Acquisitions and Dispositions

9 Months Ended

Sep. 30, 2019

(3) Acquisitions and Dispositions

On August 31, 2019, the Company completed the acquisition of substantially all of the assets used to operate

WDMK-FM

in Detroit from Urban One, Inc. for $13.5 million in cash. The purchase price was partially financed with $10.0 million in borrowings from the Company’s credit facility and partially funded with $3.5 million of cash from operations. The acquisition broadened and diversified the Company’s local radio broadcasting platform and revenue base in the Detroit radio market. The acquisition was accounted for as an asset acquisition. The Company incurred transaction costs of $0.2 million which w

ere

capitalized as a component of the assets acquired.

The assets acquired are summarized as follows:


Property and equipment	$	432,588
FCC licenses		12,891,117
Other intangibles		176,295
	$	13,500,000

On March 28, 2019, the Company completed the sale of certain land and improvements in Augusta, GA to a third party for $0.5 million. As a result of the sale, the Company recorded a gain of $0.4 million in the

first

quarter

2019.

On March 15, 2019, the Company agreed to cancel a broadband radio service license in Chattanooga, TN in exchange for a fee of $3.3 million received from Clearwire Spectrum Holdings LLC (“Clearwire”). The Company had previously leased the channels under the broadband radio service license to Clearwire under an agreement that ended on March 15, 2019. As a result of the license cancelation, the Company recorded a gain of $3.1 million in the

first

quarter

2019.

On September 27, 2018, the Company completed the acquisition of

WXTU-FM

in Philadelphia from Entercom Communications Corp. for $38.0 million in cash. The purchase price was partially financed with $35.0 million in borrowings from the Company’s credit facility and partially funded with $3.0 million of cash from operations. On July 19, 2018, the Company also entered into a local marketing agreement (“LMA”) with Entercom Communications Corp. and began operating

WXTU-FM

on July 23, 2018. During the term of the LMA, the Company included net revenues and station operating expenses, including the associated LMA fee from operating

WXTU-FM,

in its consolidated financial statements. The LMA ended on September 27, 2018. The acquisition broadened and diversified the Company’s local radio broadcasting platform and revenue base in the Philadelphia radio market. Further information regarding the acquisition is included in Note 3 to the consolidated financial statements contained in Item 8 of the Company’s Annual Report on Form

10-K

for the year ended December 31, 2018 filed on February 19, 2019.

The following unaudited pro forma information for the three and nine months ended September 30, 2018 assumes that the acquisition of

WXTU-FM

in Philadelphia had occurred on January 1, 2018. This unaudited pro forma information has been prepared based on estimates and assumptions, which management believes are reasonable, and are not necessarily indicative of what would have occurred had the acquisition been completed on January 1, 2018 or of results that may occur in the future.


	Three M onths ended September 30, 2018		Nine M onths ended September 30, 2018
Net revenue	$	65,642,435	$	187,201,031
Operating income		10,605,254		28,493,819
Net income		3,307,743		9,893,232
Basic and diluted net income per share		0.12		0.36