The good news? Spanish Broadcasting System brought in $5.7 million in cash from the sale of its Puerto Rico TV stations. The bad news? That money is already spoken for – and they’ll need more, according to the Hispanic-focused company’s Q2 earnings report.
According to a release, SBS’s net revenue for the quarter fell to $34.44 million, down from $40.01 million in Q2 2024. While operating expenses held steady at $32.09 million, the company recorded a $2.925 million non-cash impairment charge and $148,000 in severance costs. As a result, operating income dropped to $2.35 million from $7.97 million, and SBS posted a net loss of $4.44 million, compared to a $346,000 loss in the year-ago period.
The company attributed just $1.2 million of total revenue to television operations, as it continues to divest video assets to shore up liquidity. On August 15, SBS completed the sale of its three Puerto Rico television stations for $5.7 million in cash. That deal is expected to impact third-quarter results.
But the cash infusion may not be enough. In a Friday SEC filing, SBS disclosed it does not currently have the funds on hand to repay its $310 million in 9.75% senior secured notes due March 1, 2026.
“We do not have sufficient cash on hand to generate sufficient funds from operations to repay the Notes,” the company stated. While SBS management expressed confidence in its ability to secure new financing or refinancing, it added that there is “no firm commitment” in place. That uncertainty triggered a “substantial doubt” disclosure in its quarterly filing regarding its ability to continue as a going concern.
In addition to the 2026 notes, SBS holds a $4.5 million balance on its asset-based revolving credit line, which matures October 27, 2025, and carries a 7.35% interest rate. The company said it expects to pay down that debt using proceeds from the Puerto Rico TV station sale.
SBS now says it is pursuing the sale of additional television assets and real estate, with the goal of closing those transactions within the next year. The company’s previous effort to sell its entire Mega TV operation for $62 million fell through in late 2023 when buyer Voz Media failed to secure financing.
SBS currently operates 17 radio stations in major US markets, including New York City, Los Angeles, Houston, and Puerto Rico, and runs AIRE Radio Networks, serving more than 290 affiliates.
With financial reporting from RBR+TVBR‘s Adam R. Jacobson.
