resource allocation and monitoring the activities of the stations.

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Depending on the format of a particular radio station, there are a predetermined number of advertisements broadcast each hour.

We determine the number of advertisements broadcast hourly that can maximize a station’s available revenue dollars without jeopardizing listening/viewing levels.

We determine the number of advertisements broadcast hourly that can maximize a station’s available revenue dollars without jeopardizing listening levels.

While there may be shifts from time to time in the number of advertisements broadcast during a particular time of the day, the total number of advertisements broadcast on a particular station generally does not vary significantly from year to year.

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Most advertising contracts are short-term, generally running for only a few weeks.

This allows broadcasters the ability to modify advertising rates as dictated by changes in station ownership within a market, changes in listener/viewer ratings and changes in the business climate within a particular market.

This allows broadcasters the ability to modify advertising rates as dictated by changes in station ownership within a market, changes in listener ratings and changes in the business climate within a particular market.

Approximately $108,509,000 or 90% of our gross revenue for the year ended December 31, 2023 (approximately $108,999,000 or 89% in fiscal 2022 and approximately $102,367,000 or 89% in fiscal 2021) was generated from the sale of local advertising.

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Harrisonburg, VA

Adult Contemporary

Hot Adult Contemporary

October 1, 2027

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Hilton Head Island, SC

Adult Contemporary

December 1, 2027

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Jonesboro, AR

Hot Adult Contemporary

Adult Contemporary

Hot Adult Contemporary

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April 1, 2030

Greenfield, MA

April 1, 2030

Harrisonburg, VA

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

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

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.” 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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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 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.

In 2018 Quadrennial Regulatory Review—Review of the Commission’s Broadcast Ownership Rules and Other Rules Adopted Pursuant to Section 202 of the Telecommunications Act of 1996, FCC 23-117, released December 26, 2023, the FCC found that its existing rules, with some minor modifications, remain necessary in the public interest.

The FCC retained the “dual network rule” and the “local radio ownership rule,” the latter of which was modified only to make permanent the interim contour-overlap methodology long used to determine ownership limits in areas outside the boundaries of defined Nielsen Audio Metro markets and in Puerto Rico.

The FCC retained its local television ownership rule with adjustments to reflect changes that have occurred in the television marketplace to update the methodology for determining station ranking within a market to better reflect current industry practices, and expanded the existing prohibition on use of affiliation to circumvent the restriction on acquiring a second top-four ranked station in a market.

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 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 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.

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

The Company timely filed its reports.

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

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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 the Company.

Currently, one 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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The FCC also entered into a Consent Decree with Cumulus Radio to settle violations of the sponsorship identification requirements in connection with the broadcast of issue ads promoting a construction project in New Hampshire.

In an Order and Consent Decree, Townsquare Media, Inc., DA 24-54, released January 17, 2024, the licensee of AM radio stations in Idaho agreed to pay a civil penalty of $500,000 to resolve an investigation into violations of the FCC’s rules relating to on-air sponsorship identification and the maintenance of online political files.

There are other examples of FCC enforcement action for violation of the sponsorship identification requirements.

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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.

In an NPRM, Priority Application Review for Broadcast Stations that Provide Local Journalism or Other Locally Originated Programming , FCC 24-1 (MB Docket No.

24-14), released January 17, 2024, the FCC proposed to prioritize processing review of certain applications filed by commercial and noncommercial radio and television broadcast stations that provide locally originated programming.

The FCC stated that its goal is “to provide additional incentive to stations to provide programming that responds to the needs and interests of the communities they are licensed to serve.” The FCC stated that the program would be “voluntary” and that such prioritization would be granted to renewal applicants, as well as applicants for assignment or transfer of license, that certify they provide locally originated programming, thereby advancing the FCC’s efforts to promote localism and serve local communities across the nation.

If the Company were not to certify that its stations provide local programming, actions on its applications to acquire new facilities might be deferred until applications containing such

certifications had been earlier processed.

However, there is some risk in certifying since competitors or members of the public might file adverse petitions challenging the accuracy of such certifications.

The FCC is seeking comment on the proposal and the Company cannot predict whether such rules will be adopted and become effective.

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.

The Company timely paid its regulatory fees for Fiscal Year 2023.

Equal Employment Opportunity Rules.

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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.

The filing of the form was suspended in 2001 in the wake of a decision by the U.S.

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

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

This employment report form is intended to gather workforce composition data from broadcasters on an annual basis but the filing of the form was suspended in 2001 in the wake of a decision by the U.S.

Court of Appeals ( MD/DC/DE Broadcasters Association v.

FCC , Case No.

1094, 236 F.3d 13 (2001);

rehearing denied , 253 F.

3d 732 (2001), cert.

denied , 534 U.S.

1113 (2002)) vacating certain aspects of the 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 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.

On February 22, 2024, the FCC released its Fourth Report and Order, Order on Reconsideration, and Second Further Notice of Rulemaking, FCC 24-18, reinstating the filing of Form 395-B.

The Company cannot predict the impact of the reinstated form on the Company or its operations.

Time Brokerage Agreements .

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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 Company’s stations currently are not parties to any TBAs.

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.

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A petition for reconsideration of that action as to FM duplication is pending.

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

Reports have circulated that some members of the FCC are considering a proposal that would reinstate the rule in some form.

If the non-duplication rule were reinstated, it could require the Company to expend additional funds to program separately some currently simulcast stations.

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

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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.

By Public Notice , released December 13, 2022, the FCC extended the Comment and Reply Comment Deadlines in this proceeding.

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.

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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 NCE format.

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

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The FCC “found no statistically reliable evidence that low-power FM stations have a substantial or consistent economic impact on full-service commercial FM stations,” and that “low-power FM stations generally do not have, and in the future are unlikely to have, a demonstrable economic impact on full-service commercial FM radio stations.” Some LPFM stations that broadcast commercial announcements in violation of the law could have a negative economic impact on the Company’s stations.

On July 31, 2023, the FCC’s Media Bureau announced a filing window for applications for LPFM new station construction permits.

The filing window opened on Wednesday, December 6, 2023, and was extended to close on December 15, 2023.

More than 1,000 LPFM applications were received during the filing window.

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 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.

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 analog FM radio-type services on an ancillary or supplementary basis on 87.75 MHz at the lower end of the portion of the FM band reserved for NCE stations.

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.

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 .

In its Fifth Report and Order, Amendment of Parts 73 & 74 of the Commission's Rules to Establish Rules for Digital Low Power TV & TV Translator Stations , FCC 23-58, released July 20, 2023, the FCC concluded that the public interest will be served by allowing the continued operation of existing analog FM6 LPTV radio stations subject to certain conditions.

The FCC declined to adopt a proposal discussed in the Fifth NPRM that would allow new FM radio stations to be licensed on 82-88 MHz across the United States, for lack of record support.

There are only 14 authorized FM6 stations.

There is an FM6 station in the Norfolk, Virginia, radio market where the Company operates two commercial radio stations.

The Company cannot predict whether the FM6 station will have any impact on the Company’s stations in that market.

As a broadcaster, the Company is required to comply with the FCC rules implementing the Emergency Alert System (“EAS”).

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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).

Senate, a Bill, S.1669 bill would require the Department of Transportation to issue a rule that requires all new motor vehicles to have devices that can access AM broadcast stations installed as standard equipment.

The Company cannot predict whether the bill will be enacted into law.

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 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 55 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.

In an Order and NPRM , the FCC proposed changes to its digital audio broadcasting technical rules that would permit additional FM stations to increase FM HD effective radiated power beyond the existing levels without the need for individual Commission authorization.

In addition, the FCC proposed to allow digital FM stations to operate with asymmetric power on the digital sidebands.

This would allow stations to operate with different power levels on the upper and lower digital sidebands, as a way to facilitate greater digital FM radio coverage without interfering with adjacent channel FM stations.

The Company cannot predict whether the proposed rules will be adopted.

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 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.

At this time, the Company has not made a decision on whether to convert any of its AM radio stations to all-digital operation.

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The rules provide an opportunity for tribes to establish new service specifically designed to offer programming that meets the needs of tribal citizens.

In addition, the rules modified the FCC’s radio application and assignment procedures, assisting qualified applicants to more rapidly introduce new radio service to the public.

In addition, the rules modify the FCC’s radio application and assignment procedures, assisting qualified applicants to more rapidly introduce new radio service to the public.

These modifications (1) prohibit an AM applicant that obtains a construction permit through a dispositive Section 307(b) preference from downgrading the service level that led to the dispositive preference;

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and (3) provides a consistent legal process for studio professionals, including record producers and engineers to receive royalties for their contributions to music that they help to create.

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.

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

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.

Proposal to Mandate Broadcasters to Participate in the Disaster Information Reporting System (“DIRS”) and Network Outage Reporting System (“NORS”).

In an NPRM, Resilient Networks;

Amendments to Part 4 of the Commission’s Rules Concerning Disruptions to Communications;

New Part 4 of the Commission’s Rules Concerning Disruptions to Communications , 36 FCC Rcd 14802 (2021), the FCC sought comment on measures to help ensure that communications services remain operational when disasters strike.

The NPRM asks whether the FCC should adopt rules making participation in the DIRS and NORS mandatory.

On January 4, 2024, the FCC made public a proposed “Second Further NPRM” to inquire whether to require TV and radio broadcasters, satellite providers, and broadband Internet access service providers to report in NORS and/or DIRS.

Implementation of DIRS and NORS by the Company could result in significant costs, but the Company cannot predict whether the rules will be adopted and if so, the form they may take.

Proposed Changes.

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Senior Vice President, Treasurer and Chief Financial Officer

Corporate Secretary

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

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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 previously our Senior Vice President of Operations from May 2018 until his appointment to President and Chief Executive 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.

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From 1988 to 1997 he held various positions with the Media Finance Group at AT&T Capital Corporation, including senior vice president.

Lobaito was the Director of Business Affairs and Corporate Secretary since our inception in 1986, Vice President from 1996 to 2005 and Senior Vice President from 2005 to 2020.

Effective March 13, 2020, Ms.

Lobaito retired from Senior Vice President and Director of Business Affairs.

At our request, Ms.

Lobaito continues to serve as Corporate Secretary.

On September 28, 2021, Ms.

Lobaito was appointed to our Board of Directors.

Bobinski has been Senior Vice President/Finance since March 2012 and Chief Accounting Officer and Corporate Controller since September 1991.

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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

Continued Uncertain Financial and Economic Conditions 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.

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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 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;

We May be Adversely Affected by the Effects of Inflation

Inflation has the potential to adversely affect our liquidity, business, financial condition and results of operations by increasing our overall cost structure, particularly if we are unable to achieve commensurate increases in the prices we charge our customers.

The existence of inflation in the economy has resulted in, and may continue to result in, higher interest rates, increased cost of labor and other similar effects.

As a result of inflation, we have experienced and may continue to experience, cost increases.

Although we may take measures to mitigate the impact of this inflation, if these measures are not effective, our business, financial condition, results of operations and liquidity could be materially adversely affected.

Even if such measures are effective, there could be a difference between the timing of when these beneficial actions impact our results of operation and when the cost of inflation is incurred.

Our Business and Operations Could be Adversely Affected by Health Epidemics, Pandemics or Similar Outbreaks, Natural Disasters and Other Catastrophes, Impacting the Markets and Communities in which we and our Partners, Advertisers, and Users Operate

We face various risks related to health epidemics, pandemics, or similar outbreaks, natural disasters and other catastrophes that are beyond our control, which have materially and adversely affected our business and may continue to materially and adversely affect our results of operations, liquidity and financial condition.

The extent of the impact of health epidemics, pandemics or similar outbreaks, natural disasters and other catastrophes 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.

The effects of health epidemics, pandemics or similar outbreaks, natural disasters and other catastrophes 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.

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

The Russia-Ukraine war and the conflict in Gaza have 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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As part of our strategy, we have pursued and may continue to pursue acquisitions of additional radio stations, subject to the terms of our credit facility.

Broadcasting is a rapidly consolidating industry, with many companies seeking to consummate acquisitions and increase their market share.

In this environment, we compete and will continue to compete with many other buyers for the acquisition of radio stations.

Some of those competitors may be able to outbid us for acquisitions because they have greater financial resources or for other reasons.

Competitors may be able to outbid us for acquisitions.

As a result of these and other factors, our ability to identify and consummate future acquisitions is uncertain.

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The process of integrating acquired stations may involve numerous risks, including difficulties in the assimilation of operations, the diversion of management’s attention from other business concerns, risk of entering new markets, and the potential loss of key employees of the acquired stations.

The Royalties We Pay to Copyright Owners Could Increase Significantly, and Proposed Legislation Could Require Radio Broadcasters to Pay Royalties to Record Labels and Recording Artists

We pay royalties to copyright owners of musical compositions (typically song composers and publishers) whenever we broadcast or stream musical compositions.

These royalties are paid through ASCAP, BMI, SESAC, GMR and Sound Exchange.

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.

In addition, legislation has been previously introduced in Congress that would require radio broadcasters to pay a performance royalty to record labels and performing artists for use of their recorded songs.

The proposed legislation would add an additional layer of royalties to be paid directly to the record labels and artists.

It is currently unknown what proposed legislation, if any, will become law, whether industry groups will enter into an agreement with respect to performance fees, and what significance this royalty would have on our results from operations, cash flows or financial position.

Risks Related to Regulation of Our Business

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Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates included with this Form 10-K.

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

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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The FCC has increased its enforcement efforts relating to the regulation of indecency violations, and Congress has increased the penalties for broadcasting obscene, indecent or profane programming , and these penalties may potentially subject broadcasters to license revocation, renewal or qualification proceedings in the event that they broadcast such material.

The FCC has expanded the scope of items considered indecent to include material that coud be considered “blasphemy,” “personally reviling epithets,” “profanity” and vulgar or coarse words, amounting to a nuisance.

The maximum forfeiture penalty ( after 2022 annual inflation adjustment) for an indecency violation is $479,945 per incident and $4,430,255 for a continuing violation arising from a single act or failure to act.

The FCC has expanded the scope of items considered indecent to include material that could be considered “blasphemy,” “personally reviling epithets,” “profanity” and vulgar or coarse words, amounting to a nuisance.

Effective January 15, 2024, the maximum forfeiture penalty ( after 2024 annual inflation adjustment) for an indecency violation is $495,500 per incident and $4,573,840 for a continuing violation arising from a single act or failure to act.

In March 2015, the FCC issued a Notice of Apparent Liability for the then maximum forfeiture amount of $325,000 against a television station for violation of the indecency laws.

3 unchanged sentences

To the extent that any inquiries or other proceedings result in the imposition of fines, a settlement with the FCC, revocation of any of our station licenses or denials of license renewal applications, our result of operations and business could be materially adversely affected.

We are Subject to a Series of Risks Regarding Scrutiny of Environmental, Social and Governance Matters

Companies across industries are facing increasing scrutiny from a variety of stakeholders related to their environmental, social, and governance (“ESG”) practices.

For example, various groups produce ESG scores or ratings based at least in part on a company’s ESG disclosures, and certain market participants, including institutional investors, use such ratings to assess companies’ ESG profiles.

There are also increasing regulatory expectations for ESG matters.

Various policymakers, including the SEC, have adopted (or are considering adopting) requirements to disclose certain climate-related or other ESG information, which may require additional costs to comply.

This and other stakeholder expectations will likely lead to increased costs as well as scrutiny that could heighten the risk.

Additionally, many of our customers, business partners, and suppliers may be subject to similar expectations, which may augment or create additionally risks, including risks that may not be known to us.

Risks Related to Technology and Cybersecurity

20 unchanged sentences

This impact could result in reputational, competitive, operational or other business harm as well as financial costs and regulatory action.

The Company currently maintains cybersecurity insurance in the event of an information security or cyber incident, however, the coverage may not be sufficient to cover all financial losses nor may it be available in the future.

The Company currently maintains cybersecurity insurance in the event of an information security or cyber incident;

however, the coverage may not be sufficient to cover all financial losses nor may it be available in the future.

Risks Related to the Ownership of Our Stock

6 unchanged sentences

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.

The Company’s subsidiaries holding FCC licenses timely applied to the FCC for consent to transfer of control of the subsidiaries from Mr.

Christian to the shareholders of the Company, and those applications were routinely approved by the FCC on December 20, 2023.

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.

12 unchanged sentences

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