Acquisitions and Dispositions

12 Months Ended

Dec. 31, 2020

(3)	Acquisitions and Dispositions

On December 31, 2020, the Company completed the sale of certain land in Charlotte, NC to a third party for $4.65 million. As a result of the sale, the Company recorded a gain of $4.4 million in the fourth quarter of 2020.

On December 23, 2019, the Company completed the sale of certain land in Las Vegas, NV to a third party for $13.5 million. As a result of the sale, the Company recorded a gain of $7.9 million in the fourth quarter of 2019.

On December 2, 2019, the Company completed the sale of certain land in Boca Raton, FL to a third party for $7.1 million. As a result of the sale, the Company recorded a gain of $6.5 million in the fourth quarter of 2019.

On November 13, 2019, the Company created a new entity called OutlawsXP, Inc. (“Outlaws”) and holds

80%

of the equity of Outlaws. The remaining equity was acquired by Renegades Holdings, Inc. in which the Company holds approximately

51%

of the outstanding shares (see Note 8). On November 14, 2019, Outlaws acquired an esports team, the Houston Outlaws, from Immortals, LLC that competes in the Overwatch League and domestic and international tournaments. The acquisition was accounted for as a business acquisition and included franchise rights and other intangibles (see Note 7). The acquisition also included goodwill (see Note 6). The acquisition of the team was financed with cash from operations and a promissory note to the seller (the “Promissory Note”). On June 30, 2020, the Company entered into an amendment to the Promissory Note that replaced all previous agreements related to consideration and represents the final amount due to the seller (see Note 10). Outlaws also assumed

a $10.0

million franchise fee payable that will be paid to the esports league over time. The franchise fee payable was legally reduced to $6.0 million by the esports league in December 2020 and the resulting $4.0 million gain is reported in other operating (income) expenses, net in the accompanying consolidated statement of comprehensive income (loss). The Company incurred transaction costs of $0.4 million. The acquisition broadened and diversified the Company’s revenue base. The current portion of the franchise fee payable is reported in other current liabilities, and the noncurrent portion is reported in other long-term liabilities in the accompanying consolidated balance sheets. The results of operations are reported in the accompanying consolidated statements of comprehensive income (loss).

The fair value of the franchise rights was estimated using an income approach. The income approach measures the expected economic benefits the franchise rights will provide and discounts these future benefits using a discounted cash flow model. The discounted cash flow model incorporates variables such as revenue, revenue growth rates, operating expense projections, and a discount rate. The discounted cash flow projection period of ten years was determined to be an appropriate time horizon for the analyses. If different assumptions or estimates had been used in the income approach, the fair value of the franchise rights could have been materially different. If actual results are different from assumptions or estimates used in the discounted cash flow analyses, the Company may incur impairment losses in the future and they may be material. Goodwill was equal to the amount the purchase price exceeded the values allocated to the identifiable intangible assets. The amount allocated to goodwill is deductible for tax purposes. The fair value of the Promissory Note and the assumed franchise fee payable approximate the carrying value of each item as of the acquisition date.

On October 25, 2019, the Company completed the sale of a radio tower in Tampa, FL and a radio tower in New Jersey to a third party for $2.4 million. As a result of the sales, the Company recorded a gain of $2.0 million in the fourth quarter of 2019.

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 under the Company’s revolving 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 $0.3 million which were 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 of 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 of 2019.