Salem Turns In Disappointing Q3


It was not a good quarter for Salem Communications. Overall revenue dropped 2.2%, same station broadcast revenue decreased 1.4% and digital revenue was down 12% at a time when all other broadcasters are reporting big revenue increases in digital.

At the same time, operating expenses increased 32.7% to $78.6 million and the company registered a net loss for the quarter of $20 million

The forecast for Q4 isn’t much better. Salem is pacing down 4-6%

The company is in the process of selling a group of AM radio stations. Once those sales close, roughly $9 million will be used to pay down debt. Salem’s leverage is still above 6X and even after the sale of the radio stations it expects to be north of 6X. Other broadcasters are attempting to get leverage under 4X.

Back in September the company reduced the size of its board to reduce expenses.


  1. There are two major shifts working against Salem’s business model. First, the older religious elderly and
    shut-ins, the primary target for listening and sending money to the radio pastors, is diminishing. This is reducing demand for the paid pastor programs Salem sells on their AM stations, and explains why Salem is trying to sell some of the AM’s. And the younger generation is not engaging as much with organized commercial Christian products, including the Christian music that is a core product of Salem’s FM stations.
    Both of these trends pose major challenges to Salem growing their revenues. …Maybe they should diversify both their paid program blocks and FM music to other (non-Christian) religions also– that would open up other revenue streams.


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