While its net broadcast revenue held almost flat year-over-year, Salem Media Group still took a hit in Q1 2023, as discussed in their Tuesday earnings call. Revenue increased 1.4% to $63.49 million, but operating expenses soared 11.4% to $67.67 million, leading to a net loss of $5.154 million compared to the same period last year.
The broadcast division fell .2%, while outperforming the Miller Kaplan average of -2.8% in the markets Salem operates. Citing common macroeconomic issues, Salem’s national spot revenue increased 20.7%, while local dropped 8.3%. During the quarter, Salem closed its deals on three Miami AMs (WWFE, WRHC, and WMYM) and their translators for a combined $6.2 million.
CEO Dave Santrella did point out the increasing success of Salem’s combined broadcast and national digital earnings, which now make up for nearly a third of the company’s total revenue.
The first quarter did come with layoffs in the face of economic uncertainty; 44 positions were cut representing 3% of Salem’s workforce. the company also has less cash on hand at the end of Q1 2023 compared to the end of 2022, and long-term debt increased to $152.04 million.
According to CFO Evan Masyr, the second quarter outlook is also trending downward, with a 5% to 7% YoY decline in revenue expected, coupled with a 3% to 6% increase in operating expenses.
This sounds like an awesome business model. Keep spending money on assets that are initially overpriced, then decrease in value; layoff 3% of your workforce; spend cash reserves; run up operating costs, and do all of this in what will be an obviously down year, revenue-wise. Woo-hoo!!