Investments

3 Months Ended

Mar. 31, 2022

Investments, Debt and Equity Securities [Abstract]

InvestmentsInvestments consist of equity securities. The company does not have available-for-sale investments as of March 31, 2022 and December 31, 2021.

The following table summarizes the cumulative gross unrealized gains and losses and fair values for short-term investments accounted for at fair value under the fair value option, with the unrealized gains and losses reported within earnings on the Condensed Consolidated Statements of Operations (in thousands):


	Initial Book Value		Cumulative Gross Unrealized Gains		Cumulative Gross Unrealized Losses		Fair Value
March 31, 2022
Investment in Consensus (equity securities)	$	(69,290)	$	307,441	$	—	$	238,151
Total	$	(69,290)	$	307,441	$	—	$	238,151

December 31, 2021
Investment in Consensus (equity securities)	$	(69,290)	$	298,490	$	—	$	229,200
Total	$	(69,290)	$	298,490	$	—	$	229,200

There were no investments in an unrealized loss position as of March 31, 2022 and December 31, 2021.

On September 25, 2017, the Company entered into a commitment to invest $200 million (approximately 76.6% of equity) in an investment fund (the “Fund”). The primary purpose of the Fund is to provide a limited number of select investors with the opportunity to realize long-term appreciation from public and private companies, with a particular focus on the technology and life science industries. The general activities of the Fund is to buy, sell, hold and otherwise invest in securities of every kind and nature and rights and options with respect thereto, including, without limitation, stock, notes, bonds, debentures and evidence of indebtedness; to exercise all rights, powers, privileges and other incidents of ownership or possession with respect to securities held or owned by the Fund; to enter into, make and perform all contracts and other undertakings; and to engage in all activities and transactions as may be necessary, advisable or desirable to carry out the foregoing.

The manager, OCV Management, LLC, and general partner of the Fund are entities with respect to which Richard S. Ressler, former Chairman of the Board of Directors (the “Board”) of the Company, is indirectly the majority equity holder and a related party. Mr. Ressler’s tenure with the Board ended as of May 10, 2022. As a limited partner in the Fund, prior to the settlement of certain litigation generally related to the Company’s investment in the Fund in January 2022, the Company paid an annual management fee to the manager equal to 2.0% of capital commitments. In addition, subject to the terms and conditions of the Fund’s limited partnership agreement, once the Company has received distributions equal to its invested capital, the Fund’s general partner would be entitled to a carried interest equal to 20%. The Fund has a six year investment period, subject to certain exceptions. The commitment was approved by the Audit Committee of the Board in accordance with the Company’s related-party transaction approval policy. At the time of the settlement of the litigation (see Note 9 – Commitments and Contingencies), the Company had invested approximately $128.8 million in the Fund. In connection with the settlement of the litigation, among other terms, no further capital calls will be made in connection with the Company’s investment in the Fund, nor will any management fees be paid by the Company to the manager. As such, during the three months ended March 31, 2022, the Company received no capital call notices from the manager of the Fund. During the three months ended March 31, 2021, the Company received capital call notices from the manager of the Fund for $7.1 million, inclusive of certain management fees. Approximately $8.1 million was paid for capital call notices during the three months ended March 31, 2021. During both the three months ended March 31, 2022 and 2021, the Company received no distributions from OCV.

The Company recognizes its equity in the net earnings or losses relating to the investment in OCV on a one-quarter lag (including management fees) due to the timing and availability of financial information from OCV. If the Company becomes aware of a significant decline in value that is other-than-temporary, the loss will be recorded in the period in which the Company identifies the decline. During the three months ended March 31, 2022 and 2021, the Company recognized an investment (loss) gain of $(0.8) million and $24.3 million, net of tax benefit (expense), respectively. The gain in 2021 was primarily the result of gains in the underlying investments. During the three months ended March 31, 2022 and 2021, the Company recognized expense for management fees of $0.8 million and $0.8 million, net of tax benefit, respectively.

The following table discloses the carrying amount for the Company’s equity method investment (in thousands). These equity securities are included within ‘Long-term investments’ in the Condensed Consolidated Balance Sheets.


	March 31, 2022		December 31, 2021
Equity securities	$	121,552	$	122,593
Maximum exposure to loss	$	121,552	$	122,593

As a limited partner, the Company’s maximum exposure to loss is limited to its proportional ownership in the partnership. In addition, the Company is not required to contribute capital in an aggregate amount in excess of its capital commitment and any expected losses will not be in excess of the Capital Account. Finally, there are no call or put options, or other types of arrangements, which limit the Company’s ability to participate in losses and returns of the Fund.