Broadcast Rights and Other Commitments

3 Months Ended

Mar. 31, 2013

Broadcast Rights and Other Commitments [Abstract]

Broadcast Rights and Other Commitments

6. Broadcast Rights and Other Commitments

Broadcast Rights

The Company acquires broadcast rights during the ordinary course of business. The impact of such contracts on the Company’s overall financial results is dependent on a number of factors, including popularity of the program, increased competition from other programming, and strength of the advertising market. It is possible that the cost of commitments for program rights may ultimately exceed direct revenue from the program. Estimates of future revenue can change significantly and, accordingly, are reviewed periodically to determine whether impairment is expected over the life of the contract.

As of March 31, 2013, the Company had commitments under various agreements of $31.3 million for future rights to broadcast television programs, rights to sell available advertising time on a third party radio station and commitments under certain network affiliate agreements.

Hines Lease Commitment

In December 2011, the Company entered into a reimbursement agreement with Hines Global REIT (“Hines”) whereby the Company may be required to reimburse Hines up to $1.5 million if the power and/or chiller consumption by certain existing Fisher Plaza tenants, including the Company, exceeds specified levels and Hines is required to install additional power and/or chiller facilities. This reimbursement agreement expires on December 31, 2023.

Credit Facility

In November 2012, the Company entered into a credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A. as Administrative Agent and Lender, for a $30 million senior secured revolving credit facility (the “Credit Facility”). The Credit Facility will mature in 2017. In addition to the $30 million revolving credit facility, the Credit Agreement provides for a subfacility for the issuance of standby letters of credit in an amount to be determined by JPMorgan and the Company. Borrowings under the Credit Facility will accrue interest at a variable rate. The interest rate will be calculated using either an Alternate Base Rate (“ABR”) or the Eurodollar Rate, plus, in each case, an applicable margin determined by the Company’s leverage ratio in accordance with the terms of the Credit Agreement. The ABR is equal to the highest of (i) the rate of interest publicly announced by JPMorgan Chase Bank, N.A. as its prime rate in effect at its principal office in New York City (the “Prime Rate”), (ii) the federal funds effective rate from time to time plus 0.50% and (iii) the Eurodollar Rate applicable for an interest period of one month plus 1.00%.

The Credit Agreement contains customary affirmative and negative covenants for comparable financings, including but not limited to, limitations on liens, indebtedness, investments, mergers and other fundamental changes, sales and other dispositions and dividends and other distributions. The Credit Agreement also contains customary events of default and remedies in the event of an occurrence of an event of default, including the acceleration of any amounts outstanding under the Credit Agreement. Additionally, the Credit Agreement includes certain customary conditions that must be met for the Company to borrow under the Credit Facility.

Under the Credit Agreement, the Company is required to maintain certain financial ratios, including a leverage ratio and fixed charge coverage ratio. As of March 31, 2013, the Company incurred costs of approximately $256,000 directly related to obtaining the Credit Facility. These costs have been deferred on the unaudited and condensed consolidated balance sheet in “other assets” and are being amortized to interest expense over the life of the Credit Facility. As of March 31, 2013, the Company had no outstanding indebtedness under the Credit Facility.

Asset Purchase Agreement

On November 19, 2012, Fisher Broadcasting – Oregon TV, L.L.C. (“Fisher Broadcasting”), a wholly-owned subsidiary of Fisher Communications, Inc. entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Newport Television LLC and Newport Television License LLC to acquire, subject to prior approval from the Federal Communications Commission (the “FCC”), operating assets of television station KMTR(TV), together with certain related satellite stations (collectively, the “Station”), which serve the Eugene, Oregon Nielsen Designated Market Area, for a total purchase price of $8.5 million. Concurrently, Fisher Broadcasting assigned to Roberts Media, LLC, an unrelated third party (“Roberts Media”), its rights under the Purchase Agreement to acquire the FCC licenses with respect to the Station together with certain other of the Station’s operating and programming assets. Pursuant to the Purchase Agreement, the Company paid the Station a deposit of 10% of the total purchase price, or $850,000.

Also concurrently with the Purchase Agreement, Fisher Broadcasting and Roberts Media entered into a Shared Services Agreement pursuant to which Fisher Broadcasting would, following the acquisition of certain Station assets by Roberts Media, provide for a fee technical, engineering and certain other services to support Roberts Media’s operation of the Station. In addition, pursuant to the Shared Services Agreement, Fisher Broadcasting, following the closing under the Purchase Agreement, would have the right to provide up to 15% of the Station’s weekly programming and sell all of the local advertising on the Station on a commissioned basis. The Shared Services Agreement will be effective upon the closing of the Station acquisition, which is expected to occur in the first half of 2013.