Goodwill and Other Intangible Assets

12 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and other intangible assets consisted of the following (in thousands):


	September 30,
	2023		2022
Indefinite useful lives:
Goodwill	$	70,772	$	67,767
Licenses	135,735		103,972
Tradename and domain name	19,811		13,142
	226,318		184,881


	Amortization Period
Definite useful lives:
Discounted leases	Lease term	811		78
Non-compete agreements	5 years	3		55
Software	5 years	55		723
Licenses	Lease term	22,597		25,962
Leases acquired in-place	Lease term	133		117
		23,599		26,935
Total goodwill and other intangible assets		$	249,917	$	211,816

Substantially all of our goodwill and other intangible assets belong to our Nightclubs segment.


	2023						2022
	Definite- Lived Intangibles		Indefinite- Lived Intangibles		Goodwill		Definite- Lived Intangibles		Indefinite- Lived Intangibles		Goodwill
Beginning balance	$	26,935	$	117,114	$	67,767	$	400	$	67,424	$	39,379
Acquisitions	2,005		43,948		7,244		28,653		50,453		28,954
Impairment	(1,813)		(5,516)		(4,239)		—		(293)		(566)
Dispositions	—		—		—		—		(470)		—
Amortization	(3,528)		—		—		(2,118)		—		—
Ending balance	$	23,599	$	155,546	$	70,772	$	26,935	$	117,114	$	67,767

Definite-lived intangible assets consist of the following (in thousands):


	September 30,
	2023		2022
Licenses	$	27,725	$	27,725
Software	2,332		1,671
Leases acquired in-place	826		261
Discounted leases	1,076		297
Non-compete agreements	1,100		1,100
Distribution agreements	317		317
Total definite-lived intangibles	33,376		31,371
Less accumulated amortization and impairment	(9,777)		(4,436)
Definite-lived intangibles, net	$	23,599	$	26,935

As of September 30, 2023 and 2022, the accumulated impairment balance of indefinite-lived intangibles was $16.9 million and $11.4 million, respectively, while the accumulated impairment balance of goodwill was $25.4 million and $21.2 million, respectively. As of September 30, 2023 and 2022, the gross amount of goodwill amounted to $96.2 million and $88.9 million, respectively. Future amortization expense related to definite-lived intangible assets that are subject to amortization at September 30, 2023 is: 2024 - $2.5 million; 2025 - $2.4 million; 2026 - $2.4 million; 2027 - $2.3 million; 2028 - $1.5 million; and thereafter - $12.5 million.

Indefinite-lived intangible assets consist of SOB licenses, liquor licenses, and tradenames, which were obtained as part of acquisitions. These licenses are the result of zoning ordinances, thus are valid indefinitely, subject to filing annual renewal applications, which are done at minimal costs to the Company. We considered certain licenses that are associated with leased locations as definite-lived. The discounted cash flow of the income approach method was used in calculating the value of these licenses in a business combination, while the relief-from-royalty method was used in calculating the value of tradenames. During the fiscal year ended September 30, 2023, the Company recognized a $6.5 million impairment related to the SOB licenses of eight clubs and a $4.2 million impairment related to goodwill of four reporting units. During the fiscal year ended September 30, 2022, the Company recognized a $293,000 impairment related to the SOB license of one club and a $566,000 impairment related to goodwill of one reporting unit. During the fiscal year ended September 30, 2021, the Company recognized a $5.3 million impairment related to three clubs’ SOB licenses and a $6.3 million impairment related to the goodwill of seven reporting units.