Assets Held for Sale and Discontinued Operations

12 Months Ended

Dec. 31, 2020

Discontinued Operations and Disposal Groups [Abstract]

Assets Held for Sale and Discontinued Operations

Stitcher

During the second quarter of 2020, our Board of Directors approved the sale of our Stitcher podcasting business. On July 10, 2020, we signed a definitive agreement to sell the business for $325 million, with $265 million of cash upfront; earnout of up to $30 million based on 2020 financial results and paid in 2021; and earnout of up to $30 million based on 2021 financial results and paid in 2022. The transaction closed on October 16, 2020.

Beginning in the second quarter of 2020, Stitcher was classified as discontinued operations in our consolidated financial statements for all periods presented.

Radio Divestiture

In the fourth quarter of 2017, we began the process to divest our radio business. Our radio business consisted of 34 radio stations in eight markets. We closed on the sale of our Tulsa radio stations on October 1, 2018, closed on the sales of our Milwaukee, Knoxville, Omaha, Springfield and Wichita radio stations on November 1, 2018 and closed on the sales of our Boise and Tucson radio stations on December 12, 2018. We have reported its results as discontinued operations for the year ended 2018.

Operating results of our Stitcher and radio operations included in discontinued operations were as follows:


	2020		2019		2018
(in thousands)	Stitcher		Stitcher		Stitcher		Radio		Total

Operating revenues	$	57,573	$	72,545	$	51,063	$	49,243	$	100,306
Total costs and expenses	(88,599)		(91,725)		(66,311)		(42,694)		(109,005)
Depreciation and amortization of intangible assets	(1,157)		(2,642)		(3,276)		—		(3,276)
Impairment of goodwill and intangible assets	—		—		—		(25,900)		(25,900)
Other, net	(174)		(57)		29		(179)		(150)
Loss from operations	(32,357)		(21,879)		(18,495)		(19,530)		(38,025)
Pretax gain (loss) on disposal	182,589		—		—		(18,558)		(18,558)
Gain (loss) from discontinued operations before income taxes	150,232		(21,879)		(18,495)		(38,088)		(56,583)
Income tax (provision) benefit	(34,463)		5,414		4,683		1,760		6,443
Income (loss) from discontinued operations, net of tax	$	115,769	$	(16,465)	$	(13,812)	$	(36,328)	$	(50,140)

Stitcher’s discontinued operating results in 2020 include a contract termination charge that totaled $12 million. The gain on disposal for Stitcher reflects an $10 million fair value estimate for the contingent earnout consideration.

Results of discontinued operations in 2018 included $25.9 million of a non-cash impairment charge to write-down the goodwill of our radio business to fair value. The income tax provision for discontinued operations was impacted by a non-deductible charge of $30.9 million in 2018.

We also entered into separate Local Marketing Agreements (“LMA”) with the acquirer of the Tulsa radio stations and the acquirer of the Wichita, Springfield, Omaha, and Knoxville radio stations. Under the terms of these agreements, the acquiring entities paid us a monthly LMA fee and also reimbursed us for certain station expenses, as defined in the agreements, in exchange for the right to program and sell advertising from the stations' inventory of broadcast time. The LMA with the acquirer of the Tulsa radio stations was effective from July 30, 2018 until the closing of the transaction. The other LMA was effective from September 1, 2018 until closing of the transactions. Discontinued operating revenues included LMA fees totaling $2.5 million for the year ended December 31, 2018.

The following table presents a summary of the Stitcher net assets classified as discontinued operations.


(in thousands)	As of December 31, 2019

Assets:
Total current assets	$	34,793
Investments	178
Property and equipment	5,526
Goodwill and intangible assets	48,292
Operating lease right-of-use assets	10,448
Other assets	2,029
Total assets of discontinued operations	101,266
Liabilities:
Total current liabilities	10,175
Other liabilities	12,552
Total liabilities of discontinued operations	22,727
Net assets of discontinued operations	$	78,539

WPIX

When we acquired the Nexstar-Tribune television stations in 2019, we granted Nexstar the option to repurchase WPIX, the CW-affiliated station in New York City. The option was exercisable from March 31, 2020, through the end of 2021, and was assignable by Nexstar to a third party. In July 2020, Nexstar assigned their option to repurchase WPIX to Mission Broadcasting, Inc., and Mission immediately exercised the option. The option price was $75 million plus accrued interest, to be calculated on the period between September 19, 2019, the purchase date of WPIX, and the option sale closing date. The transaction closed on December 30, 2020 for cash consideration of $83.7 million. Including interest income of $7.6 million, we recognized gains from the WPIX disposition totaling $6.5 million in the fourth quarter of 2020. These gains are included within the miscellaneous, net caption on our Consolidated Statements of Operations.

Pending Triton Sale

During the first quarter of 2021, our Board of Directors approved the sale of our Triton business. On February 16, 2021, we signed a definitive agreement to sell the business for $230 million. The transaction is expected to close in the second quarter of 2021 upon satisfaction of normal and customary closing conditions and regulatory approval.