In an effort to improve its balance sheet and reduce its debt, Camarillo-based conservative content distributor Salem Media Group Inc. recently completed three transactions.
The company said in a release from Dec. 30 that it had repurchased all $159 million of its outstanding senior secured notes due in 2028; issued $40 million of a series of convertible preferred stock; and agreed to sell seven radio stations and enter into a marketing agreement for $90 million.
David Santrella, chief executive of Salem, says that because of these transactions, the company’s ability to service its national ministry partners and listeners has been greatly enhanced.
‘No outstanding debt’
Upon closing of these three transactions, Salem will have transformed and significantly improved its balance sheet and capital structure, Santrella said in a statement.
“With the exception of its revolving line of credit, Salem will have no outstanding debt,” Santrella added. “Salem will also have the benefit of working with an important new strategic investor that is expected to bring significant new opportunities to the company.”
On Dec. 23, Salem repurchased all $159 million of its outstanding 2028 notes, in consideration for payment of $104 million in cash and the issuance of an aggregate of $24 million in subordinated unsecured promissory notes to the holders of the 2028 notes, according to the company’s release.
On that same date, the company sold $40 million in preferred stock to the new strategic investor, Christian Community Foundation Inc., doing business as WaterStone in Colorado Springs, Colorado.
WaterStone’s investment in Salem will be overseen by Rick von Gnechten, the chief operating officer of the nonprofit.
Von Gnechten was appointed to the Salem board in early January.
Also on Dec. 23, the company agreed to sell seven Christian music radio stations, including KFSH-FM in Los Angeles, for $80 million to Educational Media Foundation, the Franklin, Tennessee-based owner of the country’s two largest Christian music radio networks with over 1,000 stations and streaming platforms across all 50 states.
The foundation will begin operating the stations pursuant to an affiliation agreement on or about Feb. 1.
Regarding the sale, Edward G. Atsinger, the company’s executive chair and co-founder, said that it had made a strategic decision to exit the contemporary Christian music format to pay off all of Salem’s long-term debt and he could not be more delighted that the buyer for the seven stations is the foundation.
“EMF has demonstrated over many years a unique ability and dedication to creating and distributing the highest quality Christian music content to its listeners in a positive and encouraging way” Atsinger said in a statement at the time. “I am confident that their impact on listeners and their communities will be incredibly effective.”
In addition to the stations sales, Salem also entered into an advertising and marketing agreement with the foundation for $10 million. The radio stations sale is expected to close in the first half of this year.
One of Salem’s most noteworthy talk show hosts is Dennis Prager, a La Cañada Flintridge resident, whose show airs mornings on KRLA AM 870.
