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Goodwill and Other Intangible Assets | 9 Months Ended
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Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The carrying amount of goodwill, by operating segment is as follows:
(In thousands) | Domestic Operations |  | International and Other |  | Total
December 31, 2022 | $ | 349,292 |  |  | $ | 294,127 |  |  | $ | 643,419 |
Impairment charge | — |  |  | (1,877) |  |  | (1,877) |
Amortization of "second component" goodwill | (560) |  |  | — |  |  | (560) |
Foreign currency translation | — |  |  | (839) |  |  | (839) |
September 30, 2023 | $ | 348,732 |  |  | $ | 291,411 |  |  | $ | 640,143 |
As of September 30, 2023 and December 31, 2022, accumulated impairment charges in the International and Other segment totaled $165.7 million and $163.8 million, respectively. The $1.9 million impairment charge for International and Other relates to the 25/7 Media reporting unit. See "Impairment Test of Long-Lived Assets and Goodwill" below for more details. The reduction of $0.6 million in the carrying amount of goodwill for Domestic Operations is due to the realization of a tax benefit for the amortization of "second component" goodwill at SundanceTV. Second component goodwill is the amount of tax deductible goodwill in excess of goodwill for financial reporting purposes. In accordance with the authoritative guidance at the time of the SundanceTV acquisition, the tax benefits associated with this excess are applied to first reduce the amount of goodwill, and then other intangible assets for financial reporting purposes, if and when such tax benefits are realized in the Company's tax returns. All remaining tax benefits were realized during the second quarter of 2023. The following tables summarize information relating to the Company's identifiable intangible assets:
(In thousands) | September 30, 2023 |  |
Gross |  | Accumulated Amortization |  | Net |  | Estimated Useful Lives
Amortizable intangible assets: |  |  |  |  |  |  |
Affiliate and customer relationships | $ | 633,525 |  |  | $ | (410,571) |  |  | $ | 222,954 |  |  | 6 to 25 years
Advertiser relationships | 46,282 |  |  | (37,598) |  |  | 8,684 |  |  | 11 years
Trade names and other amortizable intangible assets | 105,441 |  |  | (56,216) |  |  | 49,225 |  |  | 3 to 20 years
Total amortizable intangible assets | 785,248 |  |  | (504,385) |  |  | 280,863 |  |  |
Indefinite-lived intangible assets: |  |  |  |  |  |  |
Trademarks | 19,900 |  |  | — |  |  | 19,900 |  |  |
Total intangible assets | $ | 805,148 |  |  | $ | (504,385) |  |  | $ | 300,763 |  |  |
(In thousands) | December 31, 2022 |  |
Gross |  | Accumulated Amortization |  | Net |  |
Amortizable intangible assets: |  |  |  |  |  |  |
Affiliate and customer relationships | $ | 634,000 |  |  | $ | (373,240) |  |  | $ | 260,760 |  |  |
Advertiser relationships | 46,282 |  |  | (34,443) |  |  | 11,839 |  |  |
Trade names and other amortizable intangible assets | 105,338 |  |  | (43,161) |  |  | 62,177 |  |  |
Total amortizable intangible assets | 785,620 |  |  | (450,844) |  |  | 334,776 |  |  |
Indefinite-lived intangible assets: |  |  |  |  |  |  |
Trademarks | 19,900 |  |  | — |  |  | 19,900 |  |  |
Total intangible assets | $ | 805,520 |  |  | $ | (450,844) |  |  | $ | 354,676 |  |  |
Aggregate amortization expense for amortizable intangible assets for the three months ended September 30, 2023 and 2022 was $9.8 million and $10.2 million, respectively, and for the nine months ended September 30, 2023 and 2022 was $30.7 million and $31.2 million, respectively. Estimated aggregate amortization expense for intangible assets subject to amortization for each of the following five years is:
(In thousands) |
Years Ending December 31, |
2023 | $ | 40,454 |
2024 | 39,128 |
2025 | 37,420 |
2026 | 33,076 |
2027 | 28,272 |
Impairment Test of Long-Lived Assets and Goodwill 25/7 Media is our production services business and is part of our International and Other operating segment. See "Item 1. Business - International and Other" in our 2022 Form 10-K for further details. During the second quarter of 2023, given the impact of market challenges at 25/7 Media, specifically as it relates to reduced demand for new content and series cancellations from third parties, the Company revised its outlook for the 25/7 Media business, resulting in lower expected future cash flows. As a result, the Company determined that sufficient indicators of potential impairment of long-lived assets existed at 25/7 Media. The Company performed a recoverability test and determined that the carrying amount of the 25/7 Media asset group was not recoverable. The carrying value of the asset group exceeded its fair value, therefore an impairment charge of $23.0 million was recorded for identifiable intangible assets, which is included in impairment and other charges in the consolidated statement of income within the International and Other operating segment. Fair values used to determine the impairment charge were determined using an income approach, specifically a DCF model, and a market comparables approach. The DCF model includes significant assumptions about revenue growth rates, long-term growth rates and enterprise specific discount rates. Given the uncertainty in determining assumptions underlying the DCF approach, actual results may differ from those used in the valuations. During the second quarter of 2023, the Company also determined that a triggering event had occurred with respect to the 25/7 Media reporting unit, which required an interim goodwill impairment test to be performed. Accordingly, the Company performed a quantitative assessment using an income approach, specifically a DCF model, and a market comparables approach. Based on the valuations performed, a $1.9 million goodwill impairment charge was recorded, which is included in impairment and other charges in the consolidated statement of income, within the International and Other operating segment.

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