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Local Marketing Agreement
9 Months Ended
Sep. 30, 2012
Local Marketing Agreement [Abstract]  
Local Marketing Agreement

8. Local Marketing Agreement

In June 2012, the Company amended its Local Marketing Agreement (“LMA”) with South Sound Broadcasting LLC (“South Sound”) to manage South Sound’s FM radio station licensed in Oakville, Washington for another five years. The station broadcasts the Company’s KOMO NewsRadio AM programming to FM listeners in the Seattle – Tacoma radio market. Contemporaneously with the LMA, the Company entered into an option agreement with South Sound, whereby the Company has the right to acquire the station until January 2017. This amended LMA and related option agreement supersedes and terminates a previous LMA and option agreement between the Company and South Sound. Under the terms of the previous option agreement, the Company was obligated to pay South Sound up to approximately $1.4 million, if the Company did not exercise the option prior to its expiration. Pursuant to the amended LMA, the $1.4 million fee was eliminated and instead the Company paid South Sound $750,000 for a 7.5% ownership interest in South Sound and $615,000 for a new option agreement, pursuant to which we have the right to acquire the station until January 2017. The consideration for the option agreement is non-refundable, but will be applied to the purchase price if the Company chooses to exercise the option. The consideration for the option agreement and the investment in South Sound are presented within other assets on the Company’s unaudited condensed consolidated balance sheet as of September 30, 2012. Due to the term of the LMA and the uncertainties associated with the exercise of the option agreement, South Sound does not meet the criteria for consolidation. Advertising revenues earned under this LMA are recorded as revenue and LMA fees and programming expenses are recorded as operating costs.