Salem Catches Fish Buyer, Pays Off Entire Debt Load

Salem Media Group, Inc has  announced it has entered into a series of transactions pursuant to which it has repurchased all $159.4 million of its outstanding 7.125% Senior Secured Notes due 2028 at a $37.1 million discount, including accrued interest, has issued $40 million of a new series of convertible preferred stock, and has agreed to sell seven radio stations and enter into a marketing agreement for total consideration of $90 million.

David Santrella, Salem’s Chief Executive Officer said, “Upon the closing of these three transactions, we will have transformed and significantly improved Salem’s balance sheet and capital structure. With the exception of its revolving line of credit, Salem will have no outstanding debt. Salem will also have the benefit of working with an important new strategic investor that is expected to bring significant new opportunities to the company as well as offer incredible expertise in the area of digital media.” David Santrella added, “As a result of these transactions, our ability to service our national ministry partners and listeners with the important content provided by Salem has been greatly enhanced.”

On December 23, 2024, the Company entered into an agreement with Educational Media Foundation (“EMF”), the owner of the nation's two largest Christian music radio networks (K-LOVE and Air1) with over 1,000 broadcast signals across all 50 states, for the sale of the Company’s Contemporary Christian Music formatted radio stations in Atlanta (WFSH-FM), Cleveland (WFHM-FM), Colorado Springs (KBIQ-FM), Dallas (KLTY-FM), Los Angeles (KFSH-FM), Portland (KFIS-FM) and Sacramento (KKFS-FM) for aggregate consideration of $80 million, and will enter into an advertising and marketing agreement for $10 million. 

The Radio Stations Sale is subject to customary closing conditions and is expected to close in the first half of 2025. EMF will start operating the Stations pursuant to an Affiliation Agreement on or about February 1, 2025. In addition, the Company issued EMF a senior secured promissory note due 2027 in the principal amount of $72 million, a portion of the proceeds of which were used for the repurchase of the 2028 Notes. The Promissory Note, which will be terminated upon consummation of the Radio Stations Sale, is secured by substantially all of the assets of the Company and certain subsidiary guarantors and will bear interest at 3-month SOFR + 1.00% starting July 1, 2025.

Regarding the sale, Edward G. Atsinger, the Company’s Executive Chairman and co-founder said, “We have made a strategic decision to exit the Contemporary Christian Music format in order to pay off all of Salem’s long-term debt. We could not be more delighted that the buyer is EMF. EMF has demonstrated over many years a unique ability and dedication to creating and distributing the highest quality Christian music content to its listeners in a positive and encouraging way. I am confident that their impact on listeners and their communities will be incredibly effective.”