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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2021
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE
REQUIRED)
For the transition period from to
Commission File No. 0-25969
URBAN ONE, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
52-1166660
(I.R.S. Employer
Identification No.)
1010 Wayne Avenue,
14th Floor
Silver Spring, Maryland 20910
(Address of principal executive offices)
Registrant’s telephone number, including area code
(301) 429-3200
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Trading Symbol(s)
UONE
UONEK
Title of each class:
Class A Common Stock, $0.001 Par Value
Class D Common Stock, $0.001 Par Value
Name of each exchange on which registered:
NASDAQ Stock Market
NASDAQ Stock Market
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during
the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes ☐ No ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of
“large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐
Smaller reporting company ☒ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b)
of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes ☒ No ☐
Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes ☐ No ☒
The number of shares outstanding of each of the issuer’s classes of common stock is as follows:
Class
Class A Common Stock, $.001 par value
Class B Common Stock, $.001 par value
Class C Common Stock, $.001 par value
Class D Common Stock, $.001 par value
Outstanding at March 4, 2022
9,104,916
2,861,843
2,045,016
37,328,975
The aggregate market value of common stock held by non-affiliates of the Registrant, based upon the closing price of the Registrant’s Class A and Class D common stock on June 30, 2021,
was approximately $152.0 million.
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URBAN ONE, INC. AND SUBSIDIARIES
Form 10-K
For the Year Ended December 31, 2021
TABLE OF CONTENTS
Item 1. Business
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Mine Safety Disclosure
PART I
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Item 6. Selected Financial Data
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosure About Market Risk
Item 8. Financial Statements and Supplementary Data
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A. Controls and Procedures
Item 9B. Other Information
PART III
Item 10. Directors and Executive Officers of the Registrant
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions
Item 14. Principal Accounting Fees and Services
Item 15. Exhibits and Financial Statement Schedules
Item 16. Form 10-K Summary
SIGNATURES
PART IV
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CERTAIN DEFINITIONS
Unless otherwise noted, throughout this report, the terms “Urban One,” “the Company,” “we,” “our,” and “us” refer to
Urban One, Inc. together with all of its subsidiaries.
We use the terms “local marketing agreement” (“LMA”) or time brokerage agreement (“TBA”) in various places in
this report. An LMA or a TBA is an agreement under which a Federal Communications Commission (“FCC”) licensee of a
radio station makes available, for a fee, air time on its station to another party. The other party provides programming to be
broadcast during the airtime and collects revenues from advertising it sells for broadcast during that programming. In
addition to entering into LMAs or TBAs, we will, from time to time, enter into management or consulting agreements that
provide us with the ability, as contractually specified, to assist current owners in the management of radio station assets
that we have contracted to purchase, subject to FCC approval. In such arrangements, we generally receive a contractually
specified management fee or consulting fee in exchange for the services provided.
The term “broadcast and digital operating income” is used throughout this report. Net income (loss) before
depreciation and amortization, income taxes, interest expense, interest income, noncontrolling interests in income of
subsidiaries, other (income) expense, corporate selling, general and administrative, expenses, stock-based compensation,
impairment of long-lived assets, (gain) loss on retirement of debt and gain on sale-leaseback, is commonly referred to in
the radio broadcasting industry as “station operating income.” However, given the diverse nature of our business, station
operating income is not truly reflective of our multi-media operation and, therefore, we now use the term broadcast and
digital operating income. Broadcast and digital operating income is not a measure of financial performance under
accounting principles generally accepted in the United States (“GAAP”). Nevertheless, broadcast and digital operating
income is a significant basis used by our management to evaluate the operating performance of our core operating
segments. Broadcast and digital operating income provides helpful information about our results of operations, apart from
expenses associated with our fixed and long-lived intangible assets, income taxes, investments, impairment charges, debt
financings and retirements, corporate overhead and stock-based compensation. Our measure of broadcast and digital
operating income is similar to our historic use of station operating income; however, it reflects our more diverse business,
and therefore, may not be similar to “station operating income” or other similarly titled measures as used by other
companies. Broadcast and digital operating income does not represent operating loss or cash flow from operating activities,
as those terms are defined under GAAP, and should not be considered as an alternative to those measurements as an
indicator of our performance.
The term “broadcast and digital operating income margin” is also used throughout this report. Broadcast and digital
operating income margin represents broadcast and digital operating income as a percentage of net revenue. Broadcast and
digital operating income margin is not a measure of financial performance under GAAP. Nevertheless, we believe that
broadcast and digital operating income margin is a useful measure of our performance because it provides helpful
information about our profitability as a percentage of our net revenue. Broadcast and digital operating margin includes
results from all four segments (radio broadcasting, Reach Media, digital and cable television).
Unless otherwise indicated:
● we obtained total radio industry revenue levels from the Radio Advertising Bureau (the “RAB”);
● we obtained audience share and ranking information from Nielsen Audio, Inc. (“Nielsen”); and
● we derived historical market statistics and market revenue share percentages from data published by Miller,
Kaplan, Arase & Co., LLP (“Miller Kaplan”), a public accounting firm that specializes in serving the
broadcasting industry and BIA/Kelsey (“BIA”), a media and telecommunications advisory services firm.
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Cautionary Note Regarding Forward-Looking Statements
Our disclosure and analysis in this annual report on Form 10-K concerning our operations, cash flows and financial
position, contains forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of
the Securities Exchange Act of 1934, as amended. These forward-looking statements do not relay historical facts, but rather
reflect our current expectations concerning future operations, results and events. All statements other than statements of
historical fact are “forward-looking statements” including any projections of earnings, revenues or other financial items;
any statements of the plans, strategies and objectives of management for future operations; any statements concerning
proposed new activities, services or developments; any statements regarding future economic conditions or performance;
any statements of belief; and any statements of assumptions underlying any of the foregoing. You can identify some of
these forward-looking statements by our use of words such as “anticipates,” “expects,” “intends,” “plans,” “believes,”
“seeks,” “likely,” “may,” “estimates” and similar expressions. You can also identify a forward-looking statement in that
such statements discuss matters in a way that anticipates operations, results or events that have not already occurred but
rather will or may occur in future periods. We cannot guarantee that we will achieve any forward-looking plans, intentions,
results, operations or expectations. Because these statements apply to future events, they are subject to risks and
uncertainties, some of which are beyond our control that could cause actual results to differ materially from those
forecasted or anticipated in the forward-looking statements. These risks, uncertainties and factors include (in no particular
order), but are not limited to:
● public health crises, epidemics and pandemics such as the ongoing COVID-19 pandemic and their impact on
our business and the businesses of our advertisers, including disruptions and inefficiencies in the supply
chain;
● economic volatility, financial market unpredictability and fluctuations in the United States and other world
economies that may affect our business and financial condition, and the business and financial conditions of
our advertisers, including as a result of the ongoing COVID-19 pandemic and any similar future occurrences;
● our high degree of leverage, certain cash commitments related thereto and potential inability to finance
strategic transactions given fluctuations in market conditions;
● fluctuations in the local economies of the markets in which we operate (particularly our largest markets,
Atlanta; Baltimore; Houston; and Washington, DC) could negatively impact our ability to meet our cash
needs;
● The extent of the impact of the COVID-19 pandemic (particularly in our largest markets, Atlanta; Baltimore;
Houston; and Washington, DC), including the duration, spread, severity, and the impact of any variants, the
duration and scope of related government orders and restrictions, the impact on our employees, and the
extent of the impact of the COVID-19 pandemic on overall demand for advertising across our various media;
● local, regional, national, and international economic conditions that have fluctuated and/or deteriorated as a
result of the COVID-19 pandemic, including the risks of a global recession or a recession in one or more of
our key markets, the impact that these economic conditions may have on us and our customers, and our
assessment of that impact;
● risks associated with the implementation and execution of our business diversification strategy, including our
strategic actions with respect to expansion into gaming;
● risks associated with our investments in gaming businesses that are managed or operated by persons not
affiliated with us and over which we have little or no control;
● regulation by the Federal Communications Commission (“FCC”) relative to maintaining our broadcasting
licenses, enacting media ownership rules and enforcing of indecency rules;
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● regulation by certain gaming commissions relative to maintaining our interests, or our creditors ability to
foreclose on collateral that includes our interests in, in any gaming licenses, joint ventures or other gaming
and casino investments;
● changes in our key personnel and on-air talent;
● increases in competition for and in the costs of our programming and content, including on-air talent and
content production or acquisitions costs;
● financial losses that may be incurred due to impairment charges against our broadcasting licenses, goodwill,
and other intangible assets;
● increased competition for advertising revenues with other radio stations, broadcast and cable television,
newspapers and magazines, outdoor advertising, direct mail, internet radio, satellite radio, smart phones,
tablets, and other wireless media, the internet, social media, and other forms of advertising;
● the impact of our acquisitions, dispositions and similar transactions, as well as consolidation in industries in
which we and our advertisers operate;
● developments and/or changes in laws and regulations, such as the California Consumer Privacy Act or other
similar federal or state regulation through legislative action and revised rules and standards;
● disruptions to our technology network including computer systems and software, whether by man-made or
other disruptions of our operating systems, structures or equipment as well as natural events such as
pandemic, severe weather, fires, floods and earthquakes;
● other factors mentioned in our filings with the Securities and Exchange Commission (“SEC”) including the
factors discussed in detail in Item 1A, “Risk Factors,” contained in this report.
You should not place undue reliance on these forward-looking statements, which reflect our views based only on
information currently available to us as of the date of this report. We undertake no obligation to publicly update or revise
any forward-looking statements because of new information, future events, or otherwise.
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ITEM 1. BUSINESS
Overview
PART I
Urban One, Inc. (a Delaware corporation originally formed in 1980 and hereinafter referred to as “Urban One”) and its
subsidiaries (collectively, the “Company”) is an urban-oriented, multi-media company that primarily targets African-
American and urban consumers. Our core business is our radio broadcasting franchise which is the largest radio
broadcasting operation that primarily targets African-American and urban listeners. As of December 31, 2021, we owned
and/or operated 64 independently formatted, revenue producing broadcast stations (including 54 FM or AM stations, 8 HD
stations, and the 2 low power television stations we operate) located in 13 of the most populous African-American markets
in the United States. While a core source of our revenue has historically been and remains the sale of local and national
advertising for broadcast on our radio stations, our strategy is to operate the premier multi-media entertainment and
information content platform targeting African-American and urban consumers. Thus, we have diversified our revenue
streams by making acquisitions and investments in other complementary media properties. Our diverse media and
entertainment interests include TV One, LLC (“TV One”), which operates two cable television networks targeting African-
American and urban viewers, TV One and CLEO TV; our 80.0% ownership interest in Reach Media, Inc. (“Reach
Media”), which operates the Rickey Smiley Morning Show and our other syndicated programming assets, including the
Get Up! Mornings with Erica Campbell Show, Russ Parr Morning Show and the DL Hughley Show; and Interactive One,
LLC (“Interactive One”), our wholly owned digital platform serving the African-American community through social
content, news, information, and entertainment websites, including its Cassius and Bossip, HipHopWired and MadameNoire
digital platforms and brands. We also hold a minority ownership interest in MGM National Harbor Casino, a gaming resort
located in Prince George’s County, Maryland. Through our national multi-media operations, we provide advertisers with a
unique and powerful delivery mechanism to communicated with African-American and urban audiences.
Our core radio broadcasting franchise operates under the brand “Radio One.” We also operate other media brands,
such as TV One, CLEO TV, Reach Media and Interactive One, while developing additional branding reflective of our
diverse media operations and our targeting of African-American and urban audiences.
Recent Developments
Impact of Public Health Crisis
Throughout each of 2020 and 2021, the COVID-19 pandemic had an impact on certain of our revenue and alternative
revenue sources. Most notably, a number of advertisers across a variety of significant advertising categories have ceased
business or reduced advertising spend due to the pandemic. This has been particularly true within our radio segment which
derives substantial revenue from local advertisers, including in areas such as Texas, Ohio and Georgia. The economies in
these areas were hit particularly hard due to social distancing and other government interventions. Further, the COVID-19
pandemic has caused a shift in the way people work and commute, which in some instances has altered demand for our
broadcast radio advertising. Finally, the COVID-19 outbreak caused the postponement or cancellation of certain of our tent
pole special events or otherwise impaired or limited ticket sales for such events. We do not carry business interruption
insurance to compensate us for losses that occurred as a result of the pandemic and such losses may continue to occur as a
result of the ongoing and fluctuating nature of the COVID-19 pandemic. Outbreaks in the markets in which we operate
could have material impacts on our liquidity, operations including potential impairment of assets, and our financial results.
Likewise, our income from our investment in MGM National Harbor Casino has at times been negatively affected by
closures and limitations on occupancy imposed by state and local governmental authorities.
We anticipate continued fluctuations in revenues due to ongoing nature of the COVID-19 pandemic. The extent to
which our results continue to be affected by the COVID-19 pandemic will largely depend on future developments, which
cannot be accurately predicted and are uncertain. These developments include, but are not limited to, the duration, scope
and severity of the COVID-19 pandemic, any additional resurgences, variants or new viruses; the ability to effectively and
widely manufacture and distribute vaccines/boosters; the public’s perception of the safety of the vaccines/boosters and the
public’s willingness to take the vaccines/boosters; the effect of the COVID-19 pandemic on our customers and the ability
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of our clients to meet their payment terms; the public’s willingness to attend live events; and the pace of recovery when the
pandemic subsides.
Other Recent Developments
On November 6, 2020, the Company entered into a definitive asset exchange agreement with Audacy, Inc. (formerly
Entercom Communications Corp.) whereby the Company would receive Charlotte stations: WLNK-FM (Adult
Contemporary); WBT-AM & FM (News Talk Radio); and WFNZ-AM & 102.5 FM Translator (Sports Radio). In
exchange, Urban One would transfer three radio stations to Audacy: St. Louis, WHHL-FM (Urban Contemporary);
Philadelphia, WPHI-FM (Urban Contemporary); and Washington, DC, WTEM-AM (Sports); as well as the intellectual
property to its St. Louis radio station, WFUN-FM (Adult Urban Contemporary). The Company and Audacy began
operation of the exchanged stations on or about November 23, 2020 under LMAs until Federal Communications
Commission (“FCC”) approval was obtained. The deal was subject to FCC approval and other customary closing
conditions and, after obtaining the approvals, closed on April 20, 2021. In addition, the Company entered into an asset
purchase agreement with Gateway Creative Broadcasting, Inc. (“Gateway”) for the remaining assets of our WFUN station
in a separate transaction which also closed on April 20, 2021. The Company received approximately $8.0 million and
exchanged approximately $8.0 million in tangible and intangible assets as part of the transaction with Gateway.
PPP Loans
On December 27, 2020, the Consolidated Appropriations Act of 2021 was signed into law. The legislation creates a
second round of Paycheck Protection Program (“PPP”) loans of up to $2 million available to businesses with 300 or fewer
employees that have sustained a 25% revenue loss in any quarter of 2020. Certain of the new PPP provisions may benefit
broadcasters such as the Company. The provisions (i) allow individual TV and radio stations to apply for PPP loans as long
as the individual TV or radio station employs not more than 300 employees per physical location; (ii) permit the Small
Business Administration (“SBA”) to make loans up to $10 million total across TV and radio stations owned by a station
group; (iii) require newly eligible individual TV and radio stations to make a good faith certification that proceeds of the
loan will be used to support expenses for the production or distribution of locally-focused or emergency information; and
(iv) waive any prohibition on loans to broadcast stations owned by publicly traded entities. On January 29, 2021, the
Company submitted an application for participation in the PPP loan program. On June 1, 2021, the Company received
proceeds of approximately $7.5 million. The loan bears interest at a fixed rate of 1% per year and will not be changed
during the life of the loan. The loan matures June 1, 2026. The Company is in the process of applying for loan forgiveness.
While certain of the PPP loans may be forgivable, until they are repaid or forgiven, the loan amount may constitute debt
under the 2028 Notes (as defined below) and increase the Company’s leverage.
2028 Notes Offering
On January 25, 2021, the Company closed on an offering (the “2028 Notes Offering”) of $825 million in aggregate
principal amount of senior secured notes due 2028 (the “2028 Notes”) in a private offering exempt from the registration
requirements of the Securities Act of 1933, as amended (the “Securities Act”). The 2028 Notes are general senior secured
obligations of the Company and are guaranteed on a senior secured basis by certain of the Company’s direct and indirect
restricted subsidiaries. The 2028 Notes mature on February 1, 2028 and interest on the Notes accrues and is payable semi-
annually in arrears on February 1 and August 1 of each year, commencing on August 1, 2021 at the rate of 7.375% per
annum.
The Company used the net proceeds from the 2028 Notes Offering, together with cash on hand, to repay or redeem
(1) the loans outstanding under that certain Credit Agreement, dated as of April 18, 2017, by and among the Company,
various lenders party thereto, Guggenheim Securities Credit Partners, LLC, as administrative agent, and The Bank of New
York Mellon, as collateral agent (the “2017 Credit Facility”); (2) our 2018 credit agreement (“2018 Credit Facility”),
among the Company, the lenders party thereto from time to time, Wilmington Trust, National Association, as
administrative agent, and TCG Senior Funding L.L.C., as sole lead arranger and sole book runner; (3) the 2018 credit
agreement entered into by Urban One Entertainment SPV, LLC and its immediate parent, Radio One Entertainment
Holdings, LLC, each of which is a wholly owned subsidiary of the Company, providing $50.0 million in term loan
borrowings (the “MGM National Harbor Loan”); (4) the remaining amounts of our 7.375% Senior Secured Notes due 2022
(the “7.375% Notes”); and (5) our 8.75% Senior Secured Notes due December 2022 (the “8.75% Notes”). Upon
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settlement of the 2028 Notes Offering, the 2017 Credit Facility, the 2018 Credit Facility and the MGM National Harbor
Loan were terminated and the indentures governing the 7.375% Notes and the 8.75% Notes were satisfied and discharged.
Segments
As part of our consolidated financial statements, consistent with our financial reporting structure and how the
Company currently manages its businesses, we have provided selected financial information on the Company’s four
reportable segments: (i) radio broadcasting; (ii) cable television; (iii) Reach Media; and (iv) digital.
Our Radio Station Portfolio, Strategy and Markets
As noted above, our core business is our radio broadcasting franchise which is the largest radio broadcasting operation
in the country primarily targeting African-American and urban listeners. Within the markets in which we operate, we strive
to build clusters of radio stations with each radio station targeting different demographic segments of the African-American
population. This clustering and programming segmentation strategy allows us to achieve greater penetration within the
distinct segments of our overall target market. In addition, we have been able to achieve operating efficiencies by
consolidating office and studio space where possible to minimize duplicative management positions and reduce overhead
expenses. Depending on market conditions, changes in ratings methodologies and economic and demographic shifts, from
time to time, we may reprogram some of our stations in underperforming segments of certain markets.
As of December 31, 2021, we owned and/or operated 64 independently formatted, revenue producing broadcast
stations (including 54 FM or AM stations, 8 HD stations, and the 2 low power television stations we operate but excluding
translators) located in 13 of the most populous African-American markets in the United States. The following tables set
forth further selected information about our portfolio of radio stations as of December 31, 2021.
Urban One
Market Data
Entire Audience
Four Book
Ranking by Size of
African-American
Average Audience Population Persons
Market
Number of Stations*
Share(1)
Atlanta
Washington, DC
Houston
Dallas
Philadelphia
Baltimore
Charlotte
Raleigh-Durham
Cleveland
Richmond(3)
Columbus
Indianapolis
Cincinnati
Total
FM AM HD LP/TV**
4
4
3
2
2
2
6
4
2
4
5
3
2
43
2
2
1
2
2
1
1
11
1
1
2
1
1
1
1
8
12.3
10.8
9.5
4.2
3.5
14.9
18.6
16.0
11.7
18.1
6.3
12.2
6.4
2
3
6
5
7
11
12
18
20
23
25
30
36
1
1
2
12+(2)
Total
(millions)
5.1
5.1
6.1
6.5
4.8
2.5
2.4
1.7
1.8
1.1
1.7
1.6
1.9
Estimated Fall 2021
Metro
Population Persons
12+
African-
American
%
36
27
18
17
21
30
23
22
20
30
18
17
13
(1) Audience share data are for the 12+ demographic and derived from the Nielsen Survey ending with the Fall 2021
Nielsen Survey.
(2) Population estimates are from the Nielsen Radio Market Survey Population, Rankings and Information, Fall 2021.
(3) Richmond is the only market in which we operate using the diary methodology of audience measurement.
*
19 non-independently formatted HD stations and 12 non-independently formatted translators owned and operated by
the Company are not included in the above station count. Changes in the programming of our HD stations or
translators may alter our station count from time to time.
** Low power television station
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Market
Atlanta
WAMJ/WUMJ
WHTA
WPZE
WAMJ-HD-2
Baltimore
WERQ
WOLB
WWIN-FM
WWIN-AM
WLIF-HD-2
Charlotte
WPZS
WOSF
WQNC
WBT-AM
WBT-FM
WFNZ
WLNK
Cincinnati
WIZF
WOSL
WDBZ-AM
WIZF-HD2
Cleveland
WENZ
WERE-AM
WJMO-AM
WZAK
WENZ-HD-2
Columbus
WCKX
WXMG
WBMO
WJYD
WWLG
WQMC-TV
Dallas
KBFB
KZJM
Market Rank Metro
Population 2021
7
Format
Target Demo
21
23
33
35
36
5
Urban AC
Urban Contemporary
Contemporary Inspirational
Urban Contemporary
Urban Contemporary
News/Talk
Urban AC
Gospel
Contemporary Inspirational
Contemporary Inspirational
Urban AC / Old School
Urban Contemporary
News Talk
News Talk
Sports Talk
Hot Adult Contemporary
Urban Contemporary
Urban AC / Old School
Talk
Hispanic
Urban Contemporary
News/Talk
Contemporary Inspirational
Urban AC
Contemporary Inspirational
Urban Contemporary
Urban AC
Urban Contemporary
Contemporary Inspirational
Hispanic
Television
Urban Contemporary
Urban Contemporary
9
25-54
18-34
25-54
25-54
18-34
35-64
25-54
35-64
25-54
25-54
25-54
18-34
25-54
25-54
25-54
25-54
18-34
25-54
35-64
25-54
18-34
35-64
35-64
25-54
35-64
18-34
25-54
18-34
25-54
25-54
25-54
18-34
25-54
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Market
Houston
KBXX
KMJQ
KROI
KMJQ-HD2
Indianapolis
WTLC-FM
WHHH
WNOW
WTLC-AM
WNOW-HD2, HD3
WDNI-TV
Philadelphia
WPPZ
WRNB
WPPZ-HD2
WRNB-HD2
Raleigh
WFXC/WFXK
WQOK
WNNL
Richmond (1)
WKJS/WKJM
WCDX
WPZZ
WXGI-AM/WTPS-AM
Washington DC
WKYS
WMMJ/WDCJ
WPRS
WOL-AM
WYCB-AM
Market Rank Metro
Population 2021
Format
Target Demo
6
39
9
37
53
8
Urban Contemporary
Urban AC
Contemporary Inspirational
Contemporary Inspirational
Urban AC
Urban Contemporary
Pop/CHR
Contemporary Inspirational
Regional Mexican
Television
Adult Contemporary
Mainstream Urban
Contemporary Inspirational
Urban AC
Urban AC
Urban Contemporary
Contemporary Inspirational
Urban AC
Urban Contemporary
Contemporary Inspirational
Classic Hip Hop
Urban Contemporary
Urban AC
Contemporary Inspirational
News/Talk
Gospel
18-34
25-54
18-34
25-54
25-54
18-34
18-34
35-64
25-54
25-54
25-54
25-54
25-54
25-54
25-54
18-34
25-54
25-54
18-34
25-54
25-54
18-34
25-54
25-54
35-64
35-64
AC-refers to Adult Contemporary
CHR-refers to Contemporary Hit Radio
Pop-refers to Popular Music
Old School - refers to Old School Hip/Hop
(1) Richmond is the only market in which we operate using the diary methodology of audience measurement.
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For the year ended December 31, 2021, approximately 31.8% of our net revenue was generated from the sale of
advertising in our core radio business, excluding Reach Media. Within our core radio business, four (Houston, Washington,
DC, Atlanta and Baltimore) of the 13 markets in which we operated radio stations throughout 2021 or a portion thereof
accounted for approximately 53.8% of our radio station net revenue for the year ended December 31, 2021. Revenue from
the operations of Reach Media, along with revenue from both the Houston and Washington, DC markets accounted for
approximately 19.3% of our total consolidated net revenue for the year ended December 31, 2021. Revenue from the
operations of Reach Media, along with revenue from the four significant contributing radio markets, accounted for
approximately 27.5% of our total consolidated net revenue for the year ended December 31, 2021. Adverse events or
conditions (economic, including government cutbacks or otherwise) could lead to declines in the contribution of Reach
Media or declines in one or more of the four significant contributing radio markets, which could have a material adverse
effect on our overall financial performance and results of operations.
Radio Advertising Revenue
Substantially all net revenue generated from our radio franchise is generated from the sale of local, national and
network advertising. Local sales are made by the sales staff located in our markets. National sales are made primarily by
Katz Communications, Inc. (“Katz”), a firm specializing in radio advertising sales on the national level. Katz is paid
agency commissions on the advertising sold. Approximately 59.2% of our net revenue from our core radio business for
the year ended December 31, 2021, was generated from the sale of local advertising and 36.3% from sales to national
advertisers, including network/syndication advertising. The balance of net revenue from our radio segment is primarily
derived from tower rental income, ticket sales, and revenue related to sponsored events, management fees and other
alternative revenue.
Advertising rates charged by radio stations are based primarily on:
● a radio station’s audience share within the demographic groups targeted by the advertisers;
● the number of radio stations in the market competing for the same demographic groups; and
● the supply and demand for radio advertising time.
A radio station’s listenership is measured by the Portable People MeterTM (the “PPMTM”) system or diary ratings
surveys, both of which estimate the number of listeners tuned to a radio station and the time they spend listening to that
radio station. Ratings are used by advertisers to evaluate whether to advertise on our radio stations, and are used by us to
chart audience size, set advertising rates and adjust programming. Advertising rates are generally highest during the
morning and afternoon commuting hours.
Cable Television, Reach Media and Digital Segments, Strategy and Sources of Revenue and Income
We have expanded our operations to include other media forms that are complementary to our core radio business. In a
strategy similar to our radio market segmentation, we have multiple complementary media and online brands. Each of
these brands focuses upon a different segment of African-American consumers. With our multiple brands, we are able to
direct advertisers to specific audiences within the urban communities in which we are located or to bundle the brands for
advertising sales purposes when advantageous.
TV One, our primary cable television franchise targeting the African-American and urban communities, derives its
revenue from advertising and affiliate revenue. Advertising revenue is derived from the sale of television air time to
advertisers and is recognized when the advertisements are run. TV One also derives revenue from affiliate fees under the
terms of various affiliation agreements based upon a per subscriber fee multiplied by the most recent subscriber counts
reported by the applicable affiliate. In January 2019, we launched a second cable television franchise called CLEO TV, a
lifestyle and entertainment network targeting Millennial and Gen X women of color also operated by TV One, LLC. CLEO
TV derives its revenue principally from advertising.
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Reach Media, our syndicated radio unit, primarily derives its revenue from the sale of advertising in connection with
its syndicated radio shows, including the Rickey Smiley Morning Show, Get Up! Mornings with Erica Campbell, the Russ
Parr Morning Show, and the DL Hughley Show. In addition to being broadcast on 49 Urban One stations, our syndicated
radio programming also was available on 209 non-Urban One stations throughout the United States as of December 31,
2021.
We have launched websites that simultaneously stream radio station content for each of our radio stations, and we
derive revenue from the sale of advertisements on those websites. We generally encourage our web advertisers to run
simultaneous radio campaigns and use mentions in our radio airtime to promote our websites. By providing streaming, we
have been able to broaden our listener reach, particularly to “office hour” listeners, including at home “office hour”
listeners. We believe streaming has had a positive impact on our radio stations’ reach to listeners. In addition, our station
websites link to our other online properties operated by our primary digital unit, Interactive One. Interactive One operates
the largest social networking site primarily targeting African-Americans and other branded websites, including Bossip,
HipHopWired and MadameNoire. Interactive One derives revenue from advertising services on non-radio station branded
websites, and studio services where Interactive One provides services to other publishers. Advertising services include the
sale of banner and sponsorship advertisements. Advertising revenue is recognized either as impressions (the number of
times advertisements appear in viewed pages) are delivered or when “click through” purchases are made, where applicable.
In addition, Interactive One derives revenue from its studio operations which provide third-party clients with digital
platforms and expertise. In the case of the studio operations, revenue is recognized primarily through fixed
contractual monthly fees and/or as a share of the third party’s reported revenue.
Finally, our MGM National Harbor investment entitles us to an annual cash distribution based on net gaming revenue
from gaming activities conducted on the site of the facility. Future opportunities could include investments in, acquisitions
of, or the development of companies in diverse media businesses, gaming and entertainment, music production and
distribution, movie distribution, internet-based services, and distribution of our content through emerging distribution
systems such as the Internet, smartphones, cellular phones, tablets, and the home entertainment market.
Competition
The media industry is highly competitive and we face intense competition across our core radio franchise and all of
our complementary media properties. Our media properties compete for audiences and advertising revenue with other radio
stations and with other media such as broadcast and cable television, the Internet, satellite radio, newspapers, magazines,
direct mail and outdoor advertising, some of which may be owned or controlled by horizontally-integrated companies.
Audience ratings and advertising revenue are subject to change and any adverse change in a market could adversely affect
our net revenue in that market. If a competing radio station converts to a format similar to that of one of our radio stations,
or if one of our competitors strengthens its signal or operations, our stations could suffer a reduction in ratings and
advertising revenue. Other media companies which are larger and have more resources may also enter or increase their
presence in markets or segments in which we operate. Although we believe our media properties are well positioned to
compete, we cannot assure that our properties will maintain or increase their current ratings, market share or advertising
revenue.
Providing content across various distribution platforms is a highly competitive business. Our digital and cable
television segments compete for the time and attention of internet users and viewers and, thus, advertisers and advertising
revenues with a wide range of internet companies such as AmazonTM, NetflixTM, Yahoo!TM, GoogleTM, and MicrosoftTM,
with social networking sites such as FacebookTM and with traditional media companies, which are increasingly offering
their own digital products and services both organically and through acquisition. We experience competition for the
development and acquisition of content, distribution of content, sale of commercial time on our digital and cable television
networks and viewership. There is competition from other digital companies, production studios and other television
networks for the acquisition of content and creative talent such as writers, producers and directors. Our ability to produce
and acquire popular content is an important competitive factor for the distribution of our content, attracting viewers and the
sale of advertising. Our success in securing popular content and creative talent depends on various factors such as the
number of competitors providing content that targets the same genre and audience, the distribution of our content,
viewership, and the production, marketing and advertising support we provide.
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Our TV One and CLEO TV cable television networks compete with other networks and platforms for the acquisition
and distribution of content and for fees charged to cable television operators, DTH satellite service providers, and other
distributors that carry our content. Our ability to secure distribution agreements is necessary to ensure the retention of our
audiences. Our contractual agreements with distributors are renewed or renegotiated from time to time in the ordinary
course of business. Growth in the number of networks distributed, consolidation and other market conditions in the cable
and satellite distribution industry, and increased popularity of other platforms may adversely affect our ability to obtain and
maintain contractual terms for the distribution of our content that are as favorable as those currently in place. The ability to
secure distribution agreements is dependent upon the production, acquisition and packaging of original content,
viewership, the marketing and advertising support and incentives provided to distributors, the product offering across a
series of networks within a region, and the prices charged for carriage.
Our networks and digital products compete with other television networks, including broadcast, cable, local networks
and other content distribution outlets for their target audiences and the sale of advertising. Our success in selling
advertising is a function of the size and demographics of our audiences, quantitative and qualitative characteristics of the
audience of each network, the perceived quality of the network and of the particular content, the brand appeal of the
network and ratings/algorithms as determined by third-party research companies or search engines, prices charged for
advertising and overall advertiser demand in the marketplace.
Federal Antitrust Laws
The agencies responsible for enforcing the federal antitrust laws, the Federal Trade Commission or the Department of
Justice, may investigate certain acquisitions. We cannot predict the outcome of any specific FTC or Department of Justice
investigation. Any decision by the FTC or the Department of Justice to challenge a proposed acquisition could affect our
ability to consummate the acquisition or to consummate it on the proposed terms. For an acquisition meeting certain size
thresholds, the Hart-Scott-Rodino Antitrust Improvements Act of 1976 requires the parties to file Notification and Report
Forms concerning antitrust issues with the FTC and the Department of Justice and to observe specified waiting period
requirements before consummating the acquisition.
Federal Regulation of Radio Broadcasting
The radio broadcasting industry is subject to extensive and changing regulation by the FCC and other federal agencies
of ownership, programming, technical operations, employment and other business practices. The FCC regulates radio
broadcast stations pursuant to the Communications Act of 1934, as amended (the “Communications Act”). The
Communications Act permits the operation of radio broadcast stations only in accordance with a license issued by the FCC
upon a finding that the grant of a license would serve the public interest, convenience and necessity. Among other things,
the FCC:
● assigns frequency bands for radio broadcasting;
● determines the particular frequencies, locations, operating power, interference standards, and other technical
parameters for radio broadcast stations;
● issues, renews, revokes and modifies radio broadcast station licenses;
● imposes annual regulatory fees and application processing fees to recover its administrative costs;
● establishes technical requirements for certain transmitting equipment to restrict harmful emissions;
● adopts and implements regulations and policies that affect the ownership, operation, program content,
employment, and business practices of radio broadcast stations; and
● has the power to impose penalties, including monetary forfeitures, for violations of its rules and the
Communications Act.
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The Communications Act prohibits the assignment of an FCC license, or the transfer of control of an FCC licensee,
without the prior approval of the FCC. In determining whether to grant or renew a radio broadcast license or consent to the
assignment or transfer of control of a license, the FCC considers a number of factors, including restrictions on foreign
ownership, compliance with FCC media ownership limits and other FCC rules, the character and other qualifications of the
licensee (or proposed licensee) and compliance with the Anti-Drug Abuse Act of 1988. A licensee’s failure to comply with
the requirements of the Communications Act or FCC rules and policies may result in the imposition of sanctions, including
admonishment, fines, the grant of a license renewal for less than a full eight-year term or with conditions, denial of a
license renewal application, the revocation of an FCC license, and/or the denial of FCC consent to acquire additional
broadcast properties.
Congress, the FCC and, in some cases, other federal agencies and local jurisdictions are considering or may in the
future consider and adopt new laws, regulations and policies that could affect the operation, ownership and profitability of
our radio stations, result in the loss of audience share and advertising revenue for our radio broadcast stations or affect our
ability to acquire additional radio broadcast stations or finance such acquisitions. Such matters include or may include:
● changes to the license authorization and renewal process;
● proposals to increase record keeping, including enhanced disclosure of stations’ efforts to serve the public
interest;
● proposals to impose spectrum use or other fees on FCC licensees;
● changes to rules relating to political broadcasting, including proposals to grant free air time to candidates,
and other changes regarding political and non-political program content, political advertising rates and
sponsorship disclosures;
● revised rules and policies regarding the regulation of the broadcast of indecent content;
● proposals to increase the actions stations must take to demonstrate service to their local communities;
● technical and frequency allocation matters;
● changes in broadcast multiple ownership, foreign ownership, cross-ownership and ownership attribution
rules and policies;
● service and technical rules for digital radio, including possible additional public interest requirements for
terrestrial digital audio broadcasters;
● legislation that would provide for the payment of sound recording royalties to artists, musicians or record
companies whose music is played on terrestrial radio stations; and
● changes to tax laws affecting broadcast operations and acquisitions.
The FCC also has adopted procedures for the auction of broadcast spectrum in circumstances where two or more
parties have filed mutually exclusive applications for authority to construct new stations or certain major changes in
existing stations. Such procedures may limit our efforts to modify or expand the broadcast signals of our stations.
We cannot predict what changes, if any, might be adopted or considered in the future, or what impact, if any, the
implementation of any particular proposals or changes might have on our business.
FCC License Grants and Renewals. In making licensing determinations, the FCC considers an applicant’s legal,
technical, character and other qualifications. The FCC grants radio broadcast station licenses for specific periods of time
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and, upon application, may renew them for additional terms. A station may continue to operate beyond the expiration date
of its license if a timely filed license renewal application is pending. Under the Communications Act, radio broadcast
station licenses may be granted for a maximum term of eight years.
Generally, the FCC renews radio broadcast licenses without a hearing upon a finding that:
● the radio station has served the public interest, convenience and necessity;
● there have been no serious violations by the licensee of the Communications Act or FCC rules and
regulations; and
● there have been no other violations by the licensee of the Communications Act or FCC rules and regulations
which, taken together, indicate a pattern of abuse.
After considering these factors and any petitions to deny or informal objections against a license renewal application
(which may lead to a hearing), the FCC may grant the license renewal application with or without conditions, including
renewal for a term less than the maximum otherwise permitted. Historically, our licenses have been renewed for full eight-
year terms without any conditions or sanctions; however, there can be no assurance that the licenses of each of our stations
will be renewed for a full term without conditions or sanctions.
Types of FCC Broadcast Licenses. The FCC classifies each AM and FM radio station. An AM radio station operates
on either a clear channel, regional channel or local channel. A clear channel serves wide areas, particularly at night. A
regional channel serves primarily a principal population center and the contiguous rural areas. A local channel serves
primarily a community and the suburban and rural areas immediately contiguous to it. AM radio stations are designated as
Class A, Class B, Class C or Class D. Class A, B and C stations each operate unlimited time. Class A radio stations render
primary and secondary service over an extended area. Class B stations render service only over a primary service area.
Class C stations render service only over a primary service area that may be reduced as a consequence of interference.
Class D stations operate either during daytime hours only, during limited times only, or unlimited time with low nighttime
power.
FM class designations depend upon the geographic zone in which the transmitter of the FM radio station is located.
The minimum and maximum facilities requirements for an FM radio station are determined by its class. In general,
commercial FM radio stations are classified as follows, in order of increasing power and antenna height: Class A, B1, C3,
B, C2, C1, C0 and C. The FCC has adopted a rule subjecting Class C FM stations that do not satisfy a certain antenna
height requirement to an involuntary downgrade in class to Class C0 under certain circumstances.
Urban One’s Licenses. The following table sets forth information with respect to each of our radio stations for which
we hold the license as of December 31, 2021. Stations which we do not own as of December 31, 2021, but operate under
an LMA, are not reflected on this table. A broadcast station’s market may be different from its community of license. The
coverage of an AM radio station is chiefly a function of the power of the radio station’s transmitter, less dissipative power
losses and any directional antenna adjustments. For FM radio stations, signal coverage area is chiefly a function of the
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ERP of the radio station’s antenna and the HAAT of the radio station’s antenna. “ERP” refers to the effective radiated
power of an FM radio station. “HAAT” refers to the antenna height above average terrain of an FM radio station.
Market
Atlanta
Washington, DC
Philadelphia
Houston
Dallas
Baltimore
Charlotte
Cleveland
Raleigh-Durham
Richmond
Columbus
Indianapolis
ERP (FM)
Power
(AM) in
Year of
Station Call Letters Acquisition Class Kilowatts
1999
1999
2002
1999
WUMJ-FM
WAMJ-FM
WHTA-FM
WPZE-FM
C3
C2
C2
A
8.5
33.0
35.0
3.0
FCC
WOL-AM
WMMJ-FM
WKYS-FM
WPRS-FM
WYCB-AM
WDCJ-FM
WPHI-FM
WRNB-FM
WPPZ-FM
KMJQ-FM
KBXX-FM
KROI-FM
KBFB-FM
KZMJ-FM
WWIN-AM
WWIN-FM
WOLB-AM
WERQ-FM
WQNC-FM
WPZS-FM
WOSF-FM
WBT-FM
WBT-AM
WFNZ-AM
WLNK-FM
WJMO-AM
WENZ-FM
WZAK-FM
WERE-AM
WQOK-FM
WFXK-FM
WFXC-FM
WNNL-FM
WPZZ-FM
WCDX-FM
WKJM-FM
WKJS-FM
WTPS-AM
WXGI-AM
WCKX-FM
WBMO-FM
WXMG-FM
WJYD-FM
WHHH-FM
WTLC-FM
WNOW-FM
WTLC-AM
1980
1987
1995
2008
1998
2017
1997
2000
2004
2000
2000
2004
2000
2001
1992
1992
1993
1993
2000
2004
2014
2021
2021
2021
2021
1999
1999
2000
2000
2000
2000
2000
2000
1999
2001
2001
2001
2001
2017
2001
2001
2016
2016
2000
2000
2000
2001
C
A
B
B
C
A
A
B
A
C
C
C1
C
C
C
A
D
B
C3
A
C1
C3
A
B
C
B
B
B
C
C2
C1
C3
C3
C1
B1
A
A
C
D
A
A
B
A
A
A
A
B
0.4
2.9
24.5
20.0
1.0
2.9
0.3
17.0
0.8
100.0
100.0
40.0
100.0
100.0
0.5
3.0
0.3
37.0
10.5
6.0
51.0
7.7
50.0
5.0
100.0
5.0
16.0
27.5
1.0
50.0
100.0
13.0
7.9
100.0
4.5
6.0
2.3
1.0
3.9
1.9
6.0
21.0
6.0
3.3
6.0
6.0
5.0
Antenna
Height
(AM)
HAAT in Operating
Frequency
Meters
165.0
97.5 MHz
185.0 107.5 MHz
177.0 107.9 MHz
143.0 102.5 MHz
Expiration
Date of FCC
License
4/1/2028
4/1/2028
4/1/2028
4/1/2028
N/A
1450 kHz
146.0 102.3 MHz
215.0
93.9 MHz
244.0 104.1 MHz
1340 kHz
N/A
92.7 MHz
145.0
338.0 103.9 MHz
263.0 100.3 MHz
276.0 107.9 MHz
524.0 102.1 MHz
97.9 MHz
585.0
92.1 MHz
421.0
10/1/2027
10/1/2027
10/1/2027
10/1/2027
10/1/2027
10/1/2027
8/1/2022
8/1/2022
6/1/2022
8/1/20211
8/1/20211
8/1/20211
574.0
591.0
97.9 MHz
94.5 MHz
8/1/2029
8/1/2029
N/A
91.0
N/A
173.0
1400 kHz
95.9 MHz
1010 kHz
92.3 MHz
92.7 MHz
154.0
94.0
100.9 MHz
395.0 105.3 MHz
182.2
N/A
N/A
576.0
99.3 MHz
1110 MHz
610 MHz
107.9 MHz
N/A
1300 kHz
272.0 107.9 MHz
93.1 MHz
189.0
1490 kHz
N/A
97.5 MHz
146.0
299.0 104.3 MHz
141.0 107.1 MHz
176.0 103.9 MHz
299.0 104.7 MHz
235.0
92.1 MHz
99.3 MHz
100.0
162.0 105.7 MHz
1240 kHz
N/A
950 kHz
N/A
126.0 107.5 MHz
106.3 MHz
99.0
95.5 MHz
232.0
100.0 107.1 MHz
96.3 MHz
87.0
99.0
106.7 MHz
100.0 100.9 MHz
1310 kHz
N/A
10/1/2027
10/1/2027
10/1/2027
10/1/2027
12/1/2027
12/1/2027
12/1/2027
12/1/2027
12/1/2027
12/1/2027
12/1/2027
10/1/2028
10/1/2028
10/1/2028
10/1/2028
12/1/2027
12/1/2027
12/1/2027
12/1/2027
10/1/2027
10/1/2027
10/1/2027
10/1/2027
10/1/2027
10/1/2027
10/1/2028
10/1/2028
10/1/2028
10/1/2028
8/1/2028
8/1/2028
8/1/2028
8/1/2028
Cincinnati
8/1/2028
10/1/2028
10/1/2028
1 A station may continue to operate beyond the expiration date of its license if a timely filed license renewal application was filed and is pending, as is the
case with respect to each of our stations with licenses that have expired.
155.0 101.1 MHz
N/A
1230 kHz
141.0 100.3 MHz
WIZF-FM
WDBZ-AM
WOSL-FM
2001
2007
2006
A
C
A
2.5
1.0
3.1
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To obtain the FCC’s prior consent to assign or transfer control of a broadcast license, an appropriate application must
be filed with the FCC. If the assignment or transfer involves a substantial change in ownership or control of the licensee,
for example, the transfer of more than 50% of the voting stock, the applicant must give public notice and the application is
subject to a 30-day period for public comment. During this time, interested parties may file petitions with the FCC to deny
the application. Informal objections may be filed at any time until the FCC acts upon the application. If the FCC grants an
assignment or transfer application, administrative procedures provide for petitions seeking reconsideration or full FCC
review of the grant. The Communications Act also permits the appeal of a contested grant to a federal court.
Under the Communications Act, a broadcast license may not be granted to or held by any person who is not a U.S.
citizen or by any entity that has more than 20% of its capital stock owned or voted by non-U.S. citizens or entities or their
representatives, or by foreign governments or their representatives. The Communications Act prohibits more than 25%
indirect foreign ownership or control of a licensee through a parent company if the FCC determines the public interest will
be served by such prohibition. The FCC has interpreted this provision of the Communications Act to require an affirmative
public interest finding before this 25% limit may be exceeded. Since we serve as a holding company for subsidiaries that
serve as licensees for our stations, we are effectively restricted from having more than one-fourth of our stock owned or
voted directly or indirectly by non-U.S. citizens or their representatives, foreign governments, representatives of foreign
governments, or foreign business entities unless we seek and obtain FCC authority to exceed that level. The FCC will
entertain and authorize, on a case-by-case basis and upon a sufficient public interest showing and favorable executive
branch review, proposals to exceed the 25% indirect foreign ownership limit in broadcast licensees.
The FCC applies its media ownership limits to “attributable” interests. The interests of officers, directors and those
who directly or indirectly hold five percent or more of the total outstanding voting stock of a corporation that holds a
broadcast license (or a corporate parent) are generally deemed attributable interests, as are any limited partnership or
limited liability company interests that are not properly “insulated” from management activities. Certain passive investors
that hold stock for investment purposes only are deemed attributable with the ownership of 20% or more of the voting
stock of a licensee or parent corporation. An entity with one or more radio stations in a market that enters into a local
marketing agreement or a time brokerage agreement with another radio station in the same market obtains an attributable
interest in the brokered radio station if the brokering station supplies programming for more than 15% of the brokered
radio station’s weekly broadcast hours. Similarly, a radio station licensee’s right under a joint sales agreement (“JSA”) to
sell more than 15% per week of the advertising time on another radio station in the same market constitutes an attributable
ownership interest in such station for purposes of the FCC’s ownership rules. Debt instruments, non-voting stock,
unexercised options and warrants, minority voting interests in corporations having a single majority shareholder, and
limited partnership or limited liability company membership interests where the interest holder is not “materially involved”
in the media-related activities of the partnership or limited liability company pursuant to FCC-prescribed “insulation”
provisions, generally do not subject their holders to attribution unless such interests implicate the FCC’s equity-debt-plus
(or “EDP”) rule. Under the EDP rule, a major programming supplier or the holder of an attributable interest in a same-
market radio station, will have an attributable interest in a station if the supplier or same-market media entity also holds
debt or equity, or both, in the station that is greater than 33% of the value of the station’s total debt plus equity. For
purposes of the EDP rule, equity includes all stock, whether voting or nonvoting, and interests held by limited partners or
limited liability company members that are “insulated” from material involvement in the company’s media activities. A
major programming supplier is any supplier that provides more than 15% of the station’s weekly programming hours.
The Communications Act and FCC rules generally restrict ownership, operation or control of, or the common holding
of attributable interests in, radio broadcast stations serving the same local market in excess of specified numerical limits.
The numerical limits on radio stations that one entity may own in a local market are as follows:
● in a radio market with 45 or more commercial radio stations, a party may hold an attributable interest in up to
eight commercial radio stations, not more than five of which are in the same service (AM or FM);
● in a radio market with 30 to 44 commercial radio stations, a party may hold an attributable interest in up to
seven commercial radio stations, not more than four of which are in the same service (AM or FM);
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● in a radio market with 15 to 29 commercial radio stations, a party may hold an attributable interest in up to
six commercial radio stations, not more than four of which are in the same service (AM or FM); and
● in a radio market with 14 or fewer commercial radio stations, a party may hold an attributable interest in up
to five commercial radio stations, not more than three of which are in the same service (AM or FM), except
that a party may not hold an attributable interest in more than 50% of the radio stations in such market.
To apply these tiers, the FCC currently relies on Nielsen Metro Survey Areas, where they exist. In other areas, the FCC
relies on a contour-overlap methodology. The FCC has initiated a rulemaking to determine how to define local radio
markets in areas located outside Nielsen Metro Survey Areas. The market definition used by the FCC in applying its
ownership rules may not be the same as that used for purposes of the Hart-Scott-Rodino Act. In 2003, when the FCC
changed its methodology for defining local radio markets, it grandfathered existing combinations of radio stations that
would not comply with the modified rules. The FCC’s rules provide that these grandfathered combinations may not be sold
intact except to certain “eligible entities,” which the FCC defines as entities qualifying as a small business consistent with
Small Business Administration standards.
The media ownership rules are subject to review by the FCC every four years. In August 2016, the FCC issued an
order concluding its 2010 and 2014 quadrennial reviews. The August 2016 decision retained the local radio ownership rule,
the radio-television cross-ownership rule and the prohibition on newspaper-broadcast cross-ownership without significant
changes. In November 2017, the FCC adopted an order reconsidering the August 2016 decision and modifying it in a
number of respects. The November 2017 order on reconsideration did not significantly modify the August 2016 decision
with respect to the local radio ownership limits. It did, however, eliminate the FCC’s previous limits on radio/television
cross-ownership and newspaper/broadcast cross-ownership effective February 7, 2018. In September 2019, a federal
appeals court vacated the FCC’s November 2017 order on reconsideration, as a result of which the radio/television and
newspaper/broadcast cross-ownership rules were reinstated. On April 1, 2021, however, the U.S. Supreme Court reversed
the September 2019 appeals court ruling, resulting in the elimination of the radio/television and newspaper/broadcast cross-
ownership rules effective June 30, 2021. The FCC’s 2018 quadrennial review of its media ownership rules, which
commenced in December 2018, is currently pending.
The attribution and media ownership rules limit the number of radio stations we may acquire or own in any particular
market and may limit the prospective buyers of any stations we want to sell. The FCC’s rules could affect our business in a
number of ways, including, but not limited to, the following:
● the FCC’s radio ownership limits could have an adverse effect on our ability to accumulate stations in a given
area or to sell a group of stations in a local market to a single entity;
● restricting the assignment and transfer of control of “grandfathered” radio combinations that exceed the
ownership limits as a result of the FCC’s 2003 change in local market definition could adversely affect our
ability to buy or sell a group of stations in a local market from or to a single entity; and
● in general terms, future changes in the way the FCC defines radio markets or in the numerical station caps
could limit our ability to acquire new stations in certain markets, our ability to operate stations pursuant to
certain agreements, and our ability to improve the coverage contours of our existing stations.
Programming and Operations. The Communications Act requires broadcasters to serve the “public interest” by
presenting programming that responds to community problems, needs and interests and by maintaining records
demonstrating such responsiveness. The FCC considers complaints from viewers or listeners about a broadcast station’s
programming. All radio stations are now required to maintain their public inspection files on a publicly accessible FCC-
hosted online database. Moreover, the FCC has from time to time proposed rules designed to increase local programming
content and diversity, including renewal application processing guidelines for locally-oriented programming and a
requirement that broadcasters establish advisory boards in the communities where they own stations. Stations also must
follow FCC rules and policies regulating political advertising, obscene or indecent programming, sponsorship
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identification, contests and lotteries and technical operation, including limits on human exposure to radio frequency
radiation.
The FCC requires that licensees not discriminate in hiring practices on the basis of race, color, religion, national origin
or gender. It also requires stations with at least five full-time employees to broadly disseminate information about all full-
time job openings and undertake outreach initiatives from an FCC list of activities such as participation in job fairs,
internships, or scholarship programs. The FCC is considering whether to apply these recruitment requirements to part-time
employment positions. Stations must retain records of their outreach efforts and keep an annual Equal Employment
Opportunity (“EEO”) report in their public inspection files and post an electronic version on their websites.
From time to time, complaints may be filed against any of our radio stations alleging violations of these or other rules.
In addition, the FCC may conduct audits or inspections to ensure and verify licensee compliance with FCC rules and
regulations. Failure to observe these or other rules and regulations can result in the imposition of various sanctions,
including fines or conditions, the grant of “short” (less than the maximum eight year) renewal terms or, for particularly
egregious violations, the denial of a license renewal application or the revocation of a license.
Human Capital
As of December 31, 2021, we employed 825 full-time employees and 330 part-time employees. Our employees are not
unionized.
We believe that our success largely depends upon our continued ability to attract and retain highly skilled employees.
We provide our employees with competitive salaries and bonuses, development programs that enable continued learning
and growth, and offer an employment package that promotes well-being across all aspects of their lives, including health
care, retirement planning and paid time off.
As a business founded by an African-American woman, diversity and inclusion is engrained in our corporate history.
Our Board of Directors is diverse; Catherine L. Hughes, our Founder and Chairperson, is an African-American woman,
and four of our six directors are minorities. Our President and Chief Executive Officer, who is also a director, Alfred C.
Liggins, III is an African-American male, as is our Senior Vice President and General Counsel, Kristopher Simpson.
Further, Karen Wishart, our Executive Vice President and Chief Administrative Officer, is an African-American woman, as
is Michelle Rice, President of TV ONE. As of December 31, 2021, 79% of our employees were racially diverse, and 47%
of our employees were women. We are proud that our organization is governed and propelled by such a diverse group of
individuals, which we believe contributes to our Company’s success now, and in the long-term.
Our senior leadership team has introduced various initiatives to ensure that our Company remains inclusive and
supportive for all, including: (i) conducting workplace training, which includes focuses on unconscious bias, discrimination
and harassment; (ii) leveraging a diverse slate of candidates for all job vacancies, including senior leadership; and (iii)
developing content across our multi-media platform that elevates the voice of minority communities to foster equality and
inclusion in both the entertainment industry and across the nation.
Environmental
As the owner, lessee or operator of various real properties and facilities, we are subject to federal, state and local
environmental laws and regulations. Historically, compliance with these laws and regulations has not had a material
adverse effect on our business. There can be no assurance, however, that compliance with existing or new environmental
laws and regulations will not require us to make significant expenditures in the future.
Corporate Governance
Code of Ethics. We have adopted a code of ethics that applies to all of our directors, officers (including our principal
financial officer and principal accounting officer) and employees and meets the requirements of the SEC and the NASDAQ
Stock Market Rules. Our code of ethics can be found on our website, www.urban1.com. We will provide a paper copy of
the code of ethics, free of charge, upon request.
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Audit Committee Charter. Our audit committee has adopted a charter as required by the NASDAQ Stock Market
Rules. This committee charter can be found on our website, www.urban1.com. We will provide a paper copy of the audit
committee charter, free of charge, upon request.
Compensation Committee Charter. Our Board of Directors has adopted a compensation committee charter. We will
provide a paper copy of the compensation committee charter, free of charge, upon request.
Internet Address and Internet Access to SEC Reports
Our internet address is www.urban1.com. You may obtain through our internet website, free of charge, copies of our
proxies, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments
to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. These reports
are available as soon as reasonably practicable after we electronically file them with or furnish them to the SEC. Our
website and the information contained therein or connected thereto shall not be deemed to be incorporated into this
Form 10-K.
ITEM 1A. RISK FACTORS
Risks Related to Our Business and Industry
In an enterprise as large and complex as ours, a wide range of factors could affect our business and financial results.
The factors described below are considered to be the most significant, but are not listed in any particular order. There may
be other currently unknown or unpredictable economic, business, competitive, regulatory or other factors that could have
material adverse effects on our future results. Past financial performance may not be a reliable indicator of future
performance and historical trends should not be used to anticipate results or trends in future periods. The following
discussion of risk factors should be read in conjunction with “Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and the consolidated financial statements and related notes in “Item 8. Financial
Statements and Supplementary Data” of this Form 10-K.
Risks Related to the Nature and Operations of Our Business
Impact of Ongoing Public Health Crisis
An epidemic or pandemic disease outbreak, such as the ongoing COVID-19 pandemic, has caused, and is causing,
significant disruption to our business operations. Measures taken by governmental authorities and private actors to limit the
spread of the virus have interfered and continue to interfere with the ability our employees, suppliers, and customers to
conduct their functions and business in a normal manner. Further, the demand for advertising across our various
segments/platforms is linked to the level of economic activity and employment in the U.S. Specifically, our business is
heavily dependent on the demand for advertising from consumer-focused companies. Dislocation of consumer demand due
to social distancing and government interventions (such as lockdowns or shelter in place policies) has caused, and could
further cause, advertisers to reduce, postpone or eliminate their marketing spending generally, and on our platforms in
particular. Continued or future social distancing, government interventions and/or recessions could have a material adverse
effect on our business and financial condition. Moreover, continued or future declines or disruptions due to the COVID-19
pandemic and new variants of COVID-19, could adversely affect our business and financial performance.
The extent to which our results continue to be affected by COVID-19 will largely depend on future developments,
which are not within our control and cannot be accurately predicted and are uncertain. These developments include, but are
not limited to, the duration, scope and severity of the pandemic, any additional resurgences, variants or new viruses; the
ability to effectively and widely manufacture and distribute vaccines; the public’s perception of the safety of the vaccines
and their willingness to take the vaccines; the effect of the COVID-19 pandemic on our customers and the ability of our
clients to meet their payment terms; the public’s willingness to attend live events; and the pace of recovery when the
pandemic subsides.
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The state and condition of the global financial markets and fluctuations in the global and U.S. economies may have an
unpredictable impact on our business and financial condition.
From time to time, including as a result of the current pandemic, the global equity and credit markets experience high
levels of volatility and disruption. At various points in time, the markets have produced upward and/or downward pressure
on stock prices and limited credit capacity for certain companies without regard to those companies’ underlying financial
strength. In addition, advertising is a discretionary and variable business expense. Spending on advertising tends to decline
disproportionately during an economic recession or downturn as compared to other types of business spending.
Consequently, a downturn in the United States economy generally has an adverse effect on our advertising revenue and,
therefore, our results of operations. A recession or downturn in the economy of any individual geographic market,
particularly a major market in which we operate, also may have a significant effect on us. Radio revenues in the markets in
which we operate may also face greater challenges than the U.S. economy generally and may remain so. Radio revenues in
certain markets in which we operate have lagged the growth of the general United States economy. Radio revenues in
markets in which we operate, as measured by the accounting firm Miller Kaplan Arase LLP (“Miller Kaplan”) were down
in 2020 and, while they have recovered, they have yet to fully reach pre-pandemic levels. Even in the absence of a general
recession or downturn in the economy, an individual business sector (such as the automotive industry or the hospitality
industry) that tends to spend more on advertising than other sectors might be forced to reduce its advertising expenditures
if that sector experiences a downturn. If any such sector’s spending represents a significant portion of our advertising
revenues, any reduction in its advertising expenditures may affect our revenue.
Any deterioration in the economy could negatively impact our ability to meet our cash needs and our ability to maintain
compliance with our debt covenants.
If economic conditions change, or other adverse factors outside our control arise, including continued disruptions due
to the pandemic or other social factors, our operations could be negatively impacted, which could prevent us from
maintaining liquidity or compliance with our debt covenants. If it appears that we could not meet our liquidity needs or that
noncompliance with debt covenants is likely, we would implement remedial measures, which could include, but not be
limited to, operating cost and capital expenditure reductions and deferrals. In addition, we could implement de-leveraging
actions, which may include, but not be limited to, other debt repayments, subject to our available liquidity and contractual
ability to make such repayments and/or debt refinancing and amendments.
The terms of our indebtedness and the indebtedness of our direct and indirect subsidiaries may restrict our current and
future operations, particularly our ability to respond to changes in market conditions or to take some actions.
Our debt instruments impose operating and financial restrictions on us. These restrictions limit or prohibit, among
other things, our ability and the ability of our subsidiaries to incur additional indebtedness, issue preferred stock, incur
liens, pay dividends, enter into asset purchase or sale transactions, merge or consolidate with another company, dispose of
all or substantially all of our assets or make certain other payments or investments. These restrictions could limit our ability
to grow our business through acquisitions and could limit our ability to respond to market conditions or meet extraordinary
capital needs.
We have historically incurred net losses which could continue into the future.
We have historically reported net losses in our consolidated statements of operations, due mostly in part to recording
non-cash impairment charges for write-downs to radio broadcasting licenses and goodwill, interest expenses (both cash and
non-cash), and revenue declines caused by weakened advertising demand resulting from the current economic
environment. These results have had a negative impact on our financial condition and could be exacerbated in a poor
economic climate. If these trends continue in the future, they could have a material adverse effect on our financial
condition.
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Our revenue is substantially dependent on spending and allocation decisions by advertisers, and seasonality and/or
weakening economic conditions may have an impact upon our business.
Substantially all of our revenue is derived from sales of advertisements and program sponsorships to local and national
advertisers. Any reduction in advertising expenditures or changes in advertisers’ spending priorities and/or allocations
across different types of media/platforms or programming could have an adverse effect on the Company’s revenues and
results of operations. We do not obtain long-term commitments from our advertisers and advertisers may cancel, reduce, or
postpone advertisements without penalty, which could adversely affect our revenue. Seasonal net revenue fluctuations are
common in the media industries and are due primarily to fluctuations in advertising expenditures by local and national
advertisers. In addition, advertising revenues in even-numbered years tend to benefit from advertising placed by candidates
for political offices. The effects of such seasonality (including the weather), combined with the severe structural changes
that have occurred in the U.S. economy, make it difficult to estimate future operating results based on the previous results
of any specific quarter and may adversely affect operating results.
Advertising expenditures also tend to be cyclical and reflect general economic conditions, both nationally and locally.
Because we derive a substantial portion of our revenues from the sale of advertising, a decline or delay in advertising
expenditures could reduce our revenues or hinder our ability to increase these revenues. Advertising expenditures by
companies in certain sectors of the economy, including the automotive, financial, entertainment, and retail industries,
represent a significant portion of our advertising revenues. Structural changes (such as reduced footprints in retail and the
movement of retailers online) and business failures in these industries have affected our revenues and continued structural
changes or business failures in any of these industries could have significant further impact on our revenues. Any political,
economic, social, or technological change resulting in a significant reduction in the advertising spending of these sectors
could adversely affect our advertising revenues or our ability to increase such revenues. In addition, because many of the
products and services offered by our advertisers are largely discretionary items, weakening economic conditions or changes
in consumer spending patterns could reduce the consumption of such products and services and, thus, reduce advertising
for such products and services. Changes in advertisers’ spending priorities during economic cycles may also affect our
results. Pandemics, disasters (domestic or external to the United States), acts of terrorism, political uncertainty or hostilities
could also lead to a reduction in advertising expenditures as a result of supply or demand issues, uninterrupted news
coverage and economic uncertainty.
Our success is dependent upon audience acceptance of our content, particularly our television and radio programs,
which is difficult to predict.
Radio, video, and digital content production and distribution are inherently risky businesses because the revenues
derived from the production and distribution of media content or a radio program, and the licensing of rights to the
intellectual property associated with the content or program, depend primarily upon their acceptance and perceptions by the
public, which can change quickly and are difficult to predict. The commercial success of content or a program also depends
upon the quality and acceptance of other competing programs released into the marketplace at or near the same time, the
availability of alternative forms of entertainment and leisure time activities, general economic conditions, and other
tangible and intangible factors, all of which are difficult to predict. Our failure to obtain or retain rights to popular content
on any part of our multi-media platform could adversely affect our revenues. Further, social distancing measures and
governmental restrictions on gatherings can make the production of new content difficult (if not impossible) and this
difficulty can translate in to difficulty in making sales to advertiser who prefer to advertise against new content.
Ratings for broadcast stations and traffic on a particular website are also factors that are weighed when advertisers
determine which outlets to use and in determining the advertising rates that the outlet receives. Poor ratings or traffic levels
can lead to a reduction in pricing and advertising revenues. For example, if there is an event causing a change of
programming at one of our stations, there could be no assurance that any replacement programming would generate the
same level of ratings, revenues, or profitability as the previous programming. In addition, changes in ratings methodology,
search engine algorithms and technology could adversely impact our businesses and negatively affect our advertising
revenues.
Television content production is inherently a risky business because the revenues derived from the production and
distribution of a television program and the licensing of rights to the associated intellectual property depends primarily
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upon the public’s level of acceptance, which is difficult to predict. The commercial success of a television program also
depends upon the quality and acceptance of other competing programs in the marketplace at or near the same time, the
availability of alternative forms of entertainment and leisure time activities, general economic conditions, and other
tangible and intangible factors, all of which are difficult to predict. Rating points are also factors that are weighed when
determining the advertising rates that TV One/CLEO TV receive. Poor ratings can lead to a reduction in pricing and
advertising revenues. Consequently, low public acceptance of TV One/CLEO TV’s content may have an adverse effect on
our cable television segment’s results of operations. Further, networks or programming launched by NetflixTM, Oprah
Winfrey (OWNTM), Sean Combs (REVOLT TVTM), and Magic Johnson (ASPIRETM), could take away from our audience
share and ratings and thus have an adverse effect on our cable television’s results of operations.
Increases in or new royalties, including through legislation, could adversely impact our business, financial condition
and results of operations.
We currently pay royalties to song composers and publishers through BMI, ASCAP, SESAC and GMR but not to
record labels or recording artists for exhibition or use of over the air broadcasts of music. We must also pay royalties to the
copyright owners of sound recordings for the digital audio transmission of such sound recordings on the Internet. We pay
such royalties under federal statutory licenses and pay applicable license fees to SoundExchange, the non-profit
organization designated by the United States Copyright Royalty Board to collect such license fees. The royalty rates
applicable to sound recordings under federal statutory licenses are subject to adjustment. The royalty rates we pay to
copyright owners for the public performance of musical compositions on our radio stations and internet streams could
increase as a result of private negotiations and the emergence of new performing rights organizations, which could
adversely impact our businesses, financial condition, results of operations and cash flows. Further, from time to time,
Congress considers legislation which could change the copyright fees and the procedures by which the fees are determined.
The legislation historically has been the subject of considerable debate and activity by the broadcast industry and other
parties affected by the proposed legislation. It cannot be predicted whether any proposed future legislation will become law
or what impact it would have on our results from operations, cash flows or financial position.
A disproportionate share of our radio segment revenue comes from a small number of geographic markets and our
syndicated radio business, Reach Media.
For the year ended December 31, 2021, approximately 31.8% of our net revenue was generated from the sale of
advertising in our core radio business, excluding Reach Media. Within our core radio business, four (Houston, Washington,
DC, Atlanta and Baltimore) of the 13 markets in which we operated radio stations throughout 2021 or a portion thereof
accounted for approximately 53.8% of our radio station net revenue for the year ended December 31, 2021. Revenue from
the operations of Reach Media, along with revenue from both the Houston and Washington, DC markets accounted for
approximately 19.3% of our total consolidated net revenue for the year ended December 31, 2021. Revenue from the
operations of Reach Media, along with revenue from the four significant contributing radio markets, accounted for
approximately 27.5% of our total consolidated net revenue for the year ended December 31, 2021. Adverse events or
conditions (economic, including government cutbacks or otherwise) could lead to declines in the contribution of Reach
Media or declines in one or more of the four significant contributing radio markets, which could have a material adverse
effect on our overall financial performance and results of operations.
We may lose audience share and advertising revenue to our competitors.
Our media properties compete for audiences and advertising revenue with other radio stations and station groups and
other media such as broadcast television, newspapers, magazines, cable television, satellite television, satellite radio,
outdoor advertising, “over the top providers” on the internet and direct mail. Adverse changes in audience ratings, internet
traffic, and market shares could have a material adverse effect on our revenue. Larger media companies, with more
financial resources than we have may target our core audiences or enter the segments or markets in which we operate,
causing competitive pressure. Further, other media and broadcast companies may change their programming format or
engage in aggressive promotional campaigns to compete directly with our media properties for our core audiences and
advertisers. Competition for our core audiences in any of our segments or markets could result in lower ratings or traffic
and, hence, lower advertising revenue for us, or cause us to increase promotion and other expenses and, consequently,
lower our earnings and cash flow. Changes in population, demographics, audience tastes and other factors beyond our
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control, could also cause changes in audience ratings or market share. Failure by us to respond successfully to these
changes could have an adverse effect on our business and financial performance. We cannot assure that we will be able to
maintain or increase our current audience ratings and advertising revenue.
We must respond to the rapid changes in technology, content offerings, services, and standards across our entire
platform in order to remain competitive.
Technological standards across our media properties are evolving and new distribution technologies/platforms are
emerging at a rapid pace. We cannot assure that we will have the resources to acquire new technologies or to introduce new
features, content or services to compete with these new technologies. New media has resulted in fragmentation in the
advertising market, and we cannot predict the effect, if any, that additional competition arising from new technologies or
content offerings may have across any of our business segments or our financial condition and results of operations, which
may be adversely affected if we are not able to adapt successfully to these new media technologies or distribution
platforms. The continuing growth and evolution of channels and platforms has increased our challenges in differentiating
ourselves from other media platforms. We continually seek to develop and enhance our content offerings and distribution
platforms/methodologies. Failure to effectively execute in these efforts, actions by our competitors, or other failures to
deliver content effectively could hurt our ability to differentiate ourselves from our competitors and, as a result, have
adverse effects across our business.
The loss of key personnel, including certain on-air talent, could disrupt the management and operations of our
business.
Our business depends upon the continued efforts, abilities and expertise of our executive officers and other key
employees, including certain on-air personalities. We believe that the combination of skills and experience possessed by
our executive officers and other key employees could be difficult to replace, and that the loss of one or more of them could
have a material adverse effect on us, including the impairment of our ability to execute our business strategy. In addition,
several of our on-air personalities and syndicated radio programs hosts have large loyal audiences in their respective
broadcast areas and may be significantly responsible for the ratings of a station. The loss of such on-air personalities or any
change in their popularity could impact the ability of the station to sell advertising and our ability to derive revenue from
syndicating programs hosted by them. We cannot be assured that these individuals will remain with us or will retain their
current audiences or ratings.
If our digital segment does not continue to develop and offer compelling and differentiated content, products and
services, our advertising revenues could be adversely affected.
In order to attract consumers and generate increased activity on our digital properties, we believe that we must offer
compelling and differentiated content, products and services. However, acquiring, developing, and offering such content,
products and services may require significant costs and time to develop, while consumer tastes may be difficult to predict
and are subject to rapid change. Further, social distancing and governmental restrictions on gatherings may inhibit our
ability to produce content. If we are unable to provide content, products and services that are sufficiently attractive to our
digital users, we may not be able to generate the increases in activity necessary to generate increased advertising revenues.
In addition, although we have access to certain content provided by our other businesses, we may be required to make
substantial payments to license such content. Many of our content arrangements with third parties are non-exclusive, so
competitors may be able to offer similar or identical content. If we are not able to acquire or develop compelling content
and do so at reasonable prices, or if other companies offer content that is similar to that provided by our digital segment,
we may not be able to attract and increase the engagement of digital consumers on our digital properties.
Continued growth in our digital business also depends on our ability to continue offering a competitive and distinctive
range of advertising products and services for advertisers and publishers and our ability to maintain or increase prices for
our advertising products and services. Continuing to develop and improve these products and services may require
significant time and costs. If we cannot continue to develop and improve our advertising products and services or if prices
for our advertising products and services decrease, our digital advertising revenues could be adversely affected. Finally,
recently, our digital business has seen significant growth in its business due to advertisers increased interest in minority
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controlled media given recent social justice/equality trends. Should these trends reverse or decline, revenues within our
digital and other segments could be adversely impacted.
More individuals are using devices other than personal and laptop computers to access and use the internet, and, if we
cannot make our products and services available and attractive to consumers via these alternative devices, our internet
advertising revenues could be adversely affected.
Digital users are increasingly accessing and using the internet through mobile tablets, smartphones and wearable
devices. In order for consumers to access and use our products and services via these devices, we must ensure that our
products and services are technologically compatible with such devices. If we cannot effectively make our products and
services available on these devices, fewer internet consumers may access and use our products and services and our
advertising revenue may be negatively affected.
Unrelated third parties may claim that we infringe on their rights based on the nature and content of information posted
on websites we maintain.
We host internet services that enable individuals to exchange information, generate content, comment on our content,
and engage in various online activities. The law relating to the liability of providers of these online services for activities of
their users is currently unsettled both within the United States and internationally. While we monitor postings to such
websites, claims may be brought against us for defamation, negligence, copyright or trademark infringement, unlawful
activity, tort, including personal injury, fraud, or other theories based on the nature and content of information that may be
posted online or generated by our users. Our defense of such actions could be costly and involve significant time and
attention of our management and other resources.
If we are unable to protect our domain names and/or content, our reputation and brands could be adversely affected.
We currently hold various domain name registrations relating to our brands, including urban1.com, radio-one.com and
interactiveone.com. The registration and maintenance of domain names are generally regulated by governmental agencies
and their designees. Governing bodies may establish additional top-level domains, appoint additional domain name
registrars, or modify the requirements for holding domain names. As a result, we may be unable to register or maintain
relevant domain names. We may be unable, without significant cost or at all, to prevent third parties from registering
domain names that are similar to, infringe upon, or otherwise decrease the value of our trademarks and other proprietary
rights. Failure to protect our domain names could adversely affect our reputation and brands, and make it more difficult for
users to find our websites and our services. In addition, piracy of the Company’s content, including digital piracy, may
decrease revenue received from the exploitation of the Company’s programming and other content and adversely affect its
businesses and profitability.
Future asset impairment to the carrying values of our FCC licenses and goodwill could adversely impact our results of
operations and net worth.
As of December 31, 2021, we had approximately $505.2 million in broadcast licenses and $223.4 million in goodwill,
which totaled $728.6 million, and represented approximately 57.8% of our total assets. Therefore, we believe estimating
the fair value of goodwill and radio broadcasting licenses is a critical accounting estimate because of the significance of
their carrying values in relation to our total assets.
We are required to test our goodwill and indefinite-lived intangible assets for impairment at least annually, which we
have traditionally done in the fourth quarter, or on an interim basis when events or changes in circumstances suggest
impairment may have occurred. Impairment is measured as the excess of the carrying value of the goodwill or indefinite-
lived intangible asset over its fair value. Impairment may result from deterioration in our performance, changes in
anticipated future cash flows, changes in business plans, adverse economic or market conditions, adverse changes in
applicable laws and regulations, or other factors beyond our control. The amount of any impairment must be expensed as a
charge to operations. Fair values of FCC licenses and goodwill have been estimated using the income approach, which
involves a 10-year model that incorporates several judgmental assumptions about projected revenue growth, future
operating margins, discount rates and terminal values. We also utilize a market-based approach to evaluate our fair value
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estimates. There are inherent uncertainties related to these assumptions and our judgment in applying them to the
impairment analysis.
Changes in certain events or circumstances could result in changes to our estimated fair values, and may result in
further write-downs to the carrying values of these assets. Additional impairment charges could adversely affect our
financial results, financial ratios and could limit our ability to obtain financing in the future.
Our business depends on maintaining our licenses with the FCC. We could be prevented from operating a radio station
if we fail to maintain its license.
Within our core radio business, we are required to maintain radio broadcasting licenses issued by the FCC. These
licenses are ordinarily issued for a maximum term of eight years and are renewable. Currently, subject to renewal, our radio
broadcasting licenses expire at various times beginning August 2021 through August 1, 2029. While we anticipate
receiving renewals of all of our broadcasting licenses, interested third parties may challenge our renewal applications. A
station may continue to operate beyond the expiration date of its license if a timely filed license renewal application was
filed and is pending, as is the case with respect to each of our stations with licenses that have expired. During the periods
when a renewal application is pending, informal objections and petitions to deny the renewal application can be filed by
interested parties, including members of the public, on a variety of grounds. In addition, we are subject to extensive and
changing regulation by the FCC with respect to such matters as programming, indecency standards, technical operations,
employment and business practices. If we or any of our significant stockholders, officers, or directors violate the FCC’s
rules and regulations or the Communications Act of 1934, as amended (the “Communications Act”), or is convicted of a
felony or found to have engaged in certain other types of non-FCC related misconduct, the FCC may commence a
proceeding to impose fines or other sanctions upon us. Examples of possible sanctions include the imposition of fines, the
renewal of one or more of our broadcasting licenses for a term of fewer than eight years or the revocation of our broadcast
licenses. If the FCC were to issue an order denying a license renewal application or revoking a license, we would be
required to cease operating the radio station covered by the license only after we had exhausted administrative and judicial
review without success.
Disruptions or security breaches of our information technology infrastructure could interfere with our operations,
compromise client information and expose us to liability, possibly causing our business and reputation to suffer.
Our industry is prone to cyber-attacks by third parties seeking unauthorized access to our data or users’ data. Any
failure to prevent or mitigate security breaches and improper access to or disclosure of our data or user data could result in
the loss or misuse of such data, which could harm our business and reputation and diminish our competitive position. In
addition, computer malware, viruses, social engineering (predominantly spear phishing attacks), and general hacking have
become more prevalent in general. Our efforts to protect our company’s data or the information we receive may be
unsuccessful due to software bugs or other technical malfunctions; employee, contractor, or vendor error or malfeasance;
government surveillance; or other threats that evolve. In addition, third parties may attempt to fraudulently induce
employees or users to disclose information in order to gain access to our data or our users’ data on a continual basis.
Any internal technology breach, error or failure impacting systems hosted internally or externally, or any large scale
external interruption in technology infrastructure we depend on, such as power, telecommunications or the Internet, may
disrupt our technology network. Any individual, sustained or repeated failure of technology could impact our customer
service and result in increased costs or reduced revenues. Our technology systems and related data also may be vulnerable
to a variety of sources of interruption due to events beyond our control, including natural disasters, terrorist attacks,
telecommunications failures, computer viruses, hackers and other security issues. Our technology security initiatives,
disaster recovery plans and other measures may not be adequate or implemented properly to prevent a business disruption
and its adverse financial consequences to our reputation.
In addition, as a part of our ordinary business operations, we may collect and store sensitive data, including personal
information of our clients, listeners and employees. The secure operation of the networks and systems on which this type of
information is stored, processed and maintained is critical to our business operations and strategy. Any compromise of our
technology systems resulting from attacks by hackers or breaches due to employee error or malfeasance could result in the
loss, disclosure, misappropriation of or access to clients’, listeners’, employees’ or business partners’ information.
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Any such loss, disclosure, misappropriation or access could result in legal claims or proceedings, liability or regulatory
penalties under laws protecting the privacy of personal information, disruption of our operations and damage to our
reputation, any or all of which could adversely affect our business. Although we have developed systems and processes
that are designed to protect our data and user data, to prevent data loss, and to prevent or detect security breaches, we
cannot assure you that such measures will provide absolute security.
In the event of a technical or cyber event, we could experience a significant, unplanned disruption, or substantial and
extensive degradation of our services, or our network may fail in the future. Despite our significant infrastructure
investments, we may have insufficient communications and server capacity to address these or other disruptions, which
could result in interruptions in our services. Any widespread interruption or substantial and extensive degradation in the
functioning of our IT or technical platform for any reason could negatively impact our revenue and could harm our
business and results of operations. If such a widespread interruption occurred, or if we failed to deliver content to users as
expected, our reputation could be damaged severely. Moreover, any disruptions, significant degradation, cybersecurity
threats, security breaches, or attacks on our internal information technology systems could impact our ratings and cause us
to lose listeners, users or viewers or make it more difficult to attract new ones, either of which could harm our business and
results of operations.
On December 13, 2020, SolarWinds Corporation (“SolarWinds”) made its customers, including the Company, aware
of a cyberattack against SolarWinds that inserted a vulnerability within its Orion monitoring products, products which the
Company uses as a part of its IT infrastructure. SolarWinds advised its customers that this incident was likely the result of a
highly sophisticated, targeted and manual supply chain attack by an outside nation state. SolarWinds delivered a
communication to its customers, including the Company, that contained risk mitigation steps, including making available a
hotfix update to address this vulnerability in part and additional measures that customers could take to help secure their
environments. As of the date of this report, while we believe this attack against SolarWinds did not have an impact on the
Company, this may not continue to be the case going forward. Following the disclosure from SolarWinds, we have taken
steps designed to improve the security of our networks and computer systems. Despite these defensive measures, there can
be no assurance that we are adequately protecting our information or that we will not experience future incidents.
The Company’s business diversification efforts, including its efforts to expand its gaming investments, are subject to
risks and uncertainties.
On May 20, 2021, the City of Richmond, Virginia (the “City”) announced that it had selected the Company’s wholly-
owned unrestricted subsidiary RVA Entertainment Holdings, LLC (“RVAEH”), as the City’s preferred casino gaming
operator to develop and operate a casino resort in Richmond (“Casino Resort”). Pursuant to the Virginia Casino Act, the
City is one of five cities in the Commonwealth of Virginia eligible to host a casino gaming establishment, subject to the
citizens of the City approving a referendum (the “Referendum”). In November 2021, the required Referendum was
conducted and failed to pass. On January 24, 2022, the Richmond City Council adopted a new resolution in efforts to bring
the ONE Casino + Resort to the City. The new resolution was the first of several steps in pursuit of a second
referendum. Upon obtaining precertification for RVA Entertainment Holdings, LLC, Urban One’s wholly owned
subsidiary, by the Virginia Lottery Board, the City will then pursue an order from the Circuit Court for the City of
Richmond ordering a second referendum. If the City is successful in obtaining the precertification and the court orders a
second referendum, it is currently anticipated the second referendum would occur in November 2022. If the voters approve
the referendum then the Commonwealth may issue one license permitting operation of a casino in Richmond. While a new
process has been initiated with respect to a second referendum, there can be no assurance that a second referendum will be
ordered, pass with the required voter approval or that we will otherwise be able to move forward with the Casino Resort or
any similar initiative. As with all corporate development activities the Company may engage in, any of our current and
future business diversification efforts, including pursuit of the Casino Resort, are subject to a number of risks, including but
not limited to:
● delays in obtaining or inability to obtain necessary permits, licenses and approvals;
● changes to plans and/or specifications;
● lack of sufficient, or delays in the availability of, financing;
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● changes in laws and regulations, or in the interpretation and enforcement of laws and
regulations, applicable to gaming, leisure, real estate development or construction projects;
● availability of qualified contractors and subcontractors;
● environmental, health and safety issues, including site accidents and the spread of viruses;
● weather interferences or delays; and
● other unanticipated circumstances or cost increases.
In addition, in engaging of certain of these corporate development activities, we may rely on key contracts and
business relationships, and if any of our business partners or contracting counterparties fail to perform, or terminate, any of
their contractual arrangements with us for any reason or cease operations, our business could be disrupted and our revenues
could be adversely affected. The failure to perform or termination of any of the agreements by a partner or a counterparty,
the discontinuation of operations of a partner or counterparty, the loss of good relations with a partner or counterparty or
our inability to obtain similar relationships or agreements, may have an adverse effect on our financial condition, results of
operations and cash flow. Our operating partner, Pacific Peninsula Entertainment, recently entered into an agreement to sell
substantially all of its assets, including its interest in the ONE Casino + Resort project to Churchill Downs, Incorporated,
the owner of the Kentucky Derby. While the Company views this as a positive development for the project, there can be
no assurance that this development will not have any negative impact on the development of the project.
Certain Regulatory Risks
The FCC’s media ownership rules could restrict our ability to acquire radio stations.
The Communications Act and FCC rules and policies limit the number of broadcasting properties that any person or
entity may own (directly or by attribution) in any market and require FCC approval for transfers of control and assignments
of licenses. The FCC’s media ownership rules remain subject to further agency and court proceedings. As a result of the
FCC media ownership rules, the outside media interests of our officers and directors could limit our ability to acquire
stations. The filing of petitions or complaints against Urban One or any FCC licensee from which we are acquiring a
station could result in the FCC delaying the grant of, refusing to grant or imposing conditions on its consent to the
assignment or transfer of control of licenses. The Communications Act and FCC rules and policies also impose limitations
on non-U.S. ownership and voting of our capital stock.
Enforcement by the FCC of its indecency rules against the broadcast industry could adversely affect our business
operations.
The FCC’s rules prohibit the broadcast of obscene material at any time and indecent or profane material on broadcast
stations between the hours of 6 a.m. and 10 p.m. Broadcasters risk violating the prohibition against broadcasting indecent
material because of the vagueness of the FCC’s indecency and profanity definitions, coupled with the spontaneity of live
programming. The FCC has in the past vigorously enforced its indecency rules against the broadcasting industry and has
threatened to initiate license revocation proceedings against broadcast licensees for “serious” indecency violations. In
June 2012, the Supreme Court issued a decision which, while setting aside certain FCC indecency enforcement actions on
narrow due process grounds, declined to rule on the constitutionality of the FCC’s indecency policies. Following the
Supreme Court’s decision, the FCC requested public comment on the appropriate substance and scope of its indecency
enforcement policy. It is not possible to predict whether and, if so, how the FCC will revise its indecency enforcement
policies or the effect of any such changes on us. The fines for broadcasting indecent material are a maximum of $325,000
per utterance. The determination of whether content is indecent is inherently subjective and, as such, it can be difficult to
predict whether particular content could violate indecency standards. The difficulty in predicting whether individual
programs, words or phrases may violate the FCC’s indecency rules adds significant uncertainty to our ability to comply
with the rules. Violation of the indecency rules could lead to sanctions which may adversely affect our business and results
of operations. In addition, third parties could oppose our license renewal applications or applications for consent to acquire
broadcast stations on the grounds that we broadcast allegedly indecent programming on our stations. Some policymakers
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support the extension of the indecency rules that are applicable to over-the-air broadcasters to cover cable programming
and/or attempts to increase enforcement of or otherwise expand existing laws and rules. If such an extension, attempt to
increase enforcement, or other expansion took place and was found to be constitutional, some of TV One’s content could
be subject to additional regulation and might not be able to attract the same subscription and viewership levels.
Changes in current federal regulations could adversely affect our business operations.
Congress and the FCC have considered, and may in the future consider and adopt, new laws, regulations and policies
that could, directly or indirectly, affect the profitability of our broadcast stations. In particular, Congress may consider and
adopt a revocation of terrestrial radio’s exemption from paying royalties to performing artists and record companies for use
of their recordings (radio already pays a royalty to songwriters, composers and publishers). In addition, commercial radio
broadcasters and entities representing artists are negotiating agreements that could result in broadcast stations paying
royalties to artists. A requirement to pay additional royalties could have an adverse effect on our business operations and
financial performance. Moreover, it is possible that our license fees and negotiating costs associated with obtaining rights
to use musical compositions and sound recordings in our programming could sharply increase as a result of private
negotiations, one or more regulatory rate-setting processes, or administrative and court decisions. Finally, there has been in
the past and there could be again in the future proposed legislation that requires radio broadcasters to pay additional fees
such as a spectrum fee for the use of the spectrum. We cannot predict whether such actions will occur.
The television and distribution industries in the United States are highly regulated by U.S. federal laws and regulations
issued and administered by various federal agencies, including the FCC. The television broadcasting industry is subject to
extensive regulation by the FCC under the Communications Act. The U.S. Congress and the FCC currently have under
consideration, and may in the future adopt, new laws, regulations, and policies regarding a wide variety of matters that
could, directly or indirectly, affect the operations of our cable television segment. For example, the FCC has initiated a
proceeding to examine and potentially regulate more closely embedded advertising such as product placement and product
integration. Enhanced restrictions affecting these means of delivering advertising messages may adversely affect our cable
television segment’s advertising revenues. Changes to the media ownership and other FCC rules may affect the competitive
landscape in ways that could increase the competition faced by TV One/CLEO TV. Proposals have also been advanced
from time to time before the U.S. Congress and the FCC to extend the program access rules (currently applicable only to
those cable program services which also own or are owned by cable distribution systems) to all cable program services. TV
One/CLEO TV’s ability to obtain the most favorable terms available for its content could be adversely affected should such
an extension be enacted into law. We are unable to predict the effect that any such laws, regulations or policies may have
on our cable television segment’s operations.
New or changing federal, state or international privacy regulation or requirements could hinder the growth of our
internet business.
A variety of federal and state laws govern the collection, use, retention, sharing and security of consumer data that our
business uses to operate its services and to deliver certain advertisements to its customers, as well as the technologies used
to collect such data. Not only are existing privacy-related laws in these jurisdictions evolving and subject to potentially
disparate interpretation by governmental entities, new legislative proposals affecting privacy are now pending at both the
federal and state level in the U.S. Further, third-party service providers may from time to time change their privacy
requirements. Changes to the interpretation of existing law or the adoption of new privacy-related requirements by
governments or other businesses could hinder the growth of our business and cause us to incur new and additional costs
and expenses. Also, a failure or perceived failure to comply with such laws or requirements or with our own policies and
procedures could result in significant liabilities, including a possible loss of consumer or investor confidence or a loss of
customers or advertisers.
Our controls and procedures may fail or be circumvented, which may result in a material adverse effect on our
business, financial condition and results of operations.
Management regularly reviews and updates our internal controls, disclosure controls and procedures, and corporate
governance policies and procedures. Any system of controls, however well designed and operated, is based in part on
certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met.
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Any failure or circumvention of the controls and procedures or failure to comply with regulations related to controls and
procedures could have a material adverse effect on our business, results of operations and financial condition. In the past,
we have identified material weaknesses in our internal controls over financial reporting.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such
that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be
prevented or detected on a timely basis. We have remediated our past the material weaknesses, however, our remedial
measures to address the material weakness may be insufficient and we may in the future discover areas of our internal
controls that need improvement. Failure to maintain effective controls or to timely implement any necessary improvement
of our internal and disclosure controls could, among other things, result in losses from errors, harm our reputation, or cause
investors to lose confidence in the reported financial information, all of which could have a material adverse effect on our
results of operations and financial condition.
Unique Risks Related to Our Cable Television Segment
The loss of affiliation agreements could materially adversely affect our cable television segment’s results of operations.
Our cable television segment is dependent upon the maintenance of affiliation agreements with cable and direct
broadcast distributors for its revenues, and there can be no assurance that these agreements will be renewed in the future on
terms acceptable to such distributors. The loss of one or more of these arrangements could reduce the distribution of TV
One’s and/or CLEO TV’s programming services and reduce revenues from subscriber fees and advertising, as applicable.
Further, the loss of favorable packaging, positioning, pricing or other marketing opportunities with any distributor could
reduce revenues from subscribers and associated subscriber fees. In addition, consolidation among cable distributors and
increased vertical integration of such distributors into the cable or broadcast network business have provided more leverage
to these distributors and could adversely affect our cable television segment’s ability to maintain or obtain distribution for
its network programming on favorable or commercially reasonable terms, or at all. The results of renewals could have a
material adverse effect on our cable television segment’s revenues and results and operations. We cannot assure you that
TV One and/or CLEO TV will be able to renew their affiliation agreements on commercially reasonable terms, or at all.
The loss of a significant number of these arrangements or the loss of carriage on basic programming tiers could reduce the
distribution of our content, which may adversely affect our revenues from subscriber fees and our ability to sell national
and local advertising time.
Changes in consumer behavior resulting from new technologies and distribution platforms may impact the performance
of our businesses.
Our cable television segment faces emerging competition from other providers of digital media, some of which have
greater financial, marketing and other resources than we do. In particular, content offered over the internet has become
more prevalent as the speed and quality of broadband networks have improved. Providers such as NetflixTM, HuluTM,
AppleTM, AmazonTM and GoogleTM, as well as gaming and other consoles such as Microsoft’s XboxTM, Sony’s PS5TM,
Nintendo’s WiiTM, and RokuTM, are aggressively establishing themselves as alternative providers of video content and
services, including new and independently developed long form video content. Most recently, new online distribution
services have emerged offering live sports and other content without paying for a traditional cable bundle of channels.
These services and the growing availability of online content, coupled with an expanding market for mobile devices and
tablets that allow users to view content on an on-demand basis and internet-connected televisions, may impact our cable
television segment’s distribution for its services and content. Additionally, devices or services that allow users to view
television programs away from traditional cable providers or on a time-shifted basis and technologies that enable users to
fast-forward or skip programming, including commercials, such as DVRs and portable digital devices and systems that
enable users to store or make portable copies of content, have caused changes in consumer behavior that may affect the
attractiveness of our offerings to advertisers and could therefore adversely affect our revenues. If we cannot ensure that our
distribution methods and content are responsive to our cable television segment’s target audiences, our business could be
adversely affected.
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Unique Risks Related to Our Capital Structure
Our President and Chief Executive Officer has an interest in TV One that may conflict with your interests.
Pursuant to the terms of employment with our President and Chief Executive Officer, Mr. Alfred C. Liggins, III, in
recognition of Mr. Liggins’ contributions in founding TV One on our behalf, he is eligible to receive an award amount
equal to approximately 4% of any proceeds from distributions or other liquidity events in excess of the return of our
aggregate investment in TV One (the “Employment Agreement Award”). Our obligation to pay the award was triggered
after our recovery of the aggregate amount of capital contribution in TV One, and payment is required only upon actual
receipt of distributions of cash or marketable securities or proceeds from a liquidity event in excess of such invested
amount. Mr. Liggins’ rights to the Employment Agreement Award (i) cease if he is terminated for cause or he resigns
without good reason and (ii) expire at the termination of his employment (but similar rights could be included in the terms
of a new employment agreement or arrangement). As a result of this arrangement, the interest of Mr. Liggins’ with respect
to TV One may conflict with your interests as holders of our debt or equity securities.
Two common stockholders have a majority voting interest in Urban One and have the power to control matters on
which our common stockholders may vote, and their interests may conflict with yours.
As of December 31, 2021, our Chairperson and her son, our President and CEO, together held in excess of 75% of the
outstanding voting power of our common stock. As a result, our Chairperson and our CEO control our management and
policies and decisions involving or impacting upon Urban One, including transactions involving a change of control, such
as a sale or merger. The interests of these stockholders may differ from the interests of our other stockholders and our debt
holders. In addition, certain covenants in our debt instruments require that our Chairperson and the CEO maintain a
specified ownership and voting interest in Urban One, and prohibit other parties’ voting interests from exceeding specified
amounts. Our Chairperson and the CEO have agreed to vote their shares together in elections of members to the Board of
Directors of Urban One.
Further, we are a “controlled company” under rules governing the listing of our securities on the NASDAQ Stock
Market because more than 50% of our voting power is held by our Chairperson and the CEO. Therefore, we are not subject
to NASDAQ Stock Market listing rules that would otherwise require us to have: (i) a majority of independent directors on
the board; (ii) a compensation committee composed solely of independent directors; (iii) a nominating committee
composed solely of independent directors; (iv) compensation of our executive officers determined by a majority of the
independent directors or a compensation committee composed solely of independent directors; and (v) director nominees
selected, or recommended for the board’s selection, either by a majority of the independent directors or a nominating
committee composed solely of independent directors. While a majority of our board members are currently independent
directors, we do not make any assurances that a majority of our board members will be independent directors at any given
time.
We are a smaller reporting company and we cannot be certain if the reduced disclosure requirements applicable to our
filing status will make our common stock less attractive to investors.
We are a “smaller reporting company” and, thus, have certain decreased disclosure obligations in our SEC filings,
including, among other things, simplified executive compensation disclosures and only being required to provide two years
of audited financial statements in annual reports. Decreased disclosures in our SEC filings due to our status as a “smaller
reporting company” may make it harder for investors to analyze our results of operations and financial prospects and may
make our common stock a less attractive investment.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
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ITEM 2. PROPERTIES
The types of properties required to support each of our radio stations include offices, studios and transmitter/antenna
sites. Our other media properties, such as Interactive One, generally only require office space. We typically lease our studio
and office space with lease terms ranging from five to 10 years in length. A station’s studios are generally housed with its
offices in business districts. We generally consider our facilities to be suitable and of adequate size for our current and
intended purposes. We lease a majority of our main transmitter/antenna sites and associated broadcast towers and, when
negotiating a lease for such sites, we try to obtain a lengthy lease term with options to renew. In general, we do not
anticipate difficulties in renewing facility or transmitter/antenna site leases, or in leasing additional space or sites, if
required.
We own substantially all of our equipment, consisting principally of transmitting antennae, transmitters, studio
equipment and general office equipment. The towers, antennae and other transmission equipment used by our stations are
generally in good condition, although opportunities to upgrade facilities are periodically reviewed. The tangible personal
property owned by us and the real property owned or leased by us are subject to security interests under our senior credit
facility.
ITEM 3. LEGAL PROCEEDINGS
Urban One is involved from time to time in various routine legal and administrative proceedings and threatened legal
and administrative proceedings incidental to the ordinary course of our business. Urban One believes the resolution of such
matters will not have a material adverse effect on its business, financial condition or results of operations.
ITEM 4. MINE SAFETY DISCLOSURE
Not applicable.
PART II.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
Price Range of Our Class A and Class D Common Stock
Our Class A voting common stock is traded on The NASDAQ Stock Market (“NASDAQ”) under the symbol
“UONE.” The following table presents, for the quarters indicated, the high and low daily closing prices per share of our
Class A Common Stock as reported on the NASDAQ.
2021
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
2020
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
High
Low
$
$
$
$
$
$
$
$
8.87
20.95
9.01
11.43
2.21
36.30
19.63
5.78
$
$
$
$
$
$
$
$
4.16
4.56
6.40
4.47
1.06
1.06
3.43
4.21
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Our Class D non-voting common stock is traded on the NASDAQ under the symbol “UONEK.” The following table
presents, for the quarters indicated, the high and low daily closing prices per share of our Class D Common Stock as
reported on the NASDAQ.
2021
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
2020
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Number of Stockholders
High
Low
$
$
$
$
$
$
$
$
1.98
6.45
7.07
7.40
2.00
4.15
2.37
1.46
$
$
$
$
$
$
$
$
1.20
1.68
4.55
3.15
0.87
0.63
0.85
0.95
Based upon a survey of record holders and a review of our stock transfer records, as of March 4, 2022, there were
approximately 11,923 holders of Urban One’s Class A Common Stock, two holders of Urban One’s Class B Common
Stock, three holders of Urban One’s Class C Common Stock, and approximately 5,907 holders of Urban One’s Class D
Common Stock.
Dividends
Since first selling our common stock publicly in May 1999, we have not declared any cash dividends on any class of
our common stock. We intend to retain future earnings for use in our business and do not anticipate declaring or paying any
cash or stock dividends on shares of our common stock in the foreseeable future. In addition, any determination to declare
and pay dividends will be made by our Board of Directors in light of our earnings, financial position, capital requirements,
contractual restrictions contained in our credit facility and the indentures governing our senior subordinated notes, and
other factors as the Board of Directors deems relevant. (See Note 9 of our consolidated financial statements — Long-Term
Debt.)
ITEM 6. SELECTED FINANCIAL DATA
Not required for smaller reporting companies.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following information should be read in conjunction with “Selected Financial Data” and the Consolidated
Financial Statements and Notes thereto included elsewhere in this report.
Overview
For the year ended December 31, 2021, consolidated net revenue increased approximately 17.3% compared to the year
ended December 31, 2020. For 2022, our strategy will be to: (i) grow market share; (ii) improve audience share in certain
markets and improve revenue conversion of strong and stable audience share in certain other markets; and (iii) grow and
diversify our revenue by successfully executing our multimedia strategy.
The impact of the COVID pandemic, including the impact of variants and government interventions that limit normal
economic activity, competition from digital audio players, the internet, cable television and satellite radio, among other
new media outlets, audio and video streaming on the internet, and consumers’ increased focus on mobile applications, are
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some of the reasons our core radio business has seen slow or negative growth over the past few years. In addition to
making overall cutbacks, advertisers continue to shift their advertising budgets away from traditional media such as
newspapers, broadcast television and radio to new media outlets. Internet companies have evolved from being large
sources of advertising revenue for radio companies to being significant competitors for radio advertising dollars. While
these dynamics present significant challenges for companies that are focused solely in the radio industry, through our
diversified platform, which includes our radio websites, Interactive One and other online verticals, as well as our cable
television business, we are poised to provide advertisers and creators of content with a multifaceted way to reach African-
American consumers.
Results of Operations
Revenue
Within our core radio business, we primarily derive revenue from the sale of advertising time and program
sponsorships to local and national advertisers on our radio stations. Advertising revenue is affected primarily by the
advertising rates our radio stations are able to charge, as well as the overall demand for radio advertising time in a market.
These rates are largely based upon a radio station’s audience share in the demographic groups targeted by advertisers, the
number of radio stations in the related market, and the supply of, and demand for, radio advertising time. Advertising rates
are generally highest during morning and afternoon commuting hours.
Net revenue consists of gross revenue, net of local and national agency and outside sales representative commissions.
Agency and outside sales representative commissions are calculated based on a stated percentage applied to gross billing.
The following chart shows the percentage of consolidated net revenue generated by each reporting segment.
Radio broadcasting segment
Reach Media segment
Digital segment
Cable television segment
Corporate/eliminations
For The Year Ended
For the Years Ended December 31,
2021
2020
31.8 %
34.7 %
10.5 %
13.6 %
8.2 %
9.5 %
44.9 %
48.2 %
(0.8)%
(0.6)%
The following chart shows the percentages generated from local and national advertising as a subset of net revenue
from our core radio business.
Percentage of core radio business generated from local advertising
For the Years Ended
December 31,
2021
2020
59.2 %
53.2 %
Percentage of core radio business generated from national advertising, including
network advertising
36.3 %
45.3 %
National and local advertising also includes advertising revenue generated from our digital segment. The balance of
net revenue from our radio segment was generated from tower rental income, ticket sales and revenue related to our
sponsored events, management fees and other revenue.
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The following charts show our net revenue (and sources) for the years ended December 31, 2021 and 2020:
Net Revenue:
Radio Advertising
Political Advertising
Digital Advertising
Cable Television Advertising
Cable Television Affiliate Fees
Event Revenues & Other
Net Revenue (as reported)
Year Ended December 31,
2020
2021
(Unaudited)
(In thousands)
$ Change
% Change
$
165,244 $ 137,849 $
3,494
59,812
95,589
102,380
14,943
441,462 $ 376,337 $
22,484
34,131
79,732
99,489
2,652
$
27,395
(18,990)
25,681
15,857
2,891
12,291
65,125
19.9 %
(84.5)
75.2
19.9
2.9
463.5
17.3 %
In the broadcasting industry, radio stations and television stations often utilize trade or barter agreements to reduce
cash expenses by exchanging advertising time for goods or services. In order to maximize cash revenue for our spot
inventory, we closely manage the use of trade and barter agreements.
Within our digital segment, including Interactive One which generates the majority of the Company’s digital revenue,
revenue is principally derived from advertising services on non-radio station branded, but Company-owned websites.
Advertising services include the sale of banner and sponsorship advertisements. Advertising revenue is recognized either as
impressions (the number of times advertisements appear in viewed pages) are delivered or when “click through” purchases
are made, where applicable. In addition, Interactive One derives revenue from its studio operations, in which it provides
third-party clients with publishing services including digital platforms and related expertise. In the case of the studio
operations, revenue is recognized primarily through fixed contractual monthly fees and/or as a share of the third party’s
reported revenue.
Our cable television segment generates the Company’s cable television revenue, and derives its revenue principally
from advertising and affiliate revenue. Advertising revenue is derived from the sale of television air time to advertisers and
is recognized when the advertisements are run. Our cable television segment also derives revenue from affiliate fees under
the terms of various affiliation agreements based upon a per subscriber fee multiplied by most recent subscriber counts
reported by the applicable affiliate.
Reach Media primarily derives its revenue from the sale of advertising in connection with its syndicated radio shows,
including the Rickey Smiley Morning Show, the Russ Parr Morning Show and the DL Hughley Show. Reach Media also
operates www.BlackAmericaWeb.com, an African-American targeted news and entertainment website. Additionally, Reach
Media operates various other event-related activities.
Expenses
Our significant expenses are: (i) employee salaries and commissions; (ii) programming expenses; (iii) marketing and
promotional expenses; (iv) rental of premises for office facilities and studios; (v) rental of transmission tower space;
(vi) music license royalty fees; and (vii) content amortization. We strive to control these expenses by centralizing certain
functions such as finance, accounting, legal, human resources and management information systems and, in certain
markets, the programming management function. We also use our multiple stations, market presence and purchasing power
to negotiate favorable rates with certain vendors and national representative selling agencies. In addition to salaries and
commissions, major expenses for our internet business include membership traffic acquisition costs, software product
design, post-application software development and maintenance, database and server support costs, the help desk function,
data center expenses connected with internet service provider (“ISP”) hosting services and other internet content delivery
expenses. Major expenses for our cable television business include content acquisition and amortization, sales and
marketing.
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We generally incur marketing and promotional expenses to increase and maintain our audiences. However, because
Nielsen reports ratings either monthly or quarterly, depending on the particular market, any changed ratings and the effect
on advertising revenue tends to lag behind both the reporting of the ratings and the incurrence of advertising and
promotional expenditures.
Measurement of Performance
We monitor and evaluate the growth and operational performance of our business using net income and the following
key metrics:
(a) Net revenue: The performance of an individual radio station or group of radio stations in a particular market is
customarily measured by its ability to generate net revenue. Net revenue consists of gross revenue, net of local and national
agency and outside sales representative commissions consistent with industry practice. Net revenue is recognized in the
period in which advertisements are broadcast. Net revenue also includes advertising aired in exchange for goods and
services, which is recorded at fair value, revenue from sponsored events and other revenue. Net revenue is recognized for
our online business as impressions are delivered or as “click throughs” are made, where applicable. Net revenue is
recognized for our cable television business as advertisements are run, and during the term of the affiliation agreements at
levels appropriate for the most recent subscriber counts reported by the affiliate, net of launch support.
(b) Broadcast and digital operating income: Net income (loss) before depreciation and amortization, income taxes,
interest expense, interest income, noncontrolling interests in income of subsidiaries, other (income) expense, corporate
selling, general and administrative expenses, stock-based compensation, impairment of long-lived assets, (gain) loss on
retirement of debt and gain on sale-leaseback, is commonly referred to in the radio broadcasting industry as “station
operating income.” However, given the diverse nature of our business, station operating income is not truly reflective of
our multi-media operation and, therefore, we now use the term broadcast and digital operating income. Broadcast and
digital operating income is not a measure of financial performance under accounting principles generally accepted in the
United States of America (“GAAP”). Nevertheless, broadcast and digital operating income is a significant measure used by
our management to evaluate the operating performance of our core operating segments. Broadcast and digital operating
income provides helpful information about our results of operations, apart from expenses associated with our fixed and
long-lived intangible assets, income taxes, investments, impairment charges, debt financings and retirements, corporate
overhead and stock-based compensation. Our measure of broadcast and digital operating income is similar to industry use
of station operating income; however, it reflects our more diverse business and therefore is not completely analogous to
“station operating income” or other similarly titled measures as used by other companies. Broadcast and digital operating
income does not represent operating loss or cash flow from operating activities, as those terms are defined under GAAP,
and should not be considered as an alternative to those measurements as an indicator of our performance.
(c) Broadcast and digital operating income margin: Broadcast and digital operating income margin represents
broadcast and digital operating income as a percentage of net revenue. Broadcast and digital operating income margin is
not a measure of financial performance under GAAP. Nevertheless, we believe that broadcast and digital operating income
margin is a useful measure of our performance because it provides helpful information about our profitability as
a percentage of our net revenue. Broadcast and digital operating margin includes results from all four segments (radio
broadcasting, Reach Media, digital and cable television).
(d) Adjusted EBITDA: Adjusted EBITDA consists of net (loss) income plus (1) depreciation and amortization, income
taxes, interest expense, noncontrolling interests in income of subsidiaries, impairment of long-lived assets, stock-based
compensation, (gain) loss on retirement of debt, gain on sale-leaseback, employment agreement, incentive plan award
expenses and other compensation, contingent consideration from acquisition, severance-related costs, cost method
investment income, less (2) other income and interest income. Net income before interest income, interest expense, income
taxes, depreciation and amortization is commonly referred to in our business as “EBITDA.” Adjusted EBITDA and
EBITDA are not measures of financial performance under GAAP. We believe Adjusted EBITDA is often a useful measure
of a company’s operating performance and is a significant measure used by our management to evaluate the operating
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performance of our business because Adjusted EBITDA excludes charges for depreciation, amortization and interest
expense that have resulted from our acquisitions and debt financing, our taxes, impairment charges, and gain on retirements
of debt. Accordingly, we believe that Adjusted EBITDA provides useful information about the operating performance of
our business, apart from the expenses associated with our fixed assets and long-lived intangible assets, capital structure or
the results of our affiliated company. Adjusted EBITDA is frequently used as one of the measures for comparing
businesses in the broadcasting industry, although our measure of Adjusted EBITDA may not be comparable to similarly
titled measures of other companies, including, but not limited to the fact that our definition includes the results of all four
of our operating segments (radio broadcasting, Reach Media, digital and cable television). Adjusted EBITDA and EBITDA
do not purport to represent operating income or cash flow from operating activities, as those terms are defined under
GAAP, and should not be considered as alternatives to those measurements as an indicator of our performance.
Non-GAAP Financial Measures
The presentation of non-GAAP financial measures is not intended to be considered in isolation from, as a substitute
for, or superior to the financial information prepared and presented in accordance with GAAP. We use non-GAAP financial
measures as a means to evaluate period-to-period comparisons. Reconciliations of our non-GAAP financial measures to the
most directly comparable GAAP financial measures are included below for review. Reliance should not be placed on any
single financial measure to evaluate our business.
Summary of Performance
The table below provides a summary of our performance based on the metrics described above:
Net revenue
Broadcast and digital operating income
Broadcast and digital operating income margin
Adjusted EBITDA
Net income (loss) attributable to common stockholders
For the Years Ended December 31,
2021
2020
(In thousands, except margin data)
$
441,462
179,234
$
376,337
163,891
40.6 %
43.5 %
150,222
38,352
138,018
(8,113)
The reconciliation of net income to broadcast and digital operating income is as follows:
Consolidated net income (loss) attributable to common stockholders
Add back non-broadcast and digital operating income items included in consolidated net
income (loss):
Interest income
Interest expense
Provision for (benefit from) income taxes
Corporate selling, general and administrative, excluding stock-based compensation
Stock-based compensation
Loss on retirement of debt
Other income, net
Depreciation and amortization
Noncontrolling interests in income of subsidiaries
Impairment of long-lived assets
Broadcast and digital operating income
For the Years Ended December 31,
2021
2020
(In thousands)
$
38,352
$
(8,113)
(218)
65,702
13,577
50,837
565
6,949
(8,134)
9,289
2,315
—
179,234
$
$
(213)
74,507
(34,476)
35,860
2,294
2,894
(4,547)
9,741
1,544
84,400
163,891
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The reconciliation of net (loss) income to adjusted EBITDA is as follows:
Adjusted EBITDA reconciliation:
Consolidated net income (loss) attributable to common stockholders, as reported
Add back non-broadcast and digital operating income items included in consolidated net
income (loss):
Interest income
Interest expense
Provision for (benefit from) income taxes
Depreciation and amortization
EBITDA
Stock-based compensation
Loss on retirement of debt
Other income, net
Noncontrolling interests in income of subsidiaries
Casino chase costs
Employment Agreement Award, incentive plan award expenses and other compensation
Contingent consideration from acquisition
Severance-related costs
Impairment of long-lived assets
Cost method investment income from MGM National Harbor
Adjusted EBITDA
For the Years Ended December 31,
2021
2020
(In thousands)
$
38,352
$
(8,113)
(218)
65,702
13,577
9,289
126,702
565
6,949
(8,134)
2,315
6,727
6,163
280
965
—
7,690
150,222
$
$
$
$
(213)
74,507
(34,476)
9,741
41,446
2,294
2,894
(4,547)
1,544
—
2,271
46
2,800
84,400
4,870
138,018
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URBAN ONE, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
The following table summarizes our historical consolidated results of operations:
Year Ended December 31, 2021 Compared to Year Ended December 31, 2020 (In thousands)
Statements of Operations:
Net revenue
Operating expenses:
Programming and technical, excluding stock-based compensation
Selling, general and administrative, excluding stock-based
compensation
Corporate selling, general and administrative, excluding stock-based
compensation
Stock-based compensation
Depreciation and amortization
Impairment of long-lived assets
Total operating expenses
Operating income
Interest income
Interest expense
Loss on retirement of debt
Other income, net
Income (loss) before provision for (benefit from) income taxes and
noncontrolling interests in income of subsidiaries
Provision for (benefit from) income taxes
Consolidated net income (loss)
Noncontrolling interests in income of subsidiaries
Net income (loss) attributable to common stockholders
39
Year Ended December 31,
2021
2020
Increase/(Decrease)
$ 441,462 $ 376,337 $ 65,125
17.3 %
119,072
103,813
15,259
14.7
143,156
108,633
34,523
31.8
50,837
565
9,289
—
322,919
118,543
218
65,702
6,949
(8,134)
35,860
2,294
9,741
84,400
344,741
31,596
213
74,507
2,894
(4,547)
14,977
(1,729)
(452)
(84,400)
(21,822)
86,947
5
(8,805)
4,055
3,587
41.8
(75.4)
(4.6)
(100.0)
(6.3)
275.2
2.3
(11.8)
140.1
78.9
54,244
13,577
40,667
2,315
95,289
48,053
47,236
771
$ 38,352 $ (8,113) $ 46,465
(41,045)
(34,476)
(6,569)
1,544
232.2
139.4
719.1
49.9
572.7 %
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Net revenue
Year Ended December 31,
2021
2020
Increase/(Decrease)
$
441,462
$
376,337
$
65,125
17.3 %
During the year ended December 31, 2021, we recognized approximately $441.5 million in net revenue compared to
approximately $376.3 million during the year ended December 31, 2020. These amounts are net of agency and outside
sales representative commissions. The increase in net revenue was due primarily to mitigation of the economic impacts of
the COVID-19 pandemic which began in March 2020 and to increased demand for minority focused media. Net revenues
from our radio broadcasting segment for the year ended December 31, 2021, increased 7.4% from the same period in 2020.
Based on reports prepared by the independent accounting firm Miller, Kaplan, Arase & Co., LLP (“Miller Kaplan”), the
radio markets we operate in (excluding Richmond and Raleigh, both of which no longer participate in Miller Kaplan)
increased 18.4% in total revenues for the year ended December 31, 2021, consisting of an increase of 14.0% in local
revenues, an increase of 8.2% in national revenues, and an increase of 51.1% in digital revenues. With the exception of our
Philadelphia, Raleigh and St. Louis (which we exited in 2021) markets, we experienced net revenue improvements in all of
our radio markets, primarily due to higher advertising sales. Net revenue excluding political, from our radio broadcasting
segment increased 19.7% compared to the same period in 2020. Net revenue for our Reach Media segment increased
49.8% for the year ended December 31, 2021, compared to the same period in 2020, due primarily to increased demand
and the reinstatement of our cruise during the fourth quarter of 2021. The cruise was postponed from 2020 due to the
pandemic. We recognized approximately $198.2 million from our cable television segment for the year ended
December 31, 2021, compared to approximately $181.6 million of revenue for the same period in 2020, with the increase
due primarily to both increased advertising and affiliate sales. Net revenue from our digital segment increased
approximately $24.3 million for the year ended December 31, 2021, compared to the same period in 2020 due primarily to
stronger direct revenues.
Operating expenses
Programming and technical, excluding stock-based compensation
Year Ended December 31,
2021
2020
Increase/(Decrease)
$
119,072
$
103,813
$
15,259
14.7 %
Programming and technical expenses include expenses associated with on-air talent and the management and
maintenance of the systems, tower facilities, and studios used in the creation, distribution and broadcast of programming
content on our radio stations. Programming and technical expenses for the radio segment also include expenses associated
with our programming research activities and music royalties. For our digital segment, programming and technical
expenses include software product design, post-application software development and maintenance, database and server
support costs, the help desk function, data center expenses connected with ISP hosting services and other internet content
delivery expenses. For our cable television segment, programming and technical expenses include expenses associated with
technical, programming, production, and content management. The increase in programming and technical expenses for
the year ended December 31, 2021, compared to the same period in 2020 is primarily due to higher expenses at all our
segments. Our radio broadcasting segment experienced an increase of approximately $2.8 million for the year ended
December 31, 2021, compared to the same period in 2020 due primarily to higher compensation costs and music licensing
fees. Our Reach Media segment experienced an increase of approximately $2.0 million for the year ended December 31,
2021, compared to the same period in 2020 due primarily to higher contract labor and compensation costs. Our digital
segment experienced an increase of approximately $1.3 million for the year ended December 31, 2021, compared to the
same period in 2020 due primarily to higher contract labor, consulting and compensation costs. Our cable television
segment experienced an increase of approximately $9.2 million for the year ended December 31, 2021, compared to the
same period in 2020 due primarily to higher content amortization expense.
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Selling, general and administrative, excluding stock-based compensation
Year Ended December 31,
2021
2020
Increase/(Decrease)
$
143,156
$
108,633
$
34,523
31.8 %
Selling, general and administrative expenses include expenses associated with our sales departments, offices and
facilities and personnel (outside of our corporate headquarters), marketing and promotional expenses, special events and
sponsorships and back office expenses. Expenses to secure ratings data for our radio stations and visitors’ data for our
websites are also included in selling, general and administrative expenses. In addition, selling, general and administrative
expenses for the radio broadcasting segment and digital segment include expenses related to the advertising traffic
(scheduling and insertion) functions. Selling, general and administrative expenses also include membership traffic
acquisition costs for our online business. The increase in expense for the year ended December 31, 2021, compared to the
same period in 2020, is primarily due to higher compensation costs and special event costs, higher commissions and
national representative fees due to improved revenue and higher promotional expenses and travel and entertainment
spending. Our radio broadcasting segment experienced an increase of approximately $4.6 million for the year ended
December 31, 2021, compared to the same period in 2020 primarily due to higher compensation costs, national
representative fees, special event costs and promotional spending. Our Reach Media segment experienced an increase of
approximately $8.3 million for the year ended December 31, 2021, compared to the same period in 2020, primarily due to
the operation of Tom Joyner Foundation’s Fantastic Voyage® and higher affiliate station costs. Our cable television
segment experienced an increase of approximately $10.7 million for the year ended December 31, 2021, compared to the
same period in 2020 primarily due to higher promotional and advertising expenses, compensation costs and research
expenses. Our digital segment experienced an increase of approximately $11.9 million for the year ended December 31,
2021 compared to the same period in 2020, primarily due to higher compensation costs, higher traffic acquisition costs and
web services fees.
Corporate selling, general and administrative, excluding stock-based compensation
Year Ended December 31,
2021
2020
Increase/(Decrease)
$
50,837
$
35,860
$
14,977
41.8 %
Corporate expenses consist of expenses associated with our corporate headquarters and facilities, including personnel
as well as other corporate overhead functions. The increase in expense was primarily due to an increase in professional fees
related to corporate development activities in connection with potential gaming investments and other similar business
activities as well as an increase in compensation costs.
Stock-based compensation
Year Ended December 31,
2021
2020
Increase/(Decrease)
$
565
$
2,294
$
(1,729)
(75.4)%
The decrease in stock-based compensation for the year ended December 31, 2021, compared to the same period in
2020, is primarily due to fewer grants and vesting of stock awards for certain executive officers and other management
personnel.
Depreciation and amortization
Year Ended December 31,
2021
2020
Increase/(Decrease)
$
9,289
$
9,741
$
(452)
(4.6)%
The decrease in depreciation and amortization expense for the year ended December 31, 2020, was due to the mix of
assets approaching or near the end of their useful lives.
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Impairment of long-lived assets
Year Ended December 31,
2021
2020
Increase/(Decrease)
$
—
$
84,400
$
(84,400)
(100.0)%
The impairment of long-lived assets for the year ended December 31, 2020, was related to a non-cash impairment
charge of approximately $15.9 million recorded to reduce the carrying value of our Atlanta market and Indianapolis market
goodwill balances and a charge of approximately $68.5 million associated with our Atlanta, Cincinnati, Dallas,
Houston, Indianapolis, Philadelphia, Raleigh, Richmond and St. Louis radio market broadcasting licenses.
Interest expense
Year Ended December 31,
2021
2020
Increase/(Decrease)
$
65,702
$
74,507
$
(8,805)
(11.8)%
Interest expense decreased to approximately $65.7 million for the year ended December 31, 2021, compared to
approximately $74.5 million for the same period in 2020, due to lower overall debt balances outstanding and lower average
interest rates. As discussed above, on January 25, 2021, the Company closed on a new financing in the form of the 2028
Notes. The proceeds from the 2028 Notes were used to repay in full each of: (1) the 2017 Credit Facility; (2) the 2018
Credit Facility; (3) the MGM National Harbor Loan; (4) the remaining amounts of our 7.375% Notes; and (5) our 8.75%
Notes that were issued in the November 2020 Exchange Offer.
Loss on retirement of debt
Year Ended December 31,
2021
2020
Increase/(Decrease)
$
6,949
$
2,894
$
4,055
140.1 %
As discussed above, upon settlement of the 2028 Notes Offering, the 2017 Credit Facility, the 2018 Credit Facility and
the MGM National Harbor Loan were terminated and the indentures governing the 7.375% Notes and the 8.75% Notes
were satisfied and discharged. There was a net loss on retirement of debt of approximately $6.9 million for the year ended
December 31, 2021 associated with the settlement of the 2028 Notes. On November 9, 2020, we completed an exchange
(the “November 2020 Exchange Offer”) of 99.15% of our outstanding 7.375% Senior Secured Notes due 2022 (the
“7.375% Notes”) for $347 million aggregate principal amount of newly issued 8.75% Senior Secured Notes due
December 2022 (the “8.75% Notes”). There was a net loss on retirement of debt of approximately $2.9 million for the year
ended December 31, 2020 associated with the November 2020 Exchange Offer.
Other income, net
Year Ended December 31,
2021
2020
Increase/(Decrease)
$
(8,134)
$
(4,547)
$
3,587
78.9 %
Other income, net, increased to approximately $8.1 million for the year ended December 31, 2021, compared to
approximately $4.5 million for the same period in 2020. We recognized other income in the amount of approximately $7.7
million and $4.9 million, for the years ended December 31, 2021 and 2020, respectively, related to our MGM investment.
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Provision for (benefit from) income taxes
Year Ended December 31,
2021
2020
Increase/(Decrease)
$
13,577
$
(34,476)
$
48,053
139.4 %
During the year ended December 31, 2021, the provision for income tax was approximately $13.6 million compared to
a tax benefit of approximately $34.5 million for the year ended December 31, 2020. The increase in the provision for
income taxes was primarily due to the Company’s change in pre-tax loss to pre-tax income during the period. For the year
ended December 31, 2020, the benefit consisted of deferred tax benefit of approximately $35.0 million and current tax
expense of $552,000. The provision resulted in an effective tax rate of 25.0% and 84.0% for the years ended December 31,
2021 and 2020, respectively. The 2021 and 2020 annual effective tax rates primarily reflect taxes at statutory tax rates, the
impact of permanent tax adjustments, and the valuation allowance release related to the realizability of certain of the
Company’s net operating losses.
Noncontrolling interests in income of subsidiaries
Year Ended December 31,
2021
2020
Increase/(Decrease)
$
2,315
$
1,544
$
771
49.9 %
The increase in noncontrolling interests in income of subsidiaries was primarily due to higher net income recognized
by Reach Media for the year ended December 31, 2021, versus the same period in 2020.
Other Data
Broadcast and digital operating income
Broadcast and digital operating income increased to approximately $179.2 million for the year ended December 31,
2021, compared to approximately $163.9 million for the year ended December 31, 2020, an increase of approximately
$15.3 million or 9.4%. This increase was due to higher broadcast and digital operating income in our radio broadcasting,
Reach Media, and digital segments, which was partially offset by a decrease in broadcast and digital operating income at
our cable television segment. Our radio broadcasting segment generated approximately $42.0 million of broadcast and
digital operating income during the year ended December 31, 2021, compared to approximately $39.8 million during
the year ended December 31, 2020, an increase of approximately $2.2 million. The increase was primarily due to higher
net revenues, partially offset by higher expenses. Reach Media generated approximately $17.0 million of broadcast and
digital operating income during the year ended December 31, 2021, compared to approximately $11.8 million during
the year ended December 31, 2020, primarily due to higher net revenues, partially offset by higher expenses. Our digital
segment generated approximately $17.2 million of broadcast and digital operating income during the year ended
December 31, 2021, compared to approximately $6.0 million of broadcast and digital operating income during the year
ended December 31, 2020. The increase in our digital segment’s broadcast and digital operating income is primarily due to
an increase in net revenues, partially offset by increased expense. Finally, TV One generated approximately $103.0 million
of broadcast and digital operating income during the year ended December 31, 2021, compared to approximately $106.3
million during the year ended December 31, 2020, with the decrease due primarily to increased expenses.
Broadcast and digital operating income margin
Broadcast and digital operating income margin decreased to 40.6% for the year ended December 31, 2021, from
43.5% for 2020. The margin decrease was primarily attributable to higher expenses as described above.
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Liquidity and Capital Resources
Our primary source of liquidity is cash provided by operations and, to the extent necessary, borrowings available under
our asset-backed credit facility. The Company’s cash, cash equivalents and restricted cash balance is approximately $152.2
million as of December 31, 2021.
Throughout each of 2020 and 2021, the COVID-19 pandemic had a negative impact on certain of our revenue and
alternative revenue sources. Most notably, a number of advertisers across a variety of significant advertising categories
ceased operations or reduced their advertising spend due to the pandemic. This has been particularly true within our radio
segment which derives substantial revenue from local advertisers, including in areas such as Texas, Ohio and Georgia. The
economies in these areas were hit particularly hard due to social distancing and government interventions. Further, the
COVID-19 pandemic has caused a shift in the way people work and commute, which in some instances has altered demand
for our broadcast radio advertising. Finally, the COVID-19 outbreak caused the postponement of or cancellation of our
tent pole special events or otherwise impaired or limited ticket sales for such events. We do not carry business interruption
insurance to compensate us for losses that occurred as a result of the pandemic and such losses may continue to occur as a
result of the ongoing nature of the COVID-19 pandemic. Outbreaks in the markets in which we operate could have material
impacts on our liquidity, operations including potential impairment of assets, and our financial results. Likewise, our
income from our investment in MGM National Harbor Casino has at times been negatively affected by closures and
limitations on occupancy imposed by state and local governmental authorities.
We anticipate continued fluctuations in revenues due to the COVID-19 pandemic. The extent to which our results
continue to be affected by the COVID-19 pandemic will largely depend on future developments, which cannot be
accurately predicted and are uncertain. These developments include, but are not limited to, the duration, scope and severity
of the COVID-19 pandemic, any additional resurgences, variants or new viruses; the ability to effectively and widely
manufacture and distribute vaccines/boosters; the public’s perception of the safety of the vaccines/boosters and the public’s
willingness to take the vaccines/boosters; the effect of the COVID-19 pandemic on our customers and the ability of our
clients to meet their payment terms; the public’s willingness to attend live events; and the pace of recovery when the
pandemic subsides.
During the height of the COVID-19 pandemic in 2020, we proactively implemented certain cost-cutting measures
including furloughs, layoffs, salary reductions, other expense reduction (including eliminating travel and entertainment
expenses), eliminating merit raises, decreasing or deferring marketing spend, deferring programming/production costs,
reducing special events costs, and implementing a hiring freeze on open positions. The Company performed a complete
reforecast of its anticipated results extending through one year from the date of issuance of the consolidated financial
statements. Further, out of an abundance of caution and to provide for further liquidity given the uncertainty around the
pandemic, we drew approximately $27.5 million on our asset-backed credit facility on March 19, 2020. As operating
conditions improved throughout the year, we were able to accumulate cash and all amounts outstanding under our asset-
backed credit facility were repaid on December 22, 2020. As of December 31, 2021, no amounts were outstanding on our
current facility. Further, as we refinanced our debt structure in January 2021, we anticipate meeting our debt service
requirements and obligations for the foreseeable future, including through one year from the date of issuance of our most
recent consolidated financial statements. Our estimates however, remain subject to substantial uncertainty, in particular due
to the unpredictable extent and duration of the impact of the COVID-19 pandemic on our business and the economy
generally, the possibility of new variants of the coronavirus and the concentration of certain of our revenues in areas that
could be deemed “hotspots” for the pandemic.
On August 18, 2020, the Company entered into an Open Market Sales Agreement with Jefferies LLC (“Jefferies”)
under which the Company sold shares of its Class A common stock, par value $0.001 per share (the “Class A Shares”) up
to an aggregate offering price of $25 million (the “2020 ATM Program”). Jefferies acted as sales agent for the 2020 ATM
Program. During the year ended December 31, 2020, the Company issued 2,859,276 shares of its Class A Shares at a
weighted average price of $5.39 for approximately $14.7 million of net proceeds after associated fees and expenses.
On January 19, 2021, the Company completed its 2020 ATM Program, sold an additional 1,465,825 shares for an
aggregate of 4,325,102 Class A shares sold through the 2020 ATM Program, receiving aggregate gross proceeds of
approximately $25.0 million and net proceeds of approximately $24.0 million for the program (inclusive of the $14.7
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million sold during the year ended December 31, 2020). On January 27, 2021, the Company entered into a new 2021 Open
Market Sale Agreement (the “2021 Sale Agreement”) with Jefferies under which the Company could sell up to an
additional $25.0 million of Class A Shares, through Jefferies as its sales agent. During the three months ended March 31,
2021, the Company issued and sold an aggregate of 420,439 Class A Shares pursuant to the 2021 Sale Agreement and
received gross proceeds of approximately $3.0 million and net proceeds of approximately $2.8 million, after deducting
commissions to Jefferies and other offering expenses. During the three months ended June 30, 2021, the Company issued
and sold an aggregate of 1,893,126 Class A Shares pursuant to the 2021 Sale Agreement and received gross proceeds of
approximately $22.0 million and net proceeds of approximately $21.2 million, after deducting commissions to Jefferies and
other offering expenses which completed its 2021 ATM Program.
On May 17, 2021, the Company entered into an Open Market Sale AgreementSM (the “Class D Sale Agreement”) with
Jefferies under which the Company may offer and sell, from time to time at its sole discretion, shares of its Class D
common stock, par value $0.001 per share (the “Class D Shares”), through Jefferies as its sales agent. On May 17, 2021,
the Company filed a prospectus supplement pursuant to the Class D Sale Agreement for the offer and sale of its Class D
Shares having an aggregate offering price of up to $25.0 million. As of December 31, 2021, the Company has not sold any
Class D Shares under the Class D Sale Agreement. The Company may from time to time also enter into new additional
ATM programs and issue additional common stock from time to time under those programs.
On January 25, 2021, the Company closed on an offering (the “2028 Notes Offering”) of $825 million in aggregate
principal amount of senior secured notes due 2028 (the “2028 Notes”) in a private offering exempt from the registration
requirements of the Securities Act of 1933, as amended (the “Securities Act”). The 2028 Notes are general senior secured
obligations of the Company and are guaranteed on a senior secured basis by certain of the Company’s direct and indirect
restricted subsidiaries. The 2028 Notes mature on February 1, 2028 and interest on the Notes accrues and is payable semi-
annually in arrears on February 1 and August 1 of each year, commencing on August 1, 2021 at the rate of 7.375% per
annum.
The Company used the net proceeds from the 2028 Notes, together with cash on hand, to repay or redeem: (1) the
2017 Credit Facility; (2) the 2018 Credit Facility; (3) the MGM National Harbor Loan; (4) the remaining amounts of our
7.375% Notes; and (5) our 8.75% Notes that were issued in the November 2020 Exchange Offer. Upon settlement of the
2028 Notes Offering, the 2017 Credit Facility, the 2018 Credit Facility and the MGM National Harbor Loan were
terminated and the indentures governing the 7.375% Notes and the 8.75% Notes were satisfied and discharged.
The 2028 Notes and the guarantees are secured, subject to permitted liens and except for certain excluded assets (i) on
a first priority basis by substantially all of the Company’s and the Guarantors’ current and future property and assets (other
than accounts receivable, cash, deposit accounts, other bank accounts, securities accounts, inventory and related assets that
secure our asset-backed revolving credit facility on a first priority basis (the “ABL Priority Collateral”)), including the
capital stock of each guarantor (collectively, the “Notes Priority Collateral”) and (ii) on a second priority basis by the ABL
Priority Collateral.
On February 19, 2021, the Company closed on a new asset backed credit facility (the “Current 2021 ABL Facility”).
The Current 2021 ABL Facility is governed by a credit agreement by and among the Company, the other borrowers party
thereto, the lenders party thereto from time to time and Bank of America, N.A., as administrative agent. The Current 2021
ABL Facility provides for up to $50 million revolving loan borrowings in order to provide for the working capital needs
and general corporate requirements of the Company. The Current 2021 ABL Facility also provides for a letter of credit
facility up to $5 million as a part of the overall $50 million in capacity. The Asset Backed Senior Credit Facility entered
into on April 21, 2016 among the Company, the lenders party thereto from time to time and Wells Fargo Bank National
Association, as administrative agent (the “2016 ABL Facility”), was terminated on February 19, 2021.
At the Company’s election, the interest rate on borrowings under the Current 2021 ABL Facility are based on either (i)
the then applicable margin relative to Base Rate Loans (as defined in the Current 2021 ABL Facility) or (ii) the then
applicable margin relative to LIBOR Loans (as defined in the Current 2021 ABL Facility) corresponding to the average
availability of the Company for the most recently completed fiscal quarter.
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Advances under the Current 2021 ABL Facility are limited to (a) eighty-five percent (85%) of the amount of Eligible
Accounts (as defined in the Current 2021 ABL Facility), less the amount, if any, of the Dilution Reserve (as defined in
the Current 2021 ABL Facility), minus (b) the sum of (i) the Bank Product Reserve (as defined in the Current 2021 ABL
Facility), plus (ii) the AP and Deferred Revenue Reserve (as defined in the Current 2021 ABL Facility), plus (iii) without
duplication, the aggregate amount of all other reserves, if any, established by Administrative Agent.
All obligations under the Current 2021 ABL Facility are secured by first priority lien on all (i) deposit accounts
(related to accounts receivable), (ii) accounts receivable, and (iii) all other property which constitutes ABL Priority
Collateral (as defined in the Current 2021 ABL Facility). The obligations are also guaranteed by all material restricted
subsidiaries of the Company.
The Current 2021 ABL Facility matures on the earliest of: the earlier to occur of (a) the date that is five (5) years from
the effective date of the Current 2021 ABL Facility and (b) 91 days prior to the maturity of the Company’s 2028 Notes.
Finally, the Current 2021 ABL Facility is subject to the terms of the Revolver Intercreditor Agreement (as defined in
the Current 2021 ABL Facility) by and among the Administrative Agent and Wilmington Trust, National Association.
On January 29, 2021, the Company submitted an application for participation in the second round of the Paycheck
Protection Program loan program (“PPP”). On June 1, 2021, the Company received proceeds of approximately $7.5
million. The loan bears interest at a fixed rate of 1% per year and will not be changed during the life of the loan. The loan
matures June 1, 2026. The Company is in the process of applying for loan forgiveness. While certain of the PPP loans may
be forgivable, until they are repaid or forgiven, the loan amount may constitute debt under the 2028 Notes and increase the
Company’s leverage.
See Note 9 to our consolidated financial statements — Long-Term Debt for further information on liquidity and capital
resources.
The following table summarizes the interest rates in effect with respect to our debt as of December 31, 2021:
Type of Debt
7.375% Senior Secured Notes, net of issuance costs (fixed rate)
PPP Loan
Asset-backed credit facility (variable rate)(1)
Amount
Outstanding
(In millions)
Applicable
Interest
Rate
811.1
7.5
—
7.375 %
1.0
— %
(1) Subject to variable LIBOR or Prime plus a spread that is incorporated into the applicable interest rate.
The following table provides a comparison of our statements of cash flows for the years ended December 31, 2021 and
2020:
Net cash flows provided by operating activities
Net cash flows provided by (used in) investing activities
Net cash flows used in financing activities
$
2021
2020
(In thousands)
$
80,150
1,714
(3,504)
73,867
(3,413)
(30,142)
Net cash flows provided by operating activities were approximately $80.2 million and $73.9 million for the years
ended December 31, 2021 and 2020, respectively. Cash flow from operating activities for the year ended December 31,
2021, increased from the prior year primarily due to timing of payments. Cash flows from operations, cash and cash
equivalents, and other sources of liquidity are expected to be available and sufficient to meet foreseeable cash
requirements.
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Net cash flows provided by investing activities were approximately $1.7 million for the year ended December 31,
2021 and net cash flows used in investing activities were $3.4 million for the year ended December 31, 2020. Capital
expenditures, including digital tower and transmitter upgrades, and deposits for station equipment and purchases were
approximately $6.3 million and $3.8 million for the years ended December 31, 2021 and 2020, respectively. We took
ownership of WQMC-LD on February 24, 2020 for total consideration of $475,000 and we also sold property for proceeds
of $860,000 for the year ended December 31, 2020. The Company received approximately $8.0 million in consideration
for the assets sold to Gateway during the year ended December 31, 2021.
Net cash flows used in financing activities were approximately $3.5 million and $30.1 million for the years ended
December 31, 2021 and 2020, respectively. During the years ended December 31, 2021 and 2020, the Company repaid
approximately $855.2 million and $40.5 million, respectively, in outstanding debt. During the years ended December 31,
2021 and 2020, we repurchased $970,000 and approximately $3.6 million of our Class A and Class D Common Stock,
respectively. Reach Media paid approximately $2.4 million and $2.8 million, respectively in dividends to noncontrolling
interest shareholders for the years ended December 31, 2021 and 2020. During the year ended December 31, 2021, we
borrowed approximately $825.0 million on our 2028 Notes. The Company also received approximately $7.5 million in
connection with its PPP Loan during the year ended December 31, 2021. During the year ended December 31, 2020, we
borrowed approximately $3.6 million on the MGM National Harbor Loan. During the years ended December 31, 2021 and
2020, we paid approximately $11.2 million and $3.5 million, respectively, in debt refinancing costs. During the years ended
December 31, 2021 and 2020, we received proceeds of $397,000 and approximately $2.0 million, respectively, from the
exercise of stock options. Finally, the Company received proceeds of approximately $33.3 million and $14.7 million, from
the issuance of Class A Common Stock, net of fees paid during the years ended December 31, 2021 and 2020, respectively.
Credit Rating Agencies
On a continuing basis, Standard and Poor’s, Moody’s Investor Services and other rating agencies may evaluate our
indebtedness in order to assign a credit rating. Our corporate credit ratings by Standard & Poor’s Rating Services and
Moody’s Investors Service are speculative-grade and have been downgraded and upgraded at various times during the last
several years. Any reductions in our credit ratings could increase our borrowing costs, reduce the availability of financing
to us or increase our cost of doing business or otherwise negatively impact our business operations.
Recent Accounting Pronouncements
See Note 1 of our consolidated financial statements — Organization and Summary of Significant Accounting Policies
for a summary of recent accounting pronouncements.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our accounting policies are described in Note 1 of our consolidated financial statements – Organization and Summary
of Significant Accounting Policies. We prepare our consolidated financial statements in conformity with GAAP, which
require us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the year. Actual results could differ from those estimates. We consider the following policies and estimates to be
most critical in understanding the judgments involved in preparing our financial statements and the uncertainties that could
affect our results of operations, financial condition and cash flows.
Stock-Based Compensation
The Company accounts for stock-based compensation for stock options and restricted stock grants in accordance with
ASC 718, “Compensation - Stock Compensation.” Under the provisions of ASC 718, stock-based compensation cost for
stock options is estimated at the grant date based on the award’s fair value as calculated by the Black-Scholes valuation
option-pricing model (“BSM”) and is recognized as expense, less estimated forfeitures, ratably over the requisite service
period. The BSM incorporates various highly subjective assumptions including expected stock price volatility, for which
historical data is heavily relied upon, expected life of options granted, forfeiture rates and interest rates. If any of the
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assumptions used in the BSM model change significantly, stock-based compensation expense may differ materially in the
future from that previously recorded. Compensation expense for restricted stock grants is measured based on the fair value
on the date of grant less estimated forfeitures. Compensation expense for restricted stock grants is recognized ratably
during the vesting period. The fair value measurement objective for liabilities incurred in a share-based payment
transaction is the same as for equity instruments. Awards classified as liabilities are subsequently remeasured to their fair
values at the end of each reporting period until the liability is settled.
Goodwill and Radio Broadcasting Licenses
Impairment Testing
We have made several acquisitions in the past for which a significant portion of the purchase price was allocated to
radio broadcasting licenses and goodwill. Goodwill exists whenever the purchase price exceeds the fair value of tangible
and identifiable intangible net assets acquired in business combinations. As of December 31, 2021, we had approximately
$505.2 million in broadcast licenses and $223.4 million in goodwill, which totaled $728.6 million, and represented
approximately 57.8% of our total assets. Therefore, we believe estimating the fair value of goodwill and radio broadcasting
licenses is a critical accounting estimate because of the significance of their carrying values in relation to our total assets.
There was no impairment recorded for the year ended December 31, 2021 and for the year ended December 31, 2020, we
recorded impairment charges against radio broadcasting licenses and goodwill, collectively, of approximately $84.4
million. Significant impairment charges have been an on-going trend experienced by media companies in general, and are
not unique to us.
We test for impairment annually across all reporting units, or when events or changes in circumstances or other
conditions suggest impairment may have occurred in any given reporting unit. Our annual impairment testing is performed
as of October 1 of each year. Impairment exists when the carrying value of these assets exceeds its respective fair value.
When the carrying value exceeds fair value, an impairment amount is charged to operations for the excess.
Valuation of Broadcasting Licenses
We utilize the services of a third-party valuation firm to assist us in estimating the fair value of our radio broadcasting
licenses and reporting units. Fair value is estimated to be the price that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants at the measurement date. We use the income approach to
test for impairment of radio broadcasting licenses. A projection period of 10 years is used, as that is the time horizon in
which operators and investors generally expect to recover their investments. When evaluating our radio broadcasting
licenses for impairment, the testing is done at the unit of accounting level as determined by ASC 350, “Intangibles -
Goodwill and Other.” In our case, each unit of accounting is a cluster of radio stations into one of our geographical
markets. Broadcasting license fair values are based on the discounted future cash flows of the applicable unit of accounting
assuming an initial hypothetical start-up operation which possesses FCC licenses as the only asset. Over time, it is assumed
the operation acquires other tangible assets such as advertising and programming contracts, employment agreements and
going concern value, and matures into an average performing operation in a specific radio market. The income approach
model incorporates several variables, including, but not limited to: (i) radio market revenue estimates and growth
projections; (ii) estimated market share and revenue for the hypothetical participant; (iii) likely media competition within
the market; (iv) estimated start-up costs and losses incurred in the early years; (v) estimated profit margins and cash flows
based on market size and station type; (vi) anticipated capital expenditures; (vii) estimated future terminal values; (viii) an
effective tax rate assumption; and (ix) a discount rate based on the weighted-average cost of capital for the radio broadcast
industry. In calculating the discount rate, we considered: (i) the cost of equity, which includes estimates of the risk-free
return, the long-term market return, small stock risk premiums and industry beta; (ii) the cost of debt, which includes
estimates for corporate borrowing rates and tax rates; and (iii) estimated average percentages of equity and debt in capital
structures.
We did not identify any impairment indicators at any of our reportable segments for the year ended December 31,
2021. We performed our annual impairment testing and no impairment was identified.
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Beginning in March 2020, the Company observed that the COVID-19 pandemic and the resulting government stay at
home orders were dramatically impacting certain of the Company’s revenues. Most notably, a number of advertisers across
significant advertising categories had reduced or ceased advertising spend due to the outbreak and stay at home orders
which effectively shut many businesses down in the markets in which we operate. This was particularly true within our
radio segment which derives substantial revenue from local advertisers who had been particularly hard hit due to social
distancing and government interventions.
As a result of COVID-19, the total market revenue growth for certain markets in which we operate was below that
assumed in our annual impairment testing. During the first quarter of 2020, the Company recorded a non-cash impairment
charge of approximately $5.9 million to reduce the carrying value of our Atlanta market and Indianapolis market goodwill
balances and the Company recorded a non-cash impairment charge of approximately $47.7 million associated with our
Atlanta, Cincinnati, Dallas, Houston, Indianapolis, Philadelphia, Raleigh, Richmond and St. Louis radio market
broadcasting licenses. We did not identify any impairment indicators for the three months ended June 30, 2020. Based on
market data obtained by the Company in the third quarter of 2020, the total anticipated market revenue growth for certain
markets in which we operate continued to be below that assumed in our first quarter impairment testing. We deemed that to
be an impairment indicator that warranted interim impairment testing of certain markets’ radio broadcasting licenses,
which we performed as of September 30, 2020. As a result of that testing, the Company recorded a non-cash impairment
charge of approximately $10.0 million related to its Atlanta market and Indianapolis market goodwill balances and the
Company recorded a non-cash impairment charge of approximately $19.1 million for the three months ended
September 30, 2020 associated with our Atlanta, Cincinnati, Dallas, Houston, Indianapolis, Philadelphia and Raleigh
market radio broadcasting licenses. As part of our annual testing for the year ended December 31, 2020, there was no
additional impairment identified; however we recorded an impairment charge of approximately $1.7 million associated
with the asset sale consideration for one of our St. Louis radio broadcasting licenses for that period.
Valuation of Goodwill
The impairment testing of goodwill is performed at the reporting unit level. We had 16 reporting units as of our
October 2021 annual impairment assessment, consisting of each of the 13 radio markets within the radio division and each
of the other three business divisions. In testing for the impairment of goodwill, we primarily rely on the income approach.
The approach involves a 10-year model with similar variables as described above for broadcasting licenses, except that the
discounted cash flows are based on the Company’s estimated and projected market revenue, market share and operating
performance for its reporting units, instead of those for a hypothetical participant. We use a 5-year model for our Reach
Media reporting unit. We evaluate all events and circumstances on an interim basis to determine if an impairment indicator
is present and also perform annual testing by comparing the fair value of the reporting unit with its carrying amount. We
recognize an impairment charge to operations in the amount that the reporting unit’s carrying value exceeds its fair value.
The impairment charge recognized cannot exceed the total amount of goodwill allocated to the reporting unit.
As noted above, we did not identify any impairment indicators at any of our reportable segments for the year ended
December 31, 2021. Also as noted above, during the first and third quarters of 2020 due to the COVID-19 pandemic, we
identified impairment indicators at certain of our radio markets, and, as such, we performed an interim analysis for certain
radio market goodwill. During the three months ended March 31, 2020, the Company recorded a non-cash impairment
charge of approximately $5.9 million to reduce the carrying value of our Atlanta and Indianapolis market goodwill
balances. We did not identify any impairment indicators at any of our other reportable segments for the three months ended
June 30, 2020. During the three months ended September 30, 2020, the Company recorded a non-cash impairment charge
of approximately $10.0 million related to its Atlanta market and Indianapolis market goodwill balances.
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Table of Contents
Below are some of the key assumptions used in the income approach model for estimating the broadcasting license
and goodwill fair values for the annual impairment testing performed and interim impairment testing performed where an
impairment charge was recorded since January 1, 2020.
Radio Broadcasting
Licenses
Impairment charge (in millions)
Discount Rate
Year 1 Market Revenue Growth Rate
Range
Long-term Market Revenue Growth Rate
Range
Mature Market Share Range
Mature Operating Profit Margin Range
October 1,
2021
October 1,
2020
September 30,
2020 (a)
March 31,
2020 (a)
$
— $
9.0 %
$
1.7*
9.0 %
$
19.1
9.0 %
47.7
9.5 %
6.1% – 8.0 % (10.7)% – (16.0) % (10.7)% – (16.8) %
(13.3)%
0.7% – 1.0 %
6.2% – 23.2 %
26.9% – 36.1 %
0.7% – 1.1 %
6.7% – 23.9 %
27.7% – 37.1 %
0.7% – 1.1 %
0.7% – 1.1 %
6.7% – 23.9 % 6.9% – 25.0 %
27.7% – 37.1 % 27.6% – 39.7 %
(a) Reflects changes only to the key assumptions used in the interim testing for certain units of accounting.
(*) License fair value based on estimated asset sale consideration.
Goodwill (Radio Market
Reporting Units)
Impairment charge (in millions)
Discount Rate
Year 1 Market Revenue Growth Rate
Range
Long-term Market Revenue Growth Rate
Range
Mature Market Share Range
Mature Operating Profit Margin Range
October 1,
2021 (a)
October 1,
2020 (a)
September 30,
2020 (a)
March 31,
2020 (a)
$
— $
9.0 %
— $
9.0 %
$
10.0
9.0 %
5.9
9.5
(10.7)% – 25.4 % (12.9)% – 25.9 % (26.6)% – 34.7 % (14.5)% – (12.9)
0.7% – 1.0 %
6.2% – 16.0 %
0.9% – 1.1 %
0.7% – 1.1 %
8.4% – 12.7 %
6.8% – 16.8 %
21.2% – 47.3 % 27.7% – 49.1 % 27.7% – 48.1 %
0.9% – 1.1
11.1% – 13.0
29.4% – 39.0
(a) Reflects the key assumptions for testing only those radio markets with remaining goodwill.
Below are some of the key assumptions used in the income approach model for estimating the fair value for Reach
Media for the annual and interim impairment assessments performed since October 2020. When compared to the discount
rates used for assessing radio market reporting units, the higher discount rates used in these assessments reflect a premium
for a riskier and broader media business, with a heavier concentration and significantly higher amount of programming
content assets that are highly dependent on a single on-air personality. As a result of our impairment assessments, the
Company concluded that the goodwill was not impaired.
Reach Media Segment Goodwill
Impairment charge (in millions)
Discount Rate
Year 1 Revenue Growth Rate
Long-term Revenue Growth Rate (Year 5)
Operating Profit Margin Range
50
October 1,
2021
October 1,
2020
$
$
—
11.5 %
(15.7)%
1.0 %
—
11.0 %
22.1 %
1.0 %
24.1 – 26.2 % 18.0 – 19.1 %
Table of Contents
Below are some of the key assumptions used in the income approach model for determining the fair value of our
digital reporting unit since October 2020. When compared to discount rates for the radio reporting units, the higher
discount rate used to value the reporting unit is reflective of discount rates applicable to internet media businesses. As a
result of our impairment assessments, the Company concluded that the goodwill was not impaired.
Digital Segment Goodwill
Impairment charge (in millions)
Discount Rate
Year 1 Revenue Growth Rate
Long-term Revenue Growth Rate (Years 6 – 10)
Operating Profit Margin Range
October 1,
2021
October 1,
2020
$
—
$
—
14.0 %
(20.4)%
2.5% - 6.8 %
14.0 %
(5.4)%
3.4% - 6.0 %
(5.2)% - 14.3 % (12.5)% - 13.1 %
Below are some of the key assumptions used in the income approach model for determining the fair value of our cable
television segment since October 2020. As a result of the testing performed, the Company concluded no impairment to the
carrying value of goodwill had occurred.
Cable Television Segment Goodwill
Impairment charge (in millions)
Discount Rate
Year 1 Revenue Growth Rate
Long-term Revenue Growth Rate Range (Years 6 – 10)
Operating Profit Margin Range
October 1,
2021
October 1,
2020
$
—
$
—
9.5 %
11.6 %
0.4% - 0.6 %
10.5 %
4.5 %
0.6% - 1.5 %
34.9% - 46.4 % 37.2% - 46.1 %
The above goodwill tables reflect some of the key valuation assumptions used for 11 of our 16 reporting units. The
other five remaining reporting units had no goodwill carrying value balances as of December 31, 2021.
In arriving at the estimated fair values for radio broadcasting licenses and goodwill, we also performed an analysis by
comparing our overall average implied multiple based on our cash flow projections and fair values to recently completed
sales transactions, and by comparing our fair value estimates to the market capitalization of the Company. The results of
these comparisons confirmed that the fair value estimates resulting from our annual assessment for 2021 were reasonable.
Sensitivity Analysis
We believe both the estimates and assumptions we utilized when assessing the potential for impairment are
individually and in aggregate reasonable; however, our estimates and assumptions are highly judgmental in nature. Further,
there are inherent uncertainties related to these estimates and assumptions and our judgment in applying them to the
impairment analysis. While we believe we have made reasonable estimates and assumptions to calculate the fair values,
changes in any one estimate, assumption or a combination of estimates and assumptions, or changes in certain events or
circumstances (including uncontrollable events and circumstances resulting from continued deterioration in the economy or
credit markets) could require us to assess recoverability of broadcasting licenses and goodwill at times other than our
annual October 1 assessments, and could result in changes to our estimated fair values and further write-downs to the
carrying values of these assets. Impairment charges are non-cash in nature, and as with current and past impairment
charges, any future impairment charges will not impact our cash needs or liquidity or our bank ratio covenant compliance.
We had a total goodwill carrying value of approximately $223.4 million across 11 of our 16 reporting units as of
December 31, 2021. The below table indicates the long-term cash flow growth rates assumed in our impairment testing and
the long-term cash flow growth/decline rates that would result in additional goodwill impairment. For three of the reporting
units, given the significant excess of their fair value over carrying value, any future goodwill impairment is not likely.
However, should our estimates and assumptions for assessing the fair values of the remaining reporting units with
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Table of Contents
goodwill worsen to reflect the below or lower cash flow growth/decline rates, additional goodwill impairments may be
warranted in the future.
Reporting Unit
2
16
21
1
11
13
12
10
6
18
19
Long-Term
Cash Flow
Growth Rate
Used
Long-Term Cash
Flow
Growth/(Decline) Rate
That Would Result in
Carrying Value that is less
than Fair Value (a)
0.9 % Impairment not likely
0.7 % Impairment not likely
0.5 % Impairment not likely
1.0 %
0.7 %
0.9 %
1.0 %
1.0 %
0.7 %
2.5 %
1.0 %
0.2%
(0.8)%
(1.9)%
(2.0)%
(2.9)%
(8.3)%
(21.9)%
(268.0)%
(a) The long-term cash flow growth/(decline) rate that would result in the carrying value of the reporting unit being less
than the fair value of the reporting unit applies only to further goodwill impairment and not to any future license
impairment that would result from lowering the long-term cash flow growth rates used.
Several of the licenses in our units of accounting have limited or no excess of fair values over their respective carrying
values. As set forth in the table below, as of October 1, 2021, we appraised the radio broadcasting licenses at a fair value of
approximately $599.0 million, which was in excess of the $505.2 million carrying value by $93.9 million, or 18.6%. The
fair values of the licenses exceeded the carrying values of the licenses for all units of accounting. Should our estimates,
assumptions, or events or circumstances for any upcoming valuations worsen in the units with no or limited fair value
cushion, additional license impairments may be needed in the future.
Unit of Accounting (a)
Unit of Accounting 2
Unit of Accounting 5
Unit of Accounting 7
Unit of Accounting 11
Unit of Accounting 14
Unit of Accounting 6
Unit of Accounting 12
Unit of Accounting 4
Unit of Accounting 13
Unit of Accounting 8
Unit of Accounting 16
Unit of Accounting 1
Unit of Accounting 10
Total
Radio Broadcasting Licenses
As of
October 1,
2021
Carrying
Values
(“CV”)
October 1,
2021
Fair
Values
(“FV”)
(In thousands)
$
3,086 $
13,525
15,223
15,560
19,070
22,642
32,968
37,224
39,646
52,515
54,670
84,369
114,650
505,148
$
$
32,375 $
15,310
18,081
17,498
20,518
28,134
34,120
40,321
40,940
56,568
89,981
90,091
115,108
599,045
$
Excess
% FV
Over CV
FV vs. CV
29,289
1,785
2,858
1,938
1,448
5,492
1,152
3,097
1,294
4,053
35,311
5,722
458
93,897
949.1 %
13.2 %
18.8 %
12.5 %
7.6 %
24.3 %
3.5 %
8.3 %
3.3 %
7.7 %
64.6 %
6.8 %
0.4 %
18.6 %
(a) The units of accounting are not disclosed on a specific market basis so as to not make publicly available sensitive
information that could be competitively harmful to the Company.
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Table of Contents
The following table presents a sensitivity analysis showing the impact on our impairment testing resulting from: (i) a
100 basis point decrease in industry or reporting unit growth rates; (ii) a 100 basis point decrease in cash flow margins;
(iii) a 100 basis point increase in the discount rate; and (iv) both a 5% and 10% reduction in the fair values of broadcasting
licenses and reporting units.
Hypothetical Increase in
the Recorded
Impairment
Charge
For the Year Ended
December 31, 2021
Broadcasting
Licenses
Goodwill (a)
(In millions)
Impairment charge recorded:
Radio Market Reporting Units
Reach Media Reporting Unit
Cable Television Reporting Unit
Digital Reporting Unit
Total Impairment Recorded
Hypothetical Change for Radio Market Reporting Units:
A 100 basis point decrease in radio industry long-term growth rates
A 100 basis point decrease in cash flow margin in the projection period
A 100 basis point increase in the applicable discount rate
A 5% reduction in the fair value of broadcasting licenses and reporting units
A 10% reduction in the fair value of broadcasting licenses and reporting units
Hypothetical Change for Reach Media Reporting Unit:
A 100 basis point decrease in long-term growth rates
A 100 basis point decrease in cash flow margin in the projection period
A 100 basis point increase in the applicable discount rate
A 5% reduction in the fair value of the reporting unit
A 10% reduction in the fair value of the reporting unit
Hypothetical Change for Cable Television Reporting Unit:
A 100 basis point decrease in long-term growth rates
A 100 basis point decrease in cash flow margin in the projection period
A 100 basis point increase in the applicable discount rate
A 5% reduction in the fair value of the reporting unit
A 10% reduction in the fair value of the reporting unit
Hypothetical Change for Digital Reporting Unit:
A 100 basis point decrease in long-term growth rates
A 100 basis point decrease in cash flow margin in the projection period
A 100 basis point increase in the applicable discount rate
A 5% reduction in the fair value of the reporting unit
A 10% reduction in the fair value of the reporting unit
$
$
$
$
$
$
$
— $
—
—
—
— $
20.7
3.0
36.8
6.6
22.5
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
—
—
—
—
—
1.1
—
5.9
—
4.4
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(a) Goodwill impairment charge applies only to further goodwill impairment and not to any potential license impairment
that could result from changing other assumptions.
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Impairment of Intangible Assets Excluding Goodwill, Radio Broadcasting Licenses and Other Indefinite-Lived
Intangible Assets
Intangible assets, excluding goodwill, radio broadcasting licenses and other indefinite-lived intangible assets, are
reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or
group of assets may not be fully recoverable. These events or changes in circumstances may include a significant
deterioration of operating results, changes in business plans, or changes in anticipated future cash flows. If an impairment
indicator is present, we will evaluate recoverability by a comparison of the carrying amount of the asset or group of assets
to future undiscounted net cash flows expected to be generated by the asset or group of assets. Assets are grouped at the
lowest level for which there is identifiable cash flows that are largely independent of the cash flows generated by other
asset groups. If the assets are impaired, the impairment is measured by the amount by which the carrying amount exceeds
the fair value of the assets determined by estimates of discounted cash flows. The discount rate used in any estimate of
discounted cash flows would be the rate required for a similar investment of like risk. The Company reviewed certain
intangibles for impairment during 2021 and 2020 and determined no impairment charges were necessary. Any changes in
the valuation estimates and assumptions or changes in certain events or circumstances could result in changes to the
estimated fair values of these intangible assets and may result in future write-downs to the carrying values.
Revenue Recognition
In accordance with Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers,” the
Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects
the consideration to which it expects to be entitled in exchange for those goods or services. In general, our spot advertising
(both radio and cable television) as well as our digital advertising continues to be recognized when aired and delivered. For
our cable television affiliate revenue, the Company grants a license to the affiliate to access its television programming
content through the license period, and the Company earns a usage based royalty when the usage occurs, consistent with
our previous revenue recognition policy. Finally, for event advertising, the performance obligation is satisfied at a point in
time when the activity associated with the event is completed.
Within our radio broadcasting and Reach Media segments, the Company recognizes revenue for broadcast advertising
at a point in time when a commercial spot runs. The revenue is reported net of agency and outside sales representative
commissions. Agency and outside sales representative commissions are calculated based on a stated percentage applied to
gross billing. Generally, clients remit the gross billing amount to the agency or outside sales representative, and the agency
or outside sales representative remits the gross billing, less their commission, to the Company.
Within our digital segment, including Interactive One, which generates the majority of the Company’s digital revenue,
revenue is principally derived from advertising services on non-radio station branded but Company-owned websites.
Advertising services include the sale of banner and sponsorship advertisements. Advertising revenue is recognized at a
point in time either as impressions (the number of times advertisements appear in viewed pages) are delivered or when
“click through” purchases are made, where applicable. In addition, Interactive One derives revenue from its studio
operations, in which it provides third-party clients with publishing services including digital platforms and related
expertise. In the case of the studio operations, revenue is recognized primarily through fixed contractual monthly fees
and/or as a share of the third party’s reported revenue.
Our cable television segment derives advertising revenue from the sale of television air time to advertisers and
recognizes revenue when the advertisements are run. Advertising revenue is recognized at a point in time when the
individual spots run. To the extent there is a shortfall in contracts where the ratings were guaranteed, a portion of the
revenue is deferred until the shortfall is settled, typically by providing additional advertising units generally within
one year of the original airing. Our cable television segment also derives revenue from affiliate fees under the terms of
various multi-year affiliation agreements based on a per subscriber fee multiplied by the most recent subscriber counts
reported by the applicable affiliate. The Company recognizes the affiliate fee revenue at a point in time as its performance
obligation to provide the programming is met. The Company has a right of payment each month as the programming
services and related obligations have been satisfied.
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Contingencies and Litigation
We regularly evaluate our exposure relating to any contingencies or litigation and record a liability when available
information indicates that a liability is probable and estimable. We also disclose significant matters that are reasonably
possible to result in a loss, or are probable but for which an estimate of the liability is not currently available. To the extent
actual contingencies and litigation outcomes differ from amounts previously recorded, additional amounts may need to be
reflected.
Uncertain Tax Positions
To address the exposures of uncertain tax positions, we recognize the impact of a tax position in the financial
statements if it is more likely than not that the position would be sustained on examination based on the technical merits of
the position. As of December 31, 2021, we had approximately $1.3 million in unrecognized tax benefits. Future outcomes
of our tax positions may be more or less than the currently recorded liability, which could result in recording additional
taxes, or reversing some portion of the liability and recognizing a tax benefit once it is determined the liability is no longer
necessary as potential issues get resolved, or as statutes of limitations in various tax jurisdictions close.
Realizability of Deferred Tax Assets
As of each reporting date, management considers new evidence, both positive and negative, that could affect its
conclusions regarding the future realization of the Company’s deferred tax assets (“DTAs”). During the year ended
December 31, 2021, management continues to believe that there is sufficient positive evidence to conclude that it is more
likely than not the DTAs are realizable. The assessment to determine the value of the DTAs to be realized under ASC 740
is highly judgmental and requires the consideration of all available positive and negative evidence in evaluating the
likelihood of realizing the tax benefit of the DTAs in a future period. Circumstances may change over time such that
previous negative evidence no longer exists, and new conditions should be evaluated as positive or negative evidence that
could affect the realization of the DTAs. Since the evaluation requires consideration of events that may occur some years
into the future, significant judgment is required, and our conclusion could be materially different if certain expectations do
not materialize.
In the assessment of all available evidence, an important piece of objectively verifiable evidence is evaluating a
cumulative income or loss position over the most recent three-year period. Historically, the Company maintained a full
valuation against the net DTAs, principally due to overwhelming objectively verifiable negative evidence in the form of a
cumulative loss over the most recent three-year period. However, during the quarter ended December 31, 2018, the
Company achieved three years of cumulative income, which removed the most heavily weighted piece of objectively
verifiable negative evidence from our evaluation of the realizability of DTAs. Moreover, in combination with the
three years of cumulative income and other objectively verifiable positive evidence that existed as of the quarter ended
December 31, 2018, management believed that there was sufficient positive evidence to conclude that it was more likely
than not that a material portion of its net DTAs were realizable. Consequently, the Company reduced its valuation
allowance during the quarter ended December 31, 2018.
As of the quarter ended December 31, 2021, management continues to weigh the objectively verifiable evidence
associated with its cumulative income or loss position over the most recent three-year period. Further, as of the year ended
December 31, 2021, the Company continues to have three years of cumulative income. Management also considered the
cumulative income includes non-deductible pre-tax expenditures that, while included in pre-tax earnings, are not a
component of taxable income and therefore are not expected to negatively impact the Company’s ability to realize the tax
benefit of the DTAs in current or future years.
As part of the 2017 Tax Act, IRC Section 163(j) limits the timing of the tax deduction for interest expense. In
conjunction with evaluating and weighing the aforementioned negative and positive evidence from the Company’s
historical cumulative income or loss position, management also evaluated the impact that interest expense has had on our
cumulative income or loss position over the most recent three-year period. A material component of the Company’s
expenses is interest and has been the primary driver of historical pre-tax losses. As part of our evaluation of positive
evidence, management is adjusting for the IRC Section 163(j) interest expense limitation on projected taxable income as
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part of developing forecasts of taxable income sufficient to utilize the Company’s federal and state net operating losses that
are not subject to annual limitation resulting from the 2009 ownership shift as defined under IRC Section 382.
Realization of the Company’s DTAs is dependent on generating sufficient taxable income in future periods, and
although management believes it is more likely than not future taxable income will be sufficient to realize the DTAs,
realization is not assured and future events may cause a change to the judgment of the realizability of the DTAs. If a future
event causes management to re-evaluate and conclude that it is not more likely than not, that all or a portion of the DTAs
are realizable, the Company would be required to establish a valuation allowance against the assets at that time, which
would result in a charge to income tax expense and a decrease to net income in the period which the change of judgment is
concluded.
The Company continues to assess potential tax strategies, which if successful, may reduce the impact of the annual
limitations and potentially recover NOLs that otherwise would expire before being applied to reduce future income tax
liabilities. If successful, the Company may be able to recover additional federal and state NOLs in future periods, which
could be material. If we conclude that it is more likely than not that we will be able to realize additional federal and state
NOLs, the tax benefit could materially impact future quarterly and annual periods. The federal and state NOLs expire in
various years from 2022 to 2039.
Redeemable noncontrolling interests
Redeemable noncontrolling interests are interests in subsidiaries that are redeemable outside of the Company’s control
either for cash or other assets. These interests are classified as mezzanine equity and measured at the greater of estimated
redemption value at the end of each reporting period or the historical cost basis of the noncontrolling interests adjusted for
cumulative earnings allocations. The resulting increases or decreases in the estimated redemption amount are affected by
corresponding charges against retained earnings, or in the absence of retained earnings, additional paid-in-capital.
With the assistance of a third-party valuation firm, the Company assesses the fair value of the redeemable
noncontrolling interest in Reach Media as of the end of each reporting period. The fair value of the redeemable
noncontrolling interests as of December 31, 2021 and 2020, was approximately $17.0 million and $12.7 million,
respectively. The determination of fair value incorporated a number of assumptions and estimates including, but not limited
to, forecasted operating results, discount rates and a terminal value. Different estimates and assumptions may result in a
change to the fair value of the redeemable noncontrolling interests amount previously recorded.
Fair Value Measurements
The Company accounts for an award called for in the CEO’s employment agreement (the “Employment Agreement”)
at fair value. According to the Employment Agreement, executed in April 2008, the CEO is eligible to receive an award
(the “Employment Agreement Award”) amount equal to approximately 4% of any proceeds from distributions or other
liquidity events in excess of the return of the Company’s aggregate investment in TV One. The Company’s obligation to
pay the award was triggered after the Company recovered the aggregate amount of capital contributions in TV One, and
payment is required only upon actual receipt of distributions of cash or marketable securities or proceeds from a liquidity
event with respect to such invested amount. The long-term portion of the award is recorded in other long-term liabilities
and the current portion is recorded in other current liabilities in the consolidated balance sheets. The CEO was fully vested
in the award upon execution of the Employment Agreement, and the award lapses if the CEO voluntarily leaves the
Company or is terminated for cause. In September 2014, the Compensation Committee of the Board of Directors of the
Company approved terms for a new employment agreement with the CEO, including a renewal of the Employment
Agreement Award upon similar terms as in the prior Employment Agreement.
The Company estimated the fair value of the Employment Agreement Award as of December 31, 2021, at
approximately $28.2 million and, accordingly, adjusted the liability to that amount. The fair value estimate incorporated a
number of assumptions and estimates, including but not limited to TV One’s future financial projections. As the Company
will measure changes in the fair value of this award at each reporting period as warranted by certain circumstances,
different estimates or assumptions may result in a change to the fair value of the award amount previously recorded.
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Content Assets
Our cable television segment has entered into contracts to acquire entertainment programming rights and programs
from distributors and producers. The license periods granted in these contracts generally run from one year to five years.
Contract payments are made in installments over terms that are generally shorter than the contract period. Each contract is
recorded as an asset and a liability at an amount equal to its gross contractual commitment when the license period begins
and the program is available for its first airing. For programming that is predominantly monetized as part of a content
group, which includes our acquired and commissioned programs, capitalized costs are amortized based on an estimate of
our usage and benefit from such programming. The estimates require management’s judgement and include consideration
of factors such as expected revenues to be derived from the programming, the expected number of future airings, and, if
applicable, the length of the license period. Acquired content is generally amortized on a straight-line basis over the term of
the license which reflects the estimated usage. For certain content for which the pattern of usage is accelerated,
amortization is based upon the actual usage. Amortization of content assets is recorded in the consolidated statement of
operations as programming and technical expenses.
The Company also has programming for which the Company has engaged third parties to develop and produce, and it
owns most or all rights (commissioned programming). In accordance with ASC 926, content amortization expense for each
period is recognized based on the revenue forecast model, which approximates the proportion that estimated advertising
and affiliate revenues for the current period represent in relation to the estimated remaining total lifetime revenues as of the
beginning of the current period. Management regularly reviews, and revises when necessary, its total revenue estimates,
which may result in a change in the rate of amortization and/or a write-down of the asset to fair value.
Content that is predominantly monetized within a film group is assessed for impairment at the film group level and is
tested for impairment if circumstances indicate that the fair value of the content within the film group is less than its
unamortized costs. A significant decrease in the amount of ultimate revenue expected to be recognized was determined for
one of the film groups, and as a result, the Company recorded an impairment and additional amortization expense of
$695,000, as a result of evaluating its contracts for impairment for the year ended December 31, 2021. The Company did
not record any additional amortization expense for the year ended December 31, 2020. Impairment and amortization of
content assets is recorded in the consolidated statements of operations as programming and technical expenses. All
produced and licensed content is classified as a long-term asset, except for the portion of the unamortized content balance
that is expected to be amortized within one year which is classified as a current asset.
Tax incentives that state and local governments offer that are directly measured based on production activities are
recorded as reductions in production costs.
Capital and Commercial Commitments
Indebtedness
As of December 31, 2021, we had approximately $825.0 million of our 2028 Notes outstanding and approximately
$7.5 million outstanding on our PPP Loan within our corporate structure. The Company used the net proceeds from the
2028 Notes, together with cash on hand, to repay or redeem: (1) the 2017 Credit Facility; (2) the 2018 Credit Facility;
(3) the MGM National Harbor Loan; (4) the remaining amounts of our 7.375% Notes; and (5) our 8.75% Notes that were
issued in the November 2020 Exchange Offer. Upon settlement of the 2028 Notes, the 2017 Credit Facility, the 2018
Credit Facility and the MGM National Harbor Loan were terminated and the indentures governing the 7.375% Notes and
the 8.75% Notes were satisfied and discharged.
See “Liquidity and Capital Resources.” See the balances outstanding as of December 31, 2021 in the “Type of Debt”
section as part of the “Liquidity and Capital Resources” section above.
Lease obligations
We have non-cancelable operating leases for office space, studio space, broadcast towers and transmitter facilities that
expire over the next 10 years.
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Operating Contracts and Agreements
We have other operating contracts and agreements including employment contracts, on-air talent contracts, severance
obligations, retention bonuses, consulting agreements, equipment rental agreements, programming related agreements, and
other general operating agreements that expire over the next five years.
Royalty Agreements
Musical works rights holders, generally songwriters and music publishers, have been traditionally represented by
performing rights organizations, such as the American Society of Composers, Authors and Publishers (“ASCAP”),
Broadcast Music, Inc. (“BMI”) and SESAC, Inc. (“SESAC”). The market for rights relating to musical works is changing
rapidly. Songwriters and music publishers have withdrawn from the traditional performing rights organizations, particularly
ASCAP and BMI, and new entities, such as Global Music Rights, Inc. (“GMR”), have been formed to represent rights
holders. These organizations negotiate fees with copyright users, collect royalties and distribute them to the rights holders.
We currently have arrangements with ASCAP, SESAC and GMR. On April 22, 2020, the Radio Music License Committee
(“RMLC”), an industry group which the Company is a part of, and BMI have reached agreement on the terms of a new
license agreement that covers the period January 1, 2017, through December 31, 2021. Upon approval of the court of the
BMI/RMLC agreement, the Company automatically became a party to the agreement and to a license with BMI through
December 31, 2021.
Reach Media Redeemable Noncontrolling Interest Shareholders’ Put Rights
Beginning on January 1, 2018, the noncontrolling interest shareholders of Reach Media have had an annual right to
require Reach Media to purchase all or a portion of their shares at the then current fair market value for such shares (the
“Put Right”). This annual right is exercisable for a 30-day period beginning January 1 of each year. The purchase price for
such shares may be paid in cash and/or registered Class D common stock of Urban One, at the discretion of Urban One.
The noncontrolling interest shareholders of Reach Media did not exercise their Put Right for the 30-day period ending
January 31, 2022. Management, at this time, cannot reasonably determine the period when and if the put right will be
exercised by the noncontrolling interest shareholders.
Contractual Obligations Schedule
The following table represents our scheduled contractual obligations as of December 31, 2021:
Contractual Obligations
2022
2023
2024
2025
2026
(In thousands)
2027 and
Beyond
Total
Payments Due by Period
7.375% Subordinated Notes
(1)
PPP Loan (2)
Other operating
contracts/agreements(3)
Operating lease obligations
Total
$ 60,844
75
$ 60,844
75
$ 60,844
75
$ 60,844
75
$ 60,844
7,542
$ 890,914
—
$ 1,195,134
7,842
69,791
13,164
$ 143,874
23,117
11,333
$ 95,369
19,386
10,099
$ 90,404
19,422
5,377
$ 85,718
8,452
3,070
$ 79,908
9,408
5,378
$ 905,700
149,576
48,421
$ 1,400,973
(1) Includes interest obligations based on effective interest rates on senior secured notes outstanding as of December 31,
2021.
(2) Includes interest obligations on PPP Loan outstanding as of December 31, 2021.
(3) Includes employment contracts (including the Employment Agreement Award), severance obligations, on-air talent
contracts, consulting agreements, equipment rental agreements, programming related agreements, and other general
operating agreements. Also includes contracts that our cable television segment has entered into to acquire
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entertainment programming rights and programs from distributors and producers. These contracts relate to their
content assets as well as prepaid programming related agreements.
Of the total amount of other operating contracts and agreements included in the table above, approximately $100.1
million has not been recorded on the balance sheet as of December 31, 2021, as it does not meet recognition criteria.
Approximately $18.0 million relates to certain commitments for content agreements for our cable television segment,
approximately $30.9 million relates to employment agreements, and the remainder relates to other agreements.
Off-Balance Sheet Arrangements
On February 24, 2015, the Company entered into a letter of credit reimbursement and security agreement providing for
letter of credit capacity of up to $1.2 million. On October 8, 2019, the Company entered into an amendment to its letter of
credit reimbursement and security agreement and extended the term to October 8, 2024. As of December 31, 2021, the
Company had letters of credit totaling $871,000 under the agreement for certain operating leases and certain insurance
policies. Letters of credit issued under the agreement are required to be collateralized with cash. In addition, the Current
2021 ABL Facility provides for letter of credit capacity of up to $5 million subject to certain limitations on availability.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Not required for smaller reporting companies.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements of Urban One required by this item are filed with this report on Pages F-1 to F-
55.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures
We have carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer
(“CEO”) and the Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure
controls and procedures as of the end of the period covered by this report. Based on this evaluation, our CEO and CFO
concluded that as of such date, our disclosure controls and procedures are effective in timely alerting them to material
information required to be included in our periodic SEC reports. Disclosure controls and procedures, as defined in
Rules 13a-15(e) and 15d-15(e) under the Exchange Act, are controls and procedures that are designed to ensure that
information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules and forms.
In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and
procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired
control objectives and management necessarily was required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures. Our disclosure controls and procedures are designed to provide a
reasonable level of assurance of reaching our desired disclosure controls objective. Our management, including our CEO
and CFO, has concluded that our disclosure controls and procedures are effective in reaching that level of reasonable
assurance.
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(b) Management’s report on internal control over financial reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as
defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including
our CEO and CFO, we conducted an evaluation of the effectiveness of our internal control over financial reporting. Internal
control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its
inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance
and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial
reporting also can be circumvented by collusion or improper management override. Because of such limitations, there is a
risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial
reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is
possible to design into the process safeguards to reduce, though not eliminate, this risk.
Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, our
management conducted an assessment of the effectiveness of internal control over financial reporting as of December 31,
2021 based on the criteria established in Internal Control - Integrated Framework, issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 framework). Based on this assessment, our management has concluded
that our internal control over financial reporting was effective as of December 31, 2021.
The Company’s independent registered public accounting firm is engaged to express an opinion on our internal control
over financial reporting, as stated in its report which is included in Part IV, Item 15 of this Form 10-K under the caption
“Reports of Independent Registered Public Accounting Firm.”
(c) Changes in internal control over financial reporting
There were no changes in our internal control over financial reporting during the year ended December 31, 2021 that
have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
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ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
PART III
The information with respect to directors and executive officers required by this Item 10 is incorporated into this report
by reference to the information set forth under the caption “Nominees for Class A Directors,” “Nominees for Other
Directors,” “Code of Conduct,” and “Executive Officers” in our proxy statement for the 2022 Annual Meeting of
Stockholders, which is expected to be filed with the Commission within 120 days after the close of our fiscal year.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item 11 is incorporated into this report by reference to the information set forth under
the caption “Compensation of Directors and Executive Officers” in our proxy statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The information required by this Item 12 is incorporated into this report by reference to the information set forth under
the caption “Principal Stockholders” in our proxy statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item 13 is incorporated into this report by reference to the information set forth under
the caption “Certain Relationships and Related Transactions” in our proxy statement.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The information required by this Item 14 is incorporated into this report by reference to the information set forth under
the caption “Audit Fees” in our proxy statement.
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ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)(1) Financial Statements
PART IV
The following financial statements required by this item are submitted in a separate section beginning on page F-1 of
this report:
Reports of Independent Registered Public Accounting Firm (BDO USA, LLP; Potomac, MD; PCAOB ID #243)
Consolidated Balance Sheets as of December 31, 2021 and 2020
Consolidated Statements of Operations for the years ended December 31, 2021 and 2020
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2021 and 2020
Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2021 and 2020
Consolidated Statements of Cash Flows for the years ended December 31, 2021 and 2020
Notes to the Consolidated Financial Statements
Schedule II — Valuation and Qualifying Accounts
Schedules other than those listed above have been omitted from this Form 10-K because they are not required, are not
applicable, or the required information is included in the financial statements and notes thereto.
(a)(2) EXHIBITS AND FINANCIAL STATEMENTS: The following exhibits are filed as part of this Annual Report,
except for Exhibits 32.1 and 32.2, which are furnished, but not filed, with this Annual Report.
Exhibit
Number
3.1
3.1.1
3.2
3.3
3.4
3.5
3.6
3.7
Description
Amended and Restated Certificate of Incorporation of Urban Inc., dated as of May 4, 2000, as filed with the
State of Delaware on May 9, 2000 (incorporated by reference to Exhibit 3.1 to Urban One’s Quarterly Report
on Form 10-Q for the period ended March 31, 2000).
Certificate of Amendment, dated as of April 25, 2017, of the Amended and Restated Certificate of
Incorporation of Urban One, Inc., dated as of April 25, 2017, as filed with the State of Delaware on April 25,
2017 (incorporated by reference to Exhibit 3.1 to Urban One’s Current Report on Form 8-K filed May 8,
2017).
Amended and Restated By-laws of Urban One, Inc. amended as of May 5, 2017 (incorporated by reference
to Exhibit 3.2 to Urban One’s Current Report on Form 8-K filed May 8, 2017).
Certificate of Conversion of Bell Broadcasting Company into Bell Broadcasting Company LLC
(incorporated by reference to Exhibit 3.13 to Urban One’s Annual Report on Form 10-K, filed March 14,
2016).
Articles of Organization of Blue Chip Broadcasting Licenses, Ltd. (incorporated by reference to Exhibit 3.32
to Urban One’s Registration Statement on Form S-4, filed August 5, 2005).
Operating Agreement of Blue Chip Broadcasting Licenses, Ltd. (incorporated by reference to Exhibit 3.60 to
Urban One’s Registration Statement on Form S-4, filed August 5, 2005).
Articles of Organization of Blue Chip Broadcasting, Ltd. (incorporated by reference to Exhibit 3.30 to Urban
One’s Registration Statement on Form S-4, filed August 5, 2005).
Amended and Restated Operating Agreement of Blue Chip Broadcasting, Ltd. (incorporated by reference to
Exhibit 3.59 to Urban One’s Registration Statement on Form S-4, filed August 5, 2005).
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3.8
3.9
3.10
3.11
3.12
3.13
3.14
3.15
3.16
3.17
3.18
3.19
3.20
3.21
3.22
3.23
3.24
3.25
3.26
3.29
3.30
3.33
3.34
3.35
3.36
3.37
Certificate of Formation of Charlotte Broadcasting, LLC (incorporated by reference to Exhibit 3.18 to Urban
One’s Registration Statement on Form S-4, filed August 5, 2005).
Limited Liability Company Agreement of Charlotte Broadcasting, LLC (incorporated by reference to
Exhibit 3.53 to Urban One’s Registration Statement on Form S-4, filed August 5, 2005).
Certificate of Formation of Distribution One, LLC. (incorporated by reference to Exhibit 3.15 to Urban
One’s Registration Statement on Form S-4, filed February 9, 2011).
Limited Liability Company Agreement of Distribution One, LLC. (incorporated by reference to Exhibit 3.16
to Urban One’s Registration Statement on Form S-4, filed February 9, 2011).
Articles of Incorporation of Interactive One, Inc. (incorporated by reference to Exhibit 3.19 to Urban One’s
Registration Statement on Form S-4, filed February 9, 2011).
Bylaws of Interactive One, Inc. (incorporated by reference to Exhibit 3.20 to Urban One’s Registration
Statement on Form S-4, filed February 9, 2011).
Certificate of Formation of Interactive One, LLC. (incorporated by reference to Exhibit 3.21 to Urban One’s
Registration Statement on Form S-4, filed February 9, 2011).
Limited Liability Company Agreement of Interactive One, LLC. (incorporated by reference to Exhibit 3.22
to Urban One’s Registration Statement on Form S-4, filed February 9, 2011).
Certificate of Incorporation of New Mableton Broadcasting Corporation (incorporated by reference to
Exhibit 3.43 to Urban One’s Registration Statement on Form S-4, filed August 5, 2005).
Bylaws of New Mableton Broadcasting Corporation (incorporated by reference to Exhibit 3.70 to Urban
One’s Registration Statement on Form S-4, filed August 5, 2005).
Certificate of Conversion of Radio One Cable Holdings, Inc.to Radio One Cable Holdings, LLC.
(incorporated by reference to Exhibit 3.19 to Urban One’s Annual Report on Form 10-K, filed February 17,
2015).
Certificate of Conversion of formation of Radio One Cable Holdings, LLC. (incorporated by reference to
Exhibit 3.20 to Urban One’s Annual Report on Form 10-K, filed February 17, 2015).
Certificate of Formation of Radio One Distribution Holdings, LLC. (incorporated by reference to
Exhibit 3.27 to Urban One’s Registration Statement on Form S-4, filed February 9, 2011).
Limited Liability Company Agreement of Radio One Cable Holdings, LLC. (incorporated by reference to
Exhibit 3.20 to Urban One’s Annual Report on Form 10-K, filed February 17, 2015).
Limited Liability Company Agreement of Radio One Distribution Holdings, LLC (incorporated by reference
to Exhibit 3.28 to Urban One’s Registration Statement on Form S-4, filed February 9, 2011).
Certificate of Formation of Radio One Licenses, LLC (incorporated by reference to Exhibit 3.3 to Urban
One’s Registration Statement on Form S-4, filed August 5, 2005).
Limited Liability Company Agreement of Radio One Licenses, LLC (incorporated by reference to
Exhibit 3.46 to Urban One’s Registration Statement on Form S-4, filed August 5, 2005).
Certificate of Formation of Radio One Media Holdings, LLC (incorporated by reference to Exhibit 3.44 to
Urban One’s Registration Statement on Form S-4, filed August 5, 2005).
Limited Liability Company Agreement of Radio One Media Holdings, LLC (incorporated by reference to
Exhibit 3.71 to Urban One’s Registration Statement on Form S-4, filed August 5, 2005).
Certificate of Formation of Radio One of Charlotte, LLC (incorporated by reference to Exhibit 3.15 to Urban
One’s Registration Statement on Form S-4, filed August 5, 2005).
Limited Liability Company Agreement of Radio One of Charlotte, LLC (incorporated by reference to
Exhibit 3.51 to Urban One’s Registration Statement on Form S-4, filed August 5, 2005).
Certificate of Limited Partnership of Radio One of Indiana, L.P. (incorporated by reference to Exhibit 3.35 to
Urban One’s Registration Statement on Form S-4, filed August 5, 2005).
Limited Partnership Agreement of Radio One of Indiana, L.P. (incorporated by reference to Exhibit 3.63 to
Urban One’s Registration Statement on Form S-4, filed August 5, 2005).
Certificate of Formation of Radio One of Indiana, LLC (incorporated by reference to Exhibit 3.38 to Urban
One’s Registration Statement on Form S-4, filed August 5, 2005).
Limited Liability Company Agreement of Radio One of Indiana, LLC (incorporated by reference to
Exhibit 3.66 to Urban One’s Registration Statement on Form S-4, filed August 5, 2005).
Certificate of Formation of Radio One of North Carolina, LLC (incorporated by reference to Exhibit 3.20 to
Urban One’s Registration Statement on Form S-4, filed August 5, 2005).
63
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3.38
3.39
3.40
3.41
3.42
3.43
3.44
3.45
3.46
3.47
3.48
3.49
3.50
3.51
3.52
3.53
3.54
3.55
4.1
4.2
4.7
10.1
10.2
10.3
Limited Liability Company Agreement of Radio One of North Carolina, LLC (incorporated by reference to
Exhibit 3.54 to Urban One’s Registration Statement on Form S-4, filed August 5, 2005).
Certificate of Formation of Radio One of Texas II, LLC (incorporated by reference to Exhibit 3.37 to Urban
One’s Registration Statement on Form S-4, filed August 5, 2005).
Limited Liability Company Agreement of Radio One of Texas II, LLC (incorporated by reference to
Exhibit 3.65 to Urban One’s Registration Statement on Form S-4, filed August 5, 2005).
Certificate of Formation of Satellite One, L.L.C. (incorporated by reference to Exhibit 3.39 to Urban One’s
Registration Statement on Form S-4, filed August 5, 2005).
Limited Liability Company Agreement of Satellite One, L.L.C. (incorporated by reference to Exhibit 3.67 to
Urban One’s Registration Statement on Form S-4, filed August 5, 2005).
Certificate of Formation of IO Acquisition Sub, LLC (incorporated by reference to Exhibit 3.46 to Urban
One’s Annual Report on Form 10-K, filed February 17, 2015).
Certificate of Amendment to Certificate of Formation of BossipMadameNoire, LLC (incorporated by
reference to Exhibit 3.3 to Urban One’s Current Report on Form 8-K, filed May 8, 2017).
Limited Liability Company Agreement of BossipMadameNoire, LLC (formerly IO Acquisition Sub and
incorporated by reference to Exhibit 3.47 to Urban One’s Annual Report on Form 10-K, filed February 17,
2015).
Certificate of Formation of Radio One Urban Network Holdings, LLC (incorporated by reference to
Exhibit 3.48 to Urban One’s Annual Report on Form 10-K, filed February 17, 2015).
Limited Liability Company Agreement of Radio One Urban Network Holdings, LLC (incorporated by
reference to Exhibit 3.49 to Urban One’s Annual Report on Form 10-K, filed February 17, 2015).
Certificate of Formation of Radio One Entertainment Holdings, LLC (incorporated by reference to
Exhibit 3.50 to Urban One’s Annual Report on Form 10-K, filed February 17, 2015).
Second Amended and Restated Limited Liability Company Agreement of Radio One Entertainment
Holdings, LLC (incorporated by reference to Exhibit 3.49 to Urban One’s Annual Report on Form 10-K,
filed March 31, 2021).
Certificate of Conversion of Gaffney Broadcasting, LLC (incorporated by reference to Exhibit 3.52 to Urban
One’s Annual Report on Form 10-K, filed February 17, 2015).
Certificate of Incorporation of Reach Media, Inc. (incorporated by reference to Exhibit 3.53 to Urban One’s
Annual Report on Form 10-K, filed February 17, 2015).
Bylaws of Reach Media, Inc. (incorporated by reference to Exhibit 3.54 to Urban One’s Annual Report on
Form 10-K, filed February 17, 2015).
Certificate of Formation of RO One Solution, LLC (incorporated by reference to Exhibit 3.54 to Urban
One’s Annual Report on Form 10-K, filed March 14, 2016).
Certificate of Formation of Urban One Entertainment SPV, LLC (incorporated by reference to Exhibit 3.54
to Urban One’s Annual Report on Form 10-K, filed March 18, 2019).
Second Amended and Restated Limited Liability Company Agreement of Urban One Entertainment SPV,
LLC (incorporated by reference to Exhibit 3.55 to Urban One’s Annual Report on Form 10-K, filed
March 31, 2021).
Indenture, dated as of January 25, 2021, among Urban One, Inc., the guarantors named therein and
Wilmington Trust, National Association, as trustee, relating to the 7.375% Senior Secured Notes due 2028
(incorporated by reference to Exhibit 4.1 to Urban One’s Current Report on Form 8-K filed January 29,
2021).
Credit Agreement, dated as of February 19, 2021, among Urban One, Inc., the other borrowers party thereto,
the lenders party thereto from time to time and Bank of America, N.A., as administrative agent (incorporated
by reference to Exhibit 10.1 to Urban One’s Current Report on Form 8-K filed February 22, 2021).
Description of Registrant’s Securities*
Amended and Restated Stockholders Agreement dated as of September 28, 2004 among Catherine L.
Hughes and Alfred C. Liggins, III (incorporated by reference 4.1 Urban One’s Quarterly Report on Form 10-
Q for the period ended June 30, 2005).
Amended and Restated Radio One, Inc. 2009 Stock Option and Restricted Stock Grant Plan (incorporated by
reference to Urban One’s Definitive Proxy on Schedule 14A filed October 3, 2013).
Urban One, Inc. 2019 Equity and Performance Incentive Plan (incorporated by reference to Urban One’s
Definitive Proxy on Schedule 14A filed April 11, 2019).
64
Table of Contents
10.4
10.5
10.6
10.7
10.8
10.9
10.10
10.11
21.1
23.1
31.1
31.2
32.1
32.2
101
104
Employment Agreement between Radio One, Inc. and Peter D. Thompson dated October 9, 2014
(incorporated by reference to Exhibit 10.12 to Urban One’s Current Report on Form 8-K filed November 4,
2014).
Employment Agreement between Radio One, Inc. and Alfred C. Liggins, III dated April 16, 2008
(incorporated by reference to Exhibit 10.2 to Urban One’s Current Report on Form 8-K filed April 18, 2008).
Terms of Employment Agreement between Radio One, Inc. and Alfred C. Liggins, III approved
September 30, 2014 (incorporated by reference to Item 5.02 of Urban One’s Current Report on Form 8-K
filed October 6, 2014).
Employment Agreement between Radio One, Inc. and Catherine L. Hughes dated April 16, 2008
(incorporated by reference to Exhibit 10.1 to Urban One’s Current Report on Form 8-K filed April 18, 2008).
Terms of Employment Agreement between Radio One, Inc. and Catherine L. Hughes approved
September 30, 2014 (incorporated by reference to Item 5.02 of Urban One’s Current Report on Form 8-K
filed October 6, 2014).
Credit Agreement, dated as of April 21, 2016, among Radio One, Inc., the lenders party thereto from time to
time and Wells Fargo Bank National Association, as administrative agent (incorporated by reference to
Exhibit 10.1 to Urban One’s Current Report on Form 8-K filed April 27, 2016).
Extension Agreement attaching to and made a part of Employment Agreement by and between Radio
One, Inc. and Peter D. Thompson (incorporated by reference to Exhibit 10.2 to Urban One’s Current Report
on Form 8-K filed April 27, 2016).
Amended and Restated Urban One 2019 Equity and Performance Incentive Plan (incorporated by reference
to Exhibit A to Proxy Statement dated April 30, 2021).
Subsidiaries of Urban One, Inc.*
Consent of BDO USA, LLP *
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
Certification of Chief Executive Officer pursuant to 18 U.S.C § 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.*
Certification of Chief Financial Officer pursuant to 18 U.S.C § 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.*
Financial information from the Annual Report on Form 10-K for the year ended December 31, 2021,
formatted in Inline XBRL.*
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101
*Indicates document filed herewith.
ITEM 16. FORM 10-K SUMMARY
None.
65
Table of Contents
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on
March 15, 2022.
URBAN ONE, INC.
/s/ Peter D. Thompson
By:
Name:Peter D. Thompson
Title: Chief Financial Officer and Principal Accounting
Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed
below by the following persons on behalf of the registrant in the capacities indicated on March 15, 2022.
/s/ Terry L. Jones
/s/ Catherine L. Hughes
/s/ Alfred C. Liggins, III
By:
Name: Catherine L. Hughes
Title: Chairperson, Director and Secretary
By:
Name: Alfred C. Liggins, III
Title: Chief Executive Officer, President and Director
By:
Name: Terry L. Jones
Title: Director
By:
Name: Brian W. McNeill
Title: Director
By:
Name: B. Doyle Mitchell, Jr.
Title: Director
/s/ B. Doyle Mitchell, Jr.
/s/ Brian W. McNeill
/s/ D. Geoffrey Armstrong
By:
Name: D. Geoffrey Armstrong
Title: Director
66
Table of Contents
Report of Independent Registered Public Accounting Firm
Shareholders and Board of Directors
Urban One, Inc.
Silver Spring, Maryland
Opinion on Internal Control over Financial Reporting
We have audited Urban One, Inc’s (the “Company’s”) internal control over financial reporting as of December 31, 2021,
based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (the “COSO criteria”). In our opinion, the Company maintained, in all
material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (“PCAOB”), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related
consolidated statements of operations, comprehensive income (loss), changes in stockholders’ equity, and cash flows for
each of the years then ended, and the related notes and schedule and our report dated March 15, 2022 expressed an
unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying “Item 9A,
Management’s Report on Internal Control over Financial Reporting”. Our responsibility is to express an opinion on the
Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the
PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit of internal control over financial reporting in accordance with the standards of the PCAOB. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control
over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal
control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other
procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our
opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and
that receipts and expenditures of the company are being made only in accordance with authorizations of management and
directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ BDO USA, LLP
Potomac, Maryland
March 15, 2022
F-1
Table of Contents
Report of Independent Registered Public Accounting Firm
Shareholders and Board of Directors
Urban One, Inc.
Silver Spring, Maryland
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Urban One, Inc. (the “Company”) as of December 31,
2021 and 2020, the related consolidated statements of operations, comprehensive income (loss), changes in stockholders’
equity, and cash flows for each of the years then ended, and the related notes and schedule (collectively referred to as the
“consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material
respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations and its
cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of
America.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (“PCAOB”), the Company's internal control over financial reporting as of December 31, 2021, based on criteria
established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the
Treadway Commission (“COSO”) and our report dated March 15, 2022 expressed an unqualified opinion thereon.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to
express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting
firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the
U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our
audits also included evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable
basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated
financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to
accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially
challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our
opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit
matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they
relate.
Valuation of Radio Broadcasting Licenses
As described in Notes 1, 2 and 4 to the consolidated financial statements, the Company acquired radio broadcasting
licenses valued at approximately $21.1 million in 2021 and had total radio broadcasting licenses of approximately $505.2
million as of December 31, 2021. The Company tests radio broadcasting licenses for impairment annually, on October 1, or
more frequently when events or circumstances or other conditions suggest impairment may have occurred. With the
assistance of a third-party valuation firm, the Company estimates the fair value of radio broadcasting licenses acquired in
business combinations and being tested for impairment using the income approach, which involves but is not limited to,
judgmental
F-2
Table of Contents
estimates and assumptions over projected market share, operating profit margin, long-term revenue growth rates and the
discount rate.
We identified the Company’s estimates of the fair value of radio broadcasting licenses acquired in business combinations
and being tested for impairment as a critical audit matter. The fair value estimates are sensitive to changes in the significant
assumptions such as the projected market share, operating profit margin, long-term market revenue growth rates and the
discount rate. Auditing these assumptions required increased auditor effort including the use of valuation specialists.
The primary procedures we performed to address this critical audit matter included:
● Evaluating the design and testing the operating effectiveness of key controls related to the Company’s valuation
of radio broadcast licenses acquired in business combinations and being tested for impairment including testing
management’s controls over the development of the fair value estimates and related key inputs and assumptions,
and over the evaluation of the competency and objectivity of management's third-party valuation specialist.
● Testing the reasonableness of the projected market share, operating profit margin, long-term market revenue
growth rates and discount rate utilized in the Company's forecasts for selected licenses by comparing to external
industry and market data and to the recent historical results of the Company.
● Utilizing professionals with knowledge and experience in valuation to test the appropriateness of the valuation
model employed by the Company and the discount rate used.
Radio Goodwill Impairment Assessment
As described in Notes 1 and 4 to the consolidated financial statements, the Company’s radio market goodwill balance was
approximately $36.8 million as of December 31, 2021. The Company tests goodwill for impairment annually, on October
1, or more frequently when events or changes in circumstances or other conditions suggest impairment may have occurred.
An impairment exists when the reporting unit’s carrying value exceeds its fair value and the impairment charge is limited to
the amount of goodwill allocated to the reporting unit. The Company estimates the fair value of its reporting units primarily
using an income approach.
We identified the estimates of the fair value of the Company’s radio market reporting units as a critical audit matter. The
fair value estimates are sensitive to changes in the significant assumptions such as the projected market share, operating
profit margin, long-term market revenue growth rates and the discount rate. Auditing these assumptions required increased
auditor effort including the use of valuation specialists.
The primary procedures we performed to address this critical audit matter included:
● Evaluating the design and tested the operating effectiveness of key controls relating to valuation of the
Company’s radio market reporting units performed as part of the Company’s annual impairment test including
testing management’s controls over the development of the fair value estimates and related key inputs and
assumptions, and over the evaluation of the competency and objectivity of management's third-party valuation
specialist.
● Testing the reasonableness of the projected market share, operating profit margin, long-term market revenue
growth rates and the discount rate utilized in the Company's forecasts for selected Radio reporting units by
comparing to external industry and market data and to the recent historical results of the Company.
● Utilizing professionals with knowledge and experience in valuation to test the appropriateness of the valuation
model employed by the Company and the discount rate used.
/s/ BDO USA, LLP
We have served as the Company's auditor since 2016.
Potomac, Maryland
March 15, 2022
F-3
Table of Contents
URBAN ONE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Restricted cash
Trade accounts receivable, net of allowance for doubtful accounts of $8,743 and $7,956, respectively
Prepaid expenses
Current portion of content assets
Other current assets
Total current assets
CONTENT ASSETS, net
PROPERTY AND EQUIPMENT, net
GOODWILL
RIGHT OF USE ASSETS
RADIO BROADCASTING LICENSES
OTHER INTANGIBLE ASSETS, net
DEFERRED TAX ASSETS, net
ASSETS HELD FOR SALE
OTHER ASSETS
Total assets
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’
EQUITY
CURRENT LIABILITIES:
Accounts payable
Accrued interest
Accrued compensation and related benefits
Current portion of content payables
Current portion of lease liabilities
Other current liabilities
Current portion of long-term debt
Total current liabilities
LONG-TERM DEBT, net of current portion, original issue discount and issuance costs
CONTENT PAYABLES, net of current portion
LONG-TERM LEASE LIABILITIES
OTHER LONG-TERM LIABILITIES
DEFERRED TAX LIABILITIES, net
Total liabilities
COMMITMENTS AND CONTINGENCIES
REDEEMABLE NONCONTROLLING INTERESTS
STOCKHOLDERS’ EQUITY:
Convertible preferred stock, $.001 par value, 1,000,000 shares authorized; no shares outstanding at
December 31, 2021 and December 31, 2020
Common stock — Class A, $.001 par value, 30,000,000 shares authorized; 9,104,916 and 4,441,635 shares
issued and outstanding as of December 31, 2021 and December 31, 2020, respectively
Common stock — Class B, $.001 par value, 150,000,000 shares authorized; 2,861,843 shares issued and
outstanding as of December 31, 2021 and December 31, 2020
Common stock — Class C, $.001 par value, 150,000,000 shares authorized; 2,045,016 and 2,928,906 shares
issued and outstanding as of December 31, 2021 and December 31, 2020, respectively
Common stock — Class D, $.001 par value, 150,000,000 shares authorized; 37,324,737 and 37,515,801
shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively
Additional paid-in capital
Accumulated deficit
Total stockholders’ equity
Total liabilities, redeemable noncontrolling interests and stockholders’ equity
As of
December 31, 2021 December 31, 2020
(In thousands, except share data)
$
$
$
$
$
$
$
132,245
19,973
127,446
2,967
25,883
4,760
313,274
60,155
26,291
223,402
38,044
505,148
50,159
—
—
44,635
1,261,108
14,588
25,458
10,960
18,972
10,072
26,421
—
106,471
818,616
2,865
31,228
28,320
2,473
989,973
17,015
—
9
3
2
73,385
473
106,296
10,154
28,434
4,224
222,966
63,175
19,192
223,402
40,918
484,066
56,053
10,041
32,661
43,013
1,195,487
11,135
8,017
12,302
16,248
8,928
26,917
23,362
106,909
818,924
9,479
36,577
23,999
—
995,888
12,701
—
4
3
3
37
1,020,636
(766,567)
254,120
1,261,108
$
38
991,769
(804,919)
186,898
1,195,487
The accompanying notes are an integral part of these consolidated financial statements.
F-4
Table of Contents
URBAN ONE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
NET REVENUE
OPERATING EXPENSES:
Programming and technical including stock-based compensation of $20 and $20, respectively
Selling, general and administrative, including stock-based compensation of $31 and $413, respectively
Corporate selling, general and administrative, including stock-based compensation of $514 and $1,861,
respectively
Depreciation and amortization
Impairment of long-lived assets
Total operating expenses
Operating income
INTEREST INCOME
INTEREST EXPENSE
LOSS ON RETIREMENT OF DEBT
OTHER INCOME, net
Income (loss) before provision for (benefit from) income taxes and noncontrolling interests in income of
subsidiaries
PROVISION FOR (BENEFIT FROM) INCOME TAXES
CONSOLIDATED NET INCOME (LOSS)
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
CONSOLIDATED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS
BASIC NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS
Net income (loss) attributable to common stockholders
DILUTED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS
Net income (loss) attributable to common stockholders
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic
Diluted
Year Ended December 31,
2020
2021
(In thousands, except share data)
$
441,462
$
376,337
119,092
143,187
51,351
9,289
—
322,919
118,543
218
65,702
6,949
(8,134)
54,244
13,577
40,667
2,315
38,352
0.76
0.71
$
$
$
103,833
109,046
37,721
9,741
84,400
344,741
31,596
213
74,507
2,894
(4,547)
(41,045)
(34,476)
(6,569)
1,544
(8,113)
(0.18)
(0.18)
50,163,600
54,136,641
45,041,467
45,041,467
$
$
$
The accompanying notes are an integral part of these consolidated financial statements.
F-5
Table of Contents
URBAN ONE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
COMPREHENSIVE INCOME (LOSS)
LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS
$
$
40,667
2,315
38,352
$
$
(6,569)
1,544
(8,113)
The accompanying notes are an integral part of these consolidated financial statements.
Year Ended December 31,
2021
2020
(In thousands)
F-6
Table of Contents
URBAN ONE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
For The Years Ended December 31, 2020 and 2021
Convertible Common Common Common Common Additional
Preferred
Stock
Stock
Class A
Stock
Class B
Stock
Class C
Stock
Class D
Paid-In
Capital
Accumulated
Deficit
Total
Equity
BALANCE, as of December 31, 2019
$
— $
2
$
3
(In thousands, except share data)
$
39
3
$
$ 979,834
$
(796,806)
$ 183,075
Consolidated net loss
—
—
—
—
—
—
(8,113)
(8,113)
Stock-based compensation expense
—
—
—
—
—
2,294
—
2,294
Issuance of 2,859,276 shares of Class A
common stock
Repurchase of 3,919,280 shares of Class D
common stock
Exercise of options for 1,032,922 shares of
common stock
Adjustment of redeemable noncontrolling
interests to estimated redemption value
—
2
—
—
—
14,671
—
14,673
—
—
—
—
(3)
(3,609)
—
(3,612)
—
—
—
—
2
1,974
—
1,976
—
—
—
—
—
(3,395)
—
(3,395)
BALANCE, as of December 31, 2020
$
— $
4
$
3
$
3
$
38
$ 991,769
$
(804,919)
$ 186,898
Consolidated net income
—
—
—
—
—
—
38,352
38,352
Stock-based compensation expense
—
—
—
—
—
565
—
565
Repurchase of 521,877 shares of Class D
common stock
Issuance of 3,779,391 shares of Class A
common stock
Exercise of options for 229,756 shares of
common stock
Conversion of 883,890 shares of Class C
common stock to 883,890 shares of Class A
common stock
Adjustment of redeemable noncontrolling
interests to estimated redemption value
—
—
—
—
(1)
(969)
—
(970)
—
4
—
—
—
33,273
—
33,277
—
—
—
—
—
397
—
397
—
1
—
(1)
—
—
—
—
—
—
—
—
—
(4,399)
—
(4,399)
BALANCE, as of December 31, 2021
$
— $
9
$
3
$
2
$
37
$1,020,636
$
(766,567)
$ 254,120
The accompanying notes are an integral part of these consolidated financial statements.
F-7
Table of Contents
URBAN ONE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net income (loss)
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation and amortization
Amortization of debt financing costs
Amortization of content assets
Amortization of launch assets
Bad debt expense
Deferred income taxes
Amortization of right of use assets
Non-cash lease liability expense
Non-cash interest expense
Impairment of long-lived assets
Stock-based compensation
Non-cash fair value adjustment of Employment Agreement Award
Loss on retirement of debt
Gain on asset exchange agreement
Effect of change in operating assets and liabilities, net of assets acquired:
Trade accounts receivable
Prepaid expenses and other current assets
Other assets
Accounts payable
Accrued interest
Accrued compensation and related benefits
Other liabilities
Payments for content assets
Net cash flows provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment
Proceeds from sale of broadcasting assets
Proceeds from sale of property and equipment
Acquisition of broadcasting assets
Net cash flows provided by (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of 2017 credit facility
Proceeds from issuance of Class A common stock, net of fees
Proceeds of MGM National Harbor Loan
Repayment of 2018 credit facility
Proceeds from exercise of stock options
Payment of dividends to noncontrolling interest members of Reach Media
Repurchase of common stock
Proceeds from 2028 Notes
Proceeds from PPP Loan
Debt refinancing costs
Repayment of MGM National Harbor Loan
Repayment of 7.375% Notes
Repayment of 8.75% Notes
Net cash flows used in financing activities
INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for:
Interest
Income taxes, net of refunds
NON-CASH OPERATING, FINANCING AND INVESTING ACTIVITIES:
Assets acquired under Audacy asset exchange
Liabilities recognized under Audacy asset exchange
Right of use asset and lease liability additions
Adjustment of redeemable noncontrolling interests to estimated redemption value
2021
Year Ended
December 31,
(In thousands)
2020
$
40,667
$
9,289
2,267
47,126
1,600
1,584
12,514
7,793
4,684
158
—
565
6,163
6,949
404
(22,734)
6,651
(13,745)
3,453
17,441
(1,342)
(5,892)
(45,445)
80,150
(6,286)
8,000
—
—
1,714
(317,332)
33,277
—
(129,935)
397
(2,400)
(970)
825,000
7,505
(11,157)
(57,889)
(2,984)
(347,016)
(3,504)
78,360
73,858
152,218
45,836
1,142
28,193
2,669
6,392
4,399
$
$
$
$
$
$
$
$
$
$
$
$
$
$
(6,569)
9,741
4,465
37,394
1,079
1,394
(34,601)
7,940
5,492
2,191
84,400
2,294
2,271
—
—
(1,542)
(255)
(9,846)
5,216
(1,077)
1,399
(5,378)
(32,141)
73,867
(3,798)
—
860
(475)
(3,413)
(3,297)
14,673
3,600
(37,210)
1,976
(2,802)
(3,612)
—
—
(3,470)
—
—
—
(30,142)
40,312
33,546
73,858
68,927
115
—
—
6,660
3,395
The accompanying notes are an integral part of these consolidated financial statements.
F-8
Table of Contents
URBAN ONE, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2021 and 2020
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
(a) Organization
Urban One, Inc., a Delaware corporation, and its subsidiaries, (collectively, “Urban One,” the “Company”, “we”, “our”
and/or “us”) is an urban-oriented, multi-media company that primarily targets African-American and urban consumers. Our
core business is our radio broadcasting franchise which is the largest radio broadcasting operation that primarily targets
African-American and urban listeners. As of December 31, 2021, we owned and/or operated 64 independently formatted,
revenue producing broadcast stations (including 54 FM or AM stations, 8 HD stations, and the 2 low power television
stations we operate) located in 13 of the most populous African-American markets in the United States. While a core
source of our revenue has historically been and remains the sale of local and national advertising for broadcast on our radio
stations, our strategy is to operate the premier multi-media entertainment and information content platform targeting
African-American and urban consumers. Thus, we have diversified our revenue streams by making acquisitions and
investments in other complementary media properties. Our diverse media and entertainment interests include TV One,
LLC (“TV One”), which operates two cable television networks targeting African-American and urban viewers, TV One
and CLEO TV; our 80.0% ownership interest in Reach Media, Inc. (“Reach Media”) which operates the Rickey Smiley
Morning Show and our other syndicated programming assets, including the Get Up! Mornings with Erica Campbell Show,
Russ Parr Morning Show and the DL Hughley Show; and Interactive One, LLC (“Interactive One”), our wholly owned
digital platform serving the African-American community through social content, news, information, and entertainment
websites, including its Cassius and Bossip, HipHopWired and MadameNoire digital platforms and brands. We also hold a
minority ownership interest in MGM National Harbor, a gaming resort located in Prince George’s County, Maryland.
Through our national multi-media operations, we provide advertisers with a unique and powerful delivery mechanism to
communicate with African-American and urban audiences.
On January 19, 2019, the Company launched CLEO TV, a lifestyle and entertainment network targeting Millennial and
Gen X women of color. CLEO TV offers quality content that defies negative and cultural stereotypes of today's modern
women. The results of CLEO TV's operations are reflected in the Company's cable television segment.
Our core radio broadcasting franchise operates under the brand “Radio One.” We also operate other brands, such as
TV One, CLEO TV, Reach Media and Interactive One, while developing additional branding reflective of our diverse
media operations and our targeting of African-American and urban audiences.
As part of our consolidated financial statements, consistent with our financial reporting structure and how the
Company currently manages its businesses, we have provided selected financial information on the Company’s four
reportable segments: (i) radio broadcasting; (ii) Reach Media; (iii) digital; and (iv) cable television. (See Note 15 –
Segment Information.)
(b) Basis of Presentation
The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the
United States of America (“GAAP”) and require management to make certain estimates and assumptions. These estimates
and assumptions may affect the reported amounts of assets and liabilities and the disclosure of contingent assets and
liabilities as of the date of the financial statements. The Company bases these estimates on historical experience, current
economic environment or various other assumptions that are believed to be reasonable under the circumstances. However,
continuing economic uncertainty and any disruption in financial markets increase the possibility that actual results may
differ from these estimates.
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(c) Principles of Consolidation
The consolidated financial statements include the accounts and operations of Urban One and subsidiaries in which
Urban One has a controlling financial interest, which is generally determined when the Company holds a majority voting
interest. All significant intercompany accounts and transactions have been eliminated in consolidation. Noncontrolling
interests have been recognized where a controlling interest exists, but the Company owns less than 100% of the controlled
entity.
(d) Cash and Cash Equivalents and Restricted Cash
Cash and cash equivalents consist of cash and money market funds at various commercial banks that have original
maturities of 90 days or less. Investments with contractual maturities of 90 days or less from the date of original purchase
are classified as cash and cash equivalents. For cash and cash equivalents, cost approximates fair value. The Company’s
cash and cash equivalents are insured by the Federal Deposit Insurance Corporation up to $250,000 per account. The
Company has amounts held with banks that may exceed the amount of insurance provided on such accounts. Generally, the
balances may be redeemed upon demand and are maintained with financial institutions of reputable credit, and therefore,
bear minimal credit risk.
On July 29, 2021, RVA Entertainment Holdings, LLC (“RVAEH”), a wholly owned unrestricted subsidiary of the
Company, entered into a Host Community Agreement (the “Original HCA”) with the City of Richmond (the “City”) for the
development of the ONE Casino + Resort (the “Project”). The Original HCA imposed certain obligations on RVAEH in
connection with the development of the Project, including a $26 million upfront payment (the “Upfront Payment”) due
upon successful passage of a citywide referendum permitting development of the Project (the “Referendum”). In
connection with the Original HCA, RVAEH and its development partner Pacific Peninsula Entertainment funded the
Upfront Payment into escrow to be released to the City upon successful passage of the Referendum or back to RVAEH in
the event the Referendum failed. On November 2, 2021, the Referendum was conducted, and the resort project was
narrowly defeated. However, on January 24, 2022, the Richmond City Council adopted a new resolution in continued
efforts to bring the Project to the City. The new resolution was the first step in pursuit of a second referendum. The City
and RVAEH then entered into a new Host Community Agreement (the “New HCA”) which also included an Upfront
Payment to be held in escrow and payable upon successful passage of a citywide referendum permitting development of
the Project. Upon obtaining precertification for RVAEH, by the Virginia Lottery Board, the City will then pursue an order
from the Circuit Court for the City ordering a second referendum. If the City is successful in obtaining the precertification
and the Court orders a second referendum, it is currently anticipated the second referendum would occur in November
2022. If the voters approve the referendum then the Commonwealth may issue one license permitting operation of a casino
in Richmond. As a result of the efforts to obtain a second referendum, including execution of the New HCA, the Upfront
Payment remains in escrow. Therefore, the Company’s portion of the Upfront Payment, approximately $19.5 million is
classified as restricted cash on the balance sheet as of December 31, 2021.
(e) Trade Accounts Receivable
Trade accounts receivable are recorded at the invoiced amount. The allowance for doubtful accounts is the Company’s
estimate of the amount of probable losses in the Company’s existing accounts receivable portfolio. The Company
determines the allowance based on the aging of the receivables, the impact of economic conditions on the advertisers’
ability to pay and other factors. Inactive delinquent accounts that are past due beyond a certain amount of days are written
off and often pursued by other collection efforts. Bankruptcy accounts are immediately written off upon receipt of the
bankruptcy notice from the courts.
(f) Goodwill and Indefinite-Lived Intangible Assets (Primarily Radio Broadcasting Licenses)
In connection with past acquisitions, a significant amount of the purchase price was allocated to radio broadcasting
licenses, goodwill and other intangible assets. Goodwill consists of the excess of the purchase price over the fair value of
tangible and identifiable intangible net assets acquired. In accordance with Accounting Standards Codification (“ASC”)
350, “Intangibles - Goodwill and Other,” goodwill and other indefinite-lived intangible assets are not amortized, but are
tested annually for impairment at the reporting unit level and unit of accounting level, respectively. We test for impairment
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annually, on October 1 of each year, or more frequently when events or changes in circumstances or other conditions
suggest impairment may have occurred. Radio broadcasting license impairment exists when the asset carrying values
exceed their respective fair values, and the excess is then recorded to operations as an impairment charge. With the
assistance of a third-party valuation firm, we test for radio broadcasting license impairment at the unit of accounting level
using the income approach, which involves, but is not limited to, judgmental estimates and assumptions about projected
revenue growth, future operating margins, discount rates and terminal values. In testing for goodwill impairment, we also
rely primarily on the income approach that estimates the fair value of the reporting unit. We then perform a market-based
analysis by comparing the average implied multiple arrived at based on our cash flow projections and estimated fair values
to multiples for actual recently completed sale transactions and by comparing the total of the estimated fair values of our
reporting units to the market capitalization of the Company. We recognize an impairment charge to operations in the
amount that the reporting unit’s carrying value exceeds its fair value. The impairment charge recognized cannot exceed the
total amount of goodwill allocated to the reporting unit.
(g) Impairment of Long-Lived Assets and Intangible Assets, Excluding Goodwill and Indefinite-Lived Intangible Assets
The Company accounts for the impairment of long-lived assets and intangible assets, excluding goodwill and other
indefinite-lived intangible assets, in accordance with ASC 360, “Property, Plant and Equipment.” Long-lived assets,
excluding goodwill and other indefinite-lived intangible assets, are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset or group of assets may not be fully recoverable. These events or
changes in circumstances may include a significant deterioration in operating results, changes in business plans, or changes
in anticipated future cash flows. If an impairment indicator is present, the Company evaluates recoverability by a
comparison of the carrying amount of the asset or group of assets to future undiscounted net cash flows expected to be
generated by the asset or group of assets. Assets are grouped at the lowest levels for which there are identifiable cash flows
that are largely independent of the cash flows generated by other asset groups. If the assets are impaired, the impairment
recognized is measured by the amount by which the carrying amount exceeds the fair value of the asset or group of assets.
Fair value is generally determined by estimates of discounted future cash flows. The discount rate used in any estimate of
discounted cash flows would be the rate of return for a similar investment of like risk. The Company reviewed these long-
lived assets during 2021 and 2020 and concluded that no impairment to the carrying value of these assets was required.
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(h) Financial Instruments
Financial instruments as of December 31, 2021 and December 31, 2020, consisted of cash and cash equivalents,
restricted cash, trade accounts receivable, asset-backed credit facility, long-term debt and redeemable noncontrolling
interests. The carrying amounts approximated fair value for each of these financial instruments as of December 31, 2021
and December 31, 2020, except for the Company’s long-term debt. On June 1, 2021, the Company borrowed
approximately $7.5 million on a new PPP loan (as defined in Note 9 – Long-Term Debt). The PPP Loan had a carrying
value of approximately $7.5 million and fair value of approximately $7.5 million as of December 31, 2021. The fair value
of the PPP Loan, classified as a Level 2 instrument, was determined based on the fair value of a similar instrument as of the
reporting date using updated interest rate information derived from changes in interest rates since inception to the reporting
date. On January 25, 2021, the Company borrowed $825 million in aggregate principal amount of senior secured notes due
February 2028 (the “2028 Notes”). The 7.375% 2028 Notes had a carrying value of approximately $825.0 million and fair
value of approximately $851.8 million as of December 31, 2021. The fair values of the 2028 Notes, classified as Level 2
instruments, were determined based on the trading values of these instruments in an inactive market as of the reporting
date. The Company used the net proceeds from the 2028 Notes, together with cash on hand, to repay or redeem: (1) the
2017 Credit Facility; (2) the 2018 Credit Facility; (3) the MGM National Harbor Loan; (4) the remaining amounts of our
7.375% Notes; and (5) our 8.75% Notes that were issued in the November 2020 Exchange Offer (all as defined below).
Upon settlement of the 2028 Notes Offering, the 2017 Credit Facility, the 2018 Credit Facility and the MGM National
Harbor Loan were terminated and the indentures governing the 7.375% Notes and the 8.75% Notes were satisfied and
discharged. The 7.375% Senior Secured Notes that are due in April 2022 (the “7.375% Notes”) had a carrying value of
approximately $3.0 million and fair value of approximately $2.8 million as of December 31, 2020. The fair values of the
7.375% Notes, classified as Level 2 instruments, were determined based on the trading values of these instruments in an
inactive market as of the reporting date. On April 18, 2017, the Company closed on a $350.0 million senior secured credit
facility (the “2017 Credit Facility”) which had a carrying value of approximately $317.3 million and fair value of
approximately $293.5 million as of December 31, 2020. The fair value of the 2017 Credit Facility, classified as a Level 2
instrument, was determined based on the trading values of this instrument in an inactive market as of the reporting date. On
December 20, 2018, the Company closed on a $192.0 million unsecured credit facility (the “2018 Credit Facility”) which
had a carrying value of approximately $129.9 million and fair value of approximately $132.5 million as of December 31,
2020. The fair value of the 2018 Credit Facility, classified as a Level 2 instrument, was determined based on the trading
values of this instrument in an inactive market as of the reporting date. On December 20, 2018, the Company also closed
on a $50.0 million secured credit loan (the “MGM National Harbor Loan”) which had a carrying value of approximately
$57.9 million and fair value of approximately $64.8 million as of December 31, 2020. The fair value of the 2018 MGM
National Harbor Loan, classified as a Level 2 instrument, was determined based on the trading values of this instrument in
an inactive market as of the reporting date. On November 9, 2020, we completed an exchange (the “November 2020
Exchange Offer”) of 99.15% of our outstanding 7.375% Notes for $347.0 million aggregate principal amount of newly
issued 8.75% Senior Secured Notes due December 2022 (the “8.75% Notes”). As of December 31, 2020, the 8.75% Notes
had a carrying value of approximately $347.0 million and fair value of approximately $338.0 million. There was no
balance outstanding on the Company’s asset-backed credit facility as of December 31, 2021 and December 31, 2020.
(i) Revenue Recognition
In accordance with Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers,” the
Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects
the consideration to which it expects to be entitled in exchange for those goods or services. In general, our spot advertising
(both radio and cable television) as well as our digital advertising continues to be recognized when aired and delivered. For
our cable television affiliate revenue, the Company grants a license to the affiliate to access its television programming
content through the license period, and the Company earns a usage based royalty when the usage occurs, consistent with
our previous revenue recognition policy. Finally, for event advertising, the performance obligation is satisfied at a point in
time when the activity associated with the event is completed.
Within our radio broadcasting and Reach Media segments, the Company recognizes revenue for broadcast advertising
at a point in time when a commercial spot runs. The revenue is reported net of agency and outside sales representative
commissions. Agency and outside sales representative commissions are calculated based on a stated percentage applied to
gross billing. Generally, clients remit the gross billing amount to the agency or outside sales representative, and the agency
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or outside sales representative remits the gross billing, less their commission, to the Company. For our radio broadcasting
and Reach Media segments, agency and outside sales representative commissions were approximately $16.7 million and
$17.5 million for the years ended December 31, 2021 and 2020, respectively.
Within our digital segment, including Interactive One, which generates the majority of the Company’s digital revenue,
revenue is principally derived from advertising services on non-radio station branded but Company-owned websites.
Advertising services include the sale of banner and sponsorship advertisements. Advertising revenue is recognized at a
point in time either as impressions (the number of times advertisements appear in viewed pages) are delivered or when
“click through” purchases are made, where applicable. In addition, Interactive One derives revenue from its studio
operations, in which it provides third-party clients with publishing services including digital platforms and related
expertise. In the case of the studio operations, revenue is recognized primarily through fixed contractual monthly fees
and/or as a share of the third party’s reported revenue.
Our cable television segment derives advertising revenue from the sale of television air time to advertisers and
recognizes revenue when the advertisements are run. Advertising revenue is recognized at a point in time when the
individual spots run. To the extent there is a shortfall in contracts where the ratings were guaranteed, a portion of the
revenue is deferred until the shortfall is settled, typically by providing additional advertising units generally within
one year of the original airing. Our cable television segment also derives revenue from affiliate fees under the terms of
various multi-year affiliation agreements based on a per subscriber fee multiplied by the most recent subscriber counts
reported by the applicable affiliate. The Company recognizes the affiliate fee revenue at a point in time as its performance
obligation to provide the programming is met. The Company has a right of payment each month as the programming
services and related obligations have been satisfied. For our cable television segment, agency and outside sales
representative commissions were approximately $16.9 million and $14.6 million for the years ended December 31, 2021
and 2020, respectively.
Revenue by Contract Type
The following chart shows our net revenue (and sources) for the years ended December 31, 2021 and 2020:
Net Revenue:
Radio Advertising
Political Advertising
Digital Advertising
Cable Television Advertising
Cable Television Affiliate Fees
Event Revenues & Other
Net Revenue (as reported)
F-13
Year Ended December 31,
2020
2021
$
$
165,244
3,494
59,812
95,589
102,380
14,943
441,462
$
$
137,849
22,484
34,131
79,732
99,489
2,652
376,337
Table of Contents
Contract assets and liabilities
Contract assets (unbilled receivables) and contract liabilities (customer advances and unearned income, reserve for
audience deficiency and unearned event income) that are not separately stated in our consolidated balance sheets at
December 31, 2021 and 2020 were as follows:
Contract assets:
Unbilled receivables
Contract liabilities:
Customer advances and unearned income
Reserve for audience deficiency
Unearned event income
December 31, 2021 December 31, 2020
(In thousands)
$
$
10,735
7,494
6,020
$
$
—
5,798
4,955
3,544
5,921
Unbilled receivables consists of earned revenue on behalf of customers that have not yet been billed and are included
in accounts receivable on the consolidated balance sheets. Customer advances and unearned income represents advance
payments by customers for future services under contract that are generally incurred in the near term and are included in
other current liabilities on the consolidated balance sheets. The reserve for audience deficiency represents the portion of
revenue that is deferred until the shortfall in contracts where the ratings were guaranteed is settled, typically by providing
additional advertising units generally within one year of the original airing. Unearned event income represents payments by
customers for upcoming events.
For customer advances and unearned income as of January 1, 2021, approximately $3.0 million was recognized as
revenue during the year ended December 31, 2021. For unearned event income as of January 1, 2021, approximately $5.9
million was recognized during the year ended December 31, 2021 as the event took place during the fourth quarter of 2021.
For customer advances and unearned income as of January 1, 2020, approximately $2.3 million was recognized as revenue
during the year ended December 31, 2020. For unearned event income as of January 1, 2020, there was no revenue
recognized during the year ended December 31, 2020.
Practical expedients and exemptions
We generally expense sales commissions when incurred because the amortization period would have been one year or
less. These costs are recorded within selling, general and administrative expenses.
We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length
of one year or less or (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for
services performed.
(j) Launch Support
The cable television segment has entered into certain affiliate agreements requiring various payments for launch
support. Launch support assets are used to initiate carriage under affiliation agreements and are amortized over the term of
the respective contracts. For the year ended December 31, 2021, the Company did not pay any launch support for carriage
initiation, however during the year ended December 31, 2020, there was a non-cash launch support addition of
approximately $1.7 million for carriage initiation. The weighted-average amortization period for launch support was
approximately 7.1 years as of December 31, 2021, and approximately 7.4 years as of December 31, 2020. The remaining
weighted-average amortization period for launch support was 3.3 years and 4.5 years as of December 31, 2021 and
December 31, 2020, respectively. Amortization is recorded as a reduction to revenue to the extent that revenue is
recognized from the vendor, and any excess amortization is recorded as launch support amortization expense. For the years
ended December 31, 2021 and 2020, launch support asset amortization of $422,000 and $422,000, respectively, was
recorded as a reduction of revenue, and approximately $1.2 million and $664,000, respectively, was recorded as an
operating expense in selling, general and administrative expenses. Launch assets are included in other intangible assets on
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Table of Contents
the consolidated balance sheets, except for the portion of the unamortized balance that is expected to be amortized within
one year which is included in other current assets.
The gross value and accumulated amortization of the launch assets is as follows:
Launch assets
Less: Accumulated amortization
Launch assets, net
As of December 31,
2021
2020
(In thousands)
$
$
9,021
(4,724)
4,297
$
$
9,021
(3,124)
5,897
Future estimated launch support amortization expense or revenue reduction related to launch assets for years 2022
through 2026 is as follows:
2022
2023
2024
2025
2026
(k) Barter Transactions
(In thousands)
1,424
1,424
936
358
155
$
$
$
$
$
For barter transactions, the Company provides broadcast advertising time in exchange for programming content and
certain services. The Company includes the value of such exchanges in both broadcasting net revenue and station operating
expenses. The valuation of barter time is based upon the fair value of the network advertising time provided for the
programming content and services received. For the years ended December 31, 2021 and 2020, barter transaction revenues
were approximately $1.8 million and $2.1 million, respectively. Additionally, for the years ended December 31, 2021 and
2020, barter transaction costs were reflected in programming and technical expenses of approximately $1.2 million and
$1.5 million, respectively, and selling, general and administrative expenses of $606,000 and $570,000, respectively.
(l) Advertising and Promotions
The Company expenses advertising and promotional costs as incurred. Total advertising and promotional expenses for
the years ended December 31, 2021 and 2020, were approximately $24.7 million and $15.5 million, respectively.
(m) Income Taxes
The Company accounts for income taxes in accordance with ASC 740, “Income Taxes” (“ASC 740”). Under ASC
740, deferred tax assets or liabilities are computed based upon the difference between financial statement and income tax
bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
The effect of a change in tax rates on deferred tax assets and liabilities is recognized into income in the period of
enactment. Deferred income tax expense or benefits are based upon the changes in the net deferred tax asset or liability
from period to period.
The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to
be realized. In making such a determination, management considers all available positive and negative evidence, including
future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and
results of recent operations. If management determines that the Company would be able to realize its deferred tax assets in
the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset
valuation allowance, which would reduce the provision for income taxes. Conversely, if management determines that the
Company would not be able to realize the recorded amount of deferred tax assets in the future, the Company would make
an adjustment to the deferred tax asset valuation allowance, which would increase the provision for income taxes.
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Table of Contents
The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which
(1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical
merits of the position and (2) for those tax positions that meet the more likely than not recognition threshold, the Company
recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with
the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits on the income
tax expense line in the accompanying consolidated statements of operations. Accrued interest and penalties are included in
other current liabilities on the consolidated balance sheets.
(n) Stock-Based Compensation
The Company accounts for stock-based compensation for stock options and restricted stock grants in accordance with
ASC 718, “Compensation - Stock Compensation.” Under the provisions of ASC 718, stock-based compensation cost for
stock options is estimated at the grant date based on the award’s fair value as calculated by the Black-Scholes valuation
option-pricing model (“BSM”) and is recognized as expense ratably over the requisite service period. The BSM
incorporates various highly subjective assumptions including expected stock price volatility, for which historical data is
heavily relied upon, expected life of options granted, forfeiture rates and interest rates. Compensation expense for restricted
stock grants is measured based on the fair value on the date of grant less estimated forfeitures. Compensation expense for
restricted stock grants is recognized ratably during the vesting period. The fair value measurement objective for liabilities
incurred in a share-based payment transaction is the same as for equity instruments. Awards classified as liabilities are
subsequently remeasured to their fair values at the end of each reporting period until the liability is settled. (See Note 8 –
Employment Agreement Award and Note 11 – Stockholders’ Equity.)
(o) Segment Reporting and Major Customers
In accordance with ASC 280, “Segment Reporting” and given its diversification strategy, the Company has determined
it has four reportable segments: (i) radio broadcasting; (ii) Reach Media; (iii) digital; and (iv) cable television. These four
segments operate in the United States and are consistently aligned with the Company’s management of its businesses and
its financial reporting structure.
The radio broadcasting segment consists of all broadcast results of operations. The Reach Media segment consists of
the results of operations for the related activities and operations of our syndicated shows. The digital segment includes the
results of our online business, including the operations of Interactive One, as well as the digital components of our other
reportable segments. The cable television segment consists of the Company’s cable TV operation, including TV One’s and
CLEO TV's results of operations. Corporate/Eliminations represents financial activity associated with our corporate staff
and offices and intercompany activity among the four segments.
No single customer accounted for over 10% of our consolidated net revenues or accounts receivable during either of
the years ended December 31, 2021 or 2020.
(p) Earnings Per Share
Basic earnings per share is computed on the basis of the weighted average number of shares of common stock (Classes
A, B, C and D) outstanding during the period. Diluted earnings per share is computed on the basis of the weighted average
number of shares of common stock plus the effect of potential dilutive common shares outstanding during the period using
the treasury stock method.
The Company’s potentially dilutive securities include stock options and unvested restricted stock. Diluted earnings per
share considers the impact of potentially dilutive securities except in periods in which there is a net loss, as the inclusion of
the potentially dilutive common shares would have an anti-dilutive effect.
In each of the years ended December 31, 2021 and 2020, the amount of earnings per share would pertain to each of
our classes of common stock (Classes A, B, C and D) because the holders of each class are entitled to equal per share
dividends or distributions in liquidation in accordance with the Company’s Amended and Restated Certificate of
Incorporation.
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The following table sets forth the calculation of basic and diluted earnings per share from continuing operations (in
thousands, except share and per share data):
Year Ended December 31,
2020
2021
(Unaudited)
(In Thousands)
Numerator:
Net income (loss) attributable to common stockholders
$
38,352
$
(8,113)
Denominator:
Denominator for basic net income (loss) per share - weighted average outstanding shares
Effect of dilutive securities:
Stock options and restricted stock
Denominator for diluted net income (loss) per share - weighted-average outstanding
shares
50,163,600
45,041,467
3,973,041
—
54,136,641
45,041,467
Net income (loss) attributable to common stockholders per share – basic
Net income (loss) attributable to common stockholders per share –diluted
$
$
0.76
0.71
$
$
(0.18)
(0.18)
All stock options and restricted stock awards were excluded from the diluted calculation for the year ended December
31, 2020, as their inclusion would have been anti-dilutive. The following table summarizes the potential common shares
excluded from the diluted calculation.
Stock options
Restricted stock awards
(q) Fair Value Measurements
Year Ended
December 31, 2020
(In thousands)
4,019
1,879
We report our financial and non-financial assets and liabilities measured at fair value on a recurring and non-recurring
basis under the provisions of ASC 820, “Fair Value Measurements and Disclosures.” ASC 820 defines fair value,
establishes a framework for measuring fair value and expands disclosures about fair value measurements.
The fair value framework requires the categorization of assets and liabilities into three levels based upon the
assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas
Level 3 generally requires significant management judgment. The three levels are defined as follows:
Level 1: Inputs are unadjusted quoted prices in active markets for identical assets and liabilities that can be
accessed at the measurement date.
Level 2: Observable inputs other than those included in Level 1 (i.e., quoted prices for similar assets or liabilities
in active markets or quoted prices for identical assets or liabilities in inactive markets).
Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset
or liability.
A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant
to the fair value instrument.
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As of December 31, 2021, and December 31, 2020, respectively, the fair values of our financial assets and liabilities
measured at fair value on a recurring basis are categorized as follows:
As of December 31, 2021
Liabilities subject to fair value measurement:
Employment agreement award (a)
Total
Total
Level 1
Level 2
Level 3
(In thousands)
$
$
28,193
28,193
$
—
— $
— $
— $
28,193
28,193
Mezzanine equity subject to fair value measurement:
Redeemable noncontrolling interests (b)
$
17,015
$
— $
— $
17,015
As of December 31, 2020
Liabilities subject to fair value measurement:
Contingent consideration (c)
Employment agreement award (a)
Total
$
$
780
25,603
26,383
$
—
—
— $
— $
—
— $
780
25,603
26,383
Mezzanine equity subject to fair value measurement:
Redeemable noncontrolling interests (b)
$
12,701
$
— $
— $
12,701
(a) Each quarter, pursuant to an employment agreement (the “Employment Agreement”) executed in April 2008, the Chief
Executive Officer (“CEO”) is eligible to receive an award (the “Employment Agreement Award”) amount equal to
approximately 4% of any proceeds from distributions or other liquidity events in excess of the return of the
Company’s aggregate investment in TV One. The Company reviews the factors underlying this award at the end of
each quarter including the valuation of TV One (based on the estimated enterprise fair value of TV One as determined
by a discounted cash flow analysis). The Company’s obligation to pay the award was triggered after the Company
recovered the aggregate amount of capital contributions in TV One, and payment is required only upon actual receipt
of distributions of cash or marketable securities or proceeds from a liquidity event with respect to such invested
amount. The long-term portion of the award is recorded in other long-term liabilities and the current portion is
recorded in other current liabilities in the consolidated balance sheets. The CEO was fully vested in the award upon
execution of the Employment Agreement, and the award lapses if the CEO voluntarily leaves the Company or is
terminated for cause. A third-party valuation firm assisted the Company in estimating TV One’s fair value using a
discounted cash flow analysis. Significant inputs to the discounted cash flow analysis include forecasted operating
results, discount rate and a terminal value. In September 2014, the Compensation Committee of the Board of Directors
of the Company approved terms for a new employment agreement with the CEO, including a renewal of the
Employment Agreement Award upon similar terms as in the prior Employment Agreement.
(b) The redeemable noncontrolling interest in Reach Media is measured at fair value using a discounted cash flow
methodology. A third-party valuation firm assisted the Company in estimating the fair value. Significant inputs to the
discounted cash flow analysis include forecasted operating results, discount rate and a terminal value.
(c) This balance is measured based on the income approach to valuation in the form of a Monte Carlo simulation. The
Monte Carlo simulation method is suited to instances such as this where there is non-diversifiable risk. It is also well-
suited to multi-year, path dependent scenarios. Significant inputs to the Monte Carlo method include forecasted net
revenues, discount rate and expected volatility. A third-party valuation firm assisted the Company in estimating the
contingent consideration.
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There were no transfers in or out of Level 1, 2, or 3 during the years ended December 31, 2021 and 2020. The
following table presents the changes in Level 3 liabilities measured at fair value on a recurring basis for the years ended
December 31, 2021 and 2020:
Balance at December 31, 2019
Net income attributable to redeemable noncontrolling interests
Dividends paid to redeemable noncontrolling interests
Distribution
Change in fair value
Balance at December 31, 2020
Net income attributable to redeemable noncontrolling interests
Dividends paid to redeemable noncontrolling interests
Distribution
Change in fair value
Balance at December 31, 2021
The amount of total income (losses) for the period included in earnings
attributable to the change in unrealized losses relating to assets and
liabilities still held at December 31, 2021
The amount of total income (losses) for the period included in earnings
attributable to the change in unrealized losses relating to assets and
liabilities still held at December 31, 2020
$
$
$
$
$
Contingent
Consideration
Redeemable
Noncontrolling
Interests
Employment
Agreement
Award
(In thousands)
27,017
$
—
—
$
—
—
1,921
(1,188)
47
780
$
—
—
(1,060)
280
— $
(3,685)
2,271
25,603
$
—
—
(3,573)
6,163
28,193
$
(280)
$
(6,163)
$
(47)
$
(2,271)
$
10,564
1,544
(2,802)
—
3,395
12,701
2,315
(2,400)
—
4,399
17,015
—
—
Losses and gains included in earnings were recorded in the consolidated statements of operations as corporate selling,
general and administrative expenses for the employment agreement award and included as selling, general and
administrative expenses for contingent consideration for the years ended December 31, 2021 and 2020.
For Level 3 assets and liabilities measured at fair value on a recurring basis, the significant unobservable inputs used
in the fair value measurements were as follows:
Level 3 liabilities
Contingent consideration
Contingent consideration
Employment agreement award
Employment agreement award
Redeemable noncontrolling
interest
Redeemable noncontrolling
interest
Valuation Technique
Significant
Unobservable
Inputs
Monte Carlo Simulation Expected volatility
Monte Carlo Simulation Discount Rate
Discounted Cash Flow Discount Rate
Discounted Cash Flow Long-term Growth Rate
As of
As of
December 31,
December 31,
2021
2020
Significant Unobservable
Input Value
*
*
9.5 %
0.5 %
29.5 %
16.5 %
10.5 %
1.0 %
Discounted Cash Flow Discount Rate
11.5 %
11.0 %
Discounted Cash Flow Long-term Growth Rate
0.4 %
1.0 %
*
Contingent consideration liability is fully settled as of December 31, 2021.
Any significant increases or decreases in discount rate or long-term growth rate inputs could result in significantly
higher or lower fair value measurements.
Certain assets and liabilities are measured at fair value on a non-recurring basis using Level 3 inputs as defined in ASC
820. These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in
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certain circumstances. Included in this category are goodwill, radio broadcasting licenses and other intangible assets, net,
that are written down to fair value when they are determined to be impaired, as well as content assets that are periodically
written down to net realizable value. There was no impairment recorded for the year ended December 31, 2021 and the
Company recorded an impairment charge of approximately $84.4 million for the year ended December 31, 2020 related to
goodwill and radio broadcasting licenses.
As of December 31, 2021, the total recorded carrying values of goodwill and radio broadcasting licenses were
approximately $223.4 million and $505.2 million, respectively. Pursuant to ASC 350, “Intangibles – Goodwill and Other,”
for the year ended December 31, 2020, the Company recorded an impairment charge of approximately $15.9 million
related to its Atlanta market and Indianapolis market goodwill balances and also an impairment charge of approximately
$68.5 million associated with our Atlanta, Cincinnati, Dallas, Houston, Indianapolis, Philadelphia, Raleigh, Richmond and
St. Louis market radio broadcasting licenses. A description of the Level 3 inputs and the information used to develop the
inputs is discussed in Note 4 — Goodwill, Radio Broadcasting Licenses and Other Intangible Assets.
(r) Software and Web Development Costs
The Company capitalizes direct internal and external costs incurred to develop internal-use computer software during
the application development stage pursuant to ASC 350-40, “Intangibles – Goodwill and Other.” Internal-use software is
amortized under the straight-line method using an estimated life of three years. All web development costs incurred in
connection with operating our websites are accounted for under the provisions of ASC 350-40 and ASC 350-50, “Website
Development Costs” unless a plan exists or is being developed to market the software externally. The Company has no
plans to market software externally.
(s) Redeemable noncontrolling interests
Redeemable noncontrolling interests are interests in subsidiaries that are redeemable outside of the Company’s control
either for cash or other assets. These interests are classified as mezzanine equity and measured at the greater of estimated
redemption value at the end of each reporting period or the historical cost basis of the noncontrolling interests adjusted for
cumulative earnings allocations. The resulting increases or decreases in the estimated redemption amount are affected by
corresponding charges against retained earnings, or in the absence of retained earnings, additional paid-in-capital.
(t) Investments
Cost Method
On April 10, 2015, the Company made a $5 million investment in MGM’s world-class casino property, MGM
National Harbor, located in Prince George’s County, Maryland, which has a predominately African-American demographic
profile. On November 30, 2016, the Company contributed an additional $35 million to complete its investment. This
investment further diversified our platform in the entertainment industry while still focusing on our core demographic. We
account for this investment on a cost basis. Our MGM National Harbor investment entitles us to an annual cash distribution
based on net gaming revenue. The value of our MGM investment is included in other assets on the consolidated balance
sheets and its distribution income in the amount of approximately $7.7 million and $4.9 million, for the years ended
December 31, 2021 and 2020, respectively, is recorded in other income on the consolidated statements of operations. The
cost method investment is subject to a periodic impairment review in the normal course. The Company reviewed the
investment during 2021 and 2020 and concluded that no impairment to the carrying value was required. There has been no
impairment of the investment to date. As of December 31, 2020, the Company’s interest in the MGM National Harbor
Casino secured the MGM National Harbor Loan. Upon settlement of the 2028 Notes (which paid off the MGM National
Harbor Loan), the Company’s subsidiaries of Radio One Entertainment Holdings, LLC and Urban One Entertainment SPV,
LLC became guarantors under the 2028 Notes along with the Company’s other subsidiaries.
(u) Content Assets
Our cable television segment has entered into contracts to acquire entertainment programming rights and programs
from distributors and producers. The license periods granted in these contracts generally run from one year to five years.
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Contract payments are made in installments over terms that are generally shorter than the contract period. Each contract is
recorded as an asset and a liability at an amount equal to its gross contractual commitment when the license period begins
and the program is available for its first airing. For programming that is predominantly monetized as part of a content
group, which includes our acquired and commissioned programs, capitalized costs are amortized based on an estimate of
our usage and benefit from such programming. The estimates require management’s judgement and include consideration
of factors such as expected revenues to be derived from the programming, the expected number of future airings, and, if
applicable, the length of the license period. Acquired content is generally amortized on a straight-line basis over the term of
the license which reflects the estimated usage. For certain content for which the pattern of usage is accelerated,
amortization is based upon the actual usage. Amortization of content assets is recorded in the consolidated statement of
operations as programming and technical expenses.
The Company also has programming for which the Company has engaged third parties to develop and produce, and it
owns most or all rights (commissioned programming). In accordance with ASC 926, “Entertainment – Films,” content
amortization expense for each period is recognized based on the revenue forecast model, which approximates the
proportion that estimated advertising and affiliate revenues for the current period represent in relation to the estimated
remaining total lifetime revenues as of the beginning of the current period. Management regularly reviews, and revises
when necessary, its total revenue estimates, which may result in a change in the rate of amortization and/or a write-down of
the asset to fair value.
Content that is predominantly monetized within a film group is assessed for impairment at the film group level and is
tested for impairment if circumstances indicate that the fair value of the content within the film group is less than its
unamortized costs. A significant decrease in the amount of ultimate revenue expected to be recognized was determined for
one of the film groups, and as a result, the Company recorded an impairment and additional amortization expense of
$695,000, as a result of evaluating its contracts for impairment for the year ended December 31, 2021. The Company did
not record any additional amortization expense for the year ended December 31, 2020. Impairment and amortization of
content assets is recorded in the consolidated statements of operations as programming and technical expenses. All
produced and licensed content is classified as a long-term asset, except for the portion of the unamortized content balance
that is expected to be amortized within one year which is classified as a current asset.
Tax incentives that state and local governments offer that are directly measured based on production activities are
recorded as reductions in production costs.
(v) Impact of Recently Issued Accounting Pronouncements
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)
2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”
(“ASU 2016-13”). ASU 2016-13 is intended to provide financial statement users with more decision-useful information
about the expected credit losses on financial instruments and other commitments and requires consideration of a broader
range of reasonable and supportable information to inform credit loss estimates. In November 2019, the FASB issued ASU
2019-10, “Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic
842): Effective Dates.” ASU 2019-10 defers the effective date of credit loss standard ASU 2016-13 by two years for
smaller reporting companies and permits early adoption. ASU 2016-13 is effective for the Company beginning January 1,
2023. The Company is evaluating the impact of the adoption of ASU 2016-13 on its financial statements.
In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income
Taxes”, which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain
exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent
application. ASU 2019-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after
December 15, 2020. Early adoption is permitted. The Company adopted ASU 2019-12 on January 1, 2020, and adoption
did not have a material impact on our consolidated financial statements and related disclosures.
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(w) Related Party Transactions
Reach Media operates the Tom Joyner Foundation’s Fantastic Voyage® (the “Fantastic Voyage®”), a fund-raising
event, on behalf of the Tom Joyner Foundation, Inc. (the “Foundation”), a 501(c)(3) entity. The agreement under which the
Fantastic Voyage® operates provides that Reach Media provide all necessary operations of the cruise and that Reach Media
will be reimbursed its expenditures and receive a fee plus a performance bonus. Distributions from operating revenues are
in the following order until the funds are depleted: up to $250,000 to the Foundation, reimbursement of Reach’s
expenditures, up to a $1.0 million fee to Reach, a performance bonus of up to 50% of remaining operating revenues to
Reach Media, with the balance remaining to the Foundation. For 2021 and 2022, $250,000 to the Foundation is guaranteed.
Reach Media’s earnings for the Fantastic Voyage® in any given year may not exceed $1.75 million. The Foundation’s
remittances to Reach Media under the agreements are limited to its Fantastic Voyage® related cash collections. Reach
Media bears the risk should the Fantastic Voyage® sustain a loss and bears all credit risk associated with the related
passenger cruise package sales. The agreement between Reach and the Foundation automatically renews annually unless
termination is mutually agreed or unless a party’s financial requirements are not met, in which case the party not in breach
of their obligations has the right, but not the obligation, to terminate unilaterally. Due to the pandemic, the 2020 cruise was
rescheduled to November 2021 and passengers were given the option to have the majority of their payments refunded. As
of December 31, 2021, Reach Media owed the Foundation $41,000 under the agreements for the operation of the cruises
and as of December 31, 2020, Reach Media owed the Foundation $244,000 due to passengers’ refunds pending.
Reach Media provides office facilities (including office space, telecommunications facilities, and office equipment) to
the Foundation. Such services are provided to the Foundation on a pass-through basis at cost. Additionally, from time to
time, the Foundation reimburses Reach Media for expenditures paid on its behalf at Reach Media-related events. Under
these arrangements, as of December 31, 2021 and 2020, the Foundation owed $4,000 and $6,000, respectively, to Reach
Media.
For the year ended December 31, 2021, Reach Media's revenues, expenses, and operating income for the Fantastic
Voyage were approximately $7.0 million, $6.6 million, and $400,000, respectively. The Fantastic Voyage took place during
the fourth quarter of 2021. Due to the aforementioned rescheduling of the Fantastic Voyage resulting from impacts of the
COVID pandemic, no cruise was operated in 2020.
Alfred C. Liggins, President and Chief Executive Officer of Urban One, Inc., is a compensated member of the Board
of Directors of Broadcast Music, Inc. (“BMI”), a performance rights organization. During the years ended December 31,
2021 and 2020, the Company incurred expense of approximately $4.7 million and $3.2 million, respectively. As of
December 31, 2021 and 2020, the Company owed BMI $423,000 and ($398,000), respectively.
(x) Leases
On January 1, 2019, with the adoption of ASC 842, “Leases,” the Company adopted a package of practical expedients
as allowed by the transition guidance which permitted the Company to carry forward the historical assessment of whether
contracts contain or are leases, classification of leases and the remaining lease terms. The Company has also made an
accounting policy election to exclude leases with an initial term of twelve months or less from recognition on the
consolidated balance sheet. Short-term leases will be expensed over the lease term. The Company also elected to separate
the consideration in the lease contracts between the lease and non-lease components. All variable non-lease components
are expensed as incurred.
ASC 842 results in significant changes to the balance sheets of lessees, most significantly by requiring the recognition
of right of use (“ROU”) assets and lease liabilities by lessees for those leases classified as operating leases. Upon adoption
of ASC 842, deferred rent balances, which were historically presented separately, were combined and presented net within
the ROU asset.
Many of the Company's leases provide for renewal terms and escalation clauses, which are factored into calculating
the lease liabilities when appropriate. The implicit rate within the Company's lease agreements is generally not
determinable and as such the Company’s collateralized borrowing rate is used.
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Table of Contents
The following table sets forth the components of lease expense and the weighted average remaining lease term and the
weighted average discount rate for the Company’s leases:
Operating Lease Cost (Cost resulting from lease payments)
Variable Lease Cost (Cost excluded from lease payments)
Total Lease Cost
Operating Lease - Operating Cash Flows (Fixed Payments)
Operating Lease - Operating Cash Flows (Liability Reduction)
Year Ended December 31,
2020
2021
(Dollars In thousands)
$ 13,055
40
$ 13,095
$ 13,784
$ 9,124
$ 12,687
143
$ 12,830
$ 13,243
8,354
$
Weighted Average Lease Term - Operating Leases
Weighted Average Discount Rate - Operating Leases
4.94 years
11.00 %
5.37 years
11.00 %
As of December 31, 2021, maturities of lease liabilities were as follows:
For the Year Ended December 31,
2022
2023
2024
2025
2026
Thereafter
Total future lease payments
Imputed interest
Total
(y) Going Concern Assessment
$
(Dollars in thousands)
13,685
11,750
10,639
5,903
3,712
8,209
53,898
12,598
41,300
$
As part of its internal control framework, the Company routinely performs a going concern assessment. We have
concluded that the Company has sufficient capacity to meet its financing obligations, that cash flows from operations are
sufficient to meet the liquidity needs and/or has sufficient capacity to access asset-backed facility funds to finance working
capital needs should the need arise.
2. ACQUISITIONS AND DISPOSITIONS:
On December 19, 2019, we entered into both an asset purchase agreement (“APA”) and a time brokerage agreement
(“TBA”) with Guardian Enterprise Group, Inc. and certain of its affiliates (collectively, “GEG”) with respect to the
acquisition and interim operation of low power television station WQMC-LD in Columbus, Ohio. Pursuant to the TBA, in
January 2020, we began to operate WQMC-LD until such time as the purchase transaction can close under the APA. Under
the terms of the TBA, we pay a monthly fee as well as certain operating costs of WQMC-LD, and, in exchange, we will
retain all revenues from the sale of the advertising within the programming. After receipt of FCC approval, we closed the
transactions under the APA and took ownership of WQMC-LD on February 24, 2020 for total consideration of $475,000.
On October 30, 2020, we entered into a local marketing agreement (“LMA”) with Southeastern Ohio Broadcasting
System for the operation of station WWCD-FM in Columbus, Ohio beginning November 2020. Under the terms of the
LMA, we will pay a monthly fee as well as certain operating costs, and, in exchange, we will retain all revenues from the
sale of the advertising within the programming.
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On November 6, 2020, the Company entered into a definitive asset exchange agreement with Audacy, Inc. (formerly
Entercom Communications Corp.) whereby the Company received Charlotte stations: WLNK-FM (Adult Contemporary);
WBT-AM & FM (News Talk Radio); and WFNZ-AM & 102.5 FM Translator (Sports Radio). As part of the transaction,
the Company transferred three radio stations to Audacy: St. Louis, WHHL-FM (Urban Contemporary); Philadelphia,
WPHI-FM (Urban Contemporary); and Washington, DC, WTEM-AM (Sports); as well as the intellectual property to its St.
Louis radio station, WFUN-FM (Adult Urban Contemporary). The Company and Audacy began operation of the
exchanged stations on or about November 23, 2020 under LMAs until FCC approval was obtained. The deal was subject to
FCC approval and other customary closing conditions and, after obtaining the approvals, closed on April 20, 2021. In
addition, the Company entered into an asset purchase agreement with Gateway Creative Broadcasting, Inc. (“Gateway”)
for the remaining assets of our WFUN station in a separate transaction which also closed on April 20, 2021. The Company
received approximately $8.0 million and exchanged approximately $8.0 million in tangible and intangible assets as part of
the transaction with Gateway. The identified assets, with a combined carrying value of approximately $32.7 million, have
been classified as held for sale in the consolidated balance sheet at December 31, 2020. The major categories of the assets
held for sale include the following:
Property and equipment, net
Goodwill
Radio broadcasting licenses
Right of use assets
Lease liabilities
Assets held for sale, net
As of December 31,
2020
(In thousands)
2,144
470
30,606
1,071
(1,630)
32,661
$
$
The Company’s purchase accounting to reflect the fair value of assets acquired and liabilities assumed consisted of
approximately $21.1 million to radio broadcasting licenses, approximately $1.8 million to land and land improvements,
approximately $2.0 million to towers and antennas, $517,000 to buildings, approximately $1.0 million to transmitters,
$712,000 to studios, $53,000 to vehicles, $200,000 to furniture and fixtures, $67,000 to computer equipment, $19,000 to
other equipment, approximately $1.7 million to right of use assets, $1.9 million advertising credit liability, $921,000 to
operating lease liabilities, and $812,000 unfavorable lease liability. The fair value of the assets exchanged with Audacy
approximate the carrying value of the assets held for sale as of December 31, 2020. The Company recognized a net gain of
$404,000 related to the Audacy and Gateway transactions during the year ended December 31, 2021.
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3. PROPERTY AND EQUIPMENT:
Property and equipment are carried at cost less accumulated depreciation and amortization. Depreciation is calculated
using the straight-line method over the related estimated useful lives. Property and equipment consists of the following:
As of December 31,
2020
2021
Estimated
Useful Lives
Land and improvements
Buildings
Transmitters and towers
Equipment
Furniture and fixtures
Software and web development
Leasehold improvements
Construction-in-progress
Less: Accumulated depreciation and amortization
Property and equipment, net
—
2,372
31 years
2,654
7‑15 years
39,277
3‑7 years
59,537
6 years
9,019
3 years
29,741
24,449 Lease Term
—
372
$
$
(In thousands)
4,128
3,241
43,466
63,192
9,397
31,337
24,727
476
179,964
(153,673)
26,291
$
167,421
(148,229)
19,192
$
Depreciation and amortization expense for the years ended December 31, 2021, and 2020 was approximately $9.3
million and $9.7 million, respectively. Repairs and maintenance costs are expensed as incurred. Property and equipment
assets identified as assets held for sale are excluded from the table above.
4. GOODWILL, RADIO BROADCASTING LICENSES AND OTHER INTANGIBLE ASSETS:
Impairment Testing
We have historically made acquisitions whereby a significant amount of the purchase price was allocated to radio
broadcasting licenses, goodwill and other intangible assets. In accordance with ASC 350, “Intangibles - Goodwill and
Other,” we do not amortize our radio broadcasting licenses and goodwill. Instead, we perform a test for impairment
annually across all reporting units, or on an interim basis when events or changes in circumstances or other conditions
suggest impairment may have occurred in any given reporting unit. Other intangible assets continue to be amortized on a
straight-line basis over their useful lives. We perform our annual impairment test as of October 1 of each year. There was
no impairment recorded for the year ended December 31, 2021 and for the year ended December 31, 2020, we recorded
impairment charges against radio broadcasting licenses and goodwill collectively, of approximately $84.4 million.
We did not identify any impairment indicators at any of our reportable segments for the year ended December 31,
2021. We performed our annual impairment testing and no impairment was identified.
Beginning in March 2020, the Company observed that the COVID-19 pandemic and the resulting government stay at
home orders were dramatically impacting certain of the Company's revenues. Most notably, a number of advertisers across
significant advertising categories had reduced or ceased advertising spend due to the outbreak and stay at home orders
which effectively shut many businesses down in the markets in which we operate. This was particularly true within our
radio segment which derives substantial revenue from local advertisers who had been particularly hard hit due to social
distancing and government interventions.
2021 Annual Impairment Testing
We completed our 2021 annual impairment assessment as of October 1, 2021. Our 2021 annual impairment testing
indicated the carrying values for our radio broadcasting licenses and goodwill attributable to Reach Media, TV One, digital
and our radio broadcasting reporting units were not impaired.
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2020 Interim Impairment Testing
As a result of COVID-19, the total market revenue growth for certain markets in which we operate was below that
assumed in our annual impairment testing. During the first quarter of 2020, the Company recorded a non-cash impairment
charge of approximately $5.9 million to reduce the carrying value of our Atlanta market and Indianapolis market goodwill
balances and the Company recorded a non-cash impairment charge of approximately $47.7 million associated with our
Atlanta, Cincinnati, Dallas, Houston, Indianapolis, Philadelphia, Raleigh, Richmond and St. Louis radio market
broadcasting licenses. We did not identify any impairment indicators for the three months ended June 30, 2020. Based on
market data obtained by the Company in the third quarter of 2020, the total anticipated market revenue growth for certain
markets in which we operate continued to be below that assumed in our first quarter impairment testing. We deemed that to
be an impairment indicator that warranted interim impairment testing of certain markets’ radio broadcasting licenses,
which we performed as of September 30, 2020. As a result of that testing, the Company recorded a non-cash impairment
charge of approximately $10.0 million related to its Atlanta market and Indianapolis market goodwill balances and the
Company recorded a non-cash impairment charge of approximately $19.1 million for the three months ended September
30, 2020 associated with our Atlanta, Cincinnati, Dallas, Houston, Indianapolis, Philadelphia and Raleigh market radio
broadcasting licenses.
2020 Annual Impairment Testing
We completed our 2020 annual impairment assessment as of October 1, 2020. Our 2020 annual impairment testing
indicated the carrying values for our radio broadcasting licenses and goodwill attributable to Reach Media, TV One, digital
and our radio broadcasting reporting units were not impaired. However we recorded an impairment charge of
approximately $1.7 million associated with the estimated asset sale consideration for one of our St. Louis radio
broadcasting licenses.
Valuation of Broadcasting Licenses
We utilize the services of a third-party valuation firm to assist us in estimating the fair value of our radio broadcasting
licenses and reporting units. Fair value is estimated to be the price that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants at the measurement date. We use the income approach to
test for impairment of radio broadcasting licenses. A projection period of 10 years is used, as that is the time horizon in
which operators and investors generally expect to recover their investments. When evaluating our radio broadcasting
licenses for impairment, the testing is done at the unit of accounting level as determined by ASC 350, “Intangibles -
Goodwill and Other.” In our case, each unit of accounting is a cluster of radio stations into one of our geographical
markets. Broadcasting license fair values are based on the discounted future cash flows of the applicable unit of accounting
assuming an initial hypothetical start-up operation which possesses FCC licenses as the only asset. Over time, it is assumed
the operation acquires other tangible assets such as advertising and programming contracts, employment agreements and
going concern value, and matures into an average performing operation in a specific radio market. The income approach
model incorporates several variables, including, but not limited to: (i) radio market revenue estimates and growth
projections; (ii) estimated market share and revenue for the hypothetical participant; (iii) likely media competition within
the market; (iv) estimated start-up costs and losses incurred in the early years; (v) estimated profit margins and cash flows
based on market size and station type; (vi) anticipated capital expenditures; (vii) estimated future terminal values; (viii) an
effective tax rate assumption; and (ix) a discount rate based on the weighted-average cost of capital for the radio broadcast
industry. In calculating the discount rate, we considered: (i) the cost of equity, which includes estimates of the risk-free
return, the long-term market return, small stock risk premiums and industry beta; (ii) the cost of debt, which includes
estimates for corporate borrowing rates and tax rates; and (iii) estimated average percentages of equity and debt in capital
structures.
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Our methodology for valuing broadcasting licenses has been consistent for all periods presented. Below are some of
the key assumptions used in the income approach model for estimating the broadcasting license and goodwill fair values
for the annual impairment testing performed and interim impairment testing where an impairment charge was recorded
since January 1, 2020. During the year ended December 31, 2020, the Company recorded a non-cash impairment charge of
approximately $68.5 million associated with our Atlanta, Cincinnati, Dallas, Houston, Indianapolis, Philadelphia, Raleigh,
Richmond and St. Louis radio market broadcasting licenses.
Radio Broadcasting
Licenses
October 1,
2021
October 1,
2020
September 30,
2020 (a)
March 31,
2020 (a)
Impairment charge (in millions)
$
— $
1.7*
$
19.1
$
47.7
Discount Rate
Year 1 Market Revenue Growth Rate Range
Long-term Market Revenue Growth Rate Range
Mature Market Share Range
Mature Operating Profit Margin Range
9.0 %
6.1% – 8.0 %
0.7% – 1.0 %
6.2% – 23.2 %
26.9% – 36.1 %
9.0 %
(10.7)% – (16.0) %
0.7% – 1.1 %
6.7% – 23.9 %
27.7% – 37.1 %
9.5 %
9.0 %
(13.3)%
(10.7)% – (16.8) %
0.7% – 1.1 %
0.7% – 1.1 %
6.9% – 25.0 %
6.7% – 23.9 %
27.7% – 37.1 % 27.6% – 39.7 %
(a) Reflects changes only to the key assumptions used in the interim testing for certain units of accounting.
(*) License fair value based on estimated asset sale consideration.
Broadcasting Licenses Valuation Results
The Company’s total broadcasting licenses carrying value is approximately $505.2 million as of December 31, 2021.
The units of accounting reflected in the table below are not disclosed on a specific market basis so as to not make sensitive
information publicly available that could be competitively harmful to the Company.
Unit of Accounting
Unit of Accounting 2
Unit of Accounting 5
Unit of Accounting 7
Unit of Accounting 11
Unit of Accounting 4
Unit of Accounting 14
Unit of Accounting 6
Unit of Accounting 12
Unit of Accounting 13
Unit of Accounting 8
Unit of Accounting 16
Unit of Accounting 1
Unit of Accounting 10
Total
As of
December 31,
2020
Radio Broadcasting Licenses
Carrying Balances
Net
Increase
(Decrease)
(In thousands)
As of
December 31,
2021
$
3,086
—
13,525
—
15,223
—
—
15,560
16,142 21,082
—
19,070
—
22,642
—
32,968
—
39,646
—
52,515
—
54,670
—
84,369
—
114,650
3,086
13,525
15,223
15,560
37,224
19,070
22,642
32,968
39,646
52,515
54,670
84,369
114,650
$ 505,148
$ 484,066
$ 21,082
Our licenses expire at various dates through August 1, 2029. The FCC grants radio broadcast station licenses for
specific periods of time and, upon application, may renew them for additional terms. A station may continue to operate
beyond the expiration date of its license if a timely filed license renewal application is pending. Under the Communications
Act, radio broadcast station licenses may be granted for a maximum term of eight years. The FCC may grant the license
renewal application with or without conditions, including renewal for a term less than the maximum otherwise permitted.
Historically, our licenses have been renewed for full eight-year terms without any conditions or sanctions; however, there
can be no assurance that the licenses of each of our stations will be renewed for a full term without conditions or sanctions.
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Valuation of Goodwill
The impairment testing of goodwill is performed at the reporting unit level. We had 16 reporting units as of our
October 2021 annual impairment assessment, consisting of each of the 13 radio markets within the radio division and each
of the other three business divisions. In testing for the impairment of goodwill, we primarily rely on the income approach.
The approach involves a 10-year model with similar variables as described above for broadcasting licenses, except that the
discounted cash flows are based on the Company’s estimated and projected market revenue, market share and operating
performance for its reporting units, instead of those for a hypothetical participant. We use a 5-year model for our Reach
Media reporting unit. We evaluate all events and circumstances on an interim basis to determine if an impairment indicator
is present and also perform annual testing by comparing the fair value of the reporting unit with its carrying amount. We
recognize an impairment charge to operations in the amount that the reporting unit’s carrying value exceeds its fair value.
The impairment charge recognized cannot exceed the total amount of goodwill allocated to the reporting unit.
We have not made any changes to the methodology for valuing or allocating goodwill when determining the fair
values of the reporting units. As noted above, we did not identify any impairment indicators at any of our reportable
segments for the year ended December 31, 2021. Also as noted above, during the first and third quarters of 2020 due to the
COVID-19 pandemic, we identified impairment indicators at certain of our radio markets, and, as such, we performed an
interim analysis for certain radio market goodwill. During the three months ended March 31, 2020, the Company recorded
a non-cash impairment charge of approximately $5.9 million to reduce the carrying value of our Atlanta and Indianapolis
market goodwill balances. We did not identify any impairment indicators at any of our other reportable segments for the
three months ended June 30, 2020. During the three months ended September 30, 2020, the Company recorded a non-cash
impairment charge of approximately $10.0 million related to its Atlanta market and Indianapolis market goodwill balances.
Below are some of the key assumptions used in the income approach model for estimating reporting unit fair values
for the annual impairment assessments performed and interim impairment testing where an impairment charge was
recorded since January 1, 2020.
Goodwill (Radio Market
Reporting Units)
October 1,
2021 (a)
October 1,
2020 (a)
September 30,
2020 (a)
March 31,
2020(a)
Impairment charge (in millions)
$
— $
— $
10.0
$
Discount Rate
Year 1 Market Revenue Growth
Rate Range
Long-term Market Revenue
Growth Rate Range
Mature Market Share Range
Mature Operating Profit Margin
Range
9.0 %
9.0 %
9.0 %
(10.7)% – 25.4 % (12.9)% – 25.9 % (26.6)% – 34.7 %
(14.5)% – (12.9) %
0.7% – 1.0 %
6.2% – 16.0 %
0.7% – 1.1 %
6.8% – 16.8 %
0.9% – 1.1 %
8.4% – 12.7 %
0.9% – 1.1 %
11.1% – 13.0 %
21.2% – 47.3 %
27.7% – 49.1 %
27.7% – 48.1 %
29.4% – 39.0 %
5.9
9.5 %
(a) Reflects the key assumptions for testing only those radio markets with remaining goodwill.
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Table of Contents
Below are some of the key assumptions used in the income approach model for estimating the fair value for Reach
Media for the annual and interim impairment assessments performed since October 2020. When compared to the discount
rates used for assessing radio market reporting units, the higher discount rates used in these assessments reflect a premium
for a riskier and broader media business, with a heavier concentration and significantly higher amount of programming
content assets that are highly dependent on a single on-air personality. As a result of our impairment assessments, the
Company concluded that the goodwill was not impaired.
Reach Media Segment Goodwill
Impairment charge (in millions)
Discount Rate
Year 1 Revenue Growth Rate
Long-term Revenue Growth Rate (Year 5)
Operating Profit Margin Range
October 1,
2021
October 1,
2020
$
—
$
—
11.5 %
(15.7)%
1.0 %
11.0 %
22.1 %
1.0 %
24.1 – 26.2 % 18.0% - 19.1 %
Below are some of the key assumptions used in the income approach model for determining the fair value of our
digital reporting unit since October 2020. When compared to discount rates for the radio reporting units, the higher
discount rate used to value the reporting unit is reflective of discount rates applicable to internet media businesses. As a
result of our impairment assessments, the Company concluded that the goodwill was not impaired.
Digital Segment Goodwill
October 1,
2021
October 1,
2020
Impairment charge (in millions)
$
—
$
—
Discount Rate
Year 1 Revenue Growth Rate
Long-term Revenue Growth Rate (Years 6 – 10)
Operating Profit Margin Range
14.0 %
(20.4)%
2.5% - 6.8 %
(5.2)% - 14.3 %
14.0 %
(5.4)%
3.4% - 6.0 %
(12.5)% - 13.1 %
Below are some of the key assumptions used in the income approach model for determining the fair value of our cable
television segment since October 2020. As a result of the testing performed, the Company concluded no impairment to the
carrying value of goodwill had occurred.
Cable Television Segment Goodwill
Impairment charge (in millions)
Discount Rate
Year 1 Revenue Growth Rate
Long-term Revenue Growth Rate Range (Years 6 – 10)
Operating Profit Margin Range
October 1,
2021
October 1,
2020
$
— $
—
9.5 %
11.6 %
0.4% - 0.6 %
10.5 %
4.5 %
0.6% - 1.5 %
34.9% - 46.4 % 37.2% - 46.1 %
The above goodwill tables reflect some of the key valuation assumptions used for 11 of our 16 reporting units. The
other five remaining reporting units had no goodwill carrying value balances as of December 31, 2021.
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Table of Contents
Goodwill Valuation Results
The table below presents the changes in Company’s goodwill carrying values for its four reportable segments during
2021 and 2020:
Gross goodwill
Additions
Impairments
Accumulated impairment losses
Assets held for sale
Net goodwill at December 31, 2020
Gross goodwill
Additions
Impairments
Accumulated impairment losses
Audacy asset exchange
Net goodwill at December 31, 2021
Total
Radio
Broadcasting
Segment
Reach
Media
Segment
$ 155,000
$ 30,468
Digital
Segment
(In thousands)
$ 27,567
Cable
Television
Segment
$ 165,044
—
—
—
—
—
(15,900)
(101,848)
(470)
36,782
$
$ 155,000
(16,114)
—
$ 14,354
$ 30,468
(20,345)
—
7,222
$
$ 27,567
—
—
—
—
—
—
(117,748)
(470)
36,782
(16,114)
—
$ 14,354
(20,345)
—
7,222
$
$
—
—
—
—
$ 165,044
$ 165,044
—
—
—
—
$ 165,044
$ 378,079
—
(15,900)
(138,307)
(470)
$ 223,402
$ 378,079
—
—
(154,207)
(470)
$ 223,402
In arriving at the estimated fair values for radio broadcasting licenses and goodwill, we also performed an analysis by
comparing our overall average implied multiple based on our cash flow projections and fair values to recently completed
sales transactions, and by comparing our estimated fair values to the market capitalization of the Company. The results of
these comparisons confirmed that the fair value estimates resulting from our annual assessments in 2021 were reasonable.
Intangible Assets Excluding Goodwill and Radio Broadcasting Licenses
Other intangible assets, excluding goodwill, radio broadcasting licenses and the unamortized brand name, are being
amortized on a straight-line basis over various periods. Other intangible assets consist of the following:
Trade names
Intellectual property
Acquired income leases
Advertiser agreements
Favorable office and transmitter leases
Brand names
Brand names - unamortized
Debt cost
Launch assets
Other intangibles
Less: Accumulated amortization
Other intangible assets, net
As of December 31,
2020
2021
(In thousands)
Period of
Amortization
Remaining
Weighted-
Average
Period of
Amortization
$ 17,425
9,531
127
46,582
2,097
4,413
39,690
1,267
9,021
715
130,868
(80,709)
$ 50,159
1.8 Years
1‑5 Years
$ 17,425
0.0 Years
4‑10 Years
9,531
9.1 Years
3‑15 Years
127
1.3 Years
1‑12 Years
46,789
38.3 Years
2‑60 Years
2,097
5.9 Years
10 Years
4,413
Indefinite
—
39,690
2,053
Debt term 4.1 Years
9,021 Contract length 3.3 Years
1.0 Years
1‑5 Years
675
131,821
(75,768)
$ 56,053
4.3 Years
Amortization expense of intangible assets for the years ended December 31, 2021 and 2020 was approximately $3.7
million and $3.9 million, respectively.
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The following table presents the Company’s estimate of amortization expense for the years 2022 through 2026 for
intangible assets:
2022
2023
2024
2025
2026
(In thousands)
3,651
1,225
222
185
165
$
$
$
$
$
The table above excludes launch asset amortization as it is recorded as a reduction to revenue. Actual amortization
expense may vary as a result of future acquisitions and dispositions.
5. CONTENT ASSETS:
The gross cost and accumulated amortization of content assets is as follows:
Produced content assets:
Completed
In-production
Licensed content assets acquired:
Acquired
Content assets, at cost
Less: Accumulated amortization
Content assets, net
Current portion
Noncurrent portion
As of December 31,
2021
2020
(In thousands)
Period of
Amortization
$
397,174
12,124
$
365,806
11,029
66,005
475,303
(389,265)
86,038
(25,883)
60,155
$
56,913
433,748
(342,139)
91,609
(28,434)
63,175
$
1‑5 Years
Produced content assets include certain unamortized costs that will not be 80% amortized within three years from
December 31, 2021, totaling approximately $18.3 million. Approximately 55.8% of these unamortized costs are expected
to be amortized within three years from December 31, 2021. The remaining balance of these costs will be amortized
through the year ending December 31, 2027. Amortization of content assets is recorded in the consolidated statements of
operations as programming and technical expenses.
Future estimated content amortization expense related to agreements entered into as of December 31, 2021, for years
2022 through 2026 is as follows:
2022
2023
2024
2025
2026
(In thousands)
25,883
18,724
8,505
6,600
2,297
$
$
$
$
$
Future estimated content amortization expense is not included for in-production content assets in the table above.
Future minimum content payments required under agreements entered into as of December 31, 2021, are as follows:
2022
2023
(In thousands)
18,972
2,865
$
$
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Table of Contents
6. INVESTMENTS:
Cost Method
On April 10, 2015, the Company made a $5 million investment in MGM’s world-class casino property, MGM
National Harbor, located in Prince George’s County, Maryland, which has a predominately African-American demographic
profile. On November 30, 2016, the Company contributed an additional $35 million to complete its investment. This
investment further diversified our platform in the entertainment industry while still focusing on our core demographic. We
account for this investment on a cost basis. Our MGM National Harbor investment entitles us to an annual cash distribution
based on net gaming revenue. The value of our MGM investment is included in other assets on the consolidated balance
sheets and its distribution income in the amount of approximately $7.7 million and $4.9 million, for the years ended
December 31, 2021 and 2020, respectively, is recorded in other income on the consolidated statements of operations. The
cost method investment is subject to a periodic impairment review in the normal course. The Company reviewed the
investment and concluded that no impairment to the carrying value was required. There has been no impairment of the
investment to date. As of December 31, 2020, the Company’s interest in the MGM National Harbor Casino secured the
MGM National Harbor Loan (as defined in Note 9 - Long-Term Debt.) Upon settlement of the 2028 Notes (which paid off
the MGM National Harbor Loan), the Company’s subsidiaries of Radio One Entertainment Holdings, LLC and Urban One
Entertainment SPV, LLC became guarantors under the 2028 Notes along with the Company’s other subsidiaries.
7. OTHER CURRENT LIABILITIES:
Other current liabilities consist of the following:
Deferred revenue
Deferred barter revenue
Employment Agreement Award
Accrued national representative fees
Accrued miscellaneous taxes
Income taxes payable
Tenant allowance
Contingent consideration
Reserve for audience deficiency
Other current liabilities
Other current liabilities
8. EMPLOYMENT AGREEMENT AWARD:
As of December 31,
2020
2021
(In thousands)
$
$
7,494
1,271
3,966
457
213
283
180
—
6,020
6,537
26,421
$
$
10,875
935
3,325
1,087
562
600
242
780
3,544
4,967
26,917
The Company accounts for an award called for in the CEO’s employment agreement (the “Employment Agreement
Award”) at fair value. The Company estimated the fair value of the award at December 31, 2021 and 2020, to be
approximately $28.2 million and $25.6 million, respectively, and accordingly adjusted its liability to this amount. The long-
term portion is recorded in other long-term liabilities and the current portion is recorded in other current liabilities in the
consolidated balance sheets. The expense associated with the Employment Agreement Award was recorded in the
consolidated statements of operations as corporate selling, general and administrative expenses and was approximately
$6.2 million and $2.3 million for the years ended December 31, 2021 and 2020, respectively.
The Company’s obligation to pay the Employment Agreement Award was triggered after the Company recovered the
aggregate amount of its capital contribution in TV One and only upon actual receipt of distributions of cash or marketable
securities or proceeds from a liquidity event with respect to the Company’s aggregate investment in TV One. The CEO was
fully vested in the award upon execution of the employment agreement, and the award lapses if the CEO voluntarily
F-32
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leaves the Company, or is terminated for cause. In September 2014, the Compensation Committee of the Board of
Directors of the Company approved terms for a new employment agreement with the CEO, including a renewal of the
Employment Agreement Award upon similar terms as in the prior employment agreement.
9. LONG-TERM DEBT:
Long-term debt consists of the following:
7.375% Senior Secured Notes due February 2028
PPP Loan
2018 Credit Facility
MGM National Harbor Loan
2017 Credit Facility
8.75% Senior Secured Notes due December 2022
7.375% Senior Secured Notes due April 2022
Total debt
Less: current portion of long-term debt
Less: original issue discount and issuance costs
Long-term debt, net
2028 Notes
As of December 31,
2021
2020
(In thousands)
$
$
$
825,000
7,505
—
—
—
—
—
832,505
—
13,889
818,616
$
—
—
129,935
57,889
317,332
347,016
2,984
855,156
23,362
12,870
818,924
On January 7, 2021, the Company launched an offering (the “2028 Notes Offering”) of $825 million in aggregate
principal amount of 7.375% senior secured notes due 2028 (the “2028 Notes”) in a private offering exempt from the
registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). On January 8, 2021, the
Company entered into a purchase agreement with respect to the 2028 Notes at an issue price of 100% and the 2028 Notes
Offering closed on January 25, 2021. The 2028 Notes are general senior secured obligations of the Company and are
guaranteed on a senior secured basis by certain of the Company’s direct and indirect restricted subsidiaries. The 2028
Notes mature on February 1, 2028 and interest on the Notes accrues and is payable semi-annually in arrears on February 1
and August 1 of each year, commencing on August 1, 2021 at the rate of 7.375% per annum.
The Company used the net proceeds from the 2028 Notes Offering, together with cash on hand, to repay or redeem: (1)
the 2017 Credit Facility; (2) the 2018 Credit Facility; (3) the MGM National Harbor Loan; (4) the remaining amounts of
our 7.375% Notes; and (5) our 8.75% Notes that were issued in the November 2020 Exchange Offer (all as defined below).
Upon settlement of the 2028 Notes Offering, the 2017 Credit Facility, the 2018 Credit Facility and the MGM National
Harbor Loan were terminated and the indentures governing the 7.375% Notes and the 8.75% Notes were satisfied and
discharged. There was a net loss on retirement of debt of approximately $6.9 million for the year ended December 31, 2021
associated with the settlement of the 2028 Notes.
The 2028 Notes and the guarantees are secured, subject to permitted liens and except for certain excluded assets (i) on
a first priority basis by substantially all of the Company’s and the Guarantors’ current and future property and assets (other
than accounts receivable, cash, deposit accounts, other bank accounts, securities accounts, inventory and related assets that
secure our asset-backed revolving credit facility on a first priority basis (the “ABL Priority Collateral”)), including the
capital stock of each guarantor (collectively, the “Notes Priority Collateral”) and (ii) on a second priority basis by the ABL
Priority Collateral.
The associated debt issuance costs in the amount of approximately $15.4 million is being reflected as an adjustment to
the carrying amount of the debt obligations and amortized to interest expense over the term of the credit facility using the
effective interest rate method. The amortization of deferred financing costs was charged to interest expense for all periods
presented.
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Table of Contents
The amount of deferred financing costs included in interest expense for all instruments, for the years ended December
31, 2021 and 2020, was approximately $2.3 million and $4.5 million, respectively. The Company’s effective interest rate
for 2021 was 7.96%.
The Company conducts a portion of its business through its subsidiaries. Certain of the Company’s subsidiaries have
fully and unconditionally guaranteed the Company’s 2028 Notes.
PPP Loan
On January 29, 2021, the Company submitted an application for participation in the second round of the Paycheck
Protection Program loan program (“PPP”). On June 1, 2021, the Company received proceeds of approximately $7.5
million. The loan bears interest at a fixed rate of 1% per year and will not be changed during the life of the loan. The loan
matures June 1, 2026. The Company is in the process of applying for loan forgiveness. While certain of the PPP loans may
be forgivable, until they are repaid or forgiven, the loan amount may constitute debt under the 2028 Notes and increase the
Company’s leverage.
8.75% Notes
In October 2020, the Company announced an offer to eligible holders of its 7.375% Senior Secured Notes due 2022
(the “7.375% Notes”) to exchange any and all of their 7.375% Notes for newly issued 8.75% Senior Secured Notes due
2022 (the “8.75% Notes”). The exchange offer closed on November 9, 2020 and, therefore, is referred to as the “November
2020 Exchange Offer”. Until their satisfaction and discharge on settlement of the 2028 Notes, the 8.75% Notes were
governed by an indenture, dated November 9, 2020 (the “8.75% Notes Indenture”), by and between the Company, the
guarantors therein (the “Guarantors”) and Wilmington Trust, National Association, as trustee (in such capacity, the “8.75%
Notes Trustee”) and as notes collateral agent (in such capacity, “the 8.75% Notes Collateral Agent”). Interest on the 8.75%
Notes accrued at the rate per annum equal to 8.75% and was payable, in cash, quarterly on January 15, April 15, July 15
and October 15 of each year, commencing on January 15, 2021, to holders of record on the immediately preceding January
1, April 1, July 1 and October 1, respectively.
The 8.75% Notes were general senior obligations and were guaranteed (the “Guarantees”) by the Guarantors. The
8.75% Notes and the Guarantees: (i) ranked equal in right of payment to all of the Company’s and the Guarantor’s existing
and future senior indebtedness, (ii) were secured on a first-priority basis by the Notes Priority Collateral (as defined below)
and on a second-priority basis by the ABL Priority Collateral (defined below) owned by the Company and the applicable
Guarantor, in each case subject to certain liens permitted under the 8.75% Notes Indenture, (iii) were equal in priority to
the collateral owned by the Company and the Guarantor with respect to obligations under the credit agreement, dated as of
April 18, 2017, by and among the Company, various lenders therein and Guggenheim Securities Credit Partners, LLC, as
administrative agent and any other Parity Lien Debt (as described in the 8.75% Notes Indenture), if any, incurred after the
date the 8.75% Notes were issued, (iv) ranked senior in right of payment to any existing or future subordinated
indebtedness of the Company or Guarantors, (v) were initially guaranteed on a senior basis by each of the Company’s
wholly-owned domestic subsidiaries (other than certain immaterial subsidiaries, unrestricted subsidiaries, and other certain
exceptions), (vi) were effectively senior to all of the Company’s and the Guarantor’s existing and future unsecured
indebtedness to the extent of the value of the collateral owned by the Company or applicable Guarantors and effectively
senior to all existing and future ABL Debt Obligations (as defined in the 8.75% Notes Indenture) to the extent of the value
of the Notes Priority Collateral (as defined below) owned by the Company or applicable Guarantor, (vii) were effectively
subordinated to all of the Company’s and the Guarantor’s existing and future indebtedness that was secured by liens on
assets that do not secure the Notes or the Guarantee to the extent of the value of such assets, (viii) were structurally
subordinated to all of the Company’s and the Guarantor’s existing and future indebtedness and other claims and liabilities,
including preferred stock, of subsidiaries of the Company that are not guarantors, and (ix) were effectively senior to any
7.375% Notes that remain outstanding after the November 2020 Exchange Offer with respect to any collateral proceeds.
The 8.75% Notes and the guarantees were secured, subject to permitted liens and except for certain excluded assets (i)
on a first priority basis by substantially all of the Company’s and the Guarantors’ current and future property and assets
(other than accounts receivable, cash, deposit accounts, other bank accounts, securities accounts, inventory and related
assets that secure our asset-backed revolving credit facility on a first priority basis (the “ABL Priority Collateral”),
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including the capital stock of each Guarantor (which, in the case of foreign subsidiaries, is limited to 65% of the voting
stock and 100% of the non-voting stock of each first-tier foreign subsidiary) (collectively, the “Notes Priority Collateral”)
and (ii) on a second priority basis by the ABL Priority Collateral.
In connection with the November 2020 Exchange Offer, the 8.75% Notes were subject to a new intercreditor
agreement, pursuant to which proceeds received by the 7.375% Notes Trustee with respect to collateral proceeds received
by the 7.375% Notes Trustee for the 7.375% Notes under an existing parity lien intercreditor agreement were to be paid
over to the 8.75% Notes Trustee for the 8.75% Notes to the extent of the amounts owed to the holders of the 8.75% Notes
then outstanding.
The Company could redeem the 8.75% Notes in whole or in part, at its option, upon not less than 30 nor more than 60
days’ prior notice at a redemption price equal to 100% of the principal amount of such 8.75% Notes plus accrued and
unpaid interest, if any, to the redemption date.
Within 90 days following the completion of the November 2020 Exchange Offer, the Company was required to
repurchase, repay or redeem $15 million aggregate principal amount of the 8.75% Notes. Separately, within five business
days after each Excess Cash Flow Calculation Date (as defined in the 8.75% Notes Indenture), the Company was to redeem
an aggregate principal amount of 8.75% Notes equal to 50% of the Excess Cash Flow (as defined in the 8.75% Notes
Indenture), provided that repurchases, repayments or redemption of 8.75% Notes with internally generated funds during the
applicable calculation period would reduce on a dollar-for-dollar basis the amount of such redemption otherwise required
on the applicable calculation date. Any such mandatory redemptions were to be at par (plus accrued and unpaid interest).
During the year ended December 31, 2020, the Company recorded a loss on retirement of debt of approximately $2.9
million associated with the November 2020 Exchange Offer. The premium paid to the bondholders in the amount of
approximately $3.5 million is being reflected as an adjustment to the carrying amount of the debt obligation and amortized
to interest expense over the term of the obligation using the effective interest rate method. The amortization of deferred
financing costs was charged to interest expense for all periods presented.
2018 Credit Facility
On December 4, 2018, the Company and certain of its subsidiaries entered into a credit agreement (“2018 Credit
Facility”), among the Company, the lenders party thereto from time to time, Wilmington Trust, National Association, as
administrative agent, and TCG Senior Funding L.L.C, as sole lead arranger and sole bookrunner. The 2018 Credit Facility
provided $192.0 million in term loan borrowings, which was funded on December 20, 2018. The net proceeds of term loan
borrowings under the 2018 Credit Facility were used to refinance, repurchase, redeem or otherwise repay the Company's
then outstanding 9.25% Senior Subordinated Notes due 2020.
Until its termination on settlement of the 2028 Notes, borrowings under the 2018 Credit Facility were subject to
customary conditions precedent, as well as a requirement under the 2018 Credit Facility that (i) the Company’s total gross
leverage ratio on a pro forma basis be not greater than 8:00 to 1:00 (this total gross leverage ratio test steps down as
described below), (ii) neither of the administrative agents under the Company’s existing credit facilities nor the trustee
under the Company’s existing senior secured notes due 2022 have objected to the terms of the new credit documents and
(iii) certification by the Company that the terms and conditions of the 2018 Credit Facility satisfied the requirements of the
definition of “Permitted Refinancing” (as defined in the agreements governing the Company's existing credit facilities) and
neither of the administrative agents under the Company's existing credit facilities notified the Company within five
(5) business days prior to funding the borrowings under the 2018 Credit Facility that it disagreed with such determination
(including a reasonable description of the basis upon which it disagrees).
The 2018 Credit Facility was scheduled to mature on December 31, 2022 (the “Maturity Date”). In connection with
the November 2020 Exchange Offer, we also entered into an amendment to certain terms of our 2018 Credit Facility
including the extension of the maturity date to March 31, 2023. Interest rates on borrowings under the 2018 Credit Facility
were either (i) from the Funding Date to the Maturity Date, 12.875% per annum, (ii) 11.875% per annum, once 50% of the
term loan borrowings had been repaid or (iii) 10.875% per annum, once 75% of the term loan borrowings had been
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repaid. Interest payments began on the last day of the 3-month period commencing on the Funding Date. Within 90 days
following the completion of the November 2020 Exchange Offer, the Company was required to repay $10 million of the
2018 Credit Facility. The amendment was accounted for as a modification in accordance with the provisions of ASC 470,
“Debt”.
The Company's obligations under the 2018 Credit Facility were not secured. The 2018 Credit Facility was guaranteed
on an unsecured basis by each entity that guarantees the Company's outstanding $350.0 million 2017 Credit Facility (as
defined below).
The term loans could be voluntarily prepaid prior to February 15, 2020 subject to payment of a prepayment premium.
The Company was required to repay principal to the extent then outstanding on each quarterly interest payment date,
commencing on the last business day in March 2019, equal to one quarter of 7.5% of the aggregate initial principal amount
of all term loans incurred on the Funding Date to December 2019, commencing on the last business day in March 2020,
one quarter of 10.0% of the aggregate initial principal amount of all term loans incurred on the Funding Date to
December 2021, and, commencing on the last business day in March 2021, one quarter of 12.5% of the aggregate initial
principal amount of all term loans incurred on the Funding Date to December 2022. The Company was also required to use
75% of excess cash flow (“ECF payment”) as defined in the 2018 Credit Facility, which excluded any distributions to the
Company or its restricted subsidiaries in respect of its interests in the MGM National Harbor, to repay outstanding term
loans at par, paid semiannually and to use 100% of all distributions to the Company or its restricted subsidiaries received in
respect of its interest in the MGM National Harbor to repay outstanding term loans at par. During the year ended December
31, 2020, the Company repaid approximately $37.2 million under the 2018 Credit Facility. Included in the repayments
made during the year ended December 31, 2020 was approximately $11.1 million in ECF payments in accordance with the
agreement.
The 2018 Credit Facility contained customary representations and warranties and events of default, affirmative and
negative covenants (in each case, subject to materiality exceptions and qualifications). The 2018 Credit Facility, as
amended, also contained certain financial covenants, including a maintenance covenant requiring the Company’s total
gross leverage ratio to be not greater than 8.0 to 1.00 in 2019, 7.5 to 1.00 in 2020, 7.25 to 1.00 in 2021, 6.75 to 1.00 in
2022 and 6.25 to 1.00 in 2023.
The original issue discount in the amount of approximately $3.8 million and associated debt issuance costs in the
amount of $875,000 were reflected as an adjustment to the carrying amount of the debt obligation and amortized to interest
expense over the term of the credit facility using the effective interest rate method. The amortization of deferred financing
costs was charged to interest expense for all periods presented.
MGM National Harbor Loan
Concurrently, on December 4, 2018, Urban One Entertainment SPV, LLC (“UONESPV”) and its immediate parent,
Radio One Entertainment Holdings, LLC (“ROEH”), each of which is a wholly owned subsidiary of the Company, entered
into a credit agreement, providing $50.0 million in term loan borrowings (the “MGM National Harbor Loan”) which was
funded on December 20, 2018. On June 25, 2020, the Company borrowed an incremental $3.6 million on the MGM
National Harbor Loan and used the proceeds to pay down the higher coupon 2018 Credit Facility by the same amount.
Until its termination on settlement of the 2028 Notes, the MGM National Harbor Loan was scheduled to mature on
December 31, 2022 and bore interest at 7.0% per annum in cash plus 4.0% per annum paid-in kind. The loan had limited
ability to be prepaid in the first two years. The loan was secured on a first priority basis by the assets of UONESPV and
ROEH, including all of UONESPV’s shares held by ROEH, all of UONESPV’s interests in MGM National Harbor, its
rights under the joint venture operating agreement governing the MGM National Harbor and UONESPV’s obligation to
exercise its put right under the joint venture operating agreement in the event of a UONESPV payment default or
bankruptcy event, in each case, subject to applicable Maryland gaming laws and approvals. Exercise by UONESPV of its
put right under the joint venture operating agreement was subject to required lender consent unless the proceeds are used to
retire the MGM National Harbor Loan and any remaining excess is used to repay borrowings, if any, under the 2018 Credit
Facility. The MGM National Harbor Loan also contained customary representations and warranties and events of default,
affirmative and negative covenants (in each case, subject to materiality exceptions and qualifications).
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The original issue discount in the amount of approximately $1.0 million and associated debt issuance costs in the
amount of approximately $1.7 million was being reflected as an adjustment to the carrying amount of the debt
obligation and amortized to interest expense over the term of the obligation using the effective interest rate method. The
amortization of deferred financing costs was charged to interest expense for all periods presented.
2017 Credit Facilities
On April 18, 2017, the Company closed on a senior secured credit facility (the “2017 Credit Facility”). The 2017
Credit Facility was governed by a credit agreement by and among the Company, the lenders party thereto from time to time
and Guggenheim Securities Credit Partners, LLC, as administrative agent, The Bank of New York Mellon, as collateral
agent, and Guggenheim Securities, LLC as sole lead arranger and sole book running manager. The 2017 Credit Facility
provided for $350 million in term loan borrowings, all of which was advanced and outstanding on the date of the closing of
the transaction.
Until its termination on settlement of the 2028 Notes, the 2017 Credit Facility matured on the earlier of (i) April 18,
2023, or (ii) in the event such debt is not repaid or refinanced, 91 days prior to the maturity of the Company’s 7.375%
Notes (as defined below). At the Company’s election, the interest rate on borrowings under the 2017 Credit Facility are
based on either (i) the then applicable base rate (as defined in the 2017 Credit Facility) as, for any day, a rate per annum
(rounded upward, if necessary, to the next 1/100th of 1%) equal to the greater of (a) the prime rate published in the Wall
Street Journal, (b) 1/2 of 1% in excess rate of the overnight Federal Funds Rate at any given time, (c) the one-month
LIBOR rate commencing on such day plus 1.00%) and (d) 2%, or (ii) the then applicable LIBOR rate (as defined in the
2017 Credit Facility). The average interest rate was approximately 5.00% for 2021 and was 5.17% for 2020.
The 2017 Credit Facility was (i) guaranteed by each entity that guarantees the Company’s 7.375% Notes on a pari
passu basis with the guarantees of the 7.375% Notes and (ii) secured on a pari passu basis with the Company’s 7.375%
Notes. The Company’s obligations under the 2017 Credit Facility were secured, subject to permitted liens and except for
certain excluded assets (i) on a first priority basis by certain notes priority collateral, and (ii) on a second priority basis by
collateral for the Company’s asset-backed line of credit.
In addition to any mandatory or optional prepayments, the Company was required to pay interest on the term loans
(i) quarterly in arrears for the base rate loans, and (ii) on the last day of each interest period for LIBOR loans. Certain
voluntary prepayments of the term loans during the first six months required an additional prepayment premium.
Beginning with the interest payment date occurring in June 2017 and ending in March 2023, the Company was required to
repay principal, to the extent then outstanding, equal to 1⁄4 of 1% of the aggregate initial principal amount of all term loans
incurred on the effective date of the 2017 Credit Facility. On December 19, 2018, upon drawing under the 2018 Credit
Facility and MGM National Harbor Loan, the Company voluntarily prepaid approximately $20.0 million in principal on
the 2017 Credit Facility. During the year ended December 31, 2020, the Company repaid approximately $3.3 million under
the 2017 Credit Facility.
The 2017 Credit Facility contained customary representations and warranties and events of default, affirmative and
negative covenants (in each case, subject to materiality exceptions and qualifications) which may be more restrictive than
those governing the 7.375% Notes. The 2017 Credit Facility also contained certain financial covenants, including a
maintenance covenant requiring the Company’s interest expense coverage ratio (defined as the ratio of consolidated
EBITDA to consolidated interest expense) to be greater than or equal to 1.25 to 1.00 and its total senior secured leverage
ratio (defined as the ratio of consolidated net senior secured indebtedness to consolidated EBITDA) to be less than or equal
to 5.85 to 1.00.
The net proceeds from the 2017 Credit Facility were used to prepay in full the Company’s previous senior secured
credit facility and the agreement governing such credit facility.
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The 2017 Credit Facility contained affirmative and negative covenants that the Company was required to comply with,
including:
(a) maintaining an interest coverage ratio of no less than:
◾ 1.25 to 1.00 on June 30, 2017 and the last day of each fiscal quarter thereafter.
(b) maintaining a senior leverage ratio of no greater than:
◾ 5.85 to 1.00 on June 30, 2017 and the last day of each fiscal quarter thereafter.
(c) limitations on:
◾ liens;
◾ sale of assets;
◾ payment of dividends; and
◾ mergers.
The original issue discount is being reflected as an adjustment to the carrying amount of the debt obligations and
amortized to interest expense over the term of the credit facility using the effective interest rate method. The amortization
of deferred financing costs was charged to interest expense for all periods presented.
7.375% Notes
On April 17, 2015, the Company closed a private offering of $350.0 million aggregate principal amount of 7.375%
senior secured notes due 2022 (the “7.375% Notes”). The 7.375% Notes were offered at an original issue price of 100.0%
plus accrued interest from April 17, 2015, and matured on April 15, 2022. Interest on the 7.375% Notes accrued at the rate
of 7.375% per annum and was payable semiannually in arrears on April 15 and October 15, which commenced on
October 15, 2015. The 7.375% Notes were guaranteed, jointly and severally, on a senior secured basis by the Company’s
existing and future domestic subsidiaries, including TV One.
The Company used the net proceeds from the 7.375% Notes, to refinance a previous credit agreement, refinance
certain TV One indebtedness, and finance the buyout of membership interests of Comcast in TV One and pay the related
accrued interest, premiums, fees and expenses associated therewith.
Until their satisfaction and discharge on settlement of the 2028 Notes, the 7.375% Notes were the Company’s senior
secured obligations and ranked equal in right of payment with all of the Company’s and the guarantors’ existing and future
senior indebtedness, including obligations under the 2017 Credit Facility and the Company’s previously existing senior
subordinated notes. The 7.375% Notes and related guarantees were equally and ratably secured by the same collateral
securing the 2017 Credit Facility and any other parity lien debt issued after the issue date of the 7.375% Notes, including
any additional notes issued under the Indenture, but were effectively subordinated to the Company’s and the guarantors’
secured indebtedness to the extent of the value of the collateral securing such indebtedness that does not also secure the
7.375% Notes. Collateral included substantially all of the Company’s and the guarantors’ current and future property and
assets for accounts receivable, cash, deposit accounts, other bank accounts, securities accounts, inventory and related assets
including the capital stock of each subsidiary guarantor.
On November 9, 2020, we completed the November 2020 Exchange Offer of 99.15% of our outstanding 7.375%
Notes for $347 million aggregate principal amount of 8.75% Notes.
Asset-Backed Credit Facilities
On April 21, 2016, the Company entered into a senior credit agreement governing an asset-backed credit facility (the
“2016 ABL Facility”) among the Company, the lenders party thereto from time to time and Wells Fargo Bank National
Association, as administrative agent (the “Administrative Agent”). The 2016 ABL Facility originally provided for $25
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million in revolving loan borrowings in order to provide for the working capital needs and general corporate requirements
of the Company. On November 13, 2019, the Company entered into an amendment to the 2016 ABL Facility, (the “2016
ABL Amendment”), which increased the borrowing capacity from $25 million in revolving loan borrowings to $37.5
million in order to provide for the working capital needs and general corporate requirements of the Company and provides
for a letter of credit facility up to $7.5 million as a part of the overall $37.5 million in capacity. The 2016 ABL Amendment
also redefined the “Maturity Date” to be “the earlier to occur of (a) April 21, 2021 and (b) the date that is thirty (30) days
prior to the earlier to occur of (i) the Term Loan Maturity Date (as defined in the Term Loan Credit Agreement as in effect
on the Effective Date or as the same may be extended in accordance with the terms of the Term Loan Credit Agreement),
and (ii) the Stated Maturity (as defined in the Senior Secured Notes Indenture (as defined in the Term Loan Credit
Agreement)) of the Notes (as defined in the Senior Secured Notes Indenture as in effect on the Effective Date or as the
same may be extended in accordance with the terms of the Senior Secured Notes Indenture).”
At the Company’s election, the interest rate on borrowings under the 2016 ABL Facility are based on either (i) the then
applicable margin relative to Base Rate Loans (as defined in the 2016 ABL Facility) or (ii) the then applicable margin
relative to LIBOR Loans (as defined in the 2016 ABL Facility) corresponding to the average availability of the Company
for the most recently completed fiscal quarter.
Advances under the 2016 ABL Facility are limited to (a) eighty-five percent (85%) of the amount of Eligible Accounts
(as defined in the 2016 ABL Facility), less the amount, if any, of the Dilution Reserve (as defined in the 2016 ABL
Facility), minus (b) the sum of (i) the Bank Product Reserve (as defined in the 2016 ABL Facility), plus (ii) the aggregate
amount of all other reserves, if any, established by Administrative Agent.
All obligations under the 2016 ABL Facility are secured by first priority lien on all (i) deposit accounts (related to
accounts receivable), (ii) accounts receivable, (iii) all other property which constitutes ABL Priority Collateral (as defined
in the 2016 ABL Facility). The obligations are also secured by all material subsidiaries of the Company.
The 2016 ABL Facility was subject to the terms of the Intercreditor Agreement (as defined in the 2016 ABL Facility)
by and among the Administrative Agent, the administrative agent for the secured parties under the Company’s term loan
and the trustee and collateral trustee under the senior secured notes indenture.
In connection with the offering of the 2028 Notes, the Company entered into an amendment of its 2016 ABL Facility
to facilitate the issuance of the 2028 Notes. The amendments to the 2016 ABL Facility, include, among other things, a
consent to the issuance of the 2028 Notes, revisions to terms and exclusions of collateral and addition of certain
subsidiaries as guarantors.
On February 19, 2021, the Company closed on a new asset backed credit facility (the “Current 2021 ABL Facility”).
The Current 2021 ABL Facility is governed by a credit agreement by and among the Company, the other borrowers party
thereto, the lenders party thereto from time to time and Bank of America, N.A., as administrative agent. The Current 2021
ABL Facility provides for up to $50 million revolving loan borrowings in order to provide for the working capital needs
and general corporate requirements of the Company. The Current 2021 ABL Facility also provides for a letter of credit
facility up to $5 million as a part of the overall $50 million in capacity. On closing of the Current 2021 ABL Facility, the
2016 ABL Facility was terminated on February 19, 2021. As of December 31, 2021, there is no balance outstanding on the
Current 2021 ABL Facility.
At the Company’s election, the interest rate on borrowings under the Current 2021 ABL Facility are based on either (i)
the then applicable margin relative to Base Rate Loans (as defined in the Current 2021 ABL Facility) or (ii) the then
applicable margin relative to LIBOR Loans (as defined in the Current 2021 ABL Facility) corresponding to the average
availability of the Company for the most recently completed fiscal quarter.
Advances under the Current 2021 ABL Facility are limited to (a) eighty-five percent (85%) of the amount of Eligible
Accounts (as defined in the Current 2021 ABL Facility), less the amount, if any, of the Dilution Reserve (as defined in the
Current 2021 ABL Facility), minus (b) the sum of (i) the Bank Product Reserve (as defined in the Current 2021 ABL
Facility), plus (ii) the AP and Deferred Revenue Reserve (as defined in the Current 2021 ABL Facility), plus (iii) without
duplication, the aggregate amount of all other reserves, if any, established by Administrative Agent.
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All obligations under the Current 2021 ABL Facility are secured by first priority lien on all (i) deposit accounts
(related to accounts receivable), (ii) accounts receivable, and (iii) all other property which constitutes ABL Priority
Collateral (as defined in the Current 2021 ABL Facility). The obligations are also guaranteed by all material restricted
subsidiaries of the Company.
The Current 2021 ABL Facility matures on the earliest of: the earlier to occur of (a) the date that is five (5) years from
the effective date of the Current 2021 ABL Facility and (b) 91 days prior to the maturity of the Company’s 2028 Notes.
Finally, the Current 2021 ABL Facility is subject to the terms of the Revolver Intercreditor Agreement (as defined in
the Current 2021 ABL Facility) by and among the Administrative Agent and Wilmington Trust, National Association.
Letter of Credit Facility
On February 24, 2015, the Company entered into a letter of credit reimbursement and security agreement providing for
letter of credit capacity of up to $1.2 million. On October 8, 2019, the Company entered into an amendment to its letter of
credit reimbursement and security agreement and extended the term to October 8, 2024. As of December 31, 2021, the
Company had letters of credit totaling $871,000 under the agreement for certain operating leases and certain insurance
policies. Letters of credit issued under the agreement are required to be collateralized with cash. In addition, the Current
2021 ABL Facility provides for letter of credit capacity of up to $5 million subject to certain limitations on availability.
Future Minimum Principal Payments
Future scheduled minimum principal payments of debt as of December 31, 2021, were as follows:
2022
2023
2024
2025
2026
2027 and thereafter
Total Debt
7.375% Senior
Secured Notes due
February 2028 PPP Loan
Total
(In thousands)
$
$
— $
—
—
—
—
825,000
825,000 $
— $
—
—
—
7,505
—
—
—
—
—
7,505
825,000
7,505 $ 832,505
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10. INCOME TAXES:
A reconciliation of the statutory federal income taxes to the recorded provision for (benefit from) income taxes from
continuing operations is as follows:
Statutory federal tax expense/(benefit)
Effect of state taxes, net of federal benefit
Effect of state rate and tax law changes
Return to provision adjustments
Other permanent items
Non-deductible meals and entertainment
Impairment of long-lived intangible assets
Non-deductible officer’s compensation
Change in valuation allowance
IRC Section 382 adjustments
NOL expirations
Stock-based compensation forfeitures and adjustments
Uncertain tax positions
Other
Provision for (benefit from) income taxes
For the Years Ended December 31,
2021
2020
(In thousands)
$
$
$
11,391
2,131
(1,201)
47
(27)
65
—
2,055
(13)
(705)
610
—
(777)
1
13,577
$
(8,620)
(1,205)
(599)
503
(213)
96
3,339
1,002
28
(30,143)
3,000
216
(1,923)
43
(34,476)
The statutory federal tax rate used for the years ended December 31, 2021 and 2020 is 21.0%. Major components of
the effective tax rate for the year ended December 31, 2021 and 2020 are related to net operating loss limitations, net
operating loss expirations, impairments of long-lived assets, limitation of officer's compensation under IRC Section
162(m), uncertain tax positions and state income taxes.
The components of the provision for (benefit from) income taxes from continuing operations are as follows:
Federal:
Current
Deferred
State:
Current
Deferred
Provision for (benefit from) income taxes
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For the Years Ended
December 31,
2021
2020
(In thousands)
$
$
— $
13,395
1,063
(881)
13,577
$
—
(27,162)
552
(7,866)
(34,476)
Table of Contents
Deferred Income Taxes
Deferred income taxes reflect the impact of temporary differences between the assets and liabilities recognized for
financial reporting purposes and amounts recognized for tax purposes. Deferred taxes are based on tax laws as currently
enacted. Deferred tax assets are reduced by a valuation allowance if, based upon the weight of available evidence, it is not
more likely than not that we will realize some portion or all of the deferred tax assets. The significant components of the
Company’s deferred tax assets and liabilities are as follows:
Deferred tax assets:
Allowance for doubtful accounts
Accruals
Fixed assets
Stock-based compensation
Deferred financing costs
Net operating loss carryforwards
Lease liability
Interest expense carryforward
Other
Total deferred tax assets
Valuation allowance for deferred tax assets
Total deferred tax asset, net of valuation allowance
Deferred tax liabilities:
Intangible assets
Right of use asset
Partnership interests
Deferred financing costs
Other
Total deferred tax liabilities
Net deferred tax (liability) asset
As of December 31,
2021
2020
(In thousands)
$
$
2,111
465
486
163
—
114,217
10,022
15,506
—
142,970
(264)
142,706
1,924
2,358
453
290
1,475
128,023
11,592
11,934
(200)
157,849
(277)
157,572
(132,586)
(9,232)
(1,964)
(1,196)
(201)
(145,179)
(2,473)
$
(135,848)
(10,336)
(1,347)
—
—
(147,531)
10,041
$
As of December 31, 2021, the Company had federal and state NOL carryforward amounts of approximately $637.0
million and $410.2 million, respectively. The state NOLs are applied separately from the federal NOLs as the Company
generally files separate state returns for each subsidiary. Additionally, the amount of the state NOLs may change if future
apportionment factors differ from current factors. During 2016, the Company performed an Internal Revenue Code (“IRC”)
Section 382 study (“the study”) and concluded that there was an ownership shift during calendar year 2009 that resulted in
an estimated limitation on our federal and state NOLs for approximately $361.1 million and $262.7 million, respectively.
During 2018, the Company updated the study for additional information based on additional technical insight into the
application of the tax law, which resulted in a decrease to the initial estimated limitation. In 2018, the Company identified
certain assets with net unrealized built-in gain that reduced the estimated federal and state limitation by approximately
$65.6 million and $52.9 million, respectively. During 2020, the Company further reduced the federal and state limitation by
approximately $109.2 million and $93.6 million, respectively. The 2020 reductions of the IRC Section 382 limitation were
related to receiving approval from the Internal Revenue Service to retroactively apply a consolidated tax return election to
the 2009 income tax return and identifying additional assets with net unrealized built-in gains. The Company continues to
assess other potential tax strategies, which if successful, may reduce the impact of the annual limitations and potentially
recover NOLs that otherwise would expire before being applied to reduce future income tax liabilities. If successful, the
Company may be able to recover additional federal and state NOLs in future periods, which could be material. If we
conclude that it is more likely than not that we will be able to realize additional federal and state NOLs, the tax benefit
could materially impact future quarterly and annual periods. The federal and state NOLs expire in various years from 2022
to 2039.
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As of December 31, 2021, the gross deferred tax assets of approximately $143.0 million were primarily the result of
federal and state net operating losses and the IRC Section 163(j) interest expense carryforward. A valuation allowance of
$264,000 and $277,000 was recorded against our gross deferred tax asset balance as of December 31, 2021 and December
31, 2020, respectively and is related to state jurisdictions where it is not more likely than not the deferred tax assets will be
realized.
The assessment to determine the value of the deferred tax assets to be realized under ASC 740 is highly judgmental
and requires the consideration of all available positive and negative evidence in evaluating the likelihood of realizing the
tax benefit of the deferred tax assets in a future period. Circumstances may change over time such that previous negative
evidence no longer exists, and new conditions should be evaluated as positive or negative evidence that could affect the
realization of the deferred tax assets. Since the evaluation requires consideration of events that may occur in some years in
the future, significant judgment is required, and our conclusion could be materially different if certain expectations do not
materialize.
In the assessment of all available evidence, an important piece of objective verifiable evidence is evaluating a
cumulative income or loss position over the most recent three-year period. Historically, the Company has maintained a full
valuation against the net deferred tax assets, principally due to a cumulative loss over the most recent three-year period.
During the quarter ended December 31, 2018, the Company achieved three years of cumulative income, which removed
the most heavily weighed piece of objective verifiable negative evidence from our evaluation of the realizability of
deferred tax assets. The Company continues to maintain three years of rolling cumulative income as of December 31, 2021.
Additionally, the Company is projecting forecasts of taxable income to utilize our federal and state NOLs as part of our
evaluation of positive evidence. As part of the 2017 Tax Act, IRC Section 163(j) limited the deduction of interest expense.
In conjunction with evaluating and weighing the aforementioned negative and positive evidence from the Company’s
historical cumulative income or loss position, management also evaluated the impact that interest expense has had on our
cumulative income or loss position over the most recent three-year period. A material component of the Company’s
expenses is interest, and has been the primary driver of historical pre-tax losses. Adjusting for the IRC
Section 163(j) interest expense limitation on projected taxable income, we estimate utilization of federal and state net
operating losses that are not subject to annual limitations as a result of the 2009 ownership shift as defined under IRC
Section 382.
Realization of the Company’s federal and state net operating losses is dependent on generating sufficient taxable
income in future periods, and although the Company believes it is more likely than not future taxable income will be
sufficient to utilize the net operating losses, realization is not assured and future events may cause a change to the judgment
of the realizability of these deferred tax assets. If a future event causes the Company to re-evaluate and conclude that it is
not more likely than not, that all or a portion of the deferred tax assets are realizable, the Company would be required to
establish a valuation allowance against the assets at that time which would result in a charge to income tax expense and a
decrease to net income in the period which the change of judgment is concluded.
Unrecognized Tax Benefits
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
Balance as of January 1
Additions for tax positions related to current years
Additions (deductions) for tax positions related to prior years
Deductions for tax positions as a result of the lapse of applicable statutes of limitation
Balance as of December 31
2021
2020
(In thousands)
$
$
2,299
$
—
8
(992)
1,315
$
4,733
—
(2,434)
—
2,299
The nature of the uncertainties pertaining to the Company’s income taxes is primarily due to various state income tax
positions that affect the amount of state NOLs available to be applied to reduce future state income tax liabilities. The
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unrecognized tax benefits liability accrued on our balance sheet decreased by approximately $1.0 million and decreased by
approximately $2.4 million during the years ended December 31, 2021 and December 31, 2020, respectively, primarily as a
result of state NOL utilizations and expirations, and applicable tax rate changes. As of December 31, 2021, the Company
had unrecognized tax benefits of approximately $1.3 million, which if recognized, would impact the effective tax rate.
The Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of tax
expense. There is no material amount of interest and penalties recognized in the statement of operations and the balance
sheet for the year ended December 31, 2021. The Company believes that it is reasonably possible that a decrease of up to
$680,000 of unrecognized tax benefits related to state tax exposures may be necessary within the coming year.
The Company files income tax returns in the U.S. federal jurisdiction, various state and local jurisdictions and is
subject to examination by the various taxing authorities. The Company’s open tax years for federal income tax
examinations include the tax years ended December 31, 2018 through 2021. For state and local purposes, the open years
for tax examinations include the tax years ended December 31, 2017 through 2021. To the extent that net operating losses
are utilized, the year of the loss may be subject to examination.
11. STOCKHOLDERS’ EQUITY:
On June 16, 2020, the Company’s Board of Directors authorized an amendment (the “Potential Amendment”) of
Urban One's certificate of incorporation to effect a reverse stock split across all classes of common stock by a ratio of not
less than one-for-two and not more than one-for-fifty at any time prior to December 31, 2021, with the exact ratio to be set
at a whole number within this range as determined by our board of directors in its discretion. The Company’s shareholders
approved the Potential Amendment at the annual meeting of the shareholders June 16, 2020. The Company has not acted
on the Potential Amendment but may do so as determined by our board of directors in its discretion. On June 23, 2021, the
Company’s Board of Directors authorized an amendment of the Urban One 2019 Equity and Performance Incentive Plan to
increase the number of shares available for grant and to provide the grant of Class A as well as Class D shares. The
amendment was approved by the Company’s shareholders and added 5,519,575 shares of Class D Shares and added
2,000,000 Class A Shares.
On August 18, 2020, the Company entered into an Open Market Sales Agreement with Jefferies LLC (“Jefferies”)
under which the Company may offer and sell, from time to time at its sole discretion, shares of its Class A common stock,
par value $0.001 per share (the “Class A Shares”) up to an aggregate offering price of $25 million (the “2020 ATM
Program”). Jefferies acted as sales agent for the 2020 ATM Program. During the year ended December 31, 2020, the
Company issued 2,859,276 shares of its Class A Shares at a weighted average price of $5.39 for approximately $14.7
million of net proceeds after associated fees and expenses.
On January 19, 2021, the Company completed its 2020 ATM Program, sold an additional 1,465,825 shares for an
aggregate of 4,325,102 Class A shares sold through the 2020 ATM Program, receiving gross proceeds of approximately
$25.0 million and net proceeds of approximately $24.0 million for the program (inclusive of the $14.7 million sold during
the year ended December 31, 2020). On January 27, 2021, the Company entered into a new 2021 Open Market Sale
Agreement (the “2021 Sale Agreement”) with Jefferies under which the Company could sell up to an additional $25.0
million of Class A Shares, through Jefferies as its sales agent. During the three months ended March 31, 2021, the
Company issued and sold an aggregate of 420,439 Class A Shares pursuant to the 2021 Sale Agreement and received gross
proceeds of approximately $3.0 million and net proceeds of approximately $2.8 million, after deducting commissions to
Jefferies and other offering expenses. During the three months ended June 30, 2021, the Company issued and sold an
aggregate of 1,893,126 Class A Shares pursuant to the 2021 Sale Agreement and received gross proceeds of approximately
$22.0 million and net proceeds of approximately $21.2 million, after deducting commissions to Jefferies and other offering
expenses which completed its 2021 ATM Program.
On May 17, 2021, the Company entered into an Open Market Sale AgreementSM (the “Class D Sale Agreement”)
with Jefferies under which the Company may offer and sell, from time to time at its sole discretion, shares of its Class D
common stock, par value $0.001 per share (the “Class D Shares”), through Jefferies as its sales agent. On May 17, 2021,
the Company filed a prospectus supplement pursuant to the Class D Sale Agreement for the offer and sale of its Class D
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Shares having an aggregate offering price of up to $25.0 million. As of December 31, 2021, the Company has not sold any
Class D Shares under the Class D Sale Agreement. The Company may from time to time also enter into new additional
ATM programs and issue additional common stock from time to time under those programs.
On October 29, 2021, Alfred C. Liggins, President and Chief Executive Officer of Urban One, Inc. and/or Catherine
L. Hughes, Founder and Chairperson of Urban One, Inc., and/or their affiliates converted a total of 883,890 shares of
Class C Common Stock into 883,890 shares of Class A Common Stock.
Common Stock
The Company has four classes of common stock, Class A, Class B, Class C and Class D. Generally, the shares of each
class are identical in all respects and entitle the holders thereof to the same rights and privileges. However, with respect to
voting rights, each share of Class A common stock entitles its holder to one vote and each share of Class B common stock
entitles its holder to ten votes. The holders of Class C and Class D common stock are not entitled to vote on any matters.
The holders of Class A common stock can convert such shares into shares of Class C or Class D common stock. Subject to
certain limitations, the holders of Class B common stock can convert such shares into shares of Class A common stock.
The holders of Class C common stock can convert such shares into shares of Class A common stock. The holders of
Class D common stock have no such conversion rights.
Stock Repurchase Program
From time to time, the Company’s Board of Directors has authorized repurchases of shares of the Company’s Class A
and Class D common stock. As of March 13, 2020, the Company’s Board authorized a new repurchase plan of up to $2.6
million of the Company’s Class A and Class D shares through December 31, 2020. In addition, on June 11, 2020, the
Company’s Board authorized a repurchase of $2.4 million of the Company’s Class D shares. As of December 31, 2021, the
Company had no capacity remaining under the authorizations as the capacity under the June authorization was used and the
March authorization lapsed by its terms on December 31, 2020. Under open authorizations, repurchases may be made from
time to time in the open market or in privately negotiated transactions in accordance with applicable laws and regulations.
Shares are retired when repurchased. The timing and extent of any repurchases will depend upon prevailing market
conditions, the trading price of the Company’s Class A and/or Class D common stock and other factors, and subject to
restrictions under applicable law. When in effect, the Company executes upon stock repurchase programs in a manner
consistent with market conditions and the interests of the stockholders, including maximizing stockholder value. During
the year ended December 31, 2021, the Company did not repurchase any shares of Class A common stock and repurchased
6,715 shares of Class D common stock in the amount of $39,000 at an average price of $5.80 per share. During the year
ended December 31, 2020, the Company did not repurchase any shares of Class A common stock and repurchased
3,208,288 shares of Class D common stock in the amount of approximately $2.4 million at an average price of $0.76 per
share.
In addition, the Company has limited but ongoing authority to purchase shares of Class D common stock (in one or
more transactions at any time there remain outstanding grants) under the Company’s 2009 Stock Plan and 2019 Equity and
Performance Incentive Plan (both as defined below). As of May 21, 2019, the 2019 Equity and Performance Incentive Plan
will be used to satisfy any employee or other recipient tax obligations in connection with the exercise of an option or a
share grant under the 2009 Stock Plan and the 2019 Equity and Performance Incentive Plan, to the extent that the Company
has capacity under its financing agreements (i.e., its current credit facilities and indentures) (each a “Stock Vest Tax
Repurchase”). During the year ended December 31, 2021, the Company executed a Stock Vest Tax Repurchase of 515,162
shares of Class D Common Stock in the amount of $931,000 at an average price of $1.81 per share. During the year ended
December 31, 2020, the Company executed a Stock Vest Tax Repurchase of 710,992 shares of Class D Common Stock in
the amount of approximately $1.2 million at an average price of $1.64 per share.
Stock Option and Restricted Stock Grant Plan
Our 2009 stock option and restricted stock plan (the “2009 Stock Plan”) was originally approved by the stockholders
at the Company’s annual meeting on December 16, 2009. The Company had the authority to issue up to 8,250,000 shares
of Class D Common Stock under the 2009 Stock Plan. Since its original approval, from time to time, the Board of
Directors
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adopted and, as required, our stockholders approved certain amendments to and restatement of the 2009 Stock Plan (the
“Amended and Restated 2009 Stock Plan”). The amendments under the Amended and Restated 2009 Stock Plan primarily
affected (i) the number of shares with respect to which options and restricted stock grants may be granted under the 2009
Stock Plan and (ii) the maximum number of shares that can be awarded to any individual in any one calendar year. On
April 13, 2015, the Board of Directors adopted, and our stockholders approved on June 2, 2015, an amendment that
replenished the authorized plan shares, increasing the number of shares of Class D common stock available for grant back
up to 8,250,000 shares. Our new stock option and restricted stock plan (“2019 Equity and Performance Incentive Plan”),
currently in effect was approved by the stockholders at the Company’s annual meeting on May 21, 2019. The Board of
Directors adopted, and on May 21, 2019, our stockholders approved, the 2019 Equity and Performance Incentive Plan
which is funded with 5,500,000 shares of Class D Common Stock. The Company uses an average life for all option awards.
The Company settles stock options upon exercise by issuing stock. As of December 31, 2021, 5,898,026 shares of Class D
common stock and 2,000,000 shares of Class A common stock were available for grant under the 2019 Equity and
Performance Incentive Plan.
On June 12, 2019, the Compensation Committee (“Compensation Committee”) awarded Catherine Hughes,
Chairperson, 393,685 restricted shares of the Company’s Class D common stock, and stock options to purchase 174,971
shares of the Company’s Class D common stock. The grants were effective July 5, 2019 and vested on January 6, 2020.
On June 12, 2019, the Compensation Committee awarded Catherine Hughes, Chairperson, 427,148 restricted shares of
the Company’s Class D common stock, and stock options to purchase 189,843 shares of the Company’s Class D common
stock. The grants were effective June 5, 2020 and vested on January 6, 2021.
On June 12, 2019, the Compensation Committee awarded Alfred Liggins, Chief Executive Officer and President,
656,142 restricted shares of the Company’s Class D common stock, and stock options to purchase 291,619 shares of the
Company’s Class D common stock. The grants were effective July 5, 2019 and vested on January 6, 2020.
On June 12, 2019, the Compensation Committee awarded Alfred Liggins, Chief Executive Officer and President,
711,914 restricted shares of the Company’s Class D common stock, and stock options to purchase 316,406 shares of the
Company’s Class D common stock. The grants were effective June 5, 2020 and vested on January 6, 2021.
On June 12, 2019, the Compensation Committee awarded Peter Thompson, Chief Financial Officer, 224,654 restricted
shares of the Company’s Class D common stock, and stock options to purchase 99,846 shares of the Company’s Class D
common stock. The grants were effective July 5, 2019 and vested on January 6, 2020.
On June 12, 2019, the Compensation Committee awarded Peter Thompson, Chief Financial Officer, 243,750 restricted
shares of the Company’s Class D common stock, and stock options to purchase 108,333 shares of the Company’s Class D
common stock. The grants were effective June 5, 2020 and vested on January 6, 2021.
On August 7, 2017, the Compensation Committee awarded 575,262 shares of restricted stock and 470,000 stock
options to certain employees pursuant to the Company’s long-term incentive plan. The grants were effective August 7,
2017. 470,000 shares of restricted stock and 470,000 stock options have vested or will vest in three installments, with the
first installment of 33% having vested on January 5, 2018, and the second installment having vested on January 5, 2019,
and the final installment vested on January 5, 2020.
On October 2, 2017, Karen Wishart, our current Chief Administrative Officer, as part of her employment agreement,
received an equity grant of 37,500 shares of the Company's Class D common stock as well as a grant of options to purchase
37,500 shares of the Company's Class D common stock. The grants have vested in equal increments on each of October 2,
2018, October 2, 2019 and October 2, 2020.
On June 12, 2019, the Compensation Committee awarded David Kantor, Chief Executive Officer - Radio Division,
195,242 restricted shares of the Company’s Class D common stock, and stock options to purchase 86,774 shares of the
Company’s Class D common stock. The grants were effective July 5, 2019 and vested on January 6, 2020.
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On June 12, 2019, the Compensation Committee awarded David Kantor, Chief Executive Officer – Radio Division,
211,838 restricted shares of the Company’s Class D common stock, and stock options to purchase 94,150 shares of the
Company’s Class D common stock. The grants were effective June 5, 2020 and vested on January 6, 2021.
Pursuant to the terms of each of our stock plans and subject to the Company’s insider trading policy, a portion of each
recipient’s vested shares may be sold in the open market for tax purposes on or about the vesting dates.
The Company measures compensation cost for all stock-based awards at fair value on date of grant and recognizes the
related expense over the service period for awards expected to vest. The restricted stock-based awards do not participate in
dividends until fully vested. The fair value of stock options is determined using the BSM. Such fair value is recognized as
an expense over the service period, net of estimated forfeitures, using the straight-line method. Estimating the number of
stock awards that will ultimately vest requires judgment, and to the extent actual forfeitures differ substantially from our
current estimates, amounts will be recorded as a cumulative adjustment in the period the estimated number of stock awards
are revised. We consider many factors when estimating expected forfeitures, including the types of awards, employee
classification and historical experience. Actual forfeitures may differ substantially from our current estimate.
The Company’s use of the BSM to calculate the fair value of stock-based awards incorporates various assumptions
including volatility, expected life, and interest rates. For options granted, the BSM determines: (i) the term by using the
simplified “plain-vanilla” method as allowed under SAB No. 110; (ii) a historical volatility over a period commensurate
with the expected term, with the observation of the volatility on a daily basis; and (iii) a risk-free interest rate that was
consistent with the expected term of the stock options and based on the U.S. Treasury yield curve in effect at the time of
the grant.
Stock-based compensation expense for the years ended December 31, 2021 and 2020, was $565,000 and
approximately $2.3 million, respectively.
The Company granted 40,917 stock options during the year ended December 31, 2021 and the Company granted
878,643 stock options during the year ended December 31, 2020. The per share weighted-average fair value of options
granted during the years ended December 31, 2021 and 2020, was $2.77 and $0.66, respectively.
These fair values were derived using the BSM with the following weighted-average assumptions:
Average risk-free interest rate
Expected dividend yield
Expected lives
Expected volatility
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For the Years Ended December 31,
2021
2020
0.68 %
— %
0.40 %
— %
5.16 years
5.04 years
82.04 %
79.75 %
Table of Contents
Transactions and other information relating to stock options for the years December 31, 2021 and 2020 are
summarized below:
Number of Weighted-Average Contractual Term
Weighted-Average
Remaining
Exercise Price
(In Years)
Outstanding at December 31, 2019
Grants
Exercised
Forfeited/cancelled/expired/settled
Outstanding at December 31, 2020
Grants
Exercised
Forfeited/cancelled/expired/settled
Balance as of December 31, 2021
Vested and expected to vest at December 31, 2021
Unvested at December 31, 2021
Exercisable at December 31, 2021
Options
$
4,197,000
879,000
$
(1,033,000) $
(24,000) $
$
4,019,000
$
41,000
(230,000) $
(59,000) $
$
$
$
$
3,771,000
3,770,000
21,000
3,750,000
2.13
1.83
1.91
3.17
2.11
4.32
1.70
1.27
2.18
2.17
7.26
2.15
Aggregate
Intrinsic
Value
255,000
—
—
—
41,000
—
—
—
$ 4,660,000
$ 4,660,000
$
—
$ 4,660,000
6.70
$
—
—
—
$
—
—
—
6.48
5.68
5.68
9.76
5.66
The aggregate intrinsic value in the table above represents the difference between the Company’s stock closing price
on the last day of trading during the year ended December 31, 2021, and the exercise price, multiplied by the number of
shares that would have been received by the holders of in-the-money options had all the option holders exercised their in-
the-money options on December 31, 2021. This amount changes based on the fair market value of the Company’s stock.
There were 229,756 options exercised during the year ended December 31, 2021 and there were 1,032,922 options
exercised during the year ended December 31, 2020. The number of options that vested during the year ended December
31, 2021 was 903,643 and the number of options that vested during the year ended December 31, 2020 was 637,270.
As of December 31, 2021, $75,000 of total unrecognized compensation cost related to stock options is expected to be
recognized over a weighted-average period of 5 months. The weighted-average fair value per share of shares underlying
stock options was $1.45 at December 31, 2021.
The Company granted 101,057 and 1,649,394 shares, respectively, of restricted stock during the years ended
December 31, 2021 and 2020, respectively. During the years ended December 31, 2021 and 2020, 9,671 shares and 18,248
shares, respectively, of restricted stock were issued to the Company’s non-executive directors as a part of their
compensation packages. Each of the four non-executive directors received 9,671 shares of restricted stock, or $50,000
worth, of restricted stock based upon the closing price of the Company’s Class D common stock on July 6, 2021. Each of
the four non-executive directors received 25,000 shares of restricted stock, or $50,000 worth, of restricted stock based upon
the closing price of the Company’s Class D common stock on June 16, 2020. The restricted stock grants for the non-
executive directors vest over a two-year period in equal 50% installments.
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Table of Contents
Transactions and other information relating to restricted stock grants for the years ended December 31, 2021 and 2020
are summarized below:
Unvested at December 31, 2019
Grants
Vested
Forfeited/cancelled/expired
Unvested at December 31, 2020
Grants
Vested
Forfeited/cancelled/expired
Unvested at December 31, 2021
Average
Fair Value
at Grant
Date
2.14
0.77
2.14
—
0.83
3.22
0.83
3.90
Shares
1,814,000
1,649,000
(1,739,000)
1,724,000
101,000
(1,749,000)
$
$
$
— $
$
$
$
— $
$
76,000
Restricted stock grants were and are included in the Company’s outstanding share numbers on the effective date of
grant. As of December 31, 2021, $233,000 of total unrecognized compensation cost related to restricted stock grants was
expected to be recognized over a weighted-average period of 9 months.
12. PROFIT SHARING AND EMPLOYEE SAVINGS PLAN:
The Company maintains a profit sharing and employee savings plan under Section 401(k) of the Internal Revenue
Code. This plan allows eligible employees to defer allowable portions of their compensation on a pre-tax basis through
contributions to the savings plan. The Company may contribute to the plan at the discretion of its Board of Directors. The
Company does not match employee contributions. The Company did not make any contributions to the plan during
the years ended December 31, 2021 and 2020.
13. COMMITMENTS AND CONTINGENCIES:
Radio Broadcasting Licenses
Each of the Company’s radio stations operates pursuant to one or more licenses issued by the Federal Communications
Commission that have a maximum term of eight years prior to renewal. The Company’s radio broadcasting licenses expire
at various times beginning in August 2021 through August 1, 2029. Although the Company may apply to renew its radio
broadcasting licenses, third parties may challenge the Company’s renewal applications. The Company is not aware of any
facts or circumstances that would prevent the Company from having its current licenses renewed.
Royalty Agreements
Musical works rights holders, generally songwriters and music publishers, have been traditionally represented by
performing rights organizations, such as the American Society of Composers, Authors and Publishers (“ASCAP”),
Broadcast Music, Inc. (“BMI”) and SESAC, Inc. (“SESAC”). The market for rights relating to musical works is changing
rapidly. Songwriters and music publishers have withdrawn from the traditional performing rights organizations, particularly
ASCAP and BMI, and new entities, such as Global Music Rights, Inc. (“GMR”), have been formed to represent rights
holders. These organizations negotiate fees with copyright users, collect royalties and distribute them to the rights holders.
We currently have arrangements with ASCAP, SESAC and GMR. On April 22, 2020, the Radio Music License Committee
(“RMLC”), an industry group which the Company is a part of, and BMI have reached agreement on the terms of a new
license agreement that covers the period January 1, 2017, through December 31, 2021. Upon approval of the court of the
BMI/RMLC agreement, the Company automatically became a party to the agreement and to a license with BMI through
December 31, 2021.
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Table of Contents
Leases and Other Operating Contracts and Agreements
The Company has noncancelable operating leases for office space, studio space, broadcast towers and transmitter
facilities that expire over the next 10 years. The Company’s leases for broadcast facilities generally provide for a base rent
plus real estate taxes and certain operating expenses related to the leases. Certain of the Company’s leases contain renewal
options, escalating payments over the life of the lease and rent concessions. The future rentals under non-cancelable leases
as of December 31, 2021, are shown below.
The Company has other operating contracts and agreements including employment contracts, on-air talent contracts,
severance obligations, retention bonuses, consulting agreements, equipment rental agreements, programming related
agreements, and other general operating agreements that expire over the next five years. The amounts the Company is
obligated to pay for these agreements are shown below.
Years ending December 31:
2022
2023
2024
2025
2026
2027 and thereafter
Total
Operating
Lease
Agreements
Other
Operating
Contracts
and
Agreements
(In thousands)
$
$
13,164
11,333
10,099
5,377
3,070
5,378
48,421
$
$
69,791
23,117
19,386
19,422
8,452
9,408
149,576
Of the total amount of other operating contracts and agreements included in the table above, approximately $100.1
million has not been recorded on the balance sheet as of December 31, 2021, as it does not meet recognition criteria.
Approximately $18.0 million relates to certain commitments for content agreements for our cable television segment,
approximately $30.9 million relates to employment agreements, and the remainder relates to other programming, network
and operating agreements.
Reach Media Redeemable Noncontrolling Interest Shareholders’ Put Rights
Beginning on January 1, 2018, the noncontrolling interest shareholders of Reach Media have had an annual right to
require Reach Media to purchase all or a portion of their shares at the then current fair market value for such shares (the
“Put Right”). This annual right is exercisable for a 30-day period beginning January 1 of each year. The purchase price for
such shares may be paid in cash and/or registered Class D common stock of Urban One, at the discretion of Urban One.
The noncontrolling interest shareholders of Reach Media did not exercise their Put Right for the 30-day period ending
January 31, 2022. Management, at this time, cannot reasonably determine the period when and if the put right will be
exercised by the noncontrolling interest shareholders.
Letters of Credit
On February 24, 2015, the Company entered into a letter of credit reimbursement and security agreement providing for
letter of credit capacity of up to $1.2 million. On October 8, 2019, the Company entered into an amendment to its letter of
credit reimbursement and security agreement and extended the term to October 8, 2024. As of December 31, 2021, the
Company had letters of credit totaling $871,000 under the agreement for certain operating leases and certain insurance
policies. Letters of credit issued under the agreement are required to be collateralized with cash. In addition, the Current
2021 ABL Facility provides for letter of credit capacity of up to $5 million subject to certain limitations on availability.
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Other Contingencies
The Company has been named as a defendant in several legal actions arising in the ordinary course of business. It is
management’s opinion, after consultation with its legal counsel, that the outcome of these claims will not have a material
adverse effect on the Company’s financial position or results of operations.
14. QUARTERLY FINANCIAL DATA (UNAUDITED):
2021:
Net revenue
Operating income
Net income
Consolidated net income attributable to common
stockholders
BASIC AND DILUTED NET INCOME
ATTRIBUTABLE TO COMMON STOCKHOLDERS
Consolidated net income per share attributable to common
stockholders - basic
Consolidated net income per share attributable to common
stockholders - diluted
WEIGHTED AVERAGE SHARES OUTSTANDING
Weighted average shares outstanding — basic
Weighted average shares outstanding —diluted
31-Mar
June 30
September 30 December 31
(In thousands, except share data)
Quarters Ended
$
91,440
23,757
461
$
107,593
37,920
18,478
$
111,463
34,475
14,455
130,966
22,391
7,273
7
17,866
13,876
6,603
0.00
0.00
$
$
0.36
0.33
$
$
0.27
0.25
$
$
0.13
0.12
$
$
$
48,463,289
49,053,650
49,789,892
53,780,918
51,190,105
55,080,394
51,206,358
55,084,927
2020:
Net revenue
Operating (loss) income
Net (loss) income
Consolidated net (loss) income attributable to common
stockholders
BASIC AND DILUTED NET (LOSS) INCOME
ATTRIBUTABLE TO COMMON STOCKHOLDERS
Consolidated net (loss) income per share attributable to
common stockholders - basic
Consolidated net (loss) income per share attributable to
common stockholders - diluted
WEIGHTED AVERAGE SHARES OUTSTANDING
Weighted average shares outstanding — basic
Weighted average shares outstanding —diluted
March 31 (a)
June 30
September 30 (a) December 31 (a)
(In thousands, except share data)
Quarters Ended
$
$
$
$
94,875
(27,287)
(23,058)
$
76,008
20,382
1,642
$
91,912
3,968
(12,277)
113,542
34,533
27,124
(23,187)
1,420
(12,772)
26,426
(0.51) $
(0.51) $
0.03
0.03
$
$
(0.29) $
(0.29) $
0.58
0.55
45,228,164
45,228,164
44,806,219
48,154,262
44,175,385
44,175,385
45,942,818
48,054,418
(a) The net income (loss) from continuing operations for the quarters ended March 31, 2020, September 30, 2020, and
December 31, 2020 includes approximately $53.6 million, $29.1 million, and $1.7 million, respectively of impairment
charges.
F-51
Table of Contents
15. SEGMENT INFORMATION:
The Company has four reportable segments: (i) radio broadcasting; (ii) Reach Media; (iii) digital; and (iv) cable
television. These segments operate in the United States and are consistently aligned with the Company’s management of its
businesses and its financial reporting structure.
The radio broadcasting segment consists of all broadcast results of operations. The Reach Media segment consists of
the results of operations for the related activities and operations of our syndicated shows. The digital segment includes the
results of our online business, including the operations of Interactive One, as well as the digital components of our other
reportable segments. The cable television segment consists of the Company’s cable TV operation, including TV One’s and
CLEO TV’s results of operations. Corporate/Eliminations represents financial activity associated with our corporate staff
and offices and intercompany activity among the four segments.
Operating loss or income represents total revenues less operating expenses, depreciation and amortization, and
impairment of long-lived assets. Intercompany revenue earned and expenses charged between segments are recorded at
estimated fair value and eliminated in consolidation.
The accounting policies described in the summary of significant accounting policies in Note 1 – Organization and
Summary of Significant Accounting Policies are applied consistently across the segments.
F-52
Table of Contents
Detailed segment data for the years ended December 31, 2021 and 2020 is presented in the following table:
Net Revenue:
Radio Broadcasting
Reach Media
Digital
Cable Television
Corporate/Eliminations*
Consolidated
Operating Expenses (including stock-based compensation and excluding depreciation and
amortization and impairment of long-lived assets):
Radio Broadcasting
Reach Media
Digital
Cable Television
Corporate/Eliminations
Consolidated
Depreciation and Amortization:
Radio Broadcasting
Reach Media
Digital
Cable Television
Corporate/Eliminations
Consolidated
Impairment of Long-Lived Assets:
Radio Broadcasting
Reach Media
Digital
Cable Television
Corporate/Eliminations
Consolidated
Operating income (loss):
Radio Broadcasting
Reach Media
Digital
Cable Television
Corporate/Eliminations
Consolidated
Year Ended
December 31,
2021
2020
(In thousands)
$ 140,246
46,437
59,937
198,180
(3,338)
$ 441,462
$ 130,573
30,996
35,599
181,583
(2,414)
$ 376,337
$
98,250
32,911
42,698
103,049
36,722
$ 313,630
$
91,052
22,376
29,608
81,546
26,018
$ 250,600
$
$
$
$
3,135
208
1,264
3,738
944
9,289
$
$
3,022
237
1,592
3,749
1,141
9,741
— $
—
—
—
—
— $
84,400
—
—
—
—
84,400
$
38,861
13,318
15,975
91,393
(41,004)
$ 118,543
$
$
(47,901)
8,383
4,399
96,288
(29,573)
31,596
* Intercompany revenue included in net revenue above is as follows:
Radio Broadcasting
$
(3,338) $
(2,414)
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Table of Contents
Capital expenditures by segment are as follows:
Radio Broadcasting
Reach Media
Digital
Cable Television
Corporate/Eliminations
Consolidated
Total Assets:
Radio Broadcasting
Reach Media
Digital
Cable Television
Corporate/Eliminations
Consolidated
16. SUBSEQUENT EVENTS:
$
$
2,200
82
799
92
625
3,798
$
$
2,826
160
1,354
385
1,561
6,286
As of
December 31,
December 31,
2021
2020
(In thousands)
$
$
627,948
33,451
32,915
367,896
198,898
1,261,108
$
$
630,174
38,235
23,168
374,046
129,864
1,195,487
On July 29, 2021, RVA Entertainment Holdings, LLC (“RVAEH”), a wholly owned unrestricted subsidiary of the
Company, entered into a Host Community Agreement (the “Original HCA”) with the City of Richmond (the “City”) for the
development of the ONE Casino + Resort (the “Project”). The Original HCA imposed certain obligations on RVAEH in
connection with the development of the Project, including a $26 million upfront payment (the “Upfront Payment”) due
upon successful passage of a citywide referendum permitting development of the Project (the “Referendum”). In
connection with the Original HCA, RVAEH and its development partner Pacific Peninsula Entertainment funded the
Upfront Payment into escrow to be released to the City upon successful passage of the Referendum or back to RVAEH in
the event the Referendum failed. On November 2, 2021, the Referendum was conducted, and the resort project was
narrowly defeated. However, on January 24, 2022, the Richmond City Council adopted a new resolution in continued
efforts to bring the Project to the City. The new resolution was the first of several steps in pursuit of a second referendum.
The City and RVAEH then entered into a new Host Community Agreement (the “New HCA”) which also included an
Upfront Payment to be held in escrow and payable upon successful passage of a citywide referendum permitting
development of the Project. Upon obtaining precertification for RVAEH, by the Virginia Lottery Board, the City will then
pursue an order from the Circuit Court for the City ordering a second referendum. If the City is successful in obtaining the
precertification and the Court orders a second referendum, it is currently anticipated the second referendum would occur in
November 2022. If the voters approve the referendum then the Commonwealth may issue one license permitting operation
of a casino in Richmond. As a result of the efforts to obtain a second referendum, including execution of the New HCA,
the Upfront Payment remains in escrow. Therefore, the Company’s portion of the Upfront Payment, approximately $19.5
million, is classified as restricted cash on the balance sheet as of December 31, 2021.
On February 7, 2022, the Radio Music License Committee (“RMLC”), an industry group which the Company is a part
of, and Global Music Rights, Inc. (“GMR”) reached a settlement and achieved certain conditions which effectuate a four-
year license to which the Company is a party for the period April 1, 2022 to March 31, 2026. The license includes an
optional three year extended term that the Company may effectuate prior to the end of the initial term.
On March 7, 2022, the Board of the Company authorized and approved a share repurchase program for up to $25
million of the currently outstanding shares of the Company’s Class A and/or Class D common stock over a period of 24
months. Under the stock repurchase program, the Company intends to repurchase shares through open market purchases,
privately-negotiated transactions, block purchases or otherwise in accordance with applicable federal securities laws,
including Rule 10b-18 of the Securities Exchange Act of 1934 (the “Exchange Act”). The Board also approved a
repurchase program for up to $50 million of the Company's outstanding 7.375% Senior Secured Notes due 2028.
F-54
Table of Contents
The Board also authorized the Company to enter into written trading plans under Rule 10b5-1 of the Exchange
Act. Adopting a trading plan that satisfies the conditions of Rule 10b5-1 allows a company to repurchase its shares/bonds
at times when it might otherwise be prevented from doing so due to self-imposed trading blackout periods or pursuant to
insider trading laws. Under any Rule 10b5-1 trading plan, the Company’s third-party broker, subject to Securities and
Exchange Commission regulations regarding certain price, market, volume and timing constraints, would have authority to
purchase the Company’s common stock and/or bonds in accordance with the terms of the plan. The Company may from
time to time enter into Rule 10b5-1 trading plans to facilitate the repurchase of its common stock or bonds pursuant to its
repurchase programs.
The Company’s share repurchase programs do not obligate it to acquire any specific number of shares or bonds. The
Company cannot predict when or if it will repurchase any shares of common stock or bonds as such repurchase programs
will depend on a number of factors, including constraints specified in any Rule 10b5-1 trading plans, price, general
business and market conditions, and alternative investment opportunities. Information regarding share repurchases will be
available in the Company’s periodic reports on Form 10-Q and 10-K filed with the Securities and Exchange Commission as
required by the applicable rules of the Exchange Act.
F-55
Table of Contents
URBAN ONE, INC. AND SUBSIDIARIES
SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
For the Years Ended December 31, 2021 and 2020
Description
Allowance for Doubtful Accounts:
2021
2020
Description
Valuation Allowance for Deferred Tax Assets:
2021
2020
Balance
at
Beginning
of Year
Additions
Charged
to
Expense
Acquired
from
Acquisitions
(In thousands)
Deductions
Balance
at End
of Year
7,956
7,416
$
$
1,584 $
1,394 $
— $
— $
797
854
$
$
8,743
7,956
Balance
at
Beginning
of Year
Additions
Charged
to
Expense
Acquired
from
Acquisitions
(In thousands)
Deductions
Balance
at End
of Year
277
249
$
$
— $
28 $
— $
— $
13
$
— $
264
277
$
$
S-1
Description of Registrant’s Securities
EXHIBIT 4.7
Urban One, Inc. and its subsidiaries, (collectively, “Urban One,” the “Company”, “we”, “our” and/or “us”) has
two classes of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended:
● Class A Common Stock, $0.001 par value, 30,000,000 shares authorized, 9,104,916 shares issued and
outstanding (the “Class A Common Stock”) as of December 31, 2021.
● Class D Common Stock, $0.001 par value, 150,000,000 shares authorized, 37,324,737 shares issued and
outstanding (the “Class D Common Stock”) as of December 31, 2021.
Other shares that are authorized but not registered are:
● Class B Common Stock, $0.001 par value, 150,000,000 shares authorized, 2,861,843 shares issued and
outstanding (the “Class B Common Stock”) as of December 31, 2021.
● Class C Common Stock, $0.001 par value, 150,000,000 shares authorized, 2,045,016 shares issued and
outstanding (the “Class C Common Stock”) as of December 31, 2021.
● Preferred Stock, $0.001 par value, 1,000,000 shares authorized, no shares issued and outstanding (the
“Preferred Stock”) as of December 31, 2021.
The following is a summary of the material terms and rights of our Class A Common Stock and Class D Common
Stock and the provisions of our certificate of incorporation and our by-laws, each of which is incorporated by reference
as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2021, of which this exhibit is a
part. This summary is not complete and you should refer to the applicable provisions of our certificate of incorporation
and by-laws. Our certificate of incorporation authorizes us to issue additional capital stock, but those shares are not
registered under Section 12 of the Securities Exchange Act of 1934, as amended.
General Rights and Voting Rights - The Company has four classes of common stock, Class A, Class B, Class C
and Class D. The shares of our Class A, Class B, Class C and Class D are collectively referred to as our Common
Stock. Generally, the shares of each class are identical in all respects and entitle the holders thereof to the same rights
and privileges. However, with respect to voting rights, each share of Class A common stock entitles its holder to one
vote and each share of Class B common stock entitles its holder to ten votes. The holders of Class C and Class D
common stock are not entitled to vote on any matters. The holders of Class A common stock can convert such shares
into shares of Class C or Class D common stock. Subject to certain limitations, the holders of Class B common stock
can convert such shares into shares of Class A common stock. The holders of Class C common stock can convert such
shares into shares of Class A common stock. The holders of Class D common stock have no such conversion rights.
Dividends - As and when dividends are declared or paid with respect to shares of Common Stock, whether in
cash, property or securities of the Corporation, the holders of Class A Common, the holders of Class B Common, the
holders of Class C Common and the holders of Class D Common shall be entitled to receive such dividends pro rata at
the same rate per share for each such class of Common Stock; provided that, if such dividends are declared or paid in
shares of Common Stock, such dividends may be paid only (i) in shares of Class D Common, or (ii) if holders of any
class of Common Stock are to receive payment in shares of any class of Common Stock other than Class D Common,
then holders of shares of each class of Common Stock must receive payment only in shares of such respective class of
Common Stock. The rights of the holders of Common Stock to receive dividends are subject to the provisions of the
Preferred Stock.
Liquidation - Subject to any preferential rights of outstanding shares of Preferred Stock, in the event of any
liquidation of the Company, all remaining assets of the Company shall be distributed to holders of Common Stock pro
rata at the same rate per share for each share of Common Stock.
Other Rights and Preferences - Except as stated above, our Common Stock has no sinking fund or redemption
provisions or preemptive, conversion or exchange rights. Holders of Common Stock may act by unanimous written
consent.
Listing - Shares of our Class A common stock and Class D common stock are traded on The Nasdaq Stock Market
LLC under the trading symbols “UONE” and “UONEK,” respectively.
SUBSIDIARIES OF URBAN ONE, INC.
As of December 31, 2021
Exhibit 21.1
Radio One Licenses, LLC, a Delaware limited liability company, is a restricted subsidiary of Urban One, Inc. and is the licensee of the
following stations:
KBFB-FM
KBXX-FM
KMJQ-FM
KROI-FM
KZMJ-FM
WAMJ-FM
WCDX-FM
WDCJ-FM
WERQ-FM
WFXC-FM
WFXK-FM
WHTA-FM
WKJM-FM
WKJS-FM
WKYS-FM
WMMJ-FM
WNNL-FM
WOL-AM
WOLB-AM
WPPZ-FM
WPRS-FM
WPZZ-FM
WQOK-FM
WRNB-FM
WTEM-AM
WTPS-AM
WUMJ-FM
WWIN-AM
WWIN-FM
WXGI-AM
WYCB-AM
W275BK
W281AW
W274BX
W240DJ
W258DC
Radio One of Charlotte, LLC (“Radio One of Charlotte”), a Delaware limited liability company, the sole member of which is Urban One,
Inc., is a restricted subsidiary of Urban One, Inc. Charlotte Broadcasting, LLC (“Charlotte Broadcasting”) is a Delaware limited liability
company, the sole member of which is Radio One of Charlotte. Radio One of North Carolina, LLC (“Radio One of North Carolina”) is a
Delaware limited liability company, the sole member of which is Charlotte Broadcasting. Radio One of North Carolina is the licensee of the
following stations:
WPZS-FM
WQNC-FM
WBT-FM
WBT-AM
WFNZ-FM
WKLNK-FM
W273DA
Gaffney Broadcasting, LLC (“Gaffney Broadcasting”) is a South Carolina limited liability company, the sole member of which is
Charlotte Broadcasting. Gaffney Broadcasting is the licensee of the following station:
WOSF-FM
Blue Chip Broadcasting, Ltd. (“BCB Ltd.”), an Ohio limited liability company, the sole member of which is Urban One, Inc., and which
is a restricted subsidiary of Urban One, Inc. Blue Chip Broadcasting Licenses, Ltd. (“BC Licenses”) is an Ohio limited liability company, the
sole member of which is BCB Ltd. BC Licenses is the licensee of the following stations:
WIZF-FM
WENZ-FM
WERE-AM
WXMG-FM
W268CM
WOSL-FM
WCKX-FM
WJMO-AM
WJYD-FM
WQMC-LD
WDBZ-AM
WBMO-FM
WZAK-FM
W233CG
Radio One of Texas II, LLC, a Delaware limited liability company, the sole member of which is Urban One, Inc., and it is a restricted
subsidiary of Urban One, Inc.
Radio One of Indiana, L.P. is a Delaware limited partnership. Urban One, Inc. is the general partner and 99% owner of Radio One of
Indiana, L.P. Charlotte Broadcasting, LLC is the limited partner and 1% owner of Radio One of Indiana, L.P.
Radio One of Indiana, LLC is a Delaware limited liability company, the sole member of which is Radio One of Indiana, L.P. Radio One
of Indiana, LLC is the licensee of the following stations:
WDNI-CD
WTLC-FM
WHHH-FM
WNOW-FM
WTLC-AM
W286CM
W236CR
Satellite One, LLC is a Delaware limited liability company, the sole member of which is Urban One, Inc.
New Mableton Broadcasting Corporation, a Delaware corporation, is a wholly owned subsidiary of Urban One, Inc. and is the licensee
of the following station:
Radio One Cable Holdings, LLC, a Delaware limited liability company, is a wholly owned subsidiary of Urban One, Inc. Radio One
Cable Holdings, LLC holds an interest in TV One, LLC, a Delaware limited liability company.
WPZE-FM
Radio One Media Holdings, LLC is a Delaware limited liability company, the sole member of which is Urban One, Inc. Radio One
Media Holdings, LLC owns 80.0% of the common stock of Reach Media, Inc., a Texas corporation.
Radio One Distribution Holdings, LLC is a Delaware limited liability company, the sole member of which is Urban One, Inc. Radio One
Distribution Holdings, LLC is the sole member of Distribution One, LLC which is a Delaware limited liability company.
Interactive One, Inc., a Delaware corporation, is a wholly owned subsidiary of Urban One, Inc. and the sole member of Interactive
One, LLC.
Interactive One, LLC, is a Delaware limited liability company, the sole member of which is Interactive One, Inc.
Radio One Urban Network Holdings, LLC, is a Delaware limited liability company, the sole member of which is Urban One, Inc.
Radio One Entertainment Holdings, LLC, is a Delaware limited liability company, the sole economic and majority voting member of
which is Urban One, Inc.
BossipMadameNoire, LLC, is a Delaware limited liability company, the sole member of which is Urban One, Inc.
RO One Solution, LLC, is a Delaware limited liability company, the sole member of which is Urban One, Inc.
Urban One Productions, LLC, is a Delaware limited liability company, the sole member of which is Urban One, Inc.
Urban One Entertainment SPV, LLC, is a Delaware limited liability company, the sole economic and majority voting member of which
is Radio One Entertainment Holdings, LLC, a wholly-owned subsidiary of Urban One, Inc.
T Tenth Productions, LLC, is a Delaware limited liability company, the sole member of which is TV One, LLC.
Charlie Bear Productions, LLC, is a Maryland limited liability company, the sole member of which is TV One, LLC.
CLEOTV, LLC, is a Delaware limited liability company, the sole member of which is TV One, LLC.
Consent of Independent Registered Public Accounting Firm
EXHIBIT 23.1
Urban One, Inc.
Silver Spring, Maryland
We hereby consent to the incorporation by reference in the Registration Statements on Form S-3/A (No. 333-223695),
Form S-3 (No. 333-257149, No. 333-257037 and No. 333-241635) and Form S-8 (No. 333-232991 and No. 333-258874)
of Urban One, Inc. of our reports dated March 15, 2022, relating to the consolidated financial statements and schedule, and
the effectiveness of Urban One’s internal control over financial reporting, which appear in this Form 10-K.
/s/ BDO USA, LLP
Potomac, Maryland
March 15, 2022
1
EXHIBIT 31.1
I, Alfred C. Liggins, III, certify that:
1.
I have reviewed this annual report on Form 10-K of Urban One, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of,
and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
b)
c)
d)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those entities, particularly during the
period in which this report is being prepared;
designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case
of this report) that has materially affected, or is reasonably likely to materially affect, the registrant’s
internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or
persons performing the equivalent functions):
a)
b)
all significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and
any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant’s internal control over financial reporting.
Date: March 15, 2022
By: /s/ Alfred C. Liggins, III
Alfred C. Liggins, III
President and Chief Executive Officer
1
EXHIBIT 31.2
I, Peter D. Thompson, certify that:
1.
I have reviewed this annual report on Form 10-K of Urban One, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
b)
c)
d)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those entities, particularly during the
period in which this report is being prepared;
designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case
of this report) that has materially affected, or is reasonably likely to materially affect, the registrant’s
internal control over financial reporting; and
5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or
persons performing the equivalent functions):
a)
b)
all significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and
any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant’s internal control over financial reporting.
Date: March 15, 2022
By: /s/ Peter D. Thompson
Peter D. Thompson
Executive Vice President, Chief Financial Officer
and Principal Accounting Officer
1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
EXHIBIT 32.1
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the
undersigned officer of Urban One, Inc. (the “Company”) hereby certifies, to such officer’s knowledge, that:
(i)
the accompanying Annual Report on Form 10-K of the Company for the year ended December 31, 2021 (the
“Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities
Exchange Act of 1934, as amended; and
(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results
of operations of the Company.
Date: March 15, 2022
By:
/s/ Alfred C. Liggins, III
Name: Alfred C. Liggins, III
Title: President and Chief Executive Officer
A signed original of this written statement required by Section 906 has been provided to Urban One, Inc. and will be
retained by Urban One, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
1
CERTIFICATION OF CHIEF FINANCIAL OFFICER
EXHIBIT 32.2
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the
undersigned officer of Urban One, Inc. (the “Company”) hereby certifies, to such officer’s knowledge, that:
(i)
the accompanying Annual Report on Form 10-K of the Company for the year ended December 31, 2021 (the
“Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities
Exchange Act of 1934, as amended; and
(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results
of operations of the Company.
Date: March 15, 2022
By: /s/ Peter D. Thompson
Name: Peter D. Thompson
Title: Executive Vice President, Chief Financial Officer
and Principal Accounting Officer
A signed original of this written statement required by Section 906 has been provided to Urban One, Inc. and will be
retained by Urban One, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
1