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Acquisitions | 9 Months Ended
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Sep. 30, 2022
Business Combination and Asset Acquisition [Abstract] |
Acquisitions | Acquisitions Nuvyyo Acquisition On January 5, 2022, we acquired Nuvyyo for net cash consideration totaling $13.8 million. Nuvyyo provides consumers DVR product solutions to watch and record free over-the-air HDTV on connected devices. The preliminary purchase price allocation assigned $7.2 million to intangible assets with useful lives ranging from three to five years, $7.1 million to goodwill and the remainder was allocated to various working capital and deferred tax liability accounts. The estimated goodwill, which is not tax deductible, reflects the synergies and increased market penetration expected from combining the operations of Nuvyyo with Scripps. We allocated the goodwill to our Other segment. ION Acquisition On January 7, 2021, we completed the acquisition of national broadcast network ION Media Networks, Inc. ("ION") for $2.65 billion. ION is a national network of broadcast stations and is the largest holder of U.S. broadcast television spectrum. The business distributes its programming through owned Federal Communications Commission-licensed television stations as well as affiliated TV stations, reaching 100 million of U.S. homes through its over-the-air broadcast and pay TV platforms. The acquisition of ION enabled us to create a full-scale national television networks business by combining the ION network with our other news and entertainment networks. The transaction was financed with a combination of cash, debt financing and preferred equity financing, including Berkshire Hathaway's $600 million preferred equity investment in Scripps. Berkshire Hathaway also received a warrant to purchase up to 23.1 million Class A shares, at an exercise price of $13 per share. To comply with ownership rules of the Federal Communications Commission, we simultaneously divested 23 of ION's television stations for a total consideration of $30 million, which were purchased by INYO Broadcast Holdings, LLC upon completion of the acquisition. These divested stations became independent affiliates of ION pursuant to long-term affiliation agreements. The following table summarizes the net cash consideration for the ION transaction.
(in thousands) |  |
Total purchase price |  | $ | 2,650,000 |
Plus: Cash acquired |  | 14,493 |
Plus: Working capital |  | 57,755 |
Total transaction gross cash consideration |  | 2,722,248 |
Less: Proceeds from ION stations divested |  | (30,000) |
Total transaction net cash consideration |  | 2,692,248 |
Less: Cash acquired |  | (14,493) |
Total consideration, net of cash acquired |  | $ | 2,677,755 |
The following table summarizes the final fair values of the ION assets acquired and liabilities assumed at the closing date.
(in thousands) |  |
Accounts receivable |  | $ | 135,006 |
Other current assets |  | 25,353 |
Programming rights |  | 169,027 |
Property and equipment |  | 122,520 |
Operating lease right-of-use assets |  | 72,717 |
Other assets |  | 2,295 |
Goodwill |  | 1,796,148 |
Indefinite-lived intangible assets - FCC licenses |  | 424,200 |
Amortizable intangible assets: |  |
INYO affiliation agreement |  | 422,000 |
Other affiliation relationships |  | 22,000 |
Advertiser relationships |  | 143,000 |
Trade names |  | 72,000 |
Accounts payable |  | (9,674) |
Unearned revenue |  | (13,043) |
Accrued expenses |  | (15,814) |
Current portion of programming liabilities |  | (92,721) |
Other current liabilities |  | (24,810) |
Programming liabilities |  | (191,837) |
Deferred tax liabilities |  | (265,291) |
Operating lease liabilities |  | (78,438) |
Other long-term liabilities |  | (36,883) |
Total consideration, net of cash acquired |  | $ | 2,677,755 |
Of the value allocated to amortizable intangible assets, the INYO affiliation agreement has an estimated amortization period of 20 years, advertiser relationships have an estimated amortization period of 7 years, other affiliation relationships have an estimated amortization period of 10 years and the value allocated to trade names has an estimated amortization period of 10 years. The goodwill of $1.8 billion arising from the transactions consists largely of synergies, economies of scale and other benefits of a larger national broadcast footprint and becoming the largest holder of broadcast spectrum. We allocated the goodwill to our Scripps Networks segment. The transaction is accounted for as a stock acquisition which applies carryover tax basis to the assets and liabilities acquired. The goodwill is not deductible for income tax purposes. Pro forma results of operations Pro forma results of operations, assuming the ION acquisition had taken place at the beginning of 2020, are presented in the following table. The pro forma results do not include Nuvyyo, as the impact of this acquisition, individually or in the aggregate, is not material to prior year results of operations. The pro forma information includes the historical results of operations of Scripps and ION (excluding the results of the divested stations sold to INYO), as well as adjustments for additional depreciation and amortization of the assets acquired, additional interest expense related to the financing of the transactions and other transactional adjustments. The pro forma results do not include efficiencies, cost reductions or synergies expected to result from the acquisition, or retrospective fair value adjustments to the warrant. The unaudited pro forma financial information is not necessarily indicative of the results that actually would have occurred had the acquisition been completed at the beginning of the period.
(in thousands, except per share data) (unaudited) |  | Nine Months Ended September 30, 2021
Operating revenues |  | $ | 1,667,963 |
Net income attributable to Scripps shareholders |  | 57,469 |
Net income per share: |  |
Basic |  | $ | 0.68 |
Diluted |  | 0.64 |
The pro forma results in 2021 reflect a $33.4 million reversal of ION transaction costs incurred that were already captured in the 2020 pro forma results.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI https://asc.fasb.org/topic&trid=2303972 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 5 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472 + Details
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