Salem Media Group has taken another significant step toward correcting its financial direction with a sale-leaseback deal involving the company’s former headquarters in Camarillo, CA. The company moved most of its executive operations to Irving, TX in 2021.
The January 19 letter revealing the sale was included in an SEC filing dated January 24.
The property at 4880 Santa Rosa Road is set to be sold to Greg Robinson for $6,231,900 and subsequently leased back, ensuring continued operations on the premises with annual rent starting around $500,000. The property still hosts Salem’s Corporate, Radio, and Christian Teaching and Talk Programming divisions, according to the company’s directory.
Siena Lending Group, who now holds Salem’s refinanced $26.0 million 3-year asset-based revolving credit facility, has okayed the sale, under certain stipulations that reinforce financial prudence and a commitment to transparency. Salem Media Group has agreed to repay a portion of its loans using all of the cash proceeds from the sale.
The lender’s consent comes with a release of all liens and interests on the property, subject to compliance with several conditions. These include a no-default status before and after the sale, satisfactory documentation related to the sale, and a swift deposit of the sale proceeds into a designated account in 30 days or less after closing.
Amendments to the existing Loan and Security Agreement were also agreed upon, reflecting an increase in the Letter of Credit limit from $1 million to $3 million and other financial covenants, which will come into effect following the sale.
The building sale is the latest in several moves by Salem to cut costs and stave off debt, of which Salem has around $180 million total. This includes a $159.42 million outstanding balance due in 2028.
The company completed its voluntary delisting from the Nasdaq stock market earlier this month. As such, Salem no longer has to report its financials. The company also reached an agreement to transfer ownership of Regnery Publishing to Skyhorse Publishing, following the $30 million sale of Salem Church Products to Gloo, LLC in October 2023.
Salem’s problem is they own a bunch of small AM stations that are running syndicated conservative talk. The contemporary Christian stations are doing fine. AM stations that don’t have translators are in trouble.
Debt is a killer, and now with interest rates on the rise it is even worse. Ask the Government! Do they carry Dave Ramsey? Maybe they could ask him about debt! The borrower is slave to the lender!
After the Telecommunications Act of 1996, it was heady days for broadcasters going into massive debt to acquire, at many times 10 and 15 times cashflow, as many signals as possible in a market to establish dominance.
The bill has now come due for them. And it’s not a pretty sight. You will not see me shed a single tear for all the financial problems these companies are having now because they destroyed broadcasting as we knew it.
Young people are moving away from commercialized organized religion. Pastors are getting money from people online now; so paid radio infomercials for raising money is now nowhere near as effective. One could argue that Salem’s business model, centered around commercialized Christianity, is no longer viable.
It’s not really the business model that’s the problem, It’s the amount of debt they incurred executing it is what’s tripping them up.