Like many of its broadcast and digital media peers, Salem Media Group has struggled to find solid financial footing even as it diversifies and pivots.
Facing issues with paying down its debt, the company has in recent months sold off various assets to help correct course. After its shares traded for less than $1 for much of last year, Salem voluntarily delisted itself from Nasdaq in December. Meanwhile, the Camarillo-based media conglomerate this year has focused on retaining its marquee personalities and entering the television market.
Salem – which fields a wide variety of Christian radio stations and conservative-leaning or right-wing digital media outlets – may seek to capitalize on the November election and lean on the current political climate to generate traffic. It will need that traffic – and an escape from what its chief executive last year called “a persistent ad recession” – to help address its $323 million in liabilities, a bit more than half of which is long-term debt.
Vacuuming up brands
Founded in 1974, Salem – until 2015 called Salem Communications – built a name for itself with contemporary Christian programming and talk shows. The bulk of this programming was broadcast under the brand “The Fish” and included Spanish-language programs. The company owned its own radio stations and also licensed its programming.
As social media took off and political blogging flourished during the George W. Bush and Barack Obama administrations, the company expanded accordingly.
In 2006, it acquired Townhall, one of the original conservative blogging sites. Salem in 2010 bought the blog Hot Air and in 2012 acquired Twitchy, a Twitter (now X) aggregator – both founded by right-wing firebrand Michelle Malkin. Two years later, it acquired yet another conservative blog, RedState, and in 2019 it bought PJ Media, a subscription right-wing commentary site.
Terms of these acquisitions were not disclosed at the time, although the RedState transaction – which also included publisher Regenery Publishing, publication Human Events and a variety of other ventures – was reportedly $8.5 million, while PJ Media reportedly went for just $100,000.
This collection of websites probably served the company well as web-based conservative and right-wing media took off during the late Obama years and as former President Donald Trump took hold of the Republican Party and won the 2016 election. Salem was posting profits as recently as the second quarter of 2022.
However, Salem has not been immune to a shifting landscape.
Website The Righting, which studies conservative media and tracks their sites’ monthly traffic, has spent the current election cycle comparing monthly web traffic numbers for those sites. In May (the most recent figures available), Townhall’s unique visitors were down 89% from May 2020, while PJ Media did not even generate enough unique views to register.
Writing for The Atlantic, former Washington Post reporter Paul Farhi in April drew a correlation with the broad decline of viewership to these websites – which he said often depend on clickbait headlines designed to go viral – to when social media like Meta-owned Facebook and Instagram began deemphasizing news content in its algorithms starting in 2018 and escalating in 2021.
“All of this monkeying with the internet’s plumbing drastically reduced the referral traffic flowing to news and commentary sites,” Farhi wrote. “The changes have affected everyone involved in digital media, including some liberal-leaning sites…but the impact appears to have been the worst, on average, for conservative media.”
The loss of personalities may have been a factor, too. Already the Hot Air’s best-known writer, Nick Catoggio – who for his entire tenure at the site wrote under the pseudonym Allahpundit – garnered an added moderate and liberal audience during the Trump presidency for his consistent criticism of the administration. He left Hot Air in September 2022 to join The Dispatch, an online center-right magazine started by conservative stalwarts Stephen F. Hayes and Jonah Goldberg.
At the time of sale, Hot Air had about 3 million unique page views a month. Nowadays, it doesn’t even ping on The Righting’s radar, which captures the 15 most trafficked sites a month – with No. 15 generating about 351,000 page views in May.
Other setbacks for the company
Fallout from the 2020 election has come back around to haunt Salem from another direction.
The company in May shelled out a settlement with a Georgia voter who was the subject of “2,000 Mules,” a book and companion film created by right-wing gadfly Dinesh D’Souza and published by Salem. Both advanced unfounded conspiracy theories that the Democratic Party stole the 2020 presidential election through fraudulently cast votes in ballot drop-boxes.
One subject of the documentary-style film, Mark Andrews, sued Salem for defamation. Although the eventual settlement was not disclosed, it was reported to be a “significant amount” in court filings.
Salem is now embroiled as a plaintiff in its own lawsuit, having in May filed a breach of contract claim against Atlantic Specialty Insurance Co. for denying coverage of Salem’s court costs and settlement amount. Salem requested a jury trial in the suit.
Loss of advertising revenue has hit the company hard. In its third-quarter earnings call, Chief Executive David Santrella noted that political advertising had fallen by more than half compared to the same period in 2022. Santrella also directly attributed the slight decline in national digital revenue to the Facebook algorithm changes.
Salem last year also fell behind on its asset-based loan from Wells Fargo and signed the first of several forbearance agreements with the lender in August.
Share prices for Salem, traded as SALM, fell below $1 in May 2023. Likely unable to find a path to compliance, the company voluntarily delisted itself from Nasdaq at the end of last year and is now traded on the OTC Markets. Its prices lately hover around 24 cents per share and the company has a market cap of about $6.6 million.
A representative with Salem did not respond to an interview request. The company has not held a quarterly earnings call since delisting from Nasdaq.
Moving forward
Having ended fiscal year 2023 with a loss of $43.3 million against $259 million in revenue, the company has continued the asset-trimming run it began last year. It sold a Sacramento radio station in September for $1 million; three stations in South Carolina for $6.8 million; its Salem Church Products division for $30 million; and a Tampa, Florida, station for $700,000. Salem is also in the midst of a conditional land sale in Sarasota, Florida, that could add $9.5 million to its coffers. Salem also sold Regenery and Human Events, the latter for $300,000.
In May, Salem pulled the trigger on a sale-leaseback of its 42,000-square-foot Camarillo headquarters to Eclipse RE Holdings LLC for $5.5 million. Most recently, in June Salem closed on the sale of two radio stations in Honolulu and Nashville for $7 million.
Salem also announced in June that it partnered with HC2 Broadcasting to enter the broadcast TV in 55 U.S. markets – covering a quarter of the nation’s bulk.
The company also reupped its contract with Dennis Prager this year. Prager, who lives in La Cañada Flintridge, is well known in conservative circles for his religious programming and his nonprofit PragerU. His talk shows have been syndicated by Salem for the last 25 years and he is likely to remain among Salem’s largest draws in terms of personalities.
The company certainly hopes so.
“Dennis Prager is a true talk radio icon and has been for the last 42 years since he first began on the radio at KABC in Los Angeles hosting the original ‘Religion on the Line,’” said Phil Boyce, senior vice president of spoken word, at the time of the announcement. “Millions of listeners spend the day with Dennis, enjoying his wit, wisdom and knowledge. He is one of the most viral talk hosts on the air today, and we wanted him to remain on the Salem Radio Network for years to come.”
