10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

Commission File No. 0-25969

URBAN ONE, INC.

(Exact name of registrant as specified in its charter)

Delaware	52-1166660
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

1010 Wayne Avenue,

14th Floor

Silver Spring, Maryland 20910

(Address of principal executive offices)

(301) 429-3200

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:	Trading Symbol(s)	Name of each exchange on which registered:
Class A Common Stock	UONE	NASDAQ Stock Market
Class D Common Stock	UONEK	NASDAQ Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  x   No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes  x   No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer x
Non-accelerated filer ¨	Smaller reporting company x
	Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act.  Yes  ¨   No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at November 4, 2019
Class A Common Stock, $.001 Par Value		1,582,375
Class B Common Stock, $.001 Par Value		2,861,843
Class C Common Stock, $.001 Par Value		2,928,906
Class D Common Stock, $.001 Par Value		38,648,059

TABLE OF CONTENTS

		Page
	PART I. FINANCIAL INFORMATION
Item 1.	Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2019 and 2018 (Unaudited)	4
	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2019 and 2018 (Unaudited)	5
	Consolidated Balance Sheets as of September 30, 2019 (Unaudited) and December 31, 2018	6
	Consolidated Statement of Changes in Stockholders’ Equity for the Nine Months Ended September 30, 2019 (Unaudited)	7
	Consolidated Statement of Changes in Stockholders’ Equity for the Nine Months Ended September 30, 2018 (Unaudited)	8
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018 (Unaudited)	9
	Notes to Consolidated Financial Statements (Unaudited)	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	52
Item 4.	Controls and Procedures	53
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	54
Item 1A.	Risk Factors	54
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	54
Item 3.	Defaults Upon Senior Securities	54
Item 4.	Mine Safety Disclosures	54
Item 5.	Other Information	54
Item 6.	Exhibits	55
	SIGNATURES	56

2

CERTAIN DEFINITIONS

Unless otherwise noted, throughout this report, the terms “Urban One,” “the Company,” “we,” “our” and “us” refer to Urban One, Inc. together with its subsidiaries.

Cautionary Note Regarding Forward-Looking Statements

This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements do not relay historical facts, but rather reflect our current expectations concerning future operations, results and events. All statements other than statements of historical fact are “forward-looking statements” including any projections of earnings, revenues or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. You can identify some of these forward-looking statements by our use of words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “likely,” “may,” “estimates” and similar expressions.  You can also identify a forward-looking statement in that such statements discuss matters in a way that anticipates operations, results or events that have not already occurred but rather will or may occur in future periods.  We cannot guarantee that we will achieve any forward-looking plans, intentions, results, operations or expectations.  Because these statements apply to future events, they are subject to risks and uncertainties, some of which are beyond our control that could cause actual results to differ materially from those forecasted or anticipated in the forward-looking statements.  These risks, uncertainties and factors include (in no particular order), but are not limited to:

· economic volatility, financial market unpredictability and fluctuations in the United States and other world economies that may affect our business and financial condition, and the business and financial conditions of our advertisers;

· our high degree of leverage, certain cash commitments related thereto and potential inability to finance strategic transactions given fluctuations in market conditions;

· fluctuations in the local economies of the markets in which we operate (particularly our largest markets, Atlanta; Baltimore; Houston; and Washington, DC) could negatively impact our ability to meet our cash needs and our ability to maintain compliance with our debt covenants;

· fluctuations in the demand for advertising across our various media;

· risks associated with the implementation and execution of our business diversification strategy;

· regulation by the Federal Communications Commission (“FCC”) relative to maintaining our broadcasting licenses, enacting media ownership rules and enforcing of indecency rules;

· changes in our key personnel and on-air talent;

· increases in competition for and in the costs of our programming and content, including on-air talent and content production or acquisitions costs;

· financial losses that may be incurred due to impairment charges against our broadcasting licenses, goodwill, and other intangible assets;

· increased competition for advertising revenues with other radio stations, broadcast and cable television, newspapers and magazines, outdoor advertising, direct mail, internet radio, satellite radio, smart phones, tablets, and other wireless media, the internet, social media, and other forms of adverting;

· the impact of our acquisitions, dispositions and similar transactions, as well as consolidation in industries in which we and our advertisers operate; and

· other factors mentioned in our filings with the Securities and Exchange Commission (“SEC”) including the factors discussed in detail in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K, for the year ended December 31, 2018.

You should not place undue reliance on these forward-looking statements, which reflect our views as of the date of this report. We undertake no obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise.

3

URBAN ONE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
	(Unaudited)
	(In thousands, except share data)
NET REVENUE	$	111,055		$	110,730		$	331,075		$	325,557
OPERATING EXPENSES:
Programming and technical including stock-based compensation of $23 and $30, and $70 and $30, respectively		30,412			30,982			91,886			93,504
Selling, general and administrative, including stock-based compensation of $263 and $166, and $460 and $582, respectively		36,125			36,530			114,080			112,413
Corporate selling, general and administrative, including stock-based compensation of $1,595 and $938, and $2,062 and $3,023, respectively		9,458			2,784			27,728			23,986
Depreciation and amortization		2,593			8,333			14,451			24,869
Impairment of long-lived assets		—			—			3,800			6,556
Total operating expenses		78,588			78,629			251,945			261,328
Operating income		32,467			32,101			79,130			64,229
INTEREST INCOME		45			33			131			194
INTEREST EXPENSE		21,589			18,987			65,743			57,423
GAIN ON RETIREMENT OF DEBT		—			(120	)		—			(985	)
OTHER INCOME, net		(1,299	)		(1,935	)		(4,669	)		(5,850	)
Income before provision for (benefit from) income taxes and noncontrolling interests in income of subsidiaries		12,222			15,202			18,187			13,835
PROVISION FOR (BENEFIT FROM) INCOME TAXES		6,535			(8,173	)		8,342			(10,914	)
CONSOLIDATED NET INCOME		5,687			23,375			9,845			24,749
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS		328			331			999			670
CONSOLIDATED NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	5,359		$	23,044		$	8,846		$	24,079
BASIC NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS
Net income attributable to common stockholders	$	0.12		$	0.51		$	0.20		$	0.52
DILUTED NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS
Net income attributable to common stockholders	$	0.12		$	0.49		$	0.19		$	0.50
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		44,315,077			45,128,341			44,912,673			45,946,820
Diluted		46,118,702			47,462,358			46,965,245			48,376,362

The accompanying notes are an integral part of these consolidated financial statements.

4

URBAN ONE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
	(Unaudited)
	(In thousands)
COMPREHENSIVE INCOME	$	5,687	$	23,375	$	9,845	$	24,749
LESS:  COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS		328		331		999		670
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	5,359	$	23,044	$	8,846	$	24,079

The accompanying notes are an integral part of these consolidated financial statements.

5

URBAN ONE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	As of
	September 30, 2019			December 31, 2018
	(Unaudited)
	(In thousands, except share data)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	31,360		$	15,255
Restricted cash		543			635
Trade accounts receivable, net of allowance for doubtful accounts of $6,965 and $8,249, respectively		103,096			110,354
Prepaid expenses		9,595			9,775
Current portion of content assets		32,289			33,951
Other current assets		4,790			3,229
Total current assets		181,673			173,199
CONTENT ASSETS, net		74,454			77,266
PROPERTY AND EQUIPMENT, net		24,583			26,088
GOODWILL		245,572			245,572
RIGHT OF USE ASSETS		47,949			—
RADIO BROADCASTING LICENSES		583,697			600,134
OTHER INTANGIBLE ASSETS, net		59,428			70,091
OTHER ASSETS		44,145			45,059
Total assets	$	1,261,501		$	1,237,409
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	5,259		$	7,331
Accrued interest		14,616			6,887
Accrued compensation and related benefits		8,495			15,033
Current portion of content payables		15,914			18,870
Current portion of lease liabilities		8,926			—
Other current liabilities		24,985			24,451
Current portion of long-term debt		22,981			38,706
Total current liabilities		101,176			111,278
LONG-TERM DEBT, net of current portion, original issue discount and issuance costs		856,189			873,757
CONTENT PAYABLES, net of current portion		14,390			18,381
LONG-TERM LEASE LIABILITIES		43,560			—
OTHER LONG-TERM LIABILITIES		25,480			35,716
DEFERRED TAX LIABILITIES, net		21,778			12,904
Total liabilities		1,062,573			1,052,036
REDEEMABLE NONCONTROLLING INTERESTS		9,247			10,232
STOCKHOLDERS’ EQUITY:
Convertible preferred stock, $.001 par value, 1,000,000 shares authorized; no shares outstanding at September 30, 2019 and December 31, 2018		—			—
Common stock — Class A, $.001 par value, 30,000,000 shares authorized; 1,582,576 and 1,637,472 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively		2			2
Common stock — Class B, $.001 par value, 150,000,000 shares authorized; 2,861,843 shares issued and outstanding as of September 30, 2019 and December 31, 2018		3			3
Common stock — Class C, $.001 par value, 150,000,000 shares authorized; 2,928,906 shares issued and outstanding as of September 30, 2019 and December 31, 2018		3			3
Common stock — Class D, $.001 par value, 150,000,000 shares authorized; 38,652,083 and 38,845,917 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively		39			39
Additional paid-in capital		978,519			978,628
Accumulated deficit		(788,885	)		(803,534	)
Total stockholders’ equity		189,681			175,141
Total liabilities, redeemable noncontrolling interests and stockholders’ equity	$	1,261,501		$	1,237,409

The accompanying notes are an integral part of these consolidated financial statements.

6

URBAN ONE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 (UNAUDITED)

	Convertible Preferred Stock		Common Stock Class A		Common Stock Class B		Common Stock Class C		Common Stock Class D			Additional Paid-In Capital			Accumulated Deficit			Total Stockholders’ Equity
	(In thousands, except share data)
BALANCE, as of December 31, 2018	$	—	$	2	$	3	$	3	$	39		$	978,628		$	(799,975	)	$	178,700
Correction of tax adjustment		—		—		—		—		—			—			(3,559	)		(3,559	)
BALANCE, as of December 31, 2018 (As Revised)	$	—	$	2	$	3	$	3	$	39		$	978,628		$	(803,534	)	$	175,141
Consolidated net income		—		—		—		—		—			—			8,846			8,846
Repurchase of 54,896 shares of Class A common stock and 2,588,796 shares of Class D common stock		—		—		—		—		(2	)		(5,321	)		—			(5,323	)
Adoption of ASC 842		—		—		—		—		—			—			5,803			5,803
Exercise of options for 15,000 shares of common stock		—		—		—		—		—			29			—			29
Adjustment of redeemable noncontrolling interests to estimated redemption value		—		—		—		—		—			984			—			984
Issuance of 755,239 shares of Class D common stock		—		—		—		—		—			1,609			—			1,609
Stock-based compensation expense		—		—		—		—		2			2,590			—			2,592
BALANCE, as of September 30, 2019	$	—	$	2	$	3	$	3	$	39		$	978,519		$	(788,885	)	$	189,681

The accompanying notes are an integral part of these consolidated financial statements.

7

URBAN ONE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018 (UNAUDITED) 

	Convertible Preferred Stock		Common Stock Class A		Common Stock Class B		Common Stock Class C		Common Stock Class D			Additional Paid-In Capital			Accumulated Deficit			Total Stockholders’ Equity
	(In Thousands, except share data)
BALANCE, as of December 31, 2017	$	—	$	2	$	3	$	3	$	41		$	983,582		$	(940,976	)	$	42,655
Consolidated net income		—		—		—		—		—			—			24,079			24,079
Repurchase of 4,160 shares of Class A common stock and 3,062,574 shares of Class D common stock		—		—		—		—		(3	)		(6,127	)		—			(6,130	)
Repurchase of share-based equity awards		—		—		—		—		—			(1,077	)		—			(1,077	)
Exercise of options for 58,190 shares of common stock		—		—		—		—		—			85			—			85
Adjustment of redeemable noncontrolling interests to estimated redemption value		—		—		—		—		—			(463	)		—			(463	)
Stock-based compensation expense		—		—		—		—		2			3,633			—			3,635
BALANCE, as of September 30, 2018	$	—	$	2	$	3	$	3	$	40		$	979,633		$	(916,897	)	$	62,784

The accompanying notes are an integral part of these consolidated financial statements. 

8

URBAN ONE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine Months Ended September 30,
	2019			2018
	(Unaudited)
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net income	$	9,845		$	24,749
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		14,451			24,869
Amortization of debt financing costs		2,893			2,151
Amortization of content assets		34,167			32,315
Amortization of launch assets		772			317
Deferred income taxes		8,874			(10,732	)
Non-cash interest expense		1,513			—
Impairment of long-lived assets		3,800			6,556
Stock-based compensation		2,592			3,635
Gain on retirement of debt		—			(985	)
Effect of change in operating assets and liabilities, net of assets acquired:					—
Trade accounts receivable		7,258			5,297
Prepaid expenses and other current assets		(2,567	)		(101	)
Other assets		914			(1,172	)
Accounts payable		(2,072	)		(2,394	)
Accrued interest		7,729			164
Accrued compensation and related benefits		(6,538	)		1,171
Other liabilities		4,057			(5,254	)
Payments for content assets		(36,640	)		(36,416	)
Net cash flows provided by operating activities		51,048			44,170
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(3,947	)		(3,719	)
Proceeds from sale of radio station		13,500			12,791
Acquisition of station and broadcasting assets		—			(4,763	)
Net cash flows provided by investing activities		9,553			4,309
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of 2017 credit facility		(2,473	)		(2,625	)
Distribution of contingent consideration		(658	)		(752	)
Repayment of Comcast Note		(11,872	)		—
Proceeds of Asset-backed credit facility, net		—			—
Repayment of 2018 credit facility		(21,254	)		—
Proceeds from exercise of stock options		29			85
Repayment of 2020 Notes		(2,037	)		(28,892	)
Payment of dividends to noncontrolling interest members of Reach Media		(1,000	)		(801	)
Repayment of share-based equity awards		—			(1,077	)
Repurchase of common stock		(5,323	)		(6,130	)
Net cash flows used in financing activities		(44,588	)		(40,192	)
INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		16,013			8,287
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period		15,890			37,811
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period	$	31,903		$	46,098
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for:
Interest	$	49,512		$	55,108
Income taxes, net of refunds	$	458		$	1,289
NON-CASH FINANCING AND INVESTING ACTIVITIES:
Issuance of common stock	$	1,609		$	—
Purchases of property and equipment	$	—		$	329

The accompanying notes are an integral part of these consolidated financial statements. 

9

URBAN ONE, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

(a) Organization

Urban One, Inc. (a Delaware corporation referred to as “Urban One”) and its subsidiaries (collectively, the “Company”) is an urban-oriented, multi-media company that primarily targets African-American and urban consumers. Our core business is our radio broadcasting franchise which is the largest radio broadcasting operation that primarily targets African-American and urban listeners. As of September 30, 2019, we owned and/or operated 58 broadcast stations (including all HD stations, translator stations and the low power television station we operate) located in 15 of the most populous African-American markets in the United States. While a core source of our revenue has historically been and remains the sale of local and national advertising for broadcast on our radio stations, our strategy is to operate the premier multi-media entertainment and information content provider targeting African-American and urban consumers. Thus, we have diversified our revenue streams by making acquisitions and investments in other complementary media properties. Our diverse media and entertainment interests include TV One, LLC (“TV One”), an African-American targeted cable television network; our 80.0% ownership interest in Reach Media, Inc. (“Reach Media”) which operates the Tom Joyner Morning Show and our other syndicated programming assets, including the Rickey Smiley Morning Show, the Russ Parr Morning Show and the DL Hughley Show; and Interactive One, LLC (“Interactive One”), our wholly owned digital platform serving the African-American community through social content, news, information, and entertainment websites, including its Cassius, Bossip, HipHopWired and MadameNoire digital platforms and brands. We also hold a minority ownership interest in MGM National Harbor, a gaming resort located in Prince George’s County, Maryland. Through our national multi-media operations, we provide advertisers with a unique and powerful delivery mechanism to the African-American and urban audiences.

On January 19, 2019, the Company launched CLEO TV, a lifestyle and entertainment network targeting Millennial and Gen X women of color. CLEO TV offers quality content that defies negative and cultural stereotypes of today’s modern women. The results of CLEO TV’s operations will be reflected in the Company’s cable television segment.

Our core radio broadcasting franchise operates under the brand “Radio One.”  We also operate our other brands, such as TV One, Reach Media and Interactive One, while developing additional branding reflective of our diverse media operations and targeting our African-American and urban audiences.

As part of our consolidated financial statements, consistent with our financial reporting structure and how the Company currently manages its businesses, we have provided selected financial information on the Company’s four reportable segments: (i) radio broadcasting; (ii) Reach Media; (iii) digital; and (iv) cable television. (See Note 7 – Segment Information.)

(b) Interim Financial Statements

The interim consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In management’s opinion, the interim financial data presented herein include all adjustments (which include only normal recurring adjustments) necessary for a fair presentation. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations.

Certain reclassifications have been made to prior year sources of revenue to conform to the current year presentation as disclosed in Note 1 (d) – Revenue Recognition. These reclassifications had no effect on any other previously reported or consolidated total net revenue, net income or loss or any other statement of operations, balance sheet or cash flow amounts.

Results for interim periods are not necessarily indicative of results to be expected for the full year. This Form 10-Q should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2018 Annual Report on Form 10-K.  

10

(c) Financial Instruments

Financial instruments as of September 30, 2019 and December 31, 2018, consisted of cash and cash equivalents, restricted cash, trade accounts receivable, asset-backed credit facility, long-term debt and redeemable noncontrolling interests. The carrying amounts approximated fair value for each of these financial instruments as of September 30, 2019 and December 31, 2018, except for the Company’s long-term debt. The 9.25% Senior Subordinated Notes, which were due in February 2020 (the “2020 Notes”) had a carrying value of approximately $2.0 million and fair value of approximately $2.0 million as of December 31, 2018. On January 17, 2019, the Company announced that it had given the required notice under the indenture governing its 2020 Notes to redeem for cash all outstanding aggregate principal amount of its Notes to the extent outstanding on February 15, 2019.  On February 15, 2019, the remaining 2020 Notes were redeemed. The fair values of the 2020 Notes, classified as Level 2 instruments, were determined based on the trading values of these instruments in an inactive market as of the reporting date. The 7.375% Senior Secured Notes that are due in March 2022 (the “2022 Notes”) had a carrying value of approximately $350.0 million and fair value of approximately $343.0 million as of September 30, 2019. The 2022 Notes had a carrying value of approximately $350.0 million and fair value of approximately $332.5 million as of December 31, 2018. The fair values of the 2022 Notes, classified as Level 2 instruments, were determined based on the trading values of these instruments in an inactive market as of the reporting date. On April 18, 2017, the Company closed on a $350.0 million senior secured credit facility (the “2017 Credit Facility”) which had a carrying value of approximately $321.5 million and fair value of approximately $310.5 million as of September 30, 2019, and had a carrying value of approximately $323.9 million and fair value of approximately $305.8 million as of December 31, 2018. The fair value of the 2017 Credit Facility, classified as a Level 2 instrument, was determined based on the trading values of this instrument in an inactive market as of the reporting date. On December 20, 2018, the Company closed on a new $192.0 million unsecured credit facility (the “2018 Credit Facility”) which had a carrying value of approximately $170.7 million and fair value of approximately $174.2 million as of September 30, 2019, and had a carrying value of approximately $192.0 million and fair value of approximately $195.9 million as of December 31, 2018. The fair value of the 2018 Credit Facility, classified as a Level 2 instrument, was determined based on the trading values of this instrument in an inactive market as of the reporting date. On December 20, 2018, the Company also closed on a new $50.0 million secured credit loan (the “MGM National Harbor Loan”) which had a carrying value of approximately $51.6 million and fair value of approximately $57.8 million as of September 30, 2019, and had a carrying value of approximately $50.1 million and fair value of approximately $56.1 million as of December 31, 2018. The fair value of the 2018 MGM National Harbor Loan, classified as a Level 2 instrument, was determined based on the trading values of this instrument in an inactive market as of the reporting date. The senior unsecured promissory note in the aggregate principal amount of approximately $11.9 million (the “Comcast Note”) had a fair value and carrying value of approximately $11.9 million as of December 31, 2018. On February 15, 2019, the Comcast Note was paid in full and retired. The fair value of the Comcast Note, classified as a Level 3 instrument, was determined based on the fair value of a similar instrument as of the reporting date using updated interest rate information derived from changes in interest rates since inception to the reporting date. There was no balance outstanding on the Company’s asset-backed credit facility (the “ABL Facility”) as of September 30, 2019 and December 31, 2018.

(d) Revenue Recognition

On January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers” which requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company elected to use the modified retrospective method, but the adoption of the standard did not have a material impact to our financial statements. In general, our spot advertising (both radio and cable television) as well as our digital advertising continues to be recognized when aired and delivered. For our cable television affiliate revenue, the Company grants a license to the affiliate to access its television programming content through the license period, and the Company earns a usage based royalty when the usage occurs, consistent with our previous revenue recognition policy. Finally, for event advertising, the performance obligation is satisfied at a point in time when the activity associated with the event is completed.

Within our radio broadcasting and Reach Media segments, the Company recognizes revenue for broadcast advertising at a point in time when a commercial spot runs. The revenue is reported net of agency and outside sales representative commissions. Agency and outside sales representative commissions are calculated based on a stated percentage applied to gross billing. Generally, clients remit the gross billing amount to the agency or outside sales representative, and the agency or outside sales representative remits the gross billing, less their commission, to the Company. For our radio broadcasting and Reach Media segments, agency and outside sales representative commissions were approximately $6.2 million and $6.0 million for the three months ended September 30, 2019 and 2018, respectively. Agency and outside sales representative commissions were approximately $17.2 million in each of the nine months ended September 30, 2019 and 2018.

Within our digital segment, including Interactive One, which generates the majority of the Company’s digital revenue, revenue is principally derived from advertising services on non-radio station branded but Company-owned websites. Advertising services include the sale of banner and sponsorship advertisements.  Advertising revenue is recognized at a point in time either as impressions (the number of times advertisements appear in viewed pages) are delivered, when “click through” purchases are made, or ratably over the contract period, where applicable. In addition, Interactive One derives revenue from its studio operations, in which it provides third-party clients with publishing services including digital platforms and related expertise.  In the case of the studio operations, revenue is recognized primarily through fixed contractual monthly fees and/or as a share of the third party’s reported revenue.

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Our cable television segment derives advertising revenue from the sale of television air time to advertisers and recognizes revenue when the advertisements are run. Advertising revenue is recognized at a point in time when the individual spots run. To the extent there is a shortfall in contracts where the ratings were guaranteed, a portion of the revenue is deferred until the shortfall is settled, typically by providing additional advertising units generally within one year of the original airing. Our cable television segment also derives revenue from affiliate fees under the terms of various multi-year affiliation agreements based on a per subscriber fee multiplied by the most recent subscriber counts reported by the applicable affiliate. The Company recognizes the affiliate fee revenue at a point in time as its performance obligation to provide the programming is met. The Company has a right of payment each month as the programming services and related obligations have been satisfied. For our cable television segment, agency and outside sales representative commissions were approximately $3.4 million and $3.5 million for the three months ended September 30, 2019 and 2018, respectively. Agency and outside sales representative commissions were approximately $10.9 million and $10.4 million for the nine months ended September 30, 2019 and 2018, respectively.

Revenue by Contract Type

The following chart shows our net revenue (and sources) for the three and nine months ended September 30, 2019 and 2018:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
	(In thousands, unaudited)
Net Revenue:
Radio Advertising	$	50,813	$	51,293	$	144,958	$	144,358
Political Advertising		300		917		741		2,300
Digital Advertising		8,171		8,734		23,270		23,439
Cable Television Advertising		20,649		19,157		60,658		56,211
Cable Television Affiliate Fees		25,330		26,244		79,404		81,513
Event Revenues & Other		5,792		4,385		22,044		17,736
Net Revenue (as reported)	$	111,055	$	110,730	$	331,075	$	325,557

If economic conditions change, or other adverse factors outside our control arise, our operations could be negatively impacted.

Contract assets and liabilities

Contract assets (unbilled receivables) and contract liabilities (customer advances and unearned income and unearned event income) that are not separately stated in our consolidated balance sheets at September 30, 2019, December 31, 2018 and September 30, 2018 were as follows:

	September 30, 2019		December 31, 2018		September 30, 2018
	(Unaudited)		(In thousands)		(Unaudited)
Contract assets:
Unbilled receivables	$	5,968	$	3,425	$	4,268
Contract liabilities:
Customer advances and unearned income	$	3,403	$	3,766	$	4,588
Unearned event income		3,831		3,864		3,163

Unbilled receivables consists of earned revenue on behalf of customers that have not yet been billed. Customer advances and unearned income represents advance payments by customers for future services under contract that are generally incurred in the near term. Unearned event income represents payments by customers for upcoming events.

For customer advances and unearned income as of January 1, 2019, $250,000 and approximately $2.3 million, respectively, was recognized as revenue during the three and nine months ended September 30, 2019. For customer advances and unearned income as of January 1, 2018, $241,000 and approximately $2.0 million was recognized as revenue during the three and nine months ended September 30, 2018, respectively. For unearned event income as of January 1, 2019, approximately $3.9 million was recognized during the three and nine months ended September 30, 2019, as the event took place during the second quarter of 2019.  For unearned event income as of January 1, 2018, approximately $4.1 million was recognized during the nine months ended September 30, 2018, as the event took place during the second quarter of 2018. 

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Practical expedients and exemptions

We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within selling, general and administrative expenses.

We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less or (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

(e) Launch Support

The cable television segment has entered into certain affiliate agreements requiring various payments for launch support. Launch support assets are used to initiate carriage under affiliation agreements and are amortized over the term of the respective contracts. The Company did not pay any launch support for carriage initiation during the three and nine months ended September 30, 2019. For the three and nine months ended September 30, 2018, there was a non-cash launch support addition of $976,000 for carriage initiation. The weighted-average amortization period for launch support was approximately 7.8 years as of September 30, 2019, and approximately 7.8 years as of December 31, 2018. The remaining weighted-average amortization period for launch support was 5.3 years and 6.1 years as of September 30, 2019 and December 31, 2018, respectively. Amortization is recorded as a reduction to revenue to the extent that revenue is recognized from the vendor, and any excess amortization is recorded as launch support amortization expense. For the three months ended September 30, 2019 and 2018, launch support asset amortization of $106,000 and $106,000, respectively, was recorded as a reduction of revenue, and $151,000 and $0, respectively, was recorded as an operating expense in selling, general and administrative expenses. For the nine months ended September 30, 2019 and 2018, launch support asset amortization of $317,000 and $317,000, respectively, was recorded as a reduction of revenue, and $455,000 and $0, respectively, was recorded as an operating expense in selling, general and administrative expenses. Launch assets are included in other intangible assets on the consolidated balance sheets, except for the portion of the unamortized balance that is expected to be amortized within one year which is included in other current assets.

(f) Barter Transactions

For barter transactions, the Company provides broadcast advertising time in exchange for programming content and certain services. The Company includes the value of such exchanges in both broadcasting net revenue and operating expenses. The valuation of barter time is based upon the fair value of the network advertising time provided for the programming content and services received. For the three months ended September 30, 2019 and 2018, barter transaction revenues were $574,000 and $713,000, respectively. Additionally, for the three months ended September 30, 2019 and 2018, barter transaction costs were reflected in programming and technical expenses of $424,000 and $673,000, respectively, and selling, general and administrative expenses of $150,000 and $40,000, respectively. For the nine months ended September 30, 2019 and 2018, barter transaction revenues were approximately $1.7 million and $2.2 million, respectively. Additionally, for the nine months ended September 30, 2019 and 2018, barter transaction costs were reflected in programming and technical expenses of approximately $1.3 million and $2.1 million, respectively, and selling, general and administrative expenses of $451,000 and $121,000, respectively. The Company reached an agreement with a cable television provider related to an adjustment of previously estimated affiliate fees in the amount of approximately $2.0 million for the nine months ended September 30, 2018, as final reporting became available. As settlement of this agreement, the Company will receive approximately $2.0 million in marketing services that will be utilized in future periods.

(g) Earnings Per Share

Basic earnings per share is computed on the basis of the weighted average number of shares of common stock (Classes A, B, C and D) outstanding during the period. Diluted earnings per share is computed on the basis of the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method.  The Company’s potentially dilutive securities include stock options and unvested restricted stock. Diluted earnings per share considers the impact of potentially dilutive securities except in periods in which there is a net loss, as the inclusion of the potentially dilutive common shares would have an anti-dilutive effect.

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The following table sets forth the calculation of basic and diluted earnings per share from continuing operations (in thousands, except share and per share data):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
	(Unaudited)
	(In Thousands)
Numerator:
Net income attributable to common stockholders	$	5,359	$	23,044	$	8,846	$	24,079
Denominator:
Denominator for basic net income per share - weighted average outstanding shares		44,315,077		45,128,341		44,912,673		45,946,820
Effect of dilutive securities:
Stock options and restricted stock		1,803,625		2,334,017		2,052,572		2,429,542
Denominator for diluted net income per share - weighted-average outstanding shares		46,118,702		47,462,358		46,965,245		48,376,362
Net income attributable to common stockholders per share – basic	$	0.12	$	0.51	$	0.20	$	0.52
Net income attributable to common stockholders per share – diluted	$	0.12	$	0.49	$	0.19	$	0.50

(h) Fair Value Measurements

We report our financial and non-financial assets and liabilities measured at fair value on a recurring and non-recurring basis under the provisions of ASC 820, “Fair Value Measurements and Disclosures.” ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.

The fair value framework requires the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows: 

Level 1: Inputs are unadjusted quoted prices in active markets for identical assets and liabilities that can be accessed at the measurement date.

Level 2: Observable inputs other than those included in Level 1 (i.e., quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets).

Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value instrument.

As of September 30, 2019, and December 31, 2018, respectively, the fair values of our financial assets and liabilities measured at fair value on a recurring basis are categorized as follows:

	Total		Level 1		Level 2		Level 3
	(Unaudited)
	(In thousands)
As of September 30, 2019
Liabilities subject to fair value measurement:
Contingent consideration (a)	$	2,155		—		—	$	2,155
Employment agreement award (b)		26,374		—		—		26,374
Total	$	28,529	$	—	$	—	$	28,529
Mezzanine equity subject to fair value measurement:
Redeemable noncontrolling interests (c)	$	9,247	$	—	$	—	$	9,247
As of December 31, 2018
Liabilities subject to fair value measurement:
Contingent consideration (a)	$	2,831		—		—	$	2,831
Employment agreement award (b)		25,660		—		—		25,660
Total	$	28,491	$	—	$	—	$	28,491
Mezzanine equity subject to fair value measurement:
Redeemable noncontrolling interests (c)	$	10,232	$	—	$	—	$	10,232

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(a)  This balance is measured based on the income approach to valuation in the form of a Monte Carlo simulation. The Monte Carlo simulation method is suited to instances such as this where there is non-diversifiable risk. It is also well-suited to multi-year, path dependent scenarios. Significant inputs to the Monte Carlo method include forecasted net revenues, discount rate and expected volatility. A third-party valuation firm assisted the Company in estimating the contingent consideration.

(b)  Each quarter, pursuant to an employment agreement (the “Employment Agreement”) executed in April 2008, the Chief Executive Officer (“CEO”) is eligible to receive an award (the “Employment Agreement Award”) amount equal to approximately 4% of any proceeds from distributions or other liquidity events in excess of the return of the Company’s aggregate investment in TV One. The Company reviews the factors underlying this award at the end of each quarter including the valuation of TV One (based on the estimated enterprise fair value of TV One as determined by a discounted cash flow analysis), and an assessment of the probability that the Employment Agreement will be renewed and contain this provision. The Company’s obligation to pay the award was triggered after the Company recovered the aggregate amount of its capital contribution in TV One and only upon actual receipt of distributions of cash or marketable securities or proceeds from a liquidity event with respect to the Company’s aggregate investment in TV One. The CEO was fully vested in the award upon execution of the Employment Agreement, and the award lapses if the CEO voluntarily leaves the Company or is terminated for cause. A third-party valuation firm assisted the Company in estimating TV One’s fair value using a discounted cash flow analysis. Significant inputs to the discounted cash flow analysis include forecasted operating results, discount rate and a terminal value. In September 2014, the Compensation Committee of the Board of Directors of the Company approved terms for a new employment agreement with the CEO, including a renewal of the Employment Agreement Award upon similar terms as in the prior Employment Agreement. Prior to the quarter ended September 30, 2018, there were probability factors included in the calculation of the award related to the likelihood that the award will be realized. During the quarter ended September 30, 2018, management changed the methodology used in calculating the fair value of the Company's Employment Agreement Award liability to simplify the calculation. As part of the simplified calculation, the Company eliminated certain adjustments made to its aggregate investment in TV One, including the treatment of historical dividends paid and potential distribution of assets upon liquidation. The Compensation Committee of the Board of Directors approved the simplified method which eliminates certain assumptions that were historically used in the determination of the fair value of this liability. 

(c)  The redeemable noncontrolling interest in Reach Media is measured at fair value using a discounted cash flow methodology. A third-party valuation firm assisted the Company in estimating the fair value. Significant inputs to the discounted cash flow analysis include forecasted operating results, discount rate and a terminal value.

There were no transfers in or out of Level 1, 2, or 3 during the nine months ended September 30, 2019. The following table presents the changes in Level 3 liabilities measured at fair value on a recurring basis for the nine months ended September 30, 2019:

	Contingent Consideration			Employment Agreement Award			Redeemable Noncontrolling Interests
	(In thousands)
Balance at December 31, 2018	$	2,831		$	25,660		$	10,232
Net income attributable to noncontrolling interests		—			—			999
Distribution		(895	)		(2,861	)		—
Dividends paid to noncontrolling interests		—			—			(1,000	)
Change in fair value		219			3,575			(984	)
Balance at September 30, 2019	$	2,155		$	26,374		$	9,247
The amount of total (losses)/income for the period included in earnings attributable to the change in unrealized losses/income relating to assets and liabilities still held at the reporting date	$	(219	)	$	(3,575	)	$	—

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Losses and income included in earnings were recorded in the consolidated statements of operations as corporate selling, general and administrative expenses for the employment agreement award for the three and nine months ended September 30, 2019 and 2018. Losses included in earnings were recorded in the consolidated statements of operations as selling, general and administrative expenses for contingent consideration for the three and nine months ended September 30, 2019 and 2018.  

		Significant	As of September 30, 2019	As of December 31, 2018
Level 3 liabilities	Valuation Technique	Unobservable Inputs	Significant Unobservable Input Value
Contingent consideration	Monte Carlo Simulation	Expected volatility	26.4%		34.6	%
Contingent consideration	Monte Carlo Simulation	Discount Rate	14.5%		15.0	%
Employment agreement award	Discounted Cash Flow	Discount Rate	11.0%		11.0	%
Employment agreement award	Discounted Cash Flow	Long-term Growth Rate	2.5%		2.5	%
Redeemable noncontrolling interest	Discounted Cash Flow	Discount Rate	10.5%		10.5	%
Redeemable noncontrolling interest	Discounted Cash Flow	Long-term Growth Rate	1.0%		1.0	%

Any significant increases or decreases in discount rate or long-term growth rate inputs could result in significantly higher or lower fair value measurements.

Certain assets and liabilities are measured at fair value on a non-recurring basis using Level 3 inputs as defined in ASC 820.  These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances.  Included in this category are goodwill, radio broadcasting licenses and other intangible assets, net, that are written down to fair value when they are determined to be impaired, as well as content assets that are periodically written down to net realizable value. For the nine months ended September 30, 2019, the Company recorded an impairment charge of approximately $3.8 million related to its Detroit market radio broadcasting licenses. The Company concluded these assets were not impaired during the three months ended September 30, 2019. For the nine months ended September 30, 2018, the Company recorded an impairment charge of approximately $2.7 million related to its Charlotte market goodwill and also a charge of approximately $3.8 million associated with our Detroit market radio broadcasting licenses. The Company concluded these assets were not impaired during the three months ended September 30, 2018. 

(i) Leases

As of January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”) Topic 842, Leases, using the modification retrospective transition method. Prior comparative periods will be not be restated under this new standard and therefore those amounts are not presented below. The Company adopted a package of practical expedients as allowed by the transition guidance which permits the Company to carry forward the historical assessment of whether contracts contain or are leases, classification of leases and the remaining lease terms. The Company has also made an accounting policy election to exclude leases with an initial term of twelve months or less from recognition on the consolidated balance sheet. Short-term leases will be expensed over the lease term. The Company also elected to separate the consideration in the lease contracts between the lease and non-lease components. All variable non-lease components are expensed as incurred.

ASC 842 results in significant changes to the balance sheets of lessees, most significantly by requiring the recognition of right of use (“ROU”) assets and lease liabilities by lessees for those leases classified as operating leases. Upon adoption of ASC 842, deferred rent balances, which were historically presented separately, were combined and presented net within the ROU asset. The adoption of this standard resulted in the Company recording an increase in ROU assets of approximately $49.8 million and an increase in lease liabilities of approximately $54.1 million. Approximately $4.3 million in deferred rent was also reclassified from liabilities to offset the applicable ROU asset. The tax impact of ASC 842, which primarily consisted of deferred gains related to previous transactions that were historically accounted for as sale and operating leasebacks in accordance with ASC Topic 840 were recognized as part of the cumulative-effect adjustment to retained earnings, resulting in an increase to retained earnings, net of tax, of approximately $5.8 million.

Many of the Company's leases provide for renewal terms and escalation clauses, which are factored into calculating the lease liabilities when appropriate. The implicit rate within the Company's lease agreements is generally not determinable and as such the Company’s collateralized borrowing rate is used.

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The following table sets forth the components of lease expense and the weighted average remaining lease term and the weighted average discount rate for the Company’s leases as of September 30, 2019, dollars in thousands:

Operating Lease Cost (Cost resulting from lease payments)	$	9,642
Variable Lease Cost (Cost excluded from lease payments)		116
Total Lease Cost	$	9,758
Operating Lease - Operating Cash Flows (Fixed Payments)	$	10,010
Operating Lease - Operating Cash Flows (Liability Reduction)	$	6,653
Weighted Average Lease Term - Operating Leases		5.83 years
Weighted Average Discount Rate - Operating Leases		11.00	%

As of September 30, 2019, maturities of lease liabilities were as follows:

For the Year Ended December 31,	(Dollars in thousands)
For the remaining three months ending December 31, 2019	$	3,229
2020		13,268
2021		12,479
2022		11,657
2023		9,963
Thereafter		19,837
Total future lease payments		70,433
Imputed interest		(17,947	)
Total	$	52,486

(j) Impact of Recently Issued Accounting Pronouncements

 In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 is intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This standard will be effective for interim and annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted for annual periods beginning after December 15, 2018. The Company has not yet completed its assessment of the impact of the new standard on its consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (A Consensus of the Emerging Issues Task Force)” (“ASU 2016-15”). ASU 2016-15 is intended to reduce differences in practice in how certain transactions are classified in the statement of cash flows. This standard will be effective for interim and annual reporting periods beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The Company adopted the new standard during the first quarter of 2018 and its adoption did not have a material impact on its consolidated financial statements. 

In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”). ASU 2017-04 is intended to simplify the accounting for goodwill impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. This standard will be effective for interim and annual goodwill impairment tests beginning after December 15, 2019, with early adoption permitted on testing dates after January 1, 2017. The Company adopted the new standard during the first quarter of 2018 and its adoption did not have a material impact on its consolidated financial statements.

(k) Redeemable noncontrolling interest

Redeemable noncontrolling interests are interests in subsidiaries that are redeemable outside of the Company’s control either for cash or other assets. These interests are classified as mezzanine equity and measured at the greater of estimated redemption value at the end of each reporting period or the historical cost basis of the noncontrolling interests adjusted for cumulative earnings allocations.  The resulting increases or decreases in the estimated redemption amount are affected by corresponding charges against retained earnings, or in the absence of retained earnings, additional paid-in-capital.

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(l) Investments – Cost Method

On April 10, 2015, the Company made a $5 million investment in MGM’s world-class casino property, MGM National Harbor, located in Prince George’s County, Maryland, which has a predominately African-American demographic profile. On November 30, 2016, the Company contributed an additional $35 million to complete its investment. This investment further diversified our platform in the entertainment industry while still focusing on our core demographic. We account for this investment on a cost basis. Our MGM National Harbor investment entitles us to an annual cash distribution based on net gaming revenue. Our MGM investment is included in other assets on the consolidated balance sheets and its income in the amount of approximately $1.8 million and $1.7 million, for the three months ended September 30, 2019 and 2018, respectively, and approximately $5.2 million and $5.1 million, for the nine months ended September 30, 2019 and 2018, respectively, is recorded in other income on the consolidated statements of operations. The cost method investment is subject to a periodic impairment review in the normal course. The Company reviewed the investment and concluded that no impairment to the carrying value was required. As of December 4, 2018, the Company’s interest in the MGM National Harbor Casino secures the MGM National Harbor Loan (as defined in Note 4 – Long-Term Debt.)

(m) Content Assets

Our cable television segment has entered into contracts to acquire entertainment programming rights and programs from distributors and producers. The license periods granted in these contracts generally run from one year to ten years. Contract payments are made in installments over terms that are generally shorter than the contract period. Each contract is recorded as an asset and a liability at an amount equal to its gross contractual commitment when the license period begins and the program is available for its first airing. Acquired content is generally amortized on a straight-line basis over the term of the license which reflects the estimated usage. For certain content for which the pattern of usage is accelerated, amortization is based upon the actual usage. Amortization of content assets is recorded in the consolidated statement of operations as programming and technical expenses.

The Company also has programming for which the Company has engaged third parties to develop and produce, and it owns most or all rights (commissioned programming). In accordance with ASC 926, content amortization expense for each period is recognized based on the revenue forecast model, which approximates the proportion that estimated advertising and affiliate revenues for the current period represent in relation to the estimated remaining total lifetime revenues as of the beginning of the current period.  Management regularly reviews, and revises when necessary, its total revenue estimates, which may result in a change in the rate of amortization and/or a write-down of the asset to fair value. 

Acquired program rights are recorded at the lower of unamortized cost or estimated net realizable value. Estimated net realizable values are based on the estimated revenues associated with the program materials and related expenses. The Company recorded an impairment and recorded additional amortization expense of $602,000 as a result of evaluating its contracts for recoverability for the three and nine months ended September 30, 2019. The Company did not record any additional amortization expense as a result of evaluating its contracts for recoverability for the nine months ended September 30, 2018. All produced and licensed content is classified as a long-term asset, except for the portion of the unamortized content balance that is expected to be amortized within one year which is classified as a current asset. 

Tax incentives that state and local governments offer that are directly measured based on production activities are recorded as reductions in production costs.

(n) Derivatives

The Company recognizes all derivatives at fair value on the consolidated balance sheets as either an asset or liability. The accounting for changes in the fair value of a derivative, including certain derivative instruments embedded in other contracts, depends on the intended use of the derivative and the resulting designation.

The Company accounts for the Employment Agreement Award as a derivative instrument in accordance with ASC 815, “Derivatives and Hedging.” The Company estimated the fair value of the award at September 30, 2019, and December 31, 2018, to be approximately $26.4 million and $25.7 million, respectively, and accordingly adjusted its liability to this amount. The long-term portion is recorded in other long-term liabilities and the current portion is recorded in other current liabilities in the consolidated balance sheets. The expense associated with the Employment Agreement Award was recorded in the consolidated statements of operations as corporate selling, general and administrative expenses and was $860,000 and approximately $(6.6) million for the three months ended September 30, 2019, and 2018, respectively, and was approximately $3.6 million and $(3.7) million for the nine months ended September 30, 2019 and 2018, respectively.

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The Company’s obligation to pay the Employment Agreement Award was triggered after the Company recovered the aggregate amount of its capital contribution in TV One and only upon actual receipt of distributions of cash or marketable securities or proceeds from a liquidity event with respect to the Company’s aggregate investment in TV One. The CEO was fully vested in the award upon execution of the employment agreement, and the award lapses if the CEO voluntarily leaves the Company, or is terminated for cause. In September 2014, the Compensation Committee of the Board of Directors of the Company approved terms for a new employment agreement with the CEO, including a renewal of the Employment Agreement Award upon similar terms as in the prior employment agreement. Prior to the quarter ended September 30, 2018, there were probability factors included in the calculation of the award related to the likelihood that the award will be realized. During the quarter ended September 30, 2018, management changed the methodology used in calculating the fair value of the Company's Employment Agreement Award liability to simplify the calculation. As part of the simplified calculation, the Company eliminated certain adjustments made to its aggregate investment in TV One, including the treatment of historical dividends paid and potential distribution of assets upon liquidation. The Compensation Committee of the Board of Directors approved the simplified method which eliminates certain assumptions that were historically used in the determination of the fair value of this liability.

(o) Related Party Transactions

Reach Media operates the Tom Joyner Foundation’s Fantastic Voyage^® (the “Fantastic Voyage^®”), a fund raising event, on behalf of the Tom Joyner Foundation, Inc. (the “Foundation”), a 501(c)(3) entity. The agreements under which the Fantastic Voyage^® operates provide that Reach Media provide all necessary operations of the cruise and that Reach Media will be reimbursed its expenditures and receive a fee plus a performance bonus for the cruise. Distributions from operating income or operating revenues, depending upon the year, are in the following order until the funds are depleted: up to $250,000 to the Foundation, reimbursement of Reach’s expenditures, up to $1.0 million fee to Reach, a performance bonus of up to 50% of remaining operating income to Reach, with the balance remaining with the Foundation. For years 2020 through 2022, $250,000 to the Foundation is guaranteed. Reach Media’s earnings for the Fantastic Voyage^® may not exceed $1.7 million in 2018 and 2019, nor $1.75 million in 2020 and thereafter. The Foundation’s remittances to Reach Media under the agreements are limited to its Fantastic Voyage^®-related cash collections. Reach Media bears the risk should the Fantastic Voyage^® sustain a loss and bears all credit risk associated with the related customer cabin sales. The agreement between Reach and the Foundation automatically renews annually unless termination is mutually agreed or unless a party’s financial requirements are not met, in which case that party not in breach of their obligations has the right, but not the obligation, to terminate unilaterally. As of September 30, 2019 and December 31, 2018, the Foundation owed Reach Media approximately $2.1 million and $208,000, respectively, under the agreements for the operations on the cruises.

For the nine months ended September 30, 2019, Reach Media’s revenues, expenses, and operating income for the Fantastic Voyage were approximately $10.4 million, $8.7 million, and $1.7 million, respectively, and for the nine months ended September 30, 2018, approximately $9.3 million, $7.6 million, and $1.7 million, respectively. The Fantastic Voyage took place during the second quarters of both 2019 and 2018.

Additionally, Reach Media provides office facilities (including office space, telecommunications facilities, and office equipment) to the Foundation. Such services are provided to the Foundation on a pass-through basis at cost. Additionally, from time to time, the Foundation reimburses Reach Media for expenditures paid on its behalf at Reach Media-related events. Under these arrangements, as of September 30, 2019, and December 31, 2018, the Foundation owed $32,000 and $34,000, respectively, to Reach Media.

Karen Wishart is employed as an Executive Vice President, Chief Administrative Officer of the Company and as a Vice President of each of the Company's subsidiaries. Ms. Wishart owns a controlling interest in a temporary staffing and recruiting services firm. Subsequent to Ms. Wishart’s hiring on October 2, 2017, on a limited basis, the staffing firm can continue to provide new staffing and/or recruiting services to the Company. However, the staffing firm will only be reimbursed for direct expenses actually incurred. During the three months ended September 30, 2019 and 2018 and during the nine months ended September 30, 2019, the Company did not pay any amount to the staffing and recruiting services firm. During the nine months ended September 30, 2018, the Company paid the staffing and recruiting services firm $25,000.

2. ACQUISITIONS AND DISPOSITIONS:

On October 20, 2011, we entered into a time brokerage agreement (“TBA”) with WGPR, Inc. (“WGPR”). Pursuant to the TBA, beginning October 24, 2011, we began to broadcast programs produced, owned or acquired by the Company on WGPR’s Detroit radio station, WGPR-FM. We pay a monthly fee as well as certain operating costs of WGPR-FM, and in exchange we retain all revenues from the sale of the advertising within the programming we provide. Under the terms of the TBA, WGPR has also granted us certain rights of first negotiation and first refusal with respect to the sale of WGPR-FM by WGPR and with respect to any potential time brokerage agreement for WGPR-FM covering any time period subsequent to the term of the TBA. The original term of the TBA was through December 31, 2014; however, in September 2014, we entered into an amendment to the TBA to extend the term of the TBA through December 31, 2019.

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On August 31, 2019, the Company closed on its previously announced sale of assets of its Detroit, Michigan radio station, WDMK-FM and three translators W228CJ, W252BX, and W260CB for approximately $13.5 million to Beasley Broadcast Group, Inc. The Company recognized a loss of $509,000 on the sale of the station during the quarter ended September 30, 2019.

On January 30, 2017, the Company entered into an asset purchase agreement to sell certain land, towers and equipment to a third party for $25 million. On May 2, 2017, the Company closed on its previously announced sale, and is leasing certain assets back from the buyer as a part of its normal operations. The Company received proceeds of approximately $25.0 million, resulting in an overall net gain on sale of approximately $22.5 million, of which approximately $14.4 million was recognized immediately during the second quarter of 2017, and approximately $8.1 million which was deferred and was recognized into income ratably over the lease term of ten years. Upon adoption of ASC 842 on January 1, 2019, the unamortized portion of this deferred gain, net of tax, was recognized as a cumulative adjustment to equity.

On August 8, 2018, the Company closed on its previously announced sale of the assets of one of its Detroit, Michigan radio stations, WPZR-FM (102.7 FM), to Educational Media Foundation, of California, for total consideration of approximately $12.7 million, of which approximately $12.2 million was received in cash. As part of the deal, the Company received 3 FM translators that service the Detroit metropolitan area. These signals were combined with the existing FM translator to multicast the Detroit Praise Network. The Company recognized an immaterial loss on the sale of the station during the year ended December 31, 2018.

On August 9, 2018, the Company closed on its previously announced acquisition of the assets of the radio station The Team 980 (WTEM 980 AM) from Red Zebra Broadcasting. Upon closing, the Company also entered into an agreement with the Washington Redskins to ensure that all Redskins games, as well as pregame and postgame programming, will remain on The Team 980.  The Company’s purchase accounting to reflect the fair value of assets acquired and liabilities assumed consisted of approximately $2.0 million to radio broadcasting licenses, $1.1 million to land and land improvements, $512,000 to towers, $91,000 to goodwill, $206,000 to advertiser agreements, and $254,000 to other property and equipment assets.

3. GOODWILL AND RADIO BROADCASTING LICENSES:

Impairment Testing

In accordance with ASC 350, “Intangibles - Goodwill and Other,” we do not amortize our indefinite-lived radio broadcasting licenses and goodwill. Instead, we perform a test for impairment annually across all reporting units, or on an interim basis when events or changes in circumstances or other conditions suggest impairment may have occurred in any given reporting unit. Other intangible assets continue to be amortized on a straight-line basis over their useful lives. We perform our annual impairment test as of October 1 of each year. We evaluate all events and circumstances on an interim basis to determine if an interim indicator is present.

Valuation of Broadcasting Licenses

We did not identify any impairment indicators for the three months ended September 30, 2019. During the nine months ended September 30, 2019, the Company recorded a non-cash impairment charge of approximately $3.8 million associated with our Detroit market radio broadcasting licenses.

During the second and third quarters of 2018, the total market revenue growth for certain markets in which we operate was below that used in our annual impairment testing. We deemed that to be an impairment indicator that warranted interim impairment testing of certain markets’ radio broadcasting licenses, which we performed as of September 30, 2018. There was no impairment identified as part of the testing performed during the quarter ended September 30, 2018. During the nine months ended September 30, 2018, the Company also recorded a non-cash impairment charge of approximately $3.8 million associated with our Detroit market radio broadcasting licenses. Below are some of the key assumptions used in the income approach model for estimating broadcasting licenses fair values for the interim impairment assessments for the quarter ended September 30, 2018.

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Radio Broadcasting	September 30,
Licenses	2018 (a)
Pre-tax impairment charge (in millions)	$	—
Discount Rate		9.0	%
Year 1 Market Revenue Growth Rate Range		0.5	%
Long-term Market Revenue Growth Rate Range (Years 6 – 10)		0.5% – 1.5	%
Mature Market Share Range		6.8% – 14.3	%
Operating Profit Margin Range		29.8% – 35.1	%

(a) Reflects changes only to the key assumptions used in the interim testing for certain units of accounting.

Valuation of Goodwill

We did not identify any impairment indicators at any of our reportable segments for the three months ended September 30, 2019. 

During the second and third quarters of 2018, we identified an impairment indicator at certain of our radio markets, and, as such, we performed an interim analysis for certain radio market goodwill as of September 30, 2018. No goodwill impairment was identified during the three months ended September 30, 2018. During the nine months ended September 30, 2018, the Company recorded a non-cash impairment charge of approximately $2.7 million to reduce the carrying value of our Charlotte goodwill balance. Below are some of the key assumptions used in the income approach model for estimating reporting unit fair values for the interim impairment assessments for the quarters ended September 30, 2018.

Goodwill (Radio Market	September 30,
Reporting Units)	2018 (a)
Pre-tax impairment charge (in millions)	$	–
Discount Rate		9.0	%
Year 1 Market Revenue Growth Rate Range		1.2% – 35.2	%
Long-term Market Revenue Growth Rate Range (Years 6 – 10)		1.0% – 1.5	%
Mature Market Share Range		9.0% – 15.6	%
Operating Profit Margin Range		21.7% – 31.8	%

(a) Reflects changes only to the key assumptions used in the interim testing for certain units of accounting.

Goodwill Valuation Results

The table below presents the changes in the Company’s goodwill carrying values for its four reportable segments.

	Radio Broadcasting Segment			Reach Media Segment			Digital Segment			Cable Television Segment		Total
	(In thousands)
Gross goodwill	$	155,000		$	30,468		$	27,567		$	165,044	$	378,079
Additions		—			—			—			—		—
Impairments		—			—			—			—		—
Accumulated impairment losses		(101,848	)		(16,114	)		(14,545	)		—		(132,507	)
Net goodwill at September 30, 2019	$	53,152		$	14,354		$	13,022		$	165,044	$	245,572

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4. LONG-TERM DEBT:

Long-term debt consists of the following:

	September 30, 2019		December 31, 2018
	(Unaudited)
	(In thousands)
2018 Credit Facility	$	170,746	$	192,000
MGM National Harbor Loan		51,578		50,066
2017 Credit Facility		321,453		323,926
9.25% Senior Subordinated Notes due February 2020		—		2,037
7.375% Senior Secured Notes due April 2022		350,000		350,000
Asset-backed credit facility		—		—
Comcast Note due April 2019		—		11,872
Total debt		893,777		929,901
Less: current portion of long-term debt		22,981		38,706
Less: original issue discount and issuance costs		14,607		17,438
Long-term debt, net	$	856,189	$	873,757

2018 Credit Facility

On December 4, 2018, the Company and certain of its subsidiaries entered into a credit agreement ("2018 Credit Facility"), among the Company, the lenders party thereto from time to time, Wilmington Trust, National Association, as administrative agent, and TCG Senior Funding L.L.C, as sole lead arranger and sole bookrunner. The 2018 Credit Facility provided $192.0 million in term loan borrowings, which was funded on December 20, 2018. The net proceeds of term loan borrowings under the 2018 Credit Facility were used to refinance, repurchase, redeem or otherwise repay the Company's outstanding 9.25% Senior Subordinated Notes due 2020.

Borrowings under the 2018 Credit Facility are subject to customary conditions precedent, as well as a requirement under the 2018 Credit Facility that (i) the Company's total gross leverage ratio on a pro forma basis be not greater than 8:00 to 1:00 (this total gross leverage ratio test steps down as described below), (ii) neither of the administrative agents under the Company's existing credit facilities nor the trustee under the Company's existing senior secured notes due 2022 have objected to the terms of the new credit documents and (iii) certification by the Company that the terms and conditions of the 2018 Credit Facility satisfy the requirements of the definition of "Permitted Refinancing" (as defined in the agreements governing the Company's existing credit facilities) and neither of the administrative agents under the Company's existing credit facilities notifies the Company within five (5) business days prior to funding the borrowings under the 2018 Credit Facility that it disagrees with such determination (including a reasonable description of the basis upon which it disagrees).

The 2018 Credit Facility matures on December 31, 2022 (the "Maturity Date"). Interest rates on borrowings under the 2018 Credit Facility will be either (i) from the Funding Date to the Maturity Date, 12.875% per annum, (ii) 11.875% per annum, once 50% of the term loan borrowings have been repaid or (iii) 10.875% per annum, once 75% of the term loan borrowings have been repaid. Interest payments begin on the last day of the 3-month period commencing on the Funding Date.

The Company's obligations under the 2018 Credit Facility are not secured. The 2018 Credit Facility is guaranteed on an unsecured basis by each entity that guarantees the Company's outstanding $350.0 million 2017 Credit Facility (as defined below). 

The Company is required to repay principal to the extent then outstanding on each quarterly interest payment date, commencing on the last business day in March 2019, equal to one quarter of 7.5% of the aggregate initial principal amount of all term loans incurred on the Funding Date to December 2019, commencing on the last business day in March 2020, one quarter of 10.0% of the aggregate initial principal amount of all term loans incurred on the Funding Date to December 2021, and, commencing on the last business day in March 2021, one quarter of 12.5% of the aggregate initial principal amount of all term loans incurred on the Funding Date to December 2022. The Company is also required to use 75% of excess cash flow (“ECF payment”) as defined in the 2018 Credit Facility, which exclude any distributions to the Company or its restricted subsidiaries in respect of its interests in the MGM National Harbor to repay outstanding term loans at par, paid semiannually and to use 100% of all distributions to the Company or its restricted subsidiaries received in respect of its interest in the MGM National Harbor to repay outstanding terms loans at par. During the three and nine months September 30, 2019, the Company repaid approximately $7.1 million and $21.3 million, respectively, under the 2018 Credit Facility. Included in the repayments made during the quarter ended September 30, 2019 was approximately $3.5 million in ECF payments in accordance with the agreement.

The 2018 Credit Facility contains customary representations and warranties and events of default, affirmative and negative covenants (in each case, subject to materiality exceptions and qualifications). The 2018 Credit Facility also contains certain financial covenants, including a maintenance covenant requiring the Company's total gross leverage ratio to be not greater than 8.0 to 1.00 in 2019, 7.5 to 1.00 in 2020, 7.25 to 1.00 in 2021 and 6.75 to 1.00 in 2022. As of September 30, 2019, the Company was in compliance with all of its financial covenants under the 2018 Credit Facility.

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As of September 30, 2019, the Company had outstanding approximately $170.7 million on its 2018 Credit Facility. The original issue discount in the amount of approximately $3.8 million and associated debt issuance costs in the amount of $875,000 has been reflected as an adjustment to the carrying amount of the debt obligation and amortized to interest expense over the term of the credit facility using the effective interest rate method. The amortization of deferred financing costs was charged to interest expense for all periods presented. The amount of deferred financing costs included in interest expense for all instruments, for the three months ended September 30, 2019 and 2018, was $986,000 and $718,000, respectively. The amount of deferred financing costs included in interest expense for all instruments, for the nine months ended September 30, 2019 and 2018, was approximately $2.9 million and $2.2 million, respectively.

MGM National Harbor Loan

Concurrently, on December 4, 2018, Urban One Entertainment SPV, LLC ("UONESPV") and its immediate parent, Radio One Entertainment Holdings, LLC ("ROEH"), each of which is a wholly owned subsidiary of the Company, entered into a credit agreement, providing $50.0 million in term loan borrowings (the "MGM National Harbor Loan") which was funded on December 20, 2018.

The MGM National Harbor Loan matures on December 31, 2022 and bears interest at 7.0% per annum in cash plus 4.0% per annum paid-in kind. The loan has limited ability to be prepaid in the first two years. The loan is secured on a first priority basis by the assets of UONESPV and ROEH, including all of UONESPV's shares held by ROEH, all of UONESPV's interests in MGM National Harbor, its rights under the joint venture operating agreement governing the MGM National Harbor and UONESPV's obligation to exercise its put right under the joint venture operating agreement in the event of a UONESPV payment default or bankruptcy event, in each case, subject to applicable Maryland gaming laws and approvals. Exercise by UONESPV of its put right under the joint venture operating agreement is subject to required lender consent unless the proceeds are used to retire the MGM National Harbor Loan and any remaining excess is used to repay borrowings, if any, under the 2018 Credit Facility. The MGM National Harbor Loan also contains customary representations and warranties and events of default, affirmative and negative covenants (in each case, subject to materiality exceptions and qualifications).

As of September 30, 2019, the Company had outstanding approximately $51.6 million on its MGM National Harbor Loan. The original issue discount in the amount of approximately $1.0 million and associated debt issuance costs in the amount of approximately $1.7 million is being reflected as an adjustment to the carrying amount of the debt obligation and amortized to interest expense over the term of the obligation using the effective interest rate method. The amortization of deferred financing costs was charged to interest expense for all periods presented.

2017 Credit Facilities

On April 18, 2017, the Company closed on a senior secured credit facility (the “2017 Credit Facility”). The 2017 Credit Facility is governed by a credit agreement by and among the Company, the lenders party thereto from time to time and Guggenheim Securities Credit Partners, LLC, as administrative agent, The Bank of New York Mellon, as collateral agent, and Guggenheim Securities, LLC as sole lead arranger and sole book running manager. The 2017 Credit Facility provides for $350 million in term loan borrowings, all of which was advanced and outstanding on the date of the closing of the transaction.

The 2017 Credit Facility matures on the earlier of (i) April 18, 2023, or (ii) in the event such debt is not repaid or refinanced, 91 days prior to the maturity of the Company’s 2022 Notes (as defined below). At the Company’s election, the interest rate on borrowings under the 2017 Credit Facility are based on either (i) the then applicable base rate (as defined in the 2017 Credit Facility) as, for any day, a rate per annum (rounded upward, if necessary, to the next 1/100th of 1%) equal to the greater of (a) the prime rate published in the Wall Street Journal, (b) 1/2 of 1% in excess rate of the overnight Federal Funds Rate at any given time, (c) the one-month LIBOR rate commencing on such day plus 1.00%) and (d) 2%, or (ii) the then applicable LIBOR rate (as defined in the 2017 Credit Facility). The average interest rate was approximately 6.41% for 2019 and was 5.82% for 2018.

The 2017 Credit Facility is (i) guaranteed by each entity that guarantees the Company’s 2022 Notes on a pari passu basis with the guarantees of the 2022 Notes and (ii) secured on a pari passu basis with the Company’s 2022 Notes. The Company’s obligations under the 2017 Credit Facility are secured, subject to permitted liens and except for certain excluded assets (i) on a first priority basis by certain notes priority collateral, and (ii) on a second priority basis by collateral for the Company’s asset-backed line of credit. 

In addition to any mandatory or optional prepayments, the Company is required to pay interest on the term loans (i) quarterly in arrears for the base rate loans, and (ii) on the last day of each interest period for LIBOR loans. Certain voluntary prepayments of the term loans during the first six months will require an additional prepayment premium. Beginning with the interest payment date occurring in June 2017 and ending in March 2023, the Company will be required to repay principal, to the extent then outstanding, equal to 1∕4 of 1% of the aggregate initial principal amount of all term loans incurred on the effective date of the 2017 Credit Facility. On December 19, 2018, upon drawing under the 2018 Credit Facility and MGM National Harbor Loan, the Company voluntarily prepaid approximately $20.0 million in principal on the 2017 Credit Facility. During the three and nine months ended September 30, 2019, the Company repaid $824,000 and approximately $2.5 million, respectively, under the 2017 Credit Facility. During the three and nine months ended September 30, 2018, the Company repaid $875,000 and approximately $2.6 million, respectively, under the 2017 Credit Facility.

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The 2017 Credit Facility contains customary representations and warranties and events of default, affirmative and negative covenants (in each case, subject to materiality exceptions and qualifications) which may be more restrictive than those governing the 2022 Notes. The 2017 Credit Facility also contains certain financial covenants, including a maintenance covenant requiring the Company’s interest expense coverage ratio (defined as the ratio of consolidated EBITDA to consolidated interest expense) to be greater than or equal to 1.25 to 1.00 and its total senior secured leverage ratio (defined as the ratio of consolidated net senior secured indebtedness to consolidated EBITDA) to be less than or equal to 5.85 to 1.00. 

The net proceeds from the 2017 Credit Facility were used to prepay in full the Company’s previous senior secured credit facility and the agreement governing such credit facility.

The 2017 Credit Facility contains affirmative and negative covenants that the Company is required to comply with, including:

(a) maintaining an interest coverage ratio of no less than:

§ 1.25 to 1.00 on June 30, 2017 and the last day of each fiscal quarter thereafter.

(b) maintaining a senior leverage ratio of no greater than:

§ 5.85 to 1.00 on June 30, 2017 and the last day of each fiscal quarter thereafter.

(c) limitations on:

§	liens;
§	sale of assets;
§	payment of dividends; and
§	mergers.

As of September 30, 2019, the Company was in compliance with all of its financial covenants under the 2017 Credit Facility.

As of September 30, 2019, the Company had outstanding approximately $321.5 million on its 2017 Credit Facility. The original issue discount is being reflected as an adjustment to the carrying amount of the debt obligations and amortized to interest expense over the term of the credit facility using the effective interest rate method. The amortization of deferred financing costs was charged to interest expense for all periods presented.

2022 Notes

On April 17, 2015, the Company closed a private offering of $350.0 million aggregate principal amount of 7.375% senior secured notes due 2022 (the “2022 Notes”). The 2022 Notes were offered at an original issue price of 100.0% plus accrued interest from April 17, 2015, and will mature on April 15, 2022. Interest on the 2022 Notes accrues at the rate of 7.375% per annum and is payable semiannually in arrears on April 15 and October 15, which commenced on October 15, 2015. The 2022 Notes are guaranteed, jointly and severally, on a senior secured basis by the Company’s existing and future domestic subsidiaries, including TV One.   

In connection with the closing of the 2022 Notes, the Company and the guarantor parties thereto entered into a Fourth Supplemental Indenture to the indenture governing the 2020 Notes (as defined below). Pursuant to this Fourth Supplemental Indenture, TV One, which previously did not guarantee the 2020 Notes, became a guarantor under the 2020 Notes indentures. In addition, the transactions caused a “Triggering Event” (as defined in the 2020 Notes Indenture) and, as a result, the 2020 Notes became an unsecured obligation of the Company and the subsidiary guarantors and rank equal in right of payment with the Company’s other senior indebtedness.

The Company used the net proceeds from the 2022 Notes, to refinance a previous credit agreement, refinance certain TV One indebtedness, and finance the buyout of membership interests of Comcast in TV One and pay the related accrued interest, premiums, fees and expenses associated therewith. 

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The 2022 Notes are the Company’s senior secured obligations and rank equal in right of payment with all of the Company’s and the guarantors’ existing and future senior indebtedness, including obligations under the 2017 Credit Facility and the Company’s 2020 Notes (defined below).  The 2022 Notes and related guarantees are equally and ratably secured by the same collateral securing the 2017 Credit Facility and any other parity lien debt issued after the issue date of the 2022 Notes, including any additional notes issued under the Indenture, but are effectively subordinated to the Company’s and the guarantors’ secured indebtedness to the extent of the value of the collateral securing such indebtedness that does not also secure the 2022 Notes. Collateral includes substantially all of the Company’s and the guarantors’ current and future property and assets for accounts receivable, cash, deposit accounts, other bank accounts, securities accounts, inventory and related assets including the capital stock of each subsidiary guarantor. Finally, the Company also had the Comcast Note (defined below) which was a general but senior unsecured obligation of the Company.

On February 24, 2015, the Company entered into a letter of credit reimbursement and security agreement. See Note 9 – Subsequent Events. As of September 30, 2019, the Company had letters of credit totaling $848,000 under the agreement for certain operating leases and certain insurance policies. Letters of credit issued under the agreement are required to be collateralized with cash.

Senior Subordinated Notes

On February 10, 2014, the Company closed a private placement offering of $335.0 million aggregate principal amount of 9.25% senior subordinated notes due 2020 (the “2020 Notes”). The 2020 Notes were offered at an original issue price of 100.0% plus accrued interest from February 10, 2014. The 2020 Notes were scheduled to mature on February 15, 2020. Interest accrued at the rate of 9.25% per annum and was payable semiannually in arrears on February 15 and August 15 in the initial amount of approximately $15.5 million, which commenced on August 15, 2014. The 2020 Notes were guaranteed by certain of the Company’s existing and future domestic subsidiaries and any other subsidiaries that guarantee the existing senior credit facility or any of the Company’s other syndicated bank indebtedness or capital markets securities. The Company used the net proceeds from the offering to repurchase or otherwise redeem all of the amounts then outstanding under its previous notes and to pay the related accrued interest, premiums, fees and expenses associated therewith. During the quarter ended December 31, 2018, in conjunction with entering into the 2018 Credit Facility and MGM National Harbor Loan, the Company repurchased approximately $243.0 million of its 2020 Notes at an average price of approximately 100.88% of par. During the quarter ended December 31, 2018, the Company recorded a loss on retirement of debt of approximately $2.8 million. This amount includes a write-off of previously capitalized debt financing costs and original issue discount associated with the 2020 Notes in the amount of $649,000 and also includes approximately $2.1 million associated with the premium paid to the bondholders. During the quarter ended September 30, 2018, the Company repurchased approximately $5.0 million of its 2020 Notes at an average price of approximately 97.25% of par. The Company recorded a net gain on retirement of debt of $120,000 for the quarter ended September 30, 2018. During the quarter ended June 30, 2018, the Company repurchased approximately $14.0 million of its 2020 Notes at an average price of approximately 95.125% of par. The Company recorded a net gain on retirement of debt of $626,000 for the quarter ended June 30, 2018. During the quarter ended March 31, 2018, the Company repurchased approximately $11 million of its 2020 Notes at an average price of approximately 97.375% of par. The Company recorded a net gain on retirement of debt of $239,000 for the quarter ended March 31, 2018. As of September 30, 2019 and December 31, 2018, the Company had approximately $0 and $2.0 million, respectively, of our 2020 Notes outstanding.

On January 17, 2019, the Company announced that it had given the required notice under the indenture governing its 2020 Notes to redeem for cash all outstanding aggregate principal amount of its Notes to the extent outstanding on February 15, 2019 (the "Redemption Date").  The redemption price for the Notes will be 100.0% of the principal amount of the Notes, plus accrued and unpaid interest to the Redemption Date. On February 15, 2019, the remaining 2020 Notes were redeemed in full.

Comcast Note

The Company also had outstanding a senior unsecured promissory note in the aggregate principal amount of approximately $11.9 million due to Comcast (“Comcast Note”). The Comcast Note bears interest at 10.47%, is payable quarterly in arrears, and the entire principal amount is due on April 17, 2019. The Company is contractually required to retire the Comcast Note in February 2019 upon redemption of the remaining 2020 Notes. On February 15, 2019, upon redemption of the remaining 2020 Notes, the Comcast Note was paid in full and retired.

Asset-Backed Credit Facility

On April 21, 2016, the Company entered into a senior credit agreement governing an asset-backed credit facility (the “ABL Facility”) among the Company, the lenders party thereto from time to time and Wells Fargo Bank National Association, as administrative agent (the “Administrative Agent”). The ABL Facility provides for $25 million in revolving loan borrowings in order to provide for the working capital needs and general corporate requirements of the Company. As of September 30, 2019 and as of December 31, 2018, the Company did not have any borrowings outstanding on its ABL Facility.

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At the Company’s election, the interest rate on borrowings under the ABL Facility are based on either (i) the then applicable margin relative to Base Rate Loans (as defined in the ABL Facility) or (ii) the then applicable margin relative to LIBOR Loans (as defined in the ABL Facility) corresponding to the average availability of the Company for the most recently completed fiscal quarter.

Advances under the ABL Facility are limited to (a) eighty-five percent (85%) of the amount of Eligible Accounts (as defined in the ABL Facility), less the amount, if any, of the Dilution Reserve (as defined in the ABL Facility), minus (b) the sum of (i) the Bank Product Reserve (as defined in the ABL Facility), plus (ii) the aggregate amount of all other reserves, if any, established by Administrative Agent.

All obligations under the ABL Facility are secured by first priority lien on all (i) deposit accounts (related to accounts receivable), (ii) accounts receivable, (iii) all other property which constitutes ABL Priority Collateral (as defined in the ABL Facility).  The obligations are also secured by all material subsidiaries of the Company.

The ABL Facility matures five years from the effective date, and as such, the maturity date is April 21, 2021.

Finally, the ABL Facility is subject to the terms of the Intercreditor Agreement (as defined in the ABL Facility) by and among the Administrative Agent, the administrative agent for the secured parties under the Company’s term loan and the trustee and collateral trustee under the senior secured notes indenture.

The Company conducts a portion of its business through its subsidiaries. Certain of the Company’s subsidiaries have fully and unconditionally guaranteed the Company’s 2022 Notes, the Company’s obligations under the 2017 Credit Facility, and the obligations under the 2018 Credit Facility. The Company’s interest in the MGM National Harbor Casino fully guarantees the MGM National Harbor Loan. 

Future Minimum Principal Payments

Future scheduled minimum principal payments of debt as of September 30, 2019, are as follows:  

	2018  Credit Facility		MGM National Harbor Loan		Asset-backed Credit Facility		2017  Credit  Facility		7.38% Senior Secured Notes  due April 2022		Total
	(In thousands)
October - December 2019	$	3,600		—		—	$	824	$	—	$	4,424
2020		20,884		—		—		3,297		—		24,181
2021		19,200		—		—		3,297		—		22,497
2022		127,062		51,578		—		3,297		350,000		531,937
2023		—		—		—		310,738		—		310,738
2024 and thereafter		—		—		—		—		—		—
Total Debt	$	170,746	$	51,578		—	$	321,453	$	350,000	$	893,777

5. INCOME TAXES:

The Company uses the estimated annual effective tax rate method under ASC 740-270, “Interim Reporting” to calculate the provision for income taxes. The Company recorded a provision for income taxes of approximately $8.3 million on pre-tax income from continuing operations of approximately $18.2 million for the nine months ended September 30, 2019, which results in a tax rate of approximately 45.9%. This tax rate is based on an estimated annual effective rate of 35.5%. The Company recorded discrete tax provision expense of approximately $1.9 million primarily due to provision to return adjustments related to state apportionment.

In accordance with ASC 740, “Accounting for Income Taxes”, the Company continues to evaluate the realizability of its net deferred tax assets by assessing the likely future tax consequences of events that have been realized in the Company’s financial statements or tax returns, tax planning strategies, and future profitability. As of September 30, 2019, the Company believes it is more likely than not that these deferred tax assets will be realized. 

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The Company is subject to the continuous examination of our income tax returns by the IRS and other domestic tax authorities. We believe that an adequate provision has been made for any adjustments that may result from tax examinations. The Company does not currently anticipate that the total amounts of unrecognized tax benefits will significantly change within the next twelve months.

6. STOCKHOLDERS’ EQUITY:

Stock Repurchase Program

From time to time, the Company’s Board of Directors has authorized repurchases of shares of the Company’s Class A and Class D common stock. On May 5, 2018, the Company authorized repurchases of up to $5.0 million through December 31, 2018. In addition, on December 20, 2018, the Company authorized repurchases up to $1.0 million through December 31, 2019 and on May 10, 2019, the Company authorized repurchases up to $2.0 million through December 31, 2019. On July 1, 2019, the Company authorized repurchases up to $800,000 through December 31, 2019. As of September 30, 2019, there was no amount remaining under any of these authorizations with respect to the Company’s Class A and Class D common stock. Under open authorizations, repurchases may be made from time to time in the open market or in privately negotiated transactions in accordance with applicable laws and regulations. Shares are retired when repurchased. The timing and extent of any repurchases will depend upon prevailing market conditions, the trading price of the Company’s Class A and/or Class D common stock and other factors, and subject to restrictions under applicable law. When in effect, the Company executes upon stock repurchase programs in a manner consistent with market conditions and the interests of the stockholders, including maximizing stockholder value. During the three months ended September 30, 2019, the Company repurchased 6,345 shares of Class A common stock in the amount of $14,000 at an average price of $2.20 per share and repurchased 448,742 shares of Class D common stock in the amount of $975,000 at an average price of $2.17 per share.  During the three months ended September 30, 2018, the Company repurchased 3,928 shares of Class A common stock in the amount of $9,000 at an average price of $2.26 per share and repurchased 702,282 shares of Class D common stock in the amount of approximately $1.5 million at an average price of $2.15 per share.  During the nine months ended September 30, 2019, the Company repurchased 54,896 shares of Class A common stock in the amount of $120,000 at an average price of $2.19 per share and repurchased 1,709,315 shares of Class D common stock in the amount of approximately $3.5 million at an average price of $2.06 per share. During the nine months ended September 30, 2018, the Company repurchased 4,160 shares of Class A common stock in the amount of $9,000 at an average price of $2.26 per share and repurchased 2,463,350 shares of Class D common stock in the amount of approximately $5.1 million at an average price of $2.05 per share.

In addition, the Company has limited but ongoing authority to purchase shares of Class D common stock (in one or more transactions at any time there remain outstanding grants) under the Company’s 2009 Stock Plan and 2019 Equity and Performance Incentive Plan (as defined below). As of May 21, 2019, the 2019 Equity and Performance Incentive Plan will be used to satisfy any employee or other recipient tax obligations in connection with the exercise of an option or a share grant under the 2009 Stock Plan, to the extent that the Company has capacity under its financing agreements (i.e., its current credit facilities and indentures) (each a “Stock Vest Tax Repurchase”). During the three months ended September 30, 2019, the Company executed a Stock Vest Tax Repurchase of 13,264 shares of Class D Common Stock in the amount of $25,000 at an average price of $1.87 per share. During the three months ended September 30, 2018, the Company executed a Stock Vest Tax Repurchase of 20,787 shares of Class D Common Stock in the amount of $44,000 at an average price of $2.10 per share. During the nine months ended September 30, 2019, the Company executed a Stock Vest Tax Repurchase of 871,383 shares of Class D Common Stock in the amount of approximately $1.7 million at an average price of $1.94 per share. During the nine months ended September 30, 2018, the Company executed a Stock Vest Tax Repurchase of 599,224 shares of Class D Common Stock in the amount of approximately $1.1 million at an average price of $1.82 per share.

Stock Option and Restricted Stock Grant Plan

Our 2009 stock option and restricted stock plan (“the 2009 Stock Plan”) was originally approved by the stockholders at the Company’s annual meeting on December 16, 2009.  The Company had the authority to issue up to 8,250,000 shares of Class D Common Stock under the 2009 Stock Plan.  Since its original approval, from time to time, the Board of Directors adopted and, as required, our stockholders approved certain amendments to and restatement of the 2009 Stock Plan (the “Amended and Restated 2009 Stock Plan”). The amendments under the Amended and Restated 2009 Stock Plan primarily affected (i) the number of shares with respect to which options and restricted stock grants may be granted under the 2009 Stock Plan and (ii) the maximum number of shares that can be awarded to any individual in any one calendar year.  On April 13, 2015, the Board of Directors adopted, and our stockholders approved on June 2, 2015, an amendment that replenished the authorized plan shares, increasing the number of shares of Class D common stock available for grant back up to 8,250,000 shares.  Our new stock option and restricted stock plan (“2019 Equity and Performance Incentive Plan”), currently in effect was approved by the stockholders at the Company’s annual meeting on May 21, 2019.  The Board of Directors adopted, and on May 21, 2019, our stockholders approved, the 2019 Equity and Performance Incentive Plan which is funded with 5,500,000 shares of Class D Common Stock. As of September 30, 2019, 3,247,067 shares of Class D common stock were available for grant under the 2019 Equity and Performance Incentive Plan.

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On August 7, 2017, the Compensation Committee awarded Catherine Hughes, Chairperson, 474,609 restricted shares of the Company’s Class D common stock, and stock options to purchase 210,937 shares of the Company’s Class D common stock. The grants were effective January 5, 2018, and vested on January 5, 2019.

 On June 12, 2019, the Compensation Committee awarded Catherine Hughes, Chairperson, 393,685 restricted shares of the Company’s Class D common stock, and stock options to purchase 174,971 shares of the Company’s Class D common stock. The grants were effective July 5, 2019 and will vest on January 6, 2020. 

On August 7, 2017, the Compensation Committee awarded Alfred Liggins, Chief Executive Officer and President, 791,015 restricted shares of the Company’s Class D common stock, and stock options to purchase 351,562 shares of the Company’s Class D common stock. The grants were effective January 5, 2018, and vested on January 5, 2019.

 On June 12, 2019, the Compensation Committee awarded Alfred Liggins, Chief Executive Officer and President, 656,142 restricted shares of the Company’s Class D common stock, and stock options to purchase 291,619 shares of the Company’s Class D common stock. The grants were effective July 5, 2019 and will vest on January 6, 2020.

On August 7, 2017, the Compensation Committee awarded Peter Thompson, Chief Financial Officer, 270,833 restricted shares of the Company’s Class D common stock, and stock options to purchase 120,370 shares of the Company’s Class D common stock. The grants were effective January 5, 2018, and vested on January 5, 2019.

 On June 12, 2019, the Compensation Committee awarded Peter Thompson, Chief Financial Officer, 224,654 restricted shares of the Company’s Class D common stock, and stock options to purchase 99,846 shares of the Company’s Class D common stock. The grants were effective July 5, 2019 and will vest on January 6, 2020. 

On August 7, 2017, the Compensation Committee awarded 575,262 shares of restricted stock and 470,000 stock options to certain employees pursuant to the Company’s long-term incentive plan. The grants were effective August 7, 2017. 470,000 shares of restricted stock and 470,000 stock options will vest in three installments, with the first installment of 33% vesting on January 5, 2018, and the second installment vesting on January 5, 2019, and the remaining installment vesting on January 5, 2020. 105,262 shares of restricted stock immediately vested on August 7, 2017.

On October 2, 2017, Karen Wishart, our Chief Administrative Officer, as part of her employment agreement, received an equity grant of 37,500 shares of the Company's Class D common stock as well as a grant of options to purchase 37,500 shares of the Company's Class D common stock.  The grants vest in equal increments on each of October 2, 2018, October 2, 2019 and October 2, 2020.

On June 12, 2019, the Compensation Committee awarded David Kantor, Chief Executive Officer – Radio Division, 195,242 restricted shares of the Company’s Class D common stock, and stock options to purchase 86,774 shares of the Company’s Class D common stock. The grants were effective July 5, 2019 and will vest on January 6, 2020. 

Pursuant to the terms of the 2019 Equity and Performance Incentive Plan and subject to the Company’s insider trading policy, a portion of each recipient’s vested shares may be sold in the open market for tax purposes on or about the vesting dates. 

Stock-based compensation expense for the three months ended September 30, 2019 and 2018, was approximately $1.9 million and $1.1 million, respectively, and for the nine months ended September 30, 2019 and 2018, was approximately $2.6 million and $3.6 million, respectively.

The Company granted 653,210 stock options stock options during the three and nine months ended September 30, 2019. The Company did not grant stock options during the three months ended September 30, 2018 and granted 732,869 stock options during the nine months ended September 30, 2018.

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Transactions and other information relating to stock options for the nine months ended September 30, 2019, are summarized below:

	Number of Options		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (In Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2018		3,569,000	$	2.12		7.19	$	130,000
Grants		653,000	$	2.17
Exercised		15,000	$	1.90
Forfeited/cancelled/expired/settled		10,000	$	1.90
Balance as of September 30, 2019		4,197,000	$	2.13		6.95	$	296,000
Vested and expected to vest at September 30, 2019		4,143,000	$	2.13		6.93	$	295,000
Unvested at September 30, 2019		835,000	$	2.11		9.36	$	4,000
Exercisable at September 30, 2019		3,362,000	$	2.13		6.35	$	292,000

The aggregate intrinsic value in the table above represents the difference between the Company’s stock closing price on the last day of trading during the nine months ended September 30, 2019, and the exercise price, multiplied by the number of shares that would have been received by the holders of in-the-money options had all the option holders exercised their options on September 30, 2019. This amount changes based on the fair market value of the Company’s stock.

There were no options exercised during the three months ended September 30, 2019 and there were 15,000 options exercised during the nine months ended September 30, 2019. There were no options exercised during the three months ended September 30, 2018 and there were 58,190 options exercised during the nine months ended September 30, 2018. No options vested during the three months ended September 30, 2019 and 834,530 options vested during the nine months ended September 30, 2019. No options vested during the three months ended September 30, 2018 and 831,937 options vested during the nine months ended September 30, 2018.

As of September 30, 2019, $561,000 of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of three months. The weighted-average fair value per share of shares underlying stock options was $1.54 at September 30, 2019.

The Company granted 1,499,723 shares of restricted stock during the three months ended September 30, 2019 and granted 2,379,962 shares of restricted stock during the nine months ended September 30, 2019. Each of the four non-executive directors received 25,000 shares of restricted stock or $50,000 worth of restricted stock based upon the closing price of the Company’s Class D common stock on June 17, 2019. The Company did not grant restricted stock during the three months ended September 30, 2018 and granted 1,758,428 shares of restricted stock during the nine months ended September 30, 2018. Each of the four non-executive directors received 23,256 shares of restricted stock or $50,000 worth of restricted stock based upon the closing price of the Company’s Class D common stock on June 15, 2018. The restricted stock grants for the non-executive directors vest over a two-year period in equal 50% installments.

Transactions and other information relating to restricted stock grants for the nine months ended September 30, 2019, are summarized below:

	Shares			Average Fair Value at Grant Date
Unvested at December 31, 2018		2,124,000		$	1.85
Grants		2,380,000		$	2.15
Vested		(2,604,000	)	$	1.92
Forfeited/cancelled/expired		(37,000	)	$	2.34
Unvested at September 30, 2019		1,863,000		$	2.14

Restricted stock grants were and are included in the Company’s outstanding share numbers on the effective date of grant. As of September 30, 2019, approximately $2.3 million of total unrecognized compensation cost related to restricted stock grants is expected to be recognized over the weighted-average period of five months.

7. SEGMENT INFORMATION:

The Company has four reportable segments: (i) radio broadcasting; (ii) Reach Media; (iii) digital; and (iv) cable television. These segments operate in the United States and are consistently aligned with the Company’s management of its businesses and its financial reporting structure.

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The radio broadcasting segment consists of all broadcast results of operations. The Reach Media segment consists of the results of operations for the Tom Joyner Morning Show and related activities and operations of other syndicated shows. The digital segment includes the results of our online business, including the operations of Interactive One, as well as the digital components of our other reportable segments. The cable television segment consists of the Company’s cable TV operation, including TV One’s and CLEO TV’s results of operations. Corporate/Eliminations represents financial activity associated with our corporate staff and offices and intercompany activity among the four segments. 

Operating loss or income represents total revenues less operating expenses, depreciation and amortization, and impairment of long-lived assets. Intercompany revenue earned and expenses charged between segments are recorded at estimated fair value and eliminated in consolidation.

The accounting policies described in the summary of significant accounting policies in Note 1 – Organization and Summary of Significant Accounting Policies are applied consistently across the segments.

Detailed segment data for the three months ended September 30, 2019 and 2018, is presented in the following tables:

	Three Months Ended September 30,
	2019			2018
	(Unaudited)
	(In thousands)
Net Revenue:
Radio Broadcasting	$	46,467		$	45,958
Reach Media		10,917			10,822
Digital		8,170			8,749
Cable Television		45,981			45,401
Corporate/Eliminations*		(480	)		(200	)
Consolidated	$	111,055		$	110,730
Operating Expenses (including stock-based compensation and excluding depreciation and amortization and impairment of long-lived assets):
Radio Broadcasting	$	28,929		$	29,373
Reach Media		8,936			8,740
Digital		7,460			9,363
Cable Television		23,677			22,795
Corporate/Eliminations		6,993			25
Consolidated	$	75,995		$	70,296
Depreciation and Amortization:
Radio Broadcasting	$	791		$	872
Reach Media		60			63
Digital		474			482
Cable Television		953			6,577
Corporate/Eliminations		315			339
Consolidated	$	2,593		$	8,333
Operating income (loss):
Radio Broadcasting	$	16,747		$	15,713
Reach Media		1,921			2,019
Digital		236			(1,096	)
Cable Television		21,351			16,029
Corporate/Eliminations		(7,788	)		(564	)
Consolidated	$	32,467		$	32,101

* Intercompany revenue included in net revenue above is as follows:

Radio Broadcasting $ (480 ) $ (200 )

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Capital expenditures by segment are as follows:

Radio Broadcasting	$	1,406	$	2,663
Reach Media		31		37
Digital		348		327
Cable Television		15		474
Corporate/Eliminations		37		898
Consolidated	$	1,837	$	4,399

	Nine Months Ended September 30,
	2019			2018
	(Unaudited)
	(In thousands)
Net Revenue:
Radio Broadcasting	$	132,528		$	131,924
Reach Media		36,660			33,721
Digital		23,280			23,454
Cable Television		140,234			138,414
Corporate/Eliminations*		(1,627	)		(1,956	)
Consolidated	$	331,075		$	325,557
Operating Expenses (including stock-based compensation and excluding depreciation and amortization and impairment of long-lived assets):
Radio Broadcasting	$	86,580		$	85,588
Reach Media		30,727			29,700
Digital		22,099			28,830
Cable Television		74,540			72,072
Corporate/Eliminations		19,748			13,713
Consolidated	$	233,694		$	229,903
Depreciation and Amortization:
Radio Broadcasting	$	2,510		$	2,590
Reach Media		178			189
Digital		1,395			1,435
Cable Television		9,430			19,690
Corporate/Eliminations		938			965
Consolidated	$	14,451		$	24,869
Impairment of Long-Lived Assets:
Radio Broadcasting	$	3,800		$	6,556
Reach Media		—			—
Digital		—			—
Cable Television		—			—
Corporate/Eliminations		—			—
Consolidated	$	3,800		$	6,556
Operating income (loss):
Radio Broadcasting	$	39,638		$	37,190
Reach Media		5,755			3,832
Digital		(214	)		(6,811	)
Cable Television		56,264			46,652
Corporate/Eliminations		(22,313	)		(16,634	)
Consolidated	$	79,130		$	64,229

* Intercompany revenue included in net revenue above is as follows:

Radio Broadcasting $ (1,627 ) $ (1,956 )

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Capital expenditures by segment are as follows:

Radio Broadcasting	$	2,269	$	3,232
Reach Media		97		83
Digital		1,066		1,087
Cable Television		173		573
Corporate/Eliminations		342		1,502
Consolidated	$	3,947	$	6,477

	September 30, 2019		December 31, 2018
	(Unaudited)
	(In thousands)
Total Assets:
Radio Broadcasting	$	723,861	$	717,400
Reach Media		37,831		34,388
Digital		26,262		24,389
Cable Television		398,088		402,511
Corporate/Eliminations		75,459		58,721
Consolidated	$	1,261,501	$	1,237,409

8. COMMITMENTS AND CONTINGENCIES:

Royalty Agreements

Musical works rights holders, generally songwriters and music publishers, have been traditionally represented by performing rights organizations, such as the American Society of Composers, Authors and Publishers (“ASCAP”), Broadcast Music, Inc. (“BMI”) and SESAC, Inc. (“SESAC”).  The market for rights relating to musical works is changing rapidly. Songwriters and music publishers have withdrawn from the traditional performing rights organizations, particularly ASCAP and BMI, and new entities, such as Global Music Rights LLC (“GMR”), have been formed to represent rights holders. These organizations negotiate fees with copyright users, collect royalties and distribute them to the rights holders.  We have arrangements with ASCAP, SESAC and GMR, and are in negotiations with BMI for a new agreement. If we are unable to reach an agreement with BMI, a court will determine the royalty we will be required to pay BMI.  The changing market for musical works may have an adverse effect on us, including increasing our costs or limiting the musical works available to us.

Other Contingencies

The Company has been named as a defendant in several legal actions arising in the ordinary course of business. It is management’s opinion, after consultation with its legal counsel, that the outcome of these claims will not have a material adverse effect on the Company’s financial position or results of operations.

Off-Balance Sheet Arrangements

On February 24, 2015, the Company entered into a letter of credit reimbursement and security agreement. As of September 30, 2019, the Company had letters of credit totaling $848,000 under the agreement for certain operating leases and certain insurance policies. Letters of credit issued under the agreement are required to be collateralized with cash.

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Noncontrolling Interest Shareholders’ Put Rights

Beginning on January 1, 2018, the noncontrolling interest shareholders of Reach Media have had an annual right to require Reach Media to purchase all or a portion of their shares at the then current fair market value for such shares (the “Put Right”).  This annual right is exercisable for a 30-day period beginning January 1 of each year. The purchase price for such shares may be paid in cash and/or registered Class D common stock of Urban One, at the discretion of Urban One. The noncontrolling interest shareholders of Reach Media did not exercise their Put Right for the 30-day period ending January 30, 2019. Management, at this time, cannot reasonably determine the period when and if the put right will be exercised by the noncontrolling interest shareholders.

9. SUBSEQUENT EVENTS:

On October 8, 2019, the Company entered into an amendment to its letter of credit reimbursement and security agreement and extended the term to October 8, 2024. Letters of credit issued under the agreement are required to be collateralized with cash.

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Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following information should be read in conjunction with “Selected Financial Data” and the Consolidated Financial Statements and Notes thereto included elsewhere in this report and the audited financial statements and Management’s Discussion and Analysis contained in our Annual Report on Form 10-K for the year ended December 31, 2018.

Introduction

Revenue

Within our core radio business, we primarily derive revenue from the sale of advertising time and program sponsorships to local and national advertisers on our radio stations. Advertising revenue is affected primarily by the advertising rates our radio stations are able to charge, as well as the overall demand for radio advertising time in a market. These rates are largely based upon a radio station’s audience share in the demographic groups targeted by advertisers, the number of radio stations in the related market, and the supply of, and demand for, radio advertising time. Advertising rates are generally highest during morning and afternoon commuting hours.

Net revenue consists of gross revenue, net of local and national agency and outside sales representative commissions. Agency and outside sales representative commissions are calculated based on a stated percentage applied to gross billing.

The following chart shows the percentage of consolidated net revenue generated by each reporting segment.

	For The Three Months Ended September 30,						For The Nine Months Ended September 30,
	2019			2018			2019			2018
Radio broadcasting segment		41.8	%		41.5	%		40.0	%		40.5	%
Reach Media segment		9.8	%		9.8	%		11.1	%		10.4	%
Digital segment		7.4	%		7.9	%		7.0	%		7.2	%
Cable television segment		41.4	%		41.0	%		42.4	%		42.5	%
Corporate/eliminations		(0.4	)%		(0.2	)%		(0.5	)%		(0.6	)%

The following chart shows the percentages generated from local and national advertising as a subset of net revenue from our core radio business.

	For The Three Months Ended September 30,						For The Nine Months Ended September 30,
	2019			2018			2019			2018
Percentage of core radio business generated from local advertising		57.1	%		59.0	%		58.1	%		59.9	%
Percentage of core radio business generated from national advertising, including network advertising		37.8	%		36.9	%		36.4	%		36.2	%

National and local advertising also includes advertising revenue generated from our digital segment. The balance of net revenue from our radio segment was generated from tower rental income, ticket sales and revenue related to our sponsored events, management fees and other revenue.

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The following charts show our net revenue (and sources) for the three and nine months ended September 30, 2019 and 2018:

	Three Months Ended September 30,
	2019		2018		$ Change			% Change
	(Unaudited) (In thousands)
Net Revenue:
Radio Advertising	$	50,813	$	51,293	$	(480	)		(0.9	)%
Political Advertising		300		917		(617	)		(67.3	)
Digital Advertising		8,171		8,734		(563	)		(6.4	)
Cable Television Advertising		20,649		19,157		1,492			7.8
Cable Television Affiliate Fees		25,330		26,244		(914	)		(3.5	)
Event Revenues & Other		5,792		4,385		1,407			32.1
Net Revenue (as reported)	$	111,055	$	110,730	$	325			0.3	%

	Nine Months Ended September 30,
	2019		2018		$ Change			% Change
	(Unaudited) (In thousands)
Net Revenue:
Radio Advertising	$	144,958	$	144,358	$	600			0.4	%
Political Advertising		741		2,300		(1,559	)		(67.8	)
Digital Advertising		23,270		23,439		(169	)		(0.7	)
Cable Television Advertising		60,658		56,211		4,447			7.9
Cable Television Affiliate Fees		79,404		81,513		(2,109	)		(2.6	)
Event Revenues & Other		22,044		17,736		4,308			24.3
Net Revenue (as reported)	$	331,075	$	325,557	$	5,518			1.7	%

In the broadcasting industry, radio stations and television stations often utilize trade or barter agreements to reduce cash expenses by exchanging advertising time for goods or services. In order to maximize cash revenue for our spot inventory, we closely manage the use of trade and barter agreements.

Within our digital segment, including Interactive One which generates the majority of the Company’s digital revenue, revenue is principally derived from advertising services on non-radio station branded, but Company-owned websites. Advertising services include the sale of banner and sponsorship advertisements. Advertising revenue is recognized either as impressions (the number of times advertisements appear in viewed pages) are delivered, when “click through” purchases are made, or ratably over the contract period, where applicable. In addition, Interactive One derives revenue from its studio operations, in which it provides third-party clients with publishing services including digital platforms and related expertise.  In the case of the studio operations, revenue is recognized primarily through fixed contractual monthly fees and/or as a share of the third party’s reported revenue.

Our cable television segment generates the Company’s cable television revenue, and derives its revenue principally from advertising and affiliate revenue. Advertising revenue is derived from the sale of television air time to advertisers and is recognized when the advertisements are run. Our cable television segment also derives revenue from affiliate fees under the terms of various affiliation agreements based upon a per subscriber fee multiplied by most recent subscriber counts reported by the applicable affiliate.

Reach Media primarily derives its revenue from the sale of advertising in connection with its syndicated radio shows, including the Tom Joyner Morning Show and our other syndicated programming assets, including the Rickey Smiley Morning Show, the Russ Parr Morning Show and the DL Hughley Show. Reach Media also operates www.BlackAmericaWeb.com, an African-American targeted news and entertainment website.  Additionally, Reach Media operates various other event-related activities.

Expenses

Our significant expenses are: (i) employee salaries and commissions; (ii) programming expenses; (iii) marketing and promotional expenses; (iv) rental of premises for office facilities and studios; (v) rental of transmission tower space; (vi) music license royalty fees; and (vii) content amortization. We strive to control these expenses by centralizing certain functions such as finance, accounting, legal, human resources and management information systems and, in certain markets, the programming management function. We also use our multiple stations, market presence and purchasing power to negotiate favorable rates with certain vendors and national representative selling agencies. In addition to salaries and commissions, major expenses for our internet business include membership traffic acquisition costs, software product design, post-application software development and maintenance, database and server support costs, the help desk function, data center expenses connected with internet service provider (“ISP”) hosting services and other internet content delivery expenses. Major expenses for our cable television business include content acquisition and amortization, sales and marketing.

35

We generally incur marketing and promotional expenses to increase and maintain our audiences. However, because Nielsen reports ratings either monthly or quarterly, depending on the particular market, any changed ratings and the effect on advertising revenue tends to lag behind both the reporting of the ratings and the incurrence of advertising and promotional expenditures.

Measurement of Performance

We monitor and evaluate the growth and operational performance of our business using net income and the following key metrics:

(a)  Net revenue:  The performance of an individual radio station or group of radio stations in a particular market is customarily measured by its ability to generate net revenue. Net revenue consists of gross revenue, net of local and national agency and outside sales representative commissions consistent with industry practice. Net revenue is recognized in the period in which advertisements are broadcast. Net revenue also includes advertising aired in exchange for goods and services, which is recorded at fair value, revenue from sponsored events and other revenue. Net revenue is recognized for our online business as impressions are delivered, as “click throughs” are made or ratably over contract periods, where applicable. Net revenue is recognized for our cable television business as advertisements are run, and during the term of the affiliation agreements at levels appropriate for the most recent subscriber counts reported by the affiliate, net of launch support.

(b)  Broadcast and digital operating income:  Net income (loss) before depreciation and amortization, income taxes, interest expense, interest income, noncontrolling interests in income of subsidiaries, other (income) expense, corporate selling, general and administrative expenses, stock-based compensation, impairment of long-lived assets, (gain) loss on retirement of debt and gain on sale-leaseback, is commonly referred to in the radio broadcasting industry as “station operating income.” However, given the diverse nature of our business, station operating income is not truly reflective of our multi-media operation and, therefore, we now use the term broadcast and digital operating income. Broadcast and digital operating income is not a measure of financial performance under accounting principles generally accepted in the United States of America (“GAAP”). Nevertheless, broadcast and digital operating income is a significant measure used by our management to evaluate the operating performance of our core operating segments. Broadcast and digital operating income provides helpful information about our results of operations, apart from expenses associated with our fixed and long-lived intangible assets, income taxes, investments, impairment charges, debt financings and retirements, corporate overhead and stock-based compensation. Our measure of broadcast and digital operating income is similar to industry use of station operating income; however, it reflects our more diverse business and therefore is not completely analogous to “station operating income” or other similarly titled measures as used by other companies. Broadcast and digital operating income does not represent operating loss or cash flow from operating activities, as those terms are defined under GAAP, and should not be considered as an alternative to those measurements as an indicator of our performance.

(c)  Broadcast and digital operating income margin:  Broadcast and digital operating income margin represents broadcast and digital operating income as a percentage of net revenue. Broadcast and digital operating income margin is not a measure of financial performance under GAAP. Nevertheless, we believe that broadcast and digital operating income margin is a useful measure of our performance because it provides helpful information about our profitability as a percentage of our net revenue. Broadcast and digital operating margin includes results from all four segments (radio broadcasting, Reach Media, digital and cable television).

(d) Adjusted EBITDA: Adjusted EBITDA consists of net (loss) income plus (1) depreciation and amortization, income taxes, interest expense, noncontrolling interests in income of subsidiaries, impairment of long-lived assets, stock-based compensation, (gain) loss on retirement of debt, gain on sale-leaseback, employment agreement, incentive plan award expenses and other compensation, contingent consideration from acquisition, severance-related costs, cost method investment income, less (2) other income and interest income. Net income before interest income, interest expense, income taxes, depreciation and amortization is commonly referred to in our business as “EBITDA.” Adjusted EBITDA and EBITDA are not measures of financial performance under GAAP. We believe Adjusted EBITDA is often a useful measure of a company’s operating performance and is a significant measure used by our management to evaluate the operating performance of our business because Adjusted EBITDA excludes charges for depreciation, amortization and interest expense that have resulted from our acquisitions and debt financing, our taxes, impairment charges, and gain on retirements of debt. Accordingly, we believe that Adjusted EBITDA provides useful information about the operating performance of our business, apart from the expenses associated with our fixed assets and long-lived intangible assets, capital structure or the results of our affiliated company. Adjusted EBITDA is frequently used as one of the measures for comparing businesses in the broadcasting industry, although our measure of Adjusted EBITDA may not be comparable to similarly titled measures of other companies, including, but not limited to the fact that our definition includes the results of all four of our operating segments (radio broadcasting, Reach Media, digital and cable television). Adjusted EBITDA and EBITDA do not purport to represent operating income or cash flow from operating activities, as those terms are defined under GAAP, and should not be considered as alternatives to those measurements as an indicator of our performance.

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Summary of Performance

The tables below provide a summary of our performance based on the metrics described above:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
	(In thousands, except margin data)
	(Unaudited)
Net revenue	$	111,055		$	110,730		$	331,075		$	325,557
Broadcast and digital operating income		44,804			43,414			125,639			120,252
Broadcast and digital operating income margin		40.3	%		39.2	%		37.9	%		36.9	%
Consolidated net income attributable to common stockholders	$	5,359		$	23,044		$	8,846		$	24,079

The reconciliation of net income to broadcast and digital operating income is as follows: 

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
	(In thousands, unaudited)
Consolidated net income attributable to common stockholders	$	5,359		$	23,044		$	8,846		$	24,079
Add back non-broadcast and digital operating income items included in consolidated net income:
Interest income		(45	)		(33	)		(131	)		(194	)
Interest expense		21,589			18,987			65,743			57,423
Provision for (benefit from) income taxes		6,535			(8,173	)		8,342			(10,914	)
Corporate selling, general and administrative, excluding stock-based compensation		7,863			1,846			25,666			20,963
Stock-based compensation		1,881			1,134			2,592			3,635
Gain on retirement of debt		—			(120	)		—			(985	)
Other income, net		(1,299	)		(1,935	)		(4,669	)		(5,850	)
Depreciation and amortization		2,593			8,333			14,451			24,869
Impairment of long-lived assets		—			—			3,800			6,556
Noncontrolling interests in income of subsidiaries		328			331			999			670
Broadcast and digital operating income	$	44,804		$	43,414		$	125,639		$	120,252

The reconciliation of net income to adjusted EBITDA is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
	(In thousands, unaudited)
Adjusted EBITDA reconciliation:
Consolidated net income attributable to common stockholders, as reported	$	5,359		$	23,044		$	8,846		$	24,079
Add back non-broadcast and digital operating income items included in consolidated net income:
Interest income		(45	)		(33	)		(131	)		(194	)
Interest expense		21,589			18,987			65,743			57,423
Provision for (benefit from) income taxes		6,535			(8,173	)		8,342			(10,914	)
Depreciation and amortization		2,593			8,333			14,451			24,869
EBITDA	$	36,031		$	42,158		$	97,251		$	95,263
Stock-based compensation		1,881			1,134			2,592			3,635
Gain on retirement of debt		—			(120	)		—			(985	)
Other income, net		(1,299	)		(1,935	)		(4,669	)		(5,850	)
Noncontrolling interests in income of subsidiaries		328			331			999			670
Employment Agreement Award, incentive plan award expenses and other compensation		860			(6,355	)		3,576			(2,481	)
Contingent consideration from acquisition		53			265			219			1,715
Severance-related costs		358			622			1,178			1,621
Impairment of long-lived assets		—			—			3,800			6,556
Cost method investment income		1,809			1,711			5,167			5,143
Adjusted EBITDA	$	40,021		$	37,811		$	110,113		$	105,287

37

URBAN ONE, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS

The following table summarizes our historical consolidated results of operations:

Three Months Ended September 30, 2019 Compared to Three Months Ended September 30, 2018 (In thousands)

	Three Months Ended September 30,
	2019			2018			Increase/(Decrease)
	(Unaudited)
Statements of Operations:
Net revenue	$	111,055		$	110,730		$	325		0.3	%
Operating expenses:
Programming and technical, excluding stock-based compensation		30,389			30,952			(563	)	(1.8	)
Selling, general and administrative, excluding stock-based compensation		35,862			36,364			(502	)	(1.4	)
Corporate selling, general and administrative, excluding stock-based compensation		7,863			1,846			6,017		325.9
Stock-based compensation		1,881			1,134			747		65.9
Depreciation and amortization		2,593			8,333			(5,740	)	(68.9	)
Total operating expenses		78,588			78,629			(41	)	(0.1	)
Operating income		32,467			32,101			366		1.1
Interest income		45			33			12		36.4
Interest expense		21,589			18,987			2,602		13.7
Gain on retirement of debt		—			(120	)		(120	)	(100.0	)
Other income, net		(1,299	)		(1,935	)		(636	)	(32.9	)
Income before provision for (benefit from) income taxes and noncontrolling interests in income of subsidiaries		12,222			15,202			(2,980	)	(19.6	)
Provision for (benefit from) income taxes		6,535			(8,173	)		14,708		180.0
Consolidated net income		5,687			23,375			(17,688	)	(75.7	)
Net income attributable to noncontrolling interests		328			331			(3	)	(0.9	)
Net income attributable to common stockholders	$	5,359		$	23,044		$	(17,685	)	(76.7	)%

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Net revenue

Three Months Ended September 30,				Increase/(Decrease)
2019		2018
$	111,055	$	110,730	$	325	0.3	%

During the three months ended September 30, 2019, we recognized approximately $111.1 million in net revenue compared to approximately $110.7 million during the same period in 2018. These amounts are net of agency and outside sales representative commissions. Net revenues from our radio broadcasting segment increased 1.1% compared to the same period in 2018. Based on reports prepared by the independent accounting firm Miller, Kaplan, Arase & Co., LLP (“Miller Kaplan”), the markets we operate in (excluding Richmond and Raleigh, both of which no longer participate in Miller Kaplan) increased 5.1% in total revenues. We experienced net revenue declines most significantly in our Detroit and Indianapolis markets, with our Atlanta, Baltimore, Charlotte, Raleigh, St. Louis, and Washington DC markets experiencing the most significant growth for the quarter. As previously announced, we sold our Detroit WDMK-FM station as of August 31, 2019 and we sold our Detroit WPZR-FM station as of August 8, 2018. We recognized approximately $46.0 million of revenue from our cable television segment during the three months ended September 30, 2019, compared to approximately $45.4 million for the same period in 2018, with an increase primarily in advertising sales, which was partially offset by a decline in affiliate sales. Net revenue from our Reach Media segment increased marginally for the quarter ended September 30, 2019, compared to the same period in 2018. The Tom Joyner One More Time Experience, a multi-city tour event for 2019 added revenue for the quarter. Finally, net revenues for our digital segment decreased 6.6% for the three months ended September 30, 2019, compared to the same period in 2018, primarily due to decreases in direct revenues.

Operating Expenses

Programming and technical, excluding stock-based compensation

Three Months Ended September 30,				Increase/(Decrease)
2019		2018
$	30,389	$	30,952	$	(563	)	(1.8	)%

Programming and technical expenses include expenses associated with on-air talent and the management and maintenance of the systems, tower facilities, and studios used in the creation, distribution and broadcast of programming content on our radio stations. Programming and technical expenses for the radio segment also include expenses associated with our programming research activities and music royalties. For our digital segment, programming and technical expenses include software product design, post-application software development and maintenance, database and server support costs, the help desk function, data center expenses connected with ISP hosting services and other internet content delivery expenses. For our cable television segment, programming and technical expenses include expenses associated with technical, programming, production, and content management. The decrease in programming and technical expenses for the three months ended September 30, 2019, compared to the same period in 2018 is primarily to a decrease in expenses at our radio broadcasting, Reach Media and digital segments, which was partially offset by higher expenses at our cable television segment.

Selling, general and administrative, excluding stock-based compensation

Three Months Ended September 30,				Increase/(Decrease)
2019		2018
$	35,862	$	36,364	$	(502	)	(1.4	)%

Selling, general and administrative expenses include expenses associated with our sales departments, offices and facilities and personnel (outside of our corporate headquarters), marketing and promotional expenses, special events and sponsorships and back office expenses. Expenses to secure ratings data for our radio stations and visitors’ data for our websites are also included in selling, general and administrative expenses. In addition, selling, general and administrative expenses for the radio broadcasting segment and digital segment include expenses related to the advertising traffic (scheduling and insertion) functions. Selling, general and administrative expenses also include membership traffic acquisition costs for our online business. The decrease in expenses for the three months ended September 30, 2019, compared to the same period in 2018 is primarily from a decrease in expenses at our digital segment, which was partially offset by an increase in expenses at our Reach Media segment.

Corporate selling, general and administrative, excluding stock-based compensation

Three Months Ended September 30,				Increase/(Decrease)
2019		2018
$	7,863	$	1,846	$	6,017	325.9	%

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Corporate expenses consist of expenses associated with our corporate headquarters and facilities, including personnel as well as other corporate overhead functions. The increase in corporate selling, general and administrative expenses was due primarily to an increase in compensation expense for the Chief Executive Officer in connection with the valuation of the Employment Agreement Award element in his employment agreement. During the quarter ended September 30, 2018, management changed the methodology used in calculating the fair value of the Company's Employment Agreement Award liability to simplify the calculation. The Compensation Committee of the Board of Directors approved the simplified method which eliminated certain assumptions that were historically used in the determination of the fair value of this liability.  The revised methodology resulted in a one-time reduction of approximately $6.6 million during the quarter ended September 30, 2018 to reflect this change in estimate.

Stock-based compensation

Three Months Ended September 30,				Increase/(Decrease)
2019		2018
$	1,881	$	1,134	$	747	65.9	%

The increase in stock-based compensation for the three months ended September 30, 2019, compared to the same period in 2018, was primarily due to grants and vesting of stock awards for certain executive officers and other management personnel.

Depreciation and amortization

Three Months Ended September 30,				Increase/(Decrease)
2019		2018
$	2,593	$	8,333	$	(5,740	)	(68.9	)%

The decrease in depreciation and amortization expense for the three months ended September 30, 2019, was due to the mix of assets approaching or near the end of their useful lives, most notably the Company’s affiliate agreements.

Interest expense

Three Months Ended September 30,				Increase/(Decrease)
2019		2018
$	21,589	$	18,987	$	2,602	13.7	%

Interest expense increased to approximately $21.6 million for the three months ended September 30, 2019, compared to approximately $19.0 million for the same period in 2018, due to higher interest rates on lower overall debt balances outstanding as well as the adoption of ASC 842. On December 20, 2018, the Company closed on a new $192.0 million unsecured credit facility (the “2018 Credit Facility”) and a new $50.0 million loan secured by its interest in the MGM National Harbor Casino (the “MGM National Harbor Loan”). During the quarter ended December 31, 2018, in conjunction with entering into the 2018 Credit Facility and MGM National Harbor Loan, the Company repurchased approximately $243.0 million of its 2020 Notes at an average price of approximately 100.88% of par, with the remaining balance of the 2020 Notes being repurchased in February 2019. During the quarter ended September 30, 2019, upon adoption of ASC 842, the Company recorded interest expense of approximately $1.3 million on its operating leases.

Gain on retirement of debt

Three Months Ended September 30,					Increase/(Decrease)
2019		2018
$	—	$	(120	)	$	(120	)	(100.0	)%

There was a gain on retirement of debt of $120,000 for the three months ended September 30, 2018, due to the redemption of approximately $5.0 million of our 2020 Notes at a discount.

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Other income, net

Three Months Ended September 30,						Increase/(Decrease)
2019			2018
$	(1,299	)	$	(1,935	)	$	(636	)	(32.9	)%

Other income, net, was approximately $1.3 million and $1.9 million for the three months ended September 30, 2019 and 2018, respectively. We recognized other income in the amount of approximately $1.8 million and $1.7 million, for the three months ended September 30, 2019 and 2018, respectively, related to our MGM investment. In addition, we recognized $202,000 in other income for the three months ended September 30, 2018 related to the deferred gain on sale lease-back transaction. Upon adoption of ASC 842 on January 1, 2019, the unamortized portion of this deferred gain, net of tax, was recognized as a cumulative adjustment to equity and will no longer be recognized ratably into income. Finally, during the quarter ended September 30, 2019, the Company recognized a loss of $509,000 on the sale of the remaining Detroit station and translators.

Provision for (benefit from) income taxes

Three Months Ended September 30,					Increase/(Decrease)
2019		2018
$	6,535	$	(8,173	)	$	14,708	180.0	%

The Company is using the estimated annual effective tax rate method under ASC 740-270, “Interim Reporting” to calculate the provision for income taxes. For the three months ended September 30, 2019, we recorded a provision for income taxes of approximately $6.5 million on pre-tax income from continuing operations of approximately $12.2 million, which results in a tax rate of 53.5%. This tax rate is based on an estimated annual effective tax rate of 35.5%, and discrete tax provision adjustments of approximately $1.9 million primarily due to provision to return adjustments related to state apportionment. For the three months ended September 30, 2018, we recorded a benefit from income taxes of approximately $8.2 million on pre-tax income from continuing operations of approximately $15.2 million, that results in a tax rate of (53.8)%, of which approximately $10.4 million is attributable to deferred tax benefits that are expected to be recognizable at the end of the year, and tax expense of approximately $2.2 million related to provision to return adjustments, state rate and legislative changes.

Noncontrolling interests in (loss) income of subsidiaries

Three Months Ended September 30,				Increase/(Decrease)
2019		2018
$	328	$	331	$	(3	)	(0.9	)%

The decrease in noncontrolling interests in income of subsidiaries was due primarily to lower net income recognized by Reach Media during the three months ended September 30, 2019 compared to the three months ended September 30, 2018.

Other Data

Broadcast and digital operating income

Broadcast and digital operating income increased to approximately $44.8 million for the three months ended September 30, 2019, compared to approximately $43.4 million for the comparable period in 2018, an increase of approximately $1.4 million or 3.2%. The increase was primarily due to higher broadcast and digital operating income at our radio broadcasting and digital segments, which was partially offset by lower broadcast and digital operating income at our Reach Media and cable television segments. Our radio broadcasting segment generated approximately $17.8 million of broadcast and digital operating income during the quarter ended September 30, 2019, compared to approximately $16.8 million during the quarter ended September 30, 2018, an increase of approximately $1.0 million, primarily due to increased revenues and lower programming and technical expenses. Reach Media generated approximately $2.4 million of broadcast and digital operating income during the quarter ended September 30, 2019, compared to approximately $2.9 million during the quarter ended September 30, 2018. The decrease in Reach Media’s broadcast and digital operating income is primarily due to increased selling, general and administrative expenses. Our digital segment generated $722,000 of broadcast and digital operating income during the quarter ended September 30, 2019, compared to $602,000 of broadcast and digital operating loss during the quarter ended September 30, 2018. The increase in our digital segment’s broadcast and digital operating income is primarily due to decreased selling, general and administrative expenses. Finally, TV One generated approximately $23.8 million of broadcast and digital operating income during the quarter ended September 30, 2019, compared to approximately $24.3 million during the quarter ended September 30, 2018.

Broadcast and digital operating income margin

Broadcast and digital operating income margin increased to 40.3% for the three months ended September 30, 2019, from 39.2% for the comparable period in 2018. The margin increase was primarily attributable to higher broadcast and digital operating income as noted above.

41

URBAN ONE, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS

The following table summarizes our historical consolidated results of operations:

Nine Months Ended September 30, 2019 Compared to Nine Months Ended September 30, 2018 (In thousands)

	Nine Months Ended September 30,
	2019			2018			Increase/(Decrease)
	(Unaudited)
Statements of Operations:
Net revenue	$	331,075		$	325,557		$	5,518		1.7	%
Operating expenses:
Programming and technical, excluding stock-based compensation		91,816			93,474			(1,658	)	(1.8	)
Selling, general and administrative, excluding stock-based compensation		113,620			111,831			1,789		1.6
Corporate selling, general and administrative, excluding stock-based compensation		25,666			20,963			4,703		22.4
Stock-based compensation		2,592			3,635			(1,043	)	(28.7	)
Depreciation and amortization		14,451			24,869			(10,418	)	(41.9	)
Impairment of long-lived assets		3,800			6,556			(2,756	)	(42.0	)
Total operating expenses		251,945			261,328			(9,383	)	(3.6	)
Operating income		79,130			64,229			14,901		23.2
Interest income		131			194			(63	)	(32.5	)
Interest expense		65,743			57,423			8,320		14.5
Gain on retirement of debt		—			(985	)		(985	)	(100	)
Other income, net		(4,669	)		(5,850	)		(1,181	)	(20.2	)
Income before provision for (benefit from) income taxes and noncontrolling interests in income of subsidiaries		18,187			13,835			4,352		31.5
Provision for (benefit from) income taxes		8,342			(10,914	)		19,256		176.4
Consolidated net income		9,845			24,749			(14,904	)	(60.2	)
Net income attributable to noncontrolling interests		999			670			329		49.1
Net income attributable to common stockholders	$	8,846		$	24,079		$	(15,233	)	(63.3	)%

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Net revenue

Nine Months Ended September 30,				Increase/(Decrease)
2019		2018
$	331,075	$	325,557	$	5,518	1.7	%

During the nine months ended September 30, 2019, we recognized approximately $331.1 million in net revenue compared to approximately $325.6 million during the same period in 2018. These amounts are net of agency and outside sales representative commissions. Net revenues from our radio broadcasting segment for the nine months ended September 30, 2019, increased 0.5% from the same period in 2018. Based on reports prepared by Miller Kaplan, the markets we operate in increased 2.7% in total revenues. We experienced net revenue growth most significantly in our Atlanta, Raleigh, and Washington, DC markets; however, this growth was offset by declines most significantly in our Cincinnati, Columbus, Detroit, Indianapolis, Philadelphia, and Richmond markets. As previously announced, we sold our Detroit WDMK-FM station as of August 31, 2019 and we sold our Detroit WPZR-FM station as of August 8, 2018. Reach Media’s net revenues increased 8.7% for the nine months ended September 30, 2019, compared to the same period in 2018, due primarily to increased performance at special events. We recognized approximately $140.2 million and $138.4 million of revenue from our cable television segment during the nine months ended September 30, 2019, and 2018, respectively, due primarily to higher advertising sales which was partially offset by lower affiliate sales. Net revenue for our digital segment decreased $174,000 for the nine months ended September 30, 2019, compared to the same period in 2018.

Operating Expenses

Programming and technical, excluding stock-based compensation

Nine Months Ended September 30,				Increase/(Decrease)
2019		2018
$	91,816	$	93,474	$	(1,658	)	(1.8	)%

Programming and technical expenses include expenses associated with on-air talent and the management and maintenance of the systems, tower facilities, and studios used in the creation, distribution and broadcast of programming content on our radio stations. Programming and technical expenses for the radio segment also include expenses associated with our programming research activities and music royalties. For our internet segment, programming and technical expenses include software product design, post-application software development and maintenance, database and server support costs, the help desk function, data center expenses connected with ISP hosting services and other internet content delivery expenses. For our cable television segment, programming and technical expenses include expenses associated with technical, programming, production, and content management. The decrease in programming and technical expenses for the nine months ended September 30, 2019, compared to the same period in 2018 is primarily to lower expenses in our radio broadcasting, Reach Media and digital segments, which was partially offset by an increase in expense at our cable television segment. Our digital segment generated a decrease of approximately $1.8 million for the nine months ended September 30, 2019, compared to the same period in 2018 due primarily to lower payroll costs. Our cable television segment generated an increase of approximately $2.1 million for the nine months ended September 30, 2019, compared to the same period in 2018 due primarily to higher program content expenses.

Selling, general and administrative, excluding stock-based compensation

Nine Months Ended September 30,				Increase/(Decrease)
2019		2018
$	113,620	$	111,831	$	1,789	1.6	%

Selling, general and administrative expenses include expenses associated with our sales departments, offices and facilities and personnel (outside of our corporate headquarters), marketing and promotional expenses, special events and sponsorships and back office expenses. Expenses to secure ratings data for our radio stations and visitors’ data for our websites are also included in selling, general and administrative expenses. In addition, selling, general and administrative expenses for the radio broadcasting segment and internet segment include expenses related to the advertising traffic (scheduling and insertion) functions. Selling, general and administrative expenses also include membership traffic acquisition costs for our online business. The increase in expense for the nine months ended September 30, 2019, compared to the same period in 2018, is primarily driven by higher expenses at our radio broadcasting, Reach Media, and cable television segments, which is partially offset by a decrease in expenses at our digital segment. Our digital segment generated a decrease of approximately $4.9 million for the nine months ended September 30, 2019, compared to the same period in 2018 due primarily to lower traffic acquisition costs and lower contingent considerations costs associated with the Moguldom acquisition. Our Reach Media segment generated an increase of approximately $2.3 million for the nine months ended September 30, 2019, compared to the same period in 2018 due primarily to higher costs associated with special events.

43

Corporate selling, general and administrative, excluding stock-based compensation

Nine Months Ended September 30,				Increase/(Decrease)
2019		2018
$	25,666	$	20,963	$	4,703	22.4	%

Corporate expenses consist of expenses associated with our corporate headquarters and facilities, including personnel as well as other corporate overhead functions. During the nine months ended September 30, 2018, management changed the methodology used in calculating the fair value of the Company's Employment Agreement Award liability to simplify the calculation. The Compensation Committee of the Board of Directors approved the simplified method which eliminated certain assumptions that were historically used in the determination of the fair value of this liability.  The revised methodology resulted in a one-time reduction of approximately $6.6 million during the quarter ended September 30, 2018 to reflect this change in estimate.

Stock-based compensation

Nine Months Ended September 30,				Increase/(Decrease)
2019		2018
$	2,592	$	3,635	$	(1,043	)	(28.7	)%

The decrease in stock-based compensation for the nine months ended September 30, 2019, compared to the same period in 2018, was primarily due to grants and vesting of stock awards for certain executive officers and other management personnel.

Depreciation and amortization

Nine Months Ended September 30,				Increase/(Decrease)
2019		2018
$	14,451	$	24,869	$	(10,418	)	(41.9	)%

The decrease in depreciation and amortization expense for the nine months ended September 30, 2019, was due to the mix of assets approaching or near the end of their useful lives, most notably the Company’s affiliate agreements.

Impairment of long-lived assets

Nine Months Ended September 30,				Increase/(Decrease)
2019		2018
$	3,800	$	6,556	$	(2,756)	(42.0	)%

The impairment of long-lived assets for the nine months ended September 30, 2019, was related to a non-cash impairment charge of approximately $3.8 million associated with our Detroit market radio broadcasting licenses. The impairment of long-lived assets for the nine months ended September 30, 2018, was related to a non-cash impairment charge of approximately $2.7 million recorded to reduce the carrying value of our Charlotte goodwill balance and also a charge of approximately $3.8 million associated with our Detroit market radio broadcasting licenses.

Interest expense

Nine Months Ended September 30,				Increase/(Decrease)
2019		2018
$	65,743	$	57,423	$	8,320	14.5	%

Interest expense increased to approximately $65.7 million for the nine months ended September 30, 2019, compared to approximately $57.4 million for the same period in 2018, due to higher interest rates on lower overall debt balances outstanding as well as the adoption of ASC 842. On December 20, 2018, the Company closed on a new $192.0 million unsecured credit facility (the “2018 Credit Facility”) and a new $50.0 million loan secured by its interest in the MGM National Harbor Casino (the “MGM National Harbor Loan”). During the quarter ended December 31, 2018, in conjunction with entering into the 2018 Credit Facility and MGM National Harbor Loan, the Company repurchased approximately $243.0 million of its 2020 Notes at an average price of approximately 100.88% of par, with the remaining balance of the 2020 Notes being repurchased in February 2019. During the nine months ended September 30, 2019, upon adoption of ASC 842, the Company recorded interest expense of approximately $4.1 million on its operating leases.

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Gain on retirement of debt

Nine Months Ended September 30,					Increase/(Decrease)
2019		2018
$	—	$	(985	)	$	(985	)	(100.0	)%

There was a gain on retirement of debt of $985,000 for the nine months ended September 30, 2018, due to the redemption of approximately $30 million of our 2020 Notes at a discount.

Other income, net

Nine Months Ended September 30,						Increase/(Decrease)
2019			2018
$	(4,669	)	$	(5,850	)	$	(1,181	)	(20.2	)%

Other income, net decreased to approximately $4.7 million for the nine months ended September 30, 2019, compared to approximately $5.9 million for the same period in 2018. We recognized other income in the amount of approximately $5.2 million and $5.1 million, for the nine months ended September 30, 2019 and 2018, respectively, related to our MGM investment. In addition, we recognized $607,000 in other income for the nine months ended September 30, 2018 related to the deferred gain on sale lease-back transaction. Upon adoption of ASC 842 on January 1, 2019, the unamortized portion of this deferred gain, net of tax, was recognized as a cumulative adjustment to equity and will no longer be recognized ratably into income.

Provision for (benefit from) income taxes

Nine Months Ended September 30,					Increase/(Decrease)
2019		2018
$	8,342	$	(10,914	)	$	19,256	176.4	%

For the nine months ended September 30, 2019, we recorded a provision for income taxes of approximately $8.3 million on a pre-tax income from continuing operations of approximately $18.2 million, which results in a tax rate of 45.9%. This tax rate was based on an estimated annual effective rate of 35.5% and a discrete tax provision adjustment of approximately $1.9 million primarily due to provision to return adjustments related to state apportionment. For the nine months ended September 30, 2018, we recorded a benefit from income taxes of approximately $10.9 million on pre-tax income from continuing operations of approximately $13.8 million, which results in a tax rate of (78.9)%. This tax rate was based on an estimated annual effective rate of (66.1)% and discrete tax benefits of approximately $1.8 million related to provision to return adjustments, state rate and legislative changes.

Noncontrolling interests in income of subsidiaries

Nine Months Ended September 30,				Increase/(Decrease)
2019		2018
$	999	$	670	$	329	49.1	%

The increase in noncontrolling interests in income of subsidiaries was due primarily to higher net income recognized by Reach Media during the nine months ended September 30, 2019, versus the same period in 2018.

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Other Data

Broadcast and digital operating income

Broadcast and digital operating income increased to approximately $125.6 million for the nine months ended September 30, 2019, compared to approximately $120.3 million for the comparable period in 2018, an increase of approximately $5.4 million or 4.5%. This increase was due to higher broadcast and digital operating income at our Reach Media and digital segments, which was partially offset by lower broadcast and digital operating income at our radio broadcasting and cable television segments. Our radio broadcasting segment generated approximately $46.4 million of broadcast and digital operating income during the nine months ended September 30, 2019, compared to approximately $46.8 million during the nine months ended September 30, 2018, a decrease of $415,000. Reach Media generated approximately $7.8 million of broadcast and digital operating income during the nine months ended September 30, 2019, compared to approximately $6.5 million during the nine months ended September 30, 2018, due primarily to an increase in revenues. Our digital segment generated approximately $1.2 million of broadcast and digital operating income during the nine months ended September 30, 2019, compared to approximately $5.3 million of broadcast and digital operating loss during the nine months ended September 30, 2018. The increase in our digital segment’s broadcast and digital operating income is primarily due to overall lower expenses. Finally, TV One generated approximately $70.3 million of broadcast and digital operating income during the nine months ended September 30, 2019, compared to approximately $72.3 million during the nine months ended September 30, 2018, with the decrease due primarily to higher expenses.

Broadcast and digital operating income margin

Broadcast and digital operating income margin increased to 37.9% for the nine months ended September 30, 2019, compared to 36.9% for the comparable period in 2018. The margin increase was primarily attributable to higher broadcast and digital operating income as noted above.

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LIQUIDITY AND CAPITAL RESOURCES

Our primary source of liquidity is cash provided by operations and, to the extent necessary, borrowings available under our senior credit facility and other debt or equity financing.

See Note 4 to our consolidated financial statements – Long-Term Debt for further information on liquidity and capital resources.

As of September 30, 2019, ratios calculated in accordance with the 2017 Credit Facility were as follows:  

	As of September 30, 2019			Covenant Limit			Excess Coverage
Interest Coverage
Covenant EBITDA / Interest Expense		1.98	x		1.25	x		0.73	x
Senior Secured Leverage
Senior Secured Debt / Covenant EBITDA		4.56	x		5.85	x		1.29	x

Covenant EBITDA – Earnings before interest, taxes, depreciation and amortization (“EBITDA”) adjusted for certain other adjustments, as defined in the 2017 Credit Facility

As of September 30, 2019, ratios calculated in accordance with the 2018 Credit Facility were as follows:

	As of September 30, 2019		Covenant Limit			Excess Coverage
Total Gross Leverage
Consolidated Indebtedness / Covenant EBITDA	5.99	x		8.00	x		2.01	x

Covenant EBITDA – Earnings before interest, taxes, depreciation and amortization (“EBITDA”) adjusted for certain other adjustments, as defined in the 2018 Credit Facility

The following table summarizes the interest rates in effect with respect to our debt as of September 30, 2019:

Type of Debt	Amount Outstanding		Applicable Interest Rate
	(In millions)
2017 Credit Facility, net of original issue discount and issuance costs (at variable rates)(1)	$	315.7		6.12	%
7.375% Senior Secured Notes, net of original issue discount and issuance costs (fixed rate)		347.4		7.375	%
2018 Credit Facility, net of original issue discount and issuance costs (fixed rate)		166.8		12.875	%
MGM National Harbor Loan, net of original issue discount and issuance costs (fixed rate, including PIK)		49.3		11.0	%
Asset-backed credit facility (variable rate)(1)		—		—	%

(1) Subject to variable LIBOR or Prime plus a spread that is incorporated into the applicable interest rate set forth above.

The following table provides a comparison of our statements of cash flows for the nine months ended September 30, 2019 and 2018, respectively:

	2019			2018
	(In thousands)
Net cash flows provided by operating activities	$	51,048		$	44,170
Net cash flows provided by investing activities	$	9,553		$	4,309
Net cash flows used in financing activities	$	(44,588	)	$	(40,192	)

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Net cash flows provided by operating activities were approximately $51.0 million and $44.2 million for the nine months ended September 30, 2019 and 2018, respectively. Net cash flow from operating activities for the nine months ended September 30, 2019, increased from the prior year primarily due to timing of collections of accounts receivable and timing of payments of other liabilities. Cash flows from operations, cash and cash equivalents, and other sources of liquidity are expected to be available and sufficient to meet foreseeable cash requirements.

Net cash flows provided by investing activities were approximately $9.6 million and $4.3 million for the nine months ended September 30, 2019 and 2018, respectively. Capital expenditures, including digital tower and transmitter upgrades, and deposits for station equipment and purchases were approximately $3.9 million and $3.7 million for the nine months ended September 30, 2019 and 2018, respectively. During the nine months ended September 30, 2019, the Company received proceeds of approximately $13.5 million for the sale of the remaining Detroit station and translators. During the nine months ended September 30, 2018, the Company paid approximately $4.8 million to complete the acquisition of our new WTEM Washington DC station and Detroit translators and we received proceeds of approximately $12.8 million for the sale of our Detroit WPZR-FM station assets.

Net cash flows used in financing activities were approximately $44.6 million and $40.2 million for the nine months ended September 30, 2019 and 2018, respectively. During the nine months ended September 30, 2019 and 2018, we repaid approximately $37.6 million and $31.5 million in outstanding debt, respectively. We repurchased approximately $5.3 million and $6.1 million of our Class A and Class D Common Stock during the nine months ended September 30, 2019 and 2018, respectively. During the nine months ended September 30, 2019 and 2018, the Company distributed $658,000 and $752,000, respectively of contingent consideration related to the Moguldom acquisition. Reach Media paid approximately $1.0 million and $801,000, respectively in dividends to noncontrolling interest shareholders during the nine months ended September 30, 2019 and 2018.

Credit Rating Agencies

Our corporate credit ratings by Standard & Poor's Rating Services and Moody's Investors Service are speculative-grade and have been downgraded and upgraded at various times during the last several years. Any reductions in our credit ratings could increase our borrowing costs, reduce the availability of financing to us or increase our cost of doing business or otherwise negatively impact our business operations.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our significant accounting policies are described in Note 1 - Organization and Summary of Significant Accounting Policies of the consolidated financial statements in our Annual Report on Form 10-K. We prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States, which require us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the year. Actual results could differ from those estimates. In Management’s Discussion and Analysis contained in our Annual Report on Form 10-K for the year ended December 31, 2018, we summarized the policies and estimates that we believe to be most critical in understanding the judgments involved in preparing our consolidated financial statements and the uncertainties that could affect our results of operations, financial condition and cash flows. With the exception of the adoption of ASC 842 on January 1, 2019, there have been no material changes to our existing accounting policies or estimates since we filed our Annual Report on Form 10-K for the year ended December 31, 2018.

Goodwill and Radio Broadcasting Licenses

Impairment Testing

We have made several acquisitions in the past for which a significant portion of the purchase price was allocated to radio broadcasting licenses and goodwill. Goodwill exists whenever the purchase price exceeds the fair value of tangible and identifiable intangible net assets acquired in business combinations. As of September 30, 2019, we had approximately $583.7 million in broadcast licenses and $245.6 million in goodwill, which totaled $829.3 million, and represented approximately 65.7% of our total assets. Therefore, we believe estimating the fair value of goodwill and radio broadcasting licenses is a critical accounting estimate because of the significance of their carrying values in relation to our total assets.

For the nine months ended September 30, 2019, the Company recorded an impairment charge of approximately $3.8 million related to its Detroit market radio broadcasting licenses. For the nine months ended September 30, 2018, the Company recorded an impairment charge of approximately $2.7 million related to its Charlotte market goodwill and also a charge of approximately $3.8 million associated with our Detroit market radio broadcasting licenses. 

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We test for impairment annually across all reporting units, or when events or changes in circumstances or other conditions suggest impairment may have occurred in any given reporting unit. Our annual impairment testing is performed as of October 1 of each year. Impairment exists when the carrying value of these assets exceeds its respective fair value. When the carrying value exceeds fair value, an impairment amount is charged to operations for the excess.

Valuation of Broadcasting Licenses

We did not identify any impairment indicators for the three months ended September 30, 2019. During the nine months ended September 30, 2019, the Company recorded a non-cash impairment charge of approximately $3.8 million associated with our Detroit market radio broadcasting licenses.

During the second and third quarters of 2018, the total market revenue growth for certain markets in which we operate was below that used in our annual impairment testing. We deemed that to be an impairment indicator that warranted interim impairment testing of certain markets’ radio broadcasting licenses, which we performed as of September 30, 2018. There was no impairment identified as part of the testing performed during the quarter ended September 30, 2018. During the nine months ended September 30, 2018, the Company also recorded a non-cash impairment charge of approximately $3.8 million associated with our Detroit market radio broadcasting licenses. Below are some of the key assumptions used in the income approach model for estimating broadcasting licenses fair values for the interim impairment assessments for the quarter ended September 30, 2018.

Radio Broadcasting	September 30,
Licenses	2018(a)
Pre-tax impairment charge (in millions)	$	—
Discount Rate		9.0	%
Year 1 Market Revenue Growth Rate Range		0.5	%
Long-term Market Revenue Growth Rate Range (Years 6 – 10)		0.5% – 1.5	%
Mature Market Share Range		6.8% – 14.3	%
Operating Profit Margin Range		29.8% – 35.1	%

(a) Reflects changes only to the key assumptions used in the interim testing for certain units of accounting.

Valuation of Goodwill

We did not identify any impairment indicators at any of our reportable segments for the three months ended September 30, 2019. 

During the second and third quarters of 2018, we identified an impairment indicator at certain of our radio markets, and, as such, we performed an interim analysis for certain radio market goodwill as of September 30, 2018. No goodwill impairment was identified during the three months ended September 30, 2018. During the nine months ended September 30, 2018, the Company recorded a non-cash impairment charge of approximately $2.7 million to reduce the carrying value of our Charlotte goodwill balance. Below are some of the key assumptions used in the income approach model for estimating reporting unit fair values for the interim impairment assessments for the quarters ended September 30, 2018.

Goodwill (Radio Market	September 30,
Reporting Units)	2018(a)
Pre-tax impairment charge (in millions)	$	–
Discount Rate		9.0	%
Year 1 Market Revenue Growth Rate Range		1.2% – 35.2	%
Long-term Market Revenue Growth Rate Range (Years 6 – 10)		1.0% – 1.5	%
Mature Market Share Range		9.0% – 15.6	%
Operating Profit Margin Range		21.7% – 31.8	%

(a) Reflects changes only to the key assumptions used in the interim testing for certain units of accounting.

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As part of our annual testing, when arriving at the estimated fair values for radio broadcasting licenses and goodwill, we also performed an analysis by comparing our overall average implied multiple based on our cash flow projections and fair values to recently completed sales transactions, and by comparing our fair value estimates to the market capitalization of the Company. The results of these comparisons confirmed that the fair value estimates resulting from our annual assessment for 2018 were reasonable.

Several of the licenses in our units of accounting have limited or no excess of fair values over their respective carrying values. Should our estimates, assumptions, or events or circumstances for any upcoming valuations worsen in the units with no or limited fair value cushion, additional license impairments may be needed in the future.

Realizability of Deferred Tax Assets

As of each reporting date, management considers new evidence, both positive and negative, that could affect its conclusions regarding the future realization of the Company’s deferred tax assets (“DTAs”). During the nine months ended September 30, 2019, management continues to weigh sufficient positive evidence to conclude that it is more likely than not the net DTAs are realizable. The assessment to determine the value of the DTAs to be realized under ASC 740 is highly judgmental and requires the consideration of all available positive and negative evidence in evaluating the likelihood of realizing the tax benefit of the DTAs in a future period. Circumstances may change over time such that previous negative evidence no longer exists, and new conditions should be evaluated as positive or negative evidence that could affect the realization of the DTAs. Since the evaluation requires consideration of events that may occur in some years in the future, significant judgment is required, and our conclusion could be materially different if certain expectations do not materialize.

In the assessment of all available evidence, an important piece of objective verifiable evidence is evaluating a cumulative pre-tax income or loss position over the most recent three year period. Historically, the Company has maintained a full valuation against the net DTAs, principally due to a cumulative pre-tax loss over the most recent three year period. During the year ended December 31, 2018, the Company achieved three years of cumulative pre-tax income, which removed the most heavily weighed piece of objective verifiable negative evidence from our evaluation of the realizability of deferred tax assets. The Company continues to maintain three years of rolling cumulative pre-tax income as of September 30, 2019.

Additionally, the Company is projecting forecasts of taxable income to utilize our federal and state NOLs as part of our evaluation of positive evidence. As part of the Tax Cuts and Jobs Act, IRC Section 163(j) limited the deduction of interest expense. In conjunction with evaluating and weighing our cumulative three year pre-tax income, we also evaluated the impact that interest expense has had on our cumulative three year pre-tax income. A material component of the Company’s expenses is interest, and has been the primary driver of historical pre-tax losses. Adjusting for the IRC Section 163(j) interest expense limitation on projected taxable income, we estimate utilization of federal and state net operating losses that are not subject to annual limitations as a result of the 2009 ownership shift as defined under IRC Section 382.

Realization of the Company’s federal and state net operating losses is dependent on generating sufficient taxable income in future periods, and although the Company believes it is more likely than not future taxable income will be sufficient to utilize the net operating losses, realization is not assured and future events may cause a change to the judgment of the realizability of these deferred tax assets. If a future event causes the Company to re-evaluate and conclude that it is not more likely than not, that all or a portion of the deferred tax assets are realizable, the Company would be required to establish a valuation allowance against the assets at that time which would result in a charge to income tax expense and a decrease to net income in the period which the change of judgment is concluded.

RECENT ACCOUNTING PRONOUNCEMENTS

See Note 1 of our consolidated financial statements – Organization and Summary of Significant Accounting Policies for a summary of recent accounting pronouncements.

As of January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”) Topic 842, Leases, using the modification retrospective transition method. Prior comparative periods will be not be restated under this new standard and therefore those amounts are not presented below. The Company adopted a package of practical expedients as allowed by the transition guidance which permits the Company to carry forward the historical assessment of whether contracts contain or are leases, classification of leases and the remaining lease terms. The Company has also made an accounting policy election to exclude leases with an initial term of twelve months or less from recognition on the consolidated balance sheet. Short-term leases will be expensed over the lease term. The Company also elected to separate the consideration in the lease contracts between the lease and non-lease components. All variable non-lease components are expensed as incurred.

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ASC 842 results in significant changes to the balance sheets of lessees, most significantly by requiring the recognition of right of use (“ROU”) assets and lease liabilities by lessees for those leases classified as operating leases. Upon adoption of ASC 842, deferred rent balances, which were historically presented separately, were combined and presented net within the ROU asset. The adoption of this standard resulted in the Company recording an increase in ROU assets of approximately $49.8 million and an increase in lease liabilities of approximately $54.1 million. Approximately $4.3 million in deferred rent was also reclassified from liabilities to offset the applicable ROU asset. The tax impact of ASC 842, which primarily consisted of deferred gains related to previous transactions that were historically accounted for as sale and operating leasebacks in accordance with ASC Topic 840 were recognized as part of the cumulative-effect adjustment to retained earnings, resulting in an increase to retained earnings, net of tax, of approximately $5.8 million.

Many of the Company's leases provide for renewal terms and escalation clauses, which are factored into calculating the lease liabilities when appropriate. The implicit rate within the Company's lease agreements is generally not determinable and as such the Company’s collateralized borrowing rate is used.

CAPITAL AND COMMERCIAL COMMITMENTS:

Radio Broadcasting Licenses

Each of the Company’s radio stations operates pursuant to one or more licenses issued by the Federal Communications Commission that have a maximum term of eight years prior to renewal. The Company’s radio broadcasting licenses expire at various times beginning October 2019 through August 1, 2022. Although the Company may apply to renew its radio broadcasting licenses, third parties may challenge the Company’s renewal applications. The Company is not aware of any facts or circumstances that would prevent the Company from having its current licenses renewed.

Indebtedness

We have several debt instruments outstanding within our corporate structure. We incurred senior bank debt as part of our 2017 Credit Facility in the amount of $350.0 million that matures on the earlier of (i) April 18, 2023, or (ii) in the event such debt is not repaid or refinanced, 91 days prior to the maturity of either of the Company’s 2022 Notes. We also have approximately $350.0 million outstanding in our 2022 Notes. Finally, on December 20, 2018, the Company closed on a new $192.0 million unsecured credit facility (the “2018 Credit Facility”) and the Company also closed on a new $50.0 million loan secured by our interest in the MGM National Harbor Casino (the “MGM National Harbor Loan”). See “Liquidity and Capital Resources.” See the current balances outstanding in the “Type of Debt” section as part of the “Liquidity and Capital Resources” section above.

Royalty Agreements

Musical works rights holders, generally songwriters and music publishers, have been traditionally represented by performing rights organizations, such as the American Society of Composers, Authors and Publishers (“ASCAP”), Broadcast Music, Inc. (“BMI”) and SESAC, Inc. (“SESAC”).  The market for rights relating to musical works is changing rapidly. Songwriters and music publishers have withdrawn from the traditional performing rights organizations, particularly ASCAP and BMI, and new entities, such as Global Music Rights LLC (“GMR”), have been formed to represent rights holders. These organizations negotiate fees with copyright users, collect royalties and distribute them to the rights holders.  We have arrangements with ASCAP, SESAC and GMR, and are in negotiations with BMI for a new agreement. If we are unable to reach an agreement with BMI, a court will determine the royalty we will be required to pay BMI.  The changing market for musical works may have an adverse effect on us, including increasing our costs or limiting the musical works available to us.

Lease obligations

We have non-cancelable operating leases for office space, studio space, broadcast towers and transmitter facilities that expire over the next 12 years.

Operating Contracts and Agreements

We have other operating contracts and agreements including employment contracts, on-air talent contracts, severance obligations, retention bonuses, consulting agreements, equipment rental agreements, programming related agreements, and other general operating agreements that expire over the next six years.

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Reach Media Noncontrolling Interest Shareholders’ Put Rights

Beginning on January 1, 2018, the noncontrolling interest shareholders of Reach Media have had an annual right to require Reach Media to purchase all or a portion of their shares at the then current fair market value for such shares (the “Put Right”).  This annual right is exercisable for a 30-day period beginning January 1 of each year. The purchase price for such shares may be paid in cash and/or registered Class D common stock of Urban One, at the discretion of Urban One. The noncontrolling interest shareholders of Reach Media did not exercise their Put Right for the 30-day period ending January 30, 2019. Management, at this time, cannot reasonably determine the period when and if the put right will be exercised by the noncontrolling interest shareholders.

Contractual Obligations Schedule

The following table represents our scheduled contractual obligations as of September 30, 2019:

	Payments Due by Period
Contractual Obligations	Remainder of 2019		2020		2021		2022		2023		2024 and Beyond		Total
	(In thousands)
7.375% Senior Secured Notes (1)	$	6,453	$	25,813	$	25,813	$	357,529	$	—	$	—	$	415,608
2017 Credit facility (2)		6,169		24,812		24,907		24,633		316,363		—		396,884
2018 Credit facility (2)		9,171		41,592		37,347		142,465		—		—		230,575
Other operating contracts/agreements (3)		24,918		34,439		26,418		15,386		11,101		43,935		156,197
Operating lease obligations		3,349		12,801		11,232		10,239		8,750		16,067		62,438
MGM National Harbor Loan		1,418		5,866		6,104		65,026		—		—		78,414
Total	$	51,478	$	145,323	$	131,821	$	615,278	$	336,214	$	60,002	$	1,340,116

(1) Includes interest obligations based on effective interest rates on senior secured notes outstanding as of September 30, 2019.

(2) Includes interest obligations based on effective interest rate, and projected interest expense on credit facilities outstanding as of September 30, 2019.

(3) Includes employment contracts (including the Employment Agreement Award), severance obligations, on-air talent contracts, consulting agreements, equipment rental agreements, programming related agreements, and other general operating agreements. Also includes contracts that TV One has entered into to acquire entertainment programming rights and programs from distributors and producers.  These contracts relate to their content assets as well as prepaid programming related agreements.

Of the total amount of other operating contracts and agreements included in the table above, approximately $98.3 million has not been recorded on the balance sheet as of September 30, 2019, as it does not meet recognition criteria. Approximately $2.3 million relates to certain commitments for content agreements for our cable television segment, approximately $16.9 million relates to employment agreements, and the remainder relates to other agreements.

Other Contingencies

The Company has been named as a defendant in several legal actions arising in the ordinary course of business. It is management’s opinion, after consultation with its legal counsel, that the outcome of these claims will not have a material adverse effect on the Company’s financial position or results of operations.

Off-Balance Sheet Arrangements

On February 24, 2015, the Company entered into a letter of credit reimbursement and security agreement. As of September 30, 2019, the Company had letters of credit totaling $848,000 under the agreement for certain operating leases and certain insurance policies. Letters of credit issued under the agreement are required to be collateralized with cash.

Item 3:  Quantitative and Qualitative Disclosures About Market Risk

For quantitative and qualitative disclosures about market risk affecting Urban One, see Item 7A: “Quantitative and Qualitative Disclosures about Market Risk” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018.  Our exposure related to market risk has not changed materially since December 31, 2018.

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Item 4.  Controls and Procedures

Evaluation of disclosure controls and procedures

In connection with the preparation of this Form 10-Q, we have carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching our desired disclosure controls objectives. Based on this evaluation, our CEO and CFO concluded that as of such date, our disclosure controls and procedures are ineffective in timely alerting them to material information required to be included in our periodic SEC reports due to deficiencies in the review controls over the preparation of the consolidated financial statements and the review of the tax provision.

Identification of Material Weaknesses

The Company previously recorded a non-cash tax provision adjustment of approximately $3.4 million during the three month period ended March 31, 2019 relating to the fourth quarter of 2018. The Company determined that correcting the error in the three month period ended March 31, 2019 materially misstated the statement of operations for this period.

As a result, management has determined that the Company did not maintain effective internal controls over its evaluation and review of the correction of the out of period adjustments in its interim financial statements. This deficiency represents a material weakness in the Company’s internal control over financial reporting at September 30, 2019.

During the three month period ended September 30, 2019, management determined that we did not design and maintain effective controls over the completeness and accuracy of the balances of the income tax related accounts. Specifically, the Company’s monitoring and control activities related to i) accounting for deferred tax assets and liabilities and ii) uncertain tax positions were not operating effectively. This deficiency represents a material weakness in the Company’s internal controls over financial reporting at September 30, 2019. As a result of this material weakness, adjustments to the deferred income taxes and income tax provision as of and for the three month period ended September 30, 2019 were identified.

These material weaknesses could result in misstatements of the aforementioned accounts and disclosures that would result in a material misstatement of the consolidated financial statements that would not be prevented or detected.

Plans for Remediation

We intend to take the following actions to remediate these material weaknesses:

· Strengthening the Finance and Accounting functions and engaging additional resources with the appropriate depth of experience for our Finance and Accounting departments

· Implement a required senior management, legal and accounting review to specifically address all disclosures and related financial information

· Strengthening the existing internal controls related to estimating and accounting for deferred income taxes and determining the effective tax rate

· Implementing specific review procedures designed to enhance our income tax monitoring control

· Strengthening our current income tax control activities with improved documentation standards, technical oversight and training

Management will test the design and operating effectiveness of the newly implemented controls in future periods.

Changes in internal control over financial reporting

There were no changes in our internal control over financial reporting during the quarter ended September 30, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

Legal Proceedings

Urban One is involved from time to time in various routine legal and administrative proceedings and threatened legal and administrative proceedings incidental to the ordinary course of our business. Urban One believes the resolution of such matters will not have a material adverse effect on its business, financial condition or results of operations.

Item 1A.  Risk Factors

We have identified a material weakness in our internal control over financial reporting which could, if not remediated, result in additional material misstatements in our consolidated financial statements.

Our management is responsible for establishing and maintaining adequate internal control over our financial reporting, as defined in Rule 13a-15(f) under the Securities Exchange Act.  As disclosed in Item 4, management identified a material weakness in our internal control over financial reporting.  A material weakness is defined as a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.  As a result of this material weakness, our management concluded that our internal control over financial reporting was not effective based on criteria set forth by the Committee of Sponsoring Organization of the Treadway Commission in Internal Control — An Integrated Framework.  We are actively engaged in implementing a remediation plan designed to address this material weakness.  If our remedial measures are insufficient to address the material weakness, or if additional material weaknesses or significant deficiencies in our internal control are discovered or occur in the future, our consolidated financial statements may contain material misstatements and we could be required to restate our financial results.

In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018 (the “2018 Annual Report”), which could materially affect our business, financial condition or future results. The risks described in our 2018 Annual Report, as updated by our quarterly reports on Form 10-Q, are not the only risks facing our Company.  Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, may also materially adversely affect our business, financial condition and/or operating results.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Mine Safety Disclosures

Not applicable.

Item 5.  Other Information

None.

54

Item 6.  Exhibits

Exhibit Number	Description
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	Financial information from the Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, formatted in XBRL.

55

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

URBAN ONE, INC.

/s/ PETER D. THOMPSON

Peter D. Thompson

Executive Vice President and

Chief Financial Officer

(Principal Accounting Officer)

November 12, 2019

56

EX-31.1

Exhibit 31.1

I, Alfred C. Liggins, III, Chief Executive Officer and President of Urban One, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Urban One, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s third quarter in the case of this report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	By:	/s/ Alfred C. Liggins, III
		Alfred C. Liggins, III
		President and Chief Executive Officer
Date: November 12, 2019

EX-31.2

Exhibit 31.2

I, Peter D. Thompson, Executive Vice President, Chief Financial Officer and Principal Accounting Officer of Urban One, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Urban One, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(i) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s third quarter in the case of this report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	By:	/s/ Peter D. Thompson
		Peter D. Thompson
		Executive Vice President,
		Chief Financial Officer and Principal Accounting Officer
Date: November 12, 2019

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Urban One, Inc. (the “Company”) hereby certifies, to such officer’s knowledge, that:

(i) the accompanying Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2019 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	By:	/s/ Alfred C. Liggins, III
		Name:	Alfred C. Liggins, III
		Title:	President and Chief Executive Officer
Date: November 12, 2019

A signed original of this written statement required by Section 906 has been provided to Urban One, Inc. and will be retained by Urban One, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Urban One, Inc. (the “Company”) hereby certifies, to such officer’s knowledge, that:

(i) The accompanying Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2019 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	By:	/s/ Peter D. Thompson
		Name:	Peter D. Thompson
		Title:	Executive Vice President and Chief Financial Officer
Date: November 12, 2019

A signed original of this written statement required by Section 906 has been provided to Urban One, Inc. and will be retained by Urban One, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

GOODWILL AND RADIO BROADCASTING LICENSES

9 Months Ended

Sep. 30, 2019

GOODWILL AND RADIO BROADCASTING LICENSES

GOODWILL AND RADIO BROADCASTING LICENSES

3.    GOODWILL AND RADIO BROADCASTING LICENSES:

Impairment Testing

In accordance with ASC 350, “Intangibles - Goodwill and Other,” we do not amortize our indefinite-lived radio broadcasting licenses and goodwill. Instead, we perform a test for impairment annually across all reporting units, or on an interim basis when events or changes in circumstances or other conditions suggest impairment may have occurred in any given reporting unit. Other intangible assets continue to be amortized on a straight-line basis over their useful lives. We perform our annual impairment test as of October 1 of each year. We evaluate all events and circumstances on an interim basis to determine if an interim indicator is present.

Valuation of Broadcasting Licenses

We did not identify any impairment indicators for the three months ended September 30, 2019. During the nine months ended September 30, 2019, the Company recorded a non-cash impairment charge of approximately $3.8 million associated with our Detroit market radio broadcasting licenses.

During the second and third quarters of 2018, the total market revenue growth for certain markets in which we operate was below that used in our annual impairment testing. We deemed that to be an impairment indicator that warranted interim impairment testing of certain markets’ radio broadcasting licenses, which we performed as of September 30, 2018. There was no impairment identified as part of the testing performed during the quarter ended September 30, 2018. During the nine months ended September 30, 2018, the Company also recorded a non-cash impairment charge of approximately $3.8 million associated with our Detroit market radio broadcasting licenses. Below are some of the key assumptions used in the income approach model for estimating broadcasting licenses fair values for the interim impairment assessments for the quarter ended September 30, 2018.

Radio Broadcasting	September 30,
Licenses	2018 (a)
Pre-tax impairment charge (in millions)	$	—
Discount Rate		9.0	%
Year 1 Market Revenue Growth Rate Range		0.5	%
Long-term Market Revenue Growth Rate Range (Years 6 – 10)		0.5% – 1.5	%
Mature Market Share Range		6.8% – 14.3	%
Operating Profit Margin Range		29.8% – 35.1	%

(a)Reflects changes only to the key assumptions used in the interim testing for certain units of accounting.

Valuation of Goodwill

We did not identify any impairment indicators at any of our reportable segments for the three months ended September 30, 2019.

During the second and third quarters of 2018, we identified an impairment indicator at certain of our radio markets, and, as such, we performed an interim analysis for certain radio market goodwill as of September 30, 2018. No goodwill impairment was identified during the three months ended September 30, 2018. During the nine months ended September 30, 2018, the Company recorded a non-cash impairment charge of approximately $2.7 million to reduce the carrying value of our Charlotte goodwill balance. Below are some of the key assumptions used in the income approach model for estimating reporting unit fair values for the interim impairment assessments for the quarters ended September 30, 2018.

Goodwill (Radio Market	September 30,
Reporting Units)	2018 (a)
Pre-tax impairment charge (in millions)	$	—
Discount Rate		9.0	%
Year 1 Market Revenue Growth Rate Range		1.2% – 35.2	%
Long-term Market Revenue Growth Rate Range (Years 6 – 10)		1.0% – 1.5	%
Mature Market Share Range		9.0% – 15.6	%
Operating Profit Margin Range		21.7% – 31.8	%

(a)Reflects changes only to the key assumptions used in the interim testing for certain units of accounting.

Goodwill Valuation Results

The table below presents the changes in the Company’s goodwill carrying values for its four reportable segments.

	Radio		Reach				Cable
	Broadcasting		Media		Digital		Television
	Segment		Segment		Segment		Segment		Total
	(In thousands)
Gross goodwill	$	155,000	$	30,468	$	27,567	$	165,044	$	378,079
Additions		—		—		—		—		—
Impairments		—		—		—		—		—
Accumulated impairment losses		(101,848)		(16,114)		(14,545)		—		(132,507)
Net goodwill at September 30, 2019	$	53,152	$	14,354	$	13,022	$	165,044	$	245,572

XML

SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2019

SEGMENT INFORMATION

SEGMENT INFORMATION

7.    SEGMENT INFORMATION:

The Company has four reportable segments: (i) radio broadcasting; (ii) Reach Media; (iii) digital; and (iv) cable television. These segments operate in the United States and are consistently aligned with the Company’s management of its businesses and its financial reporting structure.

The radio broadcasting segment consists of all broadcast results of operations. The Reach Media segment consists of the results of operations for the Tom Joyner Morning Show and related activities and operations of other syndicated shows. The digital segment includes the results of our online business, including the operations of Interactive One, as well as the digital components of our other reportable segments. The cable television segment consists of the Company’s cable TV operation, including TV One’s and CLEO TV’s results of operations. Corporate/Eliminations represents financial activity associated with our corporate staff and offices and intercompany activity among the four segments.

Operating loss or income represents total revenues less operating expenses, depreciation and amortization, and impairment of long-lived assets. Intercompany revenue earned and expenses charged between segments are recorded at estimated fair value and eliminated in consolidation.

The accounting policies described in the summary of significant accounting policies in Note 1 – Organization and Summary of Significant Accounting Policies are applied consistently across the segments.

Detailed segment data for the three months ended September 30, 2019 and 2018, is presented in the following tables:

	Three Months Ended
	September 30,
	2019		2018
	(Unaudited)
	(In thousands)
Net Revenue:
Radio Broadcasting	$	46,467	$	45,958
Reach Media		10,917		10,822
Digital		8,170		8,749
Cable Television		45,981		45,401
Corporate/Eliminations*		(480)		(200)
Consolidated	$	111,055	$	110,730
Operating Expenses (including stock-based compensation and excluding depreciation and amortization and impairment of long-lived assets):
Radio Broadcasting	$	28,929	$	29,373
Reach Media		8,936		8,740
Digital		7,460		9,363
Cable Television		23,677		22,795
Corporate/Eliminations		6,993		25
Consolidated	$	75,995	$	70,296
Depreciation and Amortization:
Radio Broadcasting	$	791	$	872
Reach Media		60		63
Digital		474		482
Cable Television		953		6,577
Corporate/Eliminations		315		339
Consolidated	$	2,593	$	8,333
Operating income (loss):
Radio Broadcasting	$	16,747	$	15,713
Reach Media		1,921		2,019
Digital		236		(1,096)
Cable Television		21,351		16,029
Corporate/Eliminations		(7,788)		(564)
Consolidated	$	32,467	$	32,101

*  Intercompany revenue included in net revenue above is as follows:

Radio Broadcasting $ (480) $ (200)

Capital expenditures by segment are as follows:

Radio Broadcasting	$	1,406	$	2,663
Reach Media		31		37
Digital		348		327
Cable Television		15		474
Corporate/Eliminations		37		898
Consolidated	$	1,837	$	4,399

	Nine Months Ended
	September 30,
	2019		2018
	(Unaudited)
	(In thousands)
Net Revenue:
Radio Broadcasting	$	132,528	$	131,924
Reach Media		36,660		33,721
Digital		23,280		23,454
Cable Television		140,234		138,414
Corporate/Eliminations*		(1,627)		(1,956)
Consolidated	$	331,075	$	325,557
Operating Expenses (including stock-based compensation and excluding depreciation and amortization and impairment of long-lived assets):
Radio Broadcasting	$	86,580	$	85,588
Reach Media		30,727		29,700
Digital		22,099		28,830
Cable Television		74,540		72,072
Corporate/Eliminations		19,748		13,713
Consolidated	$	233,694	$	229,903
Depreciation and Amortization:
Radio Broadcasting	$	2,510	$	2,590
Reach Media		178		189
Digital		1,395		1,435
Cable Television		9,430		19,690
Corporate/Eliminations		938		965
Consolidated	$	14,451	$	24,869
Impairment of Long-Lived Assets:
Radio Broadcasting	$	3,800	$	6,556
Reach Media		—		—
Digital		—		—
Cable Television		—		—
Corporate/Eliminations		—		—
Consolidated	$	3,800	$	6,556
Operating income (loss):
Radio Broadcasting	$	39,638	$	37,190
Reach Media		5,755		3,832
Digital		(214)		(6,811)
Cable Television		56,264		46,652
Corporate/Eliminations		(22,313)		(16,634)
Consolidated	$	79,130	$	64,229

* Intercompany revenue included in net revenue above is as follows:

Radio Broadcasting $ (1,627) $ (1,956)

Capital expenditures by segment are as follows:

Radio Broadcasting	$	2,269	$	3,232
Reach Media		97		83
Digital		1,066		1,087
Cable Television		173		573
Corporate/Eliminations		342		1,502
Consolidated	$	3,947	$	6,477

	September 30, 2019		December 31, 2018
	(Unaudited)
	(In thousands)
Total Assets:
Radio Broadcasting	$	723,861	$	717,400
Reach Media		37,831		34,388
Digital		26,262		24,389
Cable Television		398,088		402,511
Corporate/Eliminations		75,459		58,721
Consolidated	$	1,261,501	$	1,237,409

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Nov. 04, 2019
Document Information [Line Items]
Document Type	10-Q
Document Period End Date	Sep. 30, 2019
Entity Registrant Name	URBAN ONE, INC.
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Amendment Flag	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001041657
Current Fiscal Year End Date	--12-31
Trading Symbol	UONE
Common Stock Class A [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		1,582,375
Common Stock Class B [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		2,861,843
Common Stock Class C [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		2,928,906
Common Stock Class D [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		38,648,059

XML

LONG-TERM DEBT - Rollforward (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
LONG-TERM DEBT
Total debt	$ 893,777	$ 929,901
Less: current portion of long-term debt	22,981	38,706
Less: original issue discount and issuance costs	14,607	17,438
Long-term debt, net	856,189	873,757
2017 Credit Facility [Member]
LONG-TERM DEBT
Total debt	321,453	323,926
2018 Credit Facility [Member]
LONG-TERM DEBT
Total debt	170,746	192,000
Asset Backed Credit Facility [Member]
LONG-TERM DEBT
Total debt	0	0
9.25% Senior Subordinated Notes due February 2020 [Member]
LONG-TERM DEBT
Total debt	0	2,037
7.375% Senior Secured Notes due April 2022 [Member]
LONG-TERM DEBT
Total debt	350,000	350,000
Comcast Note due April 2019 [Member]
LONG-TERM DEBT
Total debt	0	11,872
MGM National Harbor Loan [Member]
LONG-TERM DEBT
Total debt	$ 51,578	$ 50,066

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
CURRENT ASSETS:
Cash and cash equivalents	$ 31,360	$ 15,255
Restricted cash	543	635
Trade accounts receivable, net of allowance for doubtful accounts of $6,965 and $8,249, respectively	103,096	110,354
Prepaid expenses	9,595	9,775
Current portion of content assets	32,289	33,951
Other current assets	4,790	3,229
Total current assets	181,673	173,199
CONTENT ASSETS, net	74,454	77,266
PROPERTY AND EQUIPMENT, net	24,583	26,088
GOODWILL	245,572	245,572
RIGHT OF USE ASSETS	47,949	0
RADIO BROADCASTING LICENSES	583,697	600,134
OTHER INTANGIBLE ASSETS, net	59,428	70,091
OTHER ASSETS	44,145	45,059
Total assets	1,261,501	1,237,409
CURRENT LIABILITIES:
Accounts payable	5,259	7,331
Accrued interest	14,616	6,887
Accrued compensation and related benefits	8,495	15,033
Current portion of content payables	15,914	18,870
Current portion of lease liabilities	8,926	0
Other current liabilities	24,985	24,451
Current portion of long-term debt	22,981	38,706
Total current liabilities	101,176	111,278
LONG-TERM DEBT, net of current portion, original issue discount and issuance costs	856,189	873,757
CONTENT PAYABLES, net of current portion	14,390	18,381
LONG-TERM LEASE LIABILITIES	43,560	0
OTHER LONG-TERM LIABILITIES	25,480	35,716
DEFERRED TAX LIABILITIES, net	21,778	12,904
Total liabilities	1,062,573	1,052,036
REDEEMABLE NONCONTROLLING INTERESTS	9,247	10,232
STOCKHOLDERS' EQUITY:
Convertible preferred stock, $.001 par value, 1,000,000 shares authorized; no shares outstanding at September 30, 2019 and December 31, 2018	0	0
Additional paid-in capital	978,519	978,628
Accumulated deficit	(788,885)	(803,534)
Total stockholders' equity	189,681	175,141
Total liabilities, redeemable noncontrolling interests and stockholders' equity	1,261,501	1,237,409
Common Stock Class A [Member]
STOCKHOLDERS' EQUITY:
Common stock value	2	2
Common Stock Class B [Member]
STOCKHOLDERS' EQUITY:
Common stock value	3	3
Common Stock Class C [Member]
STOCKHOLDERS' EQUITY:
Common stock value	3	3
Common Stock Class D [Member]
STOCKHOLDERS' EQUITY:
Common stock value	$ 39	$ 39

XML

GOODWILL AND RADIO BROADCASTING LICENSES - Valuation of Broadcasting Licenses (Details) - Radio Broadcasting Licenses [Member] - USD ($) $ in Millions	Sep. 30, 2019	Sep. 30, 2018
Schedule of Goodwill, Radio Broadcasting Licenses And Other Intangible Assets [Line Items]
Impairment charge (in millions)	$ 3.8	$ 3.8
Discount Rate		9.00%
Year 1 Market Revenue Growth Rate Range		0.50%
Maximum [Member]
Schedule of Goodwill, Radio Broadcasting Licenses And Other Intangible Assets [Line Items]
Long-term Market Revenue Growth Rate Range (Years 6 - 10)		1.50%
Mature Market Share Range		14.30%
Mature Operating Profit Margin Range		35.10%
Minimum [Member]
Schedule of Goodwill, Radio Broadcasting Licenses And Other Intangible Assets [Line Items]
Long-term Market Revenue Growth Rate Range (Years 6 - 10)		0.50%
Mature Market Share Range		6.80%
Mature Operating Profit Margin Range		29.80%

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net income	$ 9,845	$ 24,749
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	14,451	24,869
Amortization of debt financing costs	2,893	2,151
Amortization of content assets	34,167	32,315
Amortization of launch assets	772	317
Deferred income taxes	8,874	(10,732)
Non-cash interest expense	1,513	0
Impairment of long-lived assets	3,800	6,556
Stock-based compensation	2,592	3,635
Gain on retirement of debt	0	(985)
Effect of change in operating assets and liabilities, net of assets acquired:
Trade accounts receivable	7,258	5,297
Prepaid expenses and other current assets	(2,567)	(101)
Other assets	914	(1,172)
Accounts payable	(2,072)	(2,394)
Accrued interest	7,729	164
Accrued compensation and related benefits	(6,538)	1,171
Other liabilities	4,057	(5,254)
Payments for content assets	(36,640)	(36,416)
Net cash flows provided by operating activities	51,048	44,170
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(3,947)	(3,719)
Proceeds from sale of radio station	13,500	12,791
Acquisition of station and broadcasting assets	0	(4,763)
Net cash flows provided by investing activities	9,553	4,309
CASH FLOWS FROM FINANCING ACTIVITIES:
Distribution of contingent consideration	(658)	(752)
Repayment of Comcast Note	(11,872)	0
Proceeds of Asset-backed credit facility, net	0	0
Proceeds from exercise of stock options	29	85
Repayment of 2020 Notes	(2,037)	(28,892)
Payment of dividends to noncontrolling interest members of Reach Media	(1,000)	(801)
Repayment of share-based equity awards	0	(1,077)
Repurchase of common stock	(5,323)	(6,130)
Net cash flows used in financing activities	(44,588)	(40,192)
INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	16,013	8,287
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period	15,890	37,811
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period	31,903	46,098
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for: Interest	49,512	55,108
Cash paid for: Income taxes, net of refunds	458	1,289
NON-CASH FINANCING AND INVESTING ACTIVITIES:
Issuance of common stock	1,609	0
Purchases of property and equipment	0	329
2018 Credit Facility [Member]
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of credit facility	(21,254)	0
2017 Credit Facility [Member]
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of credit facility	$ (2,473)	$ (2,625)

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Leases (Details)	9 Months Ended
	Sep. 30, 2019 USD ($)
Leases
Operating Lease Cost (Cost resulting from lease payments)	$ 9,642
Variable Lease Cost (Cost excluded from lease payments)	116
Total Lease Cost	9,758
Operating Lease - Operating Cash Flows (Fixed Payments)	10,010
Operating Lease - Operating Cash Flows (Liability Reduction)	$ 6,653
Weighted Average Lease Term - Operating Leases	5 years 9 months 29 days
Weighted Average Discount Rate - Operating Leases	11.00%

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STOCKHOLDERS' EQUITY - Additional Information (Details)						1 Months Ended	3 Months Ended			9 Months Ended
	Jun. 17, 2019 USD ($) shares	Jun. 12, 2019 shares	Jun. 15, 2018 USD ($) shares	Aug. 07, 2017 installment shares	Aug. 07, 2017 shares	Oct. 30, 2017 shares	Sep. 30, 2019 USD ($) $ / shares shares	Sep. 30, 2018 USD ($) $ / shares shares	Sep. 30, 2017 USD ($)	Sep. 30, 2019 USD ($) $ / shares shares	Sep. 30, 2018 USD ($) $ / shares shares	Jul. 01, 2019 USD ($)	May 21, 2019 shares	May 10, 2019 USD ($)	Dec. 20, 2018 USD ($)	May 05, 2018 USD ($)	Dec. 31, 2009 shares
STOCKHOLDERS' EQUITY
Stock Repurchased During Period, Value | $										$ 5,323,000	$ 6,130,000
Share-based Compensation, Total | $							$ 1,900,000		$ 1,100,000	$ 2,592,000	$ 3,635,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares							0	0		834,530	831,937
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Gross							653,210			653,210	732,869
Stock Repurchase Program, Authorized Amount | $												$ 800,000		$ 2,000,000	$ 1,000,000	$ 5,000,000
Sharebased Compensation Arrangement by Sharebased Payment Award Options exercised Number of Shares							0	0		15,000	58,190
Restricted Stock [Member]
STOCKHOLDERS' EQUITY
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Stock Options | $							$ 2,300,000			$ 2,300,000
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures							1,499,723			2,379,962	1,758,428
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period										2,380,000
Employee [Member]
STOCKHOLDERS' EQUITY
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Gross					470,000
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Stock Options | $							$ 561,000			$ 561,000
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition										3 months
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures					575,262
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares										$ 1.54
Share based Compensation Arrangement By Share based Payment Award Restricted Stock Vested Number Of Shares					105,262
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period				470,000
Number of Installments | installment				3
Employee [Member] | Share-based Compensation Award, Tranche Two [Member]
STOCKHOLDERS' EQUITY
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage				33.00%
Employee [Member] | Share-based Compensation Award, Tranche Three [Member]
STOCKHOLDERS' EQUITY
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage				33.00%
Employee [Member] | Restricted Stock [Member] | Share-based Compensation Award, Tranche One [Member]
STOCKHOLDERS' EQUITY
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage				33.00%
Non-Executive Directors | Restricted Stock [Member]
STOCKHOLDERS' EQUITY
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures			23,256
Common Class D [Member]
STOCKHOLDERS' EQUITY
Stock Repurchased During Period, Shares							448,742	702,282		1,709,315	2,463,350
Stock Repurchased During Period, Value | $							$ 975,000	$ 1,500,000		$ 3,500,000	$ 5,100,000
Repurchase Of Common Stock Price Per Share | $ / shares							$ 2.17	$ 2.15		$ 2.06	$ 2.05
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant							8,250,000			8,250,000
Common Class D [Member] | Stock Plan 2009 [Member]
STOCKHOLDERS' EQUITY
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized																	8,250,000
Common Class D [Member] | Stock Vest Tax Repurchase [Member]
STOCKHOLDERS' EQUITY
Stock Repurchased During Period, Shares							13,264	20,787		871,383	599,224
Stock Repurchased During Period, Value | $							$ 25,000	$ 44,000		$ 1,700,000	$ 1,100,000
Repurchase Of Common Stock Price Per Share | $ / shares							$ 1.87	$ 2.10		$ 1.94	$ 1.82
Common Class D [Member] | 2019 Equity and Performance Incentive Plan
STOCKHOLDERS' EQUITY
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant							3,247,067			3,247,067			5,500,000
Common Class D [Member] | Chief Financial Officer [Member] | Restricted Stock [Member] | Share-based Compensation Award, Tranche Two [Member]
STOCKHOLDERS' EQUITY
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Gross		99,846
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures		224,654			270,833
Common Class D [Member] | Chief Financial Officer [Member] | Employees Stock Option [Member] | Share-based Compensation Award, Tranche Two [Member]
STOCKHOLDERS' EQUITY
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Gross					120,370
Common Class D [Member] | Chief Administrative Officer [Member]
STOCKHOLDERS' EQUITY
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares		195,242				37,500
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period						37,500
Common Class D [Member] | Chairperson [Member] | Restricted Stock [Member] | Share-based Compensation Award, Tranche Two [Member]
STOCKHOLDERS' EQUITY
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Gross		174,971
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures		393,685			474,609
Common Class D [Member] | Chairperson [Member] | Employees Stock Option [Member] | Share-based Compensation Award, Tranche Two [Member]
STOCKHOLDERS' EQUITY
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Gross					210,937
Common Class D [Member] | Chief Executive Officer and President [Member]
STOCKHOLDERS' EQUITY
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period		86,774
Common Class D [Member] | Chief Executive Officer and President [Member] | Restricted Stock [Member] | Share-based Compensation Award, Tranche One [Member]
STOCKHOLDERS' EQUITY
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures					791,015
Common Class D [Member] | Chief Executive Officer and President [Member] | Employees Stock Option [Member] | Share-based Compensation Award, Tranche One [Member]
STOCKHOLDERS' EQUITY
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Gross		291,619			351,562
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures		656,142
Common Class D [Member] | Non-Executive Directors | Restricted Stock [Member]
STOCKHOLDERS' EQUITY
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures	25,000
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures | $	$ 50,000		$ 50,000
Common Stock Class [Member]
STOCKHOLDERS' EQUITY
Repurchase Of Common Stock Price Per Share | $ / shares								$ 2.26
Class A Common Stock [Member]
STOCKHOLDERS' EQUITY
Stock Repurchased During Period, Shares							6,345	3,928		54,896	4,160
Stock Repurchased During Period, Value | $							$ 14,000	$ 9,000		$ 120,000	$ 9,000
Repurchase Of Common Stock Price Per Share | $ / shares							$ 2.20			$ 2.19	$ 2.26

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LONG-TERM DEBT - Additional Information (Details) - USD ($)		1 Months Ended				3 Months Ended						9 Months Ended		12 Months Ended
	Feb. 10, 2014	Dec. 19, 2018	Jun. 30, 2017	Apr. 18, 2017	Apr. 21, 2016	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Dec. 20, 2018	Apr. 17, 2015
Debt Instrument [Line Items]
Letters of Credit Outstanding, Amount						$ 848,000						$ 848,000
Long-term Debt, Gross								$ 350,000,000						$ 350,000,000
Debt Instrument, Interest Rate, Stated Percentage								9.25%						9.25%
Gain Losses on Extinguishment of Debt						0			$ 120,000			0	$ 985,000
Debt Instrument, Interest Rate Terms				The 2017 Credit Facility contains customary representations and warranties and events of default, affirmative and negative covenants (in each case, subject to materiality exceptions and qualifications) which may be more restrictive than those governing the 2022 Notes. The 2017 Credit Facility also contains certain financial covenants, including a maintenance covenant requiring the Company's interest expense coverage ratio (defined as the ratio of consolidated EBITDA to consolidated interest expense) to be greater than or equal to 1.25 to 1.00 and its total senior secured leverage ratio (defined as the ratio of consolidated net senior secured indebtedness to consolidated EBITDA) to be less than or equal to 5.85 to 1.00.										The 2018 Credit Facility contains customary representations and warranties and events of default, affirmative and negative covenants (in each case, subject to materiality exceptions and qualifications). The 2018 Credit Facility also contains certain financial covenants, including a maintenance covenant requiring the Company's total gross leverage ratio to be not greater than 8.0 to 1.00 in 2019, 7.5 to 1.00 in 2020, 7.25 to 1.00 in 2021 and 6.75 to 1.00 in 2022.
Interest Expense, Total						21,589,000			18,987,000			65,743,000	57,423,000
Repayments of Long Term Debt, Excess Cash Flow Payments						3,500,000
Comcast Note [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount						$ 11,900,000						$ 11,900,000
Long-term Debt, Gross								$ 11,900,000						$ 11,900,000
Debt Instrument, Interest Rate, Stated Percentage						10.47%						10.47%
Senior Secured Notes Due 2022 [Member]
Debt Instrument [Line Items]
Long-term Debt, Gross																$ 350,000,000
9.25% Senior Subordinated Notes due February 2020 [Member]
Debt Instrument [Line Items]
Long-term Debt, Gross						$ 0		2,000,000				$ 0		2,000,000
Debt Instrument, Interest Rate, Stated Percentage						9.25%						9.25%
Gain Losses on Extinguishment of Debt								2,800,000
Debt Instrument, Repurchase Amount								$ 243,000,000						$ 243,000,000
Debt Instrument, Redemption Price, Percentage								100.88%
Write off of Deferred Debt Issuance Cost								$ 649,000
Premium Paid to the Bondholders								$ 2,100,000
9.25% Senior Subordinated Notes due February 2020 [Member] | Private Offering [Member]
Debt Instrument [Line Items]
Long-term Debt, Gross	$ 335,000,000
Debt Instrument, Periodic Payment	$ 15,500,000
MGM National Harbor Loan [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount						$ 50,000,000						$ 50,000,000
Long-term Debt, Gross						51,600,000						51,600,000
Debt Instrument, Unamortized Discount (Premium), Net						1,000,000						1,000,000
Long Term Debt Percentage Paid In Kind														4.00%
Debt Issuance Costs, Net						1,700,000						1,700,000
Asset Backed Credit Facility [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity					$ 25,000,000
Percentage Borrowing Of Eligible Accounts					(85.00%)
2017 Credit Facility [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount				$ 350,000,000
Repayments of Long-term Debt, Total		$ 20,000,000				$ 824,000			875,000			$ 2,500,000	2,600,000
Debt, Weighted Average Interest Rate						6.41%		5.82%				6.41%		5.82%
Percentage of Outstanding Principal Amount			0.25%
Long-term Debt, Gross				$ 350,000,000		$ 321,500,000		$ 323,900,000				$ 321,500,000		$ 323,900,000
Debt Instrument, Interest Rate, Stated Percentage				2.00%
Debt Instrument, Description				The 2017 Credit Facility matures on the earlier of (i) April 18, 2023, or (ii) in the event such debt is not repaid or refinanced, 91 days prior to the maturity of the Company's 2022 Notes (as defined below). At the Company's election, the interest rate on borrowings under the 2017 Credit Facility are based on either (i) the then applicable base rate (as defined in the 2017 Credit Facility) as, for any day, a rate per annum (rounded upward, if necessary, to the next 1/100th of 1%) equal to the greater of (a) the prime rate published in the Wall Street Journal, (b) 1/2 of 1% in excess rate of the overnight Federal Funds Rate at any given time, (c) the one-month LIBOR rate commencing on such day plus 1.00%) and (d) 2%, or (ii) the then applicable LIBOR rate (as defined in the 2017 Credit Facility). The average interest rate was approximately 6.41% for 2019 and was 5.82% for 2018.
2018 Credit Facility [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount															$ 192,000,000
Number of Days to Notify the Changes														5 days
Debt Instrument, Interest Rate, Stated Percentage, If 50% of Term Repaid														11.875%
Debt Instrument, Interest Rate, Stated Percentage, If 75% of Term Repaid														10.875%
Excess Cash Flows														75.00%
Percentage of Distributions														100.00%
Repayments of Long-term Debt, Total						7,100,000						21,300,000
Long-term Debt, Gross						170,700,000		$ 192,000,000				170,700,000		$ 192,000,000
Debt Instrument, Interest Rate, Stated Percentage								12.875%						12.875%
Interest Expense, Total						986,000			718,000			2,900,000	2,200,000
Debt Instrument Additional Interest Payment Term On Prepayment														The Company is required to repay principal to the extent then outstanding on each quarterly interest payment date, commencing on the last business day in March 2019, equal to one quarter of 7.5% of the aggregate initial principal amount of all term loans incurred on the Funding Date to December 2019, commencing on the last business day in March 2020, one quarter of 10.0% of the aggregate initial principal amount of all term loans incurred on the Funding Date to December 2021, and, commencing on the last business day in March 2021, one quarter of 12.5% of the aggregate initial principal amount of all term loans incurred on the Funding Date to December 2022. The Company is also required to use 75% of excess cash flow ("ECF payment") as defined in the 2018 Credit Facility, which exclude any distributions to the Company or its restricted subsidiaries in respect of its interests in the MGM National Harbor to repay outstanding term loans at par, paid semiannually and to use 100% of all distributions to the Company or its restricted subsidiaries received in respect of its interest in the MGM National Harbor to repay outstanding terms loans at par.
Debt Instrument, Unamortized Discount (Premium), Net						3,800,000						3,800,000
2018 Credit Facility [Member] | Debt Financing Cost [Member]
Debt Instrument [Line Items]
Debt Issuance Costs, Net						$ 875,000						$ 875,000
Senior Subordinated Notes Due From 2020 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage																7.375%
Gain Losses on Extinguishment of Debt									120,000	$ 626,000	$ 239,000
Debt Instrument, Repurchase Amount							$ 14,000,000		$ 5,000,000		$ 11,000,000		$ 5,000,000
Debt Instrument, Redemption Price, Percentage							95.125%		97.25%		97.375%

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2019

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of net revenue (and sources)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
	(In thousands, unaudited)
Net Revenue:
Radio Advertising	$	50,813	$	51,293	$	144,958	$	144,358
Political Advertising		300		917		741		2,300
Digital Advertising		8,171		8,734		23,270		23,439
Cable Television Advertising		20,649		19,157		60,658		56,211
Cable Television Affiliate Fees		25,330		26,244		79,404		81,513
Event Revenues & Other		5,792		4,385		22,044		17,736
Net Revenue (as reported)	$	111,055	$	110,730	$	331,075	$	325,557

Schedule of contract assets (unbilled receivables) and contract liabilities (customer advances and unearned income and unearned event income)

	September 30, 2019		December 31, 2018		September 30, 2018
	(Unaudited)		(In thousands)		(Unaudited)
Contract assets:
Unbilled receivables	$	5,968	$	3,425	$	4,268
Contract liabilities:
Customer advances and unearned income	$	3,403	$	3,766	$	4,588
Unearned event income		3,831		3,864		3,163

Schedule of calculation of basic and diluted earnings per share from continuing operations

The following table sets forth the calculation of basic and diluted earnings per share from continuing operations (in thousands, except share and per share data):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
	(Unaudited)
	(In Thousands)
Numerator:
Net income attributable to common stockholders	$	5,359	$	23,044	$	8,846	$	24,079
Denominator:
Denominator for basic net income per share - weighted average outstanding shares		44,315,077		45,128,341		44,912,673		45,946,820
Effect of dilutive securities:
Stock options and restricted stock		1,803,625		2,334,017		2,052,572		2,429,542
Denominator for diluted net income per share - weighted-average outstanding shares		46,118,702		47,462,358		46,965,245		48,376,362
Net income attributable to common stockholders per share – basic	$	0.12	$	0.51	$	0.20	$	0.52
Net income attributable to common stockholders per share – diluted	$	0.12	$	0.49	$	0.19	$	0.50

Schedule of fair values of our financial assets and liabilities measured at fair value on a recurring basis

	Total		Level 1		Level 2		Level 3
	(Unaudited)
	(In thousands)
As of September 30, 2019
Liabilities subject to fair value measurement:
Contingent consideration (a)	$	2,155		—		—	$	2,155
Employment agreement award (b)		26,374		—		—		26,374
Total	$	28,529	$	—	$	—	$	28,529
Mezzanine equity subject to fair value measurement:
Redeemable noncontrolling interests (c)	$	9,247	$	—	$	—	$	9,247
As of December 31, 2018
Liabilities subject to fair value measurement:
Contingent consideration (a)	$	2,831		—		—	$	2,831
Employment agreement award (b)		25,660		—		—		25,660
Total	$	28,491	$	—	$	—	$	28,491
Mezzanine equity subject to fair value measurement:
Redeemable noncontrolling interests (c)	$	10,232	$	—	$	—	$	10,232

Schedule of changes in Level 3 liabilities measured at fair value on a recurring basis

			Employment		Redeemable
	Contingent		Agreement		Noncontrolling
	Consideration		Award		Interests
	(In thousands)
Balance at December 31, 2018	$	2,831	$	25,660	$	10,232
Net income attributable to noncontrolling interests		—		—		999
Distribution		(895)		(2,861)		—
Dividends paid to noncontrolling interests		—		—		(1,000)
Change in fair value		219		3,575		(984)
Balance at September 30, 2019	$	2,155	$	26,374	$	9,247
The amount of total (losses)/income for the period included in earnings attributable to the change in unrealized losses/income relating to assets and liabilities still held at the reporting date	$	(219)	$	(3,575)	$	—

Schedule of significant unobservable input value

					As of
			As of		December 31,
		Significant	September 30, 2019		2018
		Unobservable	Significant Unobservable
Level 3 liabilities	Valuation Technique	Inputs	Input Value
Contingent consideration	Monte Carlo Simulation	Expected volatility	26.4	%	34.6	%
Contingent consideration	Monte Carlo Simulation	Discount Rate	14.5	%	15.0	%
Employment agreement award	Discounted Cash Flow	Discount Rate	11.0	%	11.0	%
Employment agreement award	Discounted Cash Flow	Long-term Growth Rate	2.5	%	2.5	%
Redeemable noncontrolling interest	Discounted Cash Flow	Discount Rate	10.5	%	10.5	%
Redeemable noncontrolling interest	Discounted Cash Flow	Long-term Growth Rate	1.0	%	1.0	%

Schedule of the components of lease expense and the weighted average remaining lease term and the weighted average discount rate

The following table sets forth the components of lease expense and the weighted average remaining lease term and the weighted average discount rate for the Company’s leases as of September 30, 2019, dollars in thousands:

Operating Lease Cost (Cost resulting from lease payments)	$	9,642
Variable Lease Cost (Cost excluded from lease payments)		116
Total Lease Cost	$	9,758
Operating Lease - Operating Cash Flows (Fixed Payments)	$	10,010
Operating Lease - Operating Cash Flows (Liability Reduction)	$	6,653
Weighted Average Lease Term - Operating Leases		5.83	years
Weighted Average Discount Rate - Operating Leases		11.00	%

Schedule of maturities of lease liabilities

For the Year Ended December 31,	(Dollars in thousands)
For the remaining three months ending December 31, 2019	$	3,229
2020		13,268
2021		12,479
2022		11,657
2023		9,963
Thereafter		19,837
Total future lease payments		70,433
Imputed interest		(17,947)
Total	$	52,486

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SEGMENT INFORMATION (Tables)

9 Months Ended

Sep. 30, 2019

SEGMENT INFORMATION

Schedule of Segment Reporting Information, by Segment

	Three Months Ended
	September 30,
	2019		2018
	(Unaudited)
	(In thousands)
Net Revenue:
Radio Broadcasting	$	46,467	$	45,958
Reach Media		10,917		10,822
Digital		8,170		8,749
Cable Television		45,981		45,401
Corporate/Eliminations*		(480)		(200)
Consolidated	$	111,055	$	110,730
Operating Expenses (including stock-based compensation and excluding depreciation and amortization and impairment of long-lived assets):
Radio Broadcasting	$	28,929	$	29,373
Reach Media		8,936		8,740
Digital		7,460		9,363
Cable Television		23,677		22,795
Corporate/Eliminations		6,993		25
Consolidated	$	75,995	$	70,296
Depreciation and Amortization:
Radio Broadcasting	$	791	$	872
Reach Media		60		63
Digital		474		482
Cable Television		953		6,577
Corporate/Eliminations		315		339
Consolidated	$	2,593	$	8,333
Operating income (loss):
Radio Broadcasting	$	16,747	$	15,713
Reach Media		1,921		2,019
Digital		236		(1,096)
Cable Television		21,351		16,029
Corporate/Eliminations		(7,788)		(564)
Consolidated	$	32,467	$	32,101

*  Intercompany revenue included in net revenue above is as follows:

Radio Broadcasting $ (480) $ (200)

Capital expenditures by segment are as follows:

Radio Broadcasting	$	1,406	$	2,663
Reach Media		31		37
Digital		348		327
Cable Television		15		474
Corporate/Eliminations		37		898
Consolidated	$	1,837	$	4,399

	Nine Months Ended
	September 30,
	2019		2018
	(Unaudited)
	(In thousands)
Net Revenue:
Radio Broadcasting	$	132,528	$	131,924
Reach Media		36,660		33,721
Digital		23,280		23,454
Cable Television		140,234		138,414
Corporate/Eliminations*		(1,627)		(1,956)
Consolidated	$	331,075	$	325,557
Operating Expenses (including stock-based compensation and excluding depreciation and amortization and impairment of long-lived assets):
Radio Broadcasting	$	86,580	$	85,588
Reach Media		30,727		29,700
Digital		22,099		28,830
Cable Television		74,540		72,072
Corporate/Eliminations		19,748		13,713
Consolidated	$	233,694	$	229,903
Depreciation and Amortization:
Radio Broadcasting	$	2,510	$	2,590
Reach Media		178		189
Digital		1,395		1,435
Cable Television		9,430		19,690
Corporate/Eliminations		938		965
Consolidated	$	14,451	$	24,869
Impairment of Long-Lived Assets:
Radio Broadcasting	$	3,800	$	6,556
Reach Media		—		—
Digital		—		—
Cable Television		—		—
Corporate/Eliminations		—		—
Consolidated	$	3,800	$	6,556
Operating income (loss):
Radio Broadcasting	$	39,638	$	37,190
Reach Media		5,755		3,832
Digital		(214)		(6,811)
Cable Television		56,264		46,652
Corporate/Eliminations		(22,313)		(16,634)
Consolidated	$	79,130	$	64,229

* Intercompany revenue included in net revenue above is as follows:

Radio Broadcasting $ (1,627) $ (1,956)

Capital expenditures by segment are as follows:

Radio Broadcasting	$	2,269	$	3,232
Reach Media		97		83
Digital		1,066		1,087
Cable Television		173		573
Corporate/Eliminations		342		1,502
Consolidated	$	3,947	$	6,477

	September 30, 2019		December 31, 2018
	(Unaudited)
	(In thousands)
Total Assets:
Radio Broadcasting	$	723,861	$	717,400
Reach Media		37,831		34,388
Digital		26,262		24,389
Cable Television		398,088		402,511
Corporate/Eliminations		75,459		58,721
Consolidated	$	1,261,501	$	1,237,409

XML

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value Measurements (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Liabilities subject to fair value measurement:
Contingent consideration	$ 2,155	$ 2,831
Employment agreement award	26,374	25,660
Total	28,529	28,491
Mezzanine equity subject to fair value measurement:
Redeemable noncontrolling interests	9,247	10,232
Fair Value, Inputs, Level 3 [Member]
Liabilities subject to fair value measurement:
Contingent consideration	2,155	2,831
Employment agreement award	26,374	25,660
Total	28,529	28,491
Mezzanine equity subject to fair value measurement:
Redeemable noncontrolling interests	$ 9,247	$ 10,232

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STOCKHOLDERS' EQUITY - Restricted stock grants (Details) - Restricted Stock [Member]	9 Months Ended
	Sep. 30, 2019 $ / shares shares
STOCKHOLDERS' EQUITY
Shares, Unvested at beginning of year | shares	2,124,000
Shares, Grants | shares	2,380,000
Shares, Vested | shares	(2,604,000)
Shares, Forfeited/cancelled/expired | shares	(37,000)
Shares, Unvested at end of year | shares	1,863,000
Average Fair Value at Grant Date, Unvested at beginning of year (in dollars per share) | $ / shares	$ 1.85
Average Fair Value at Grant Date, Grants (in dollars per share) | $ / shares	2.15
Average Fair Value at Grant Date, Vested (in dollars per share) | $ / shares	1.92
Average Fair Value at Grant Date, Forfeited/cancelled/expired (in dollars per share) | $ / shares	2.34
Average Fair Value at Grant Date, Unvested at end of year (in dollars per share) | $ / shares	$ 2.14

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LONG-TERM DEBT - Future Minimum Principal Payments (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
LONG-TERM DEBT
October - December 2019	$ 4,424
2020	24,181
2021	22,497
2022	531,937
2023	310,738
Total Debt	893,777	$ 929,901
2018 Credit Facility [Member]
LONG-TERM DEBT
October - December 2019	3,600
2020	20,884
2021	19,200
2022	127,062
2023	0
2024 and thereafter	0
Total Debt	170,746
MGM National Harbor Loan [Member]
LONG-TERM DEBT
October - December 2019	0
2020	0
2021	0
2022	51,578
2023	0
2024 and thereafter	0
Total Debt	51,578	50,066
Asset Backed Credit Facility [Member]
LONG-TERM DEBT
October - December 2019	0
2020	0
2021	0
2022	0
2023	0
2024 and thereafter	0
Total Debt	0
2017 Credit Facility [Member]
LONG-TERM DEBT
October - December 2019	824
2020	3,297
2021	3,297
2022	3,297
2023	310,738
2024 and thereafter	0
Total Debt	321,453
7.375% Senior Secured Notes due April 2022 [Member]
LONG-TERM DEBT
October - December 2019	0
2020	0
2021	0
2022	350,000
2023	0
2024 and thereafter	0
Total Debt	$ 350,000	$ 350,000

XML

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair value measured on recurring basis (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($)
Contingent Consideration [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance, beginning of period	$ 2,831
Net income attributable to noncontrolling interests	0
Distribution	(895)
Change in fair value	219
Balance, end of period	2,155
The amount of total income (losses) for the period included in earnings attributable to the change in unrealized losses relating to assets and liabilities still held	(219)
Employment Agreement Award [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance, beginning of period	25,660
Net income attributable to noncontrolling interests	0
Distribution	(2,861)
Change in fair value	3,575
Balance, end of period	26,374
The amount of total income (losses) for the period included in earnings attributable to the change in unrealized losses relating to assets and liabilities still held	(3,575)
Redeemable Noncontrolling Interest [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance, beginning of period	10,232
Net income attributable to noncontrolling interests	999
Distribution	0
Dividends paid to noncontrolling interests	(1,000)
Change in fair value	(984)
Balance, end of period	9,247
The amount of total income (losses) for the period included in earnings attributable to the change in unrealized losses relating to assets and liabilities still held	$ 0

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GOODWILL AND RADIO BROADCASTING LICENSES (Tables)

9 Months Ended

Sep. 30, 2019

Goodwill and Radio Broadcasting Licenses [Abstract]

Schedule Of Radio Broadcasting Licenses Impairment

Radio Broadcasting	September 30,
Licenses	2018 (a)
Pre-tax impairment charge (in millions)	$	—
Discount Rate		9.0	%
Year 1 Market Revenue Growth Rate Range		0.5	%
Long-term Market Revenue Growth Rate Range (Years 6 – 10)		0.5% – 1.5	%
Mature Market Share Range		6.8% – 14.3	%
Operating Profit Margin Range		29.8% – 35.1	%

(a)Reflects changes only to the key assumptions used in the interim testing for certain units of accounting.

Schedule Of GoodWill Impairment Test Radio Marketing Unit

Goodwill (Radio Market	September 30,
Reporting Units)	2018 (a)
Pre-tax impairment charge (in millions)	$	—
Discount Rate		9.0	%
Year 1 Market Revenue Growth Rate Range		1.2% – 35.2	%
Long-term Market Revenue Growth Rate Range (Years 6 – 10)		1.0% – 1.5	%
Mature Market Share Range		9.0% – 15.6	%
Operating Profit Margin Range		21.7% – 31.8	%

(a)Reflects changes only to the key assumptions used in the interim testing for certain units of accounting.

Schedule Of Changes In Carrying Amount Of Goodwill

	Radio		Reach				Cable
	Broadcasting		Media		Digital		Television
	Segment		Segment		Segment		Segment		Total
	(In thousands)
Gross goodwill	$	155,000	$	30,468	$	27,567	$	165,044	$	378,079
Additions		—		—		—		—		—
Impairments		—		—		—		—		—
Accumulated impairment losses		(101,848)		(16,114)		(14,545)		—		(132,507)
Net goodwill at September 30, 2019	$	53,152	$	14,354	$	13,022	$	165,044	$	245,572

XML

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Net Revenue	$ 111,055	$ 110,730	$ 331,075	$ 325,557
Radio Advertising [Member]
Net Revenue	50,813	51,293	144,958	144,358
Political Advertising [Member]
Net Revenue	300	917	741	2,300
Digital Advertising [Member]
Net Revenue	8,171	8,734	23,270	23,439
Cable Television Advertising [Member]
Net Revenue	20,649	19,157	60,658	56,211
Cable Television Affiliate Fees [Member]
Net Revenue	25,330	26,244	79,404	81,513
Event Revenues & Other [Member]
Net Revenue	$ 5,792	$ 4,385	$ 22,044	$ 17,736

XML

LONG-TERM DEBT

9 Months Ended

Sep. 30, 2019

LONG-TERM DEBT

LONG-TERM DEBT

4.    LONG-TERM DEBT:

Long-term debt consists of the following:

	September 30, 2019		December 31, 2018
	(Unaudited)
	(In thousands)
2018 Credit Facility	$	170,746	$	192,000
MGM National Harbor Loan		51,578		50,066
2017 Credit Facility		321,453		323,926
9.25% Senior Subordinated Notes due February 2020		—		2,037
7.375% Senior Secured Notes due April 2022		350,000		350,000
Asset-backed credit facility		—		—
Comcast Note due April 2019		—		11,872
Total debt		893,777		929,901
Less: current portion of long-term debt		22,981		38,706
Less: original issue discount and issuance costs		14,607		17,438
Long-term debt, net	$	856,189	$	873,757

2018 Credit Facility

On December 4, 2018, the Company and certain of its subsidiaries entered into a credit agreement ("2018 Credit Facility"), among the Company, the lenders party thereto from time to time, Wilmington Trust, National Association, as administrative agent, and TCG Senior Funding L.L.C, as sole lead arranger and sole bookrunner. The 2018 Credit Facility provided $192.0 million in term loan borrowings, which was funded on December 20, 2018. The net proceeds of term loan borrowings under the 2018 Credit Facility were used to refinance, repurchase, redeem or otherwise repay the Company’s outstanding 9.25% Senior Subordinated Notes due 2020.

Borrowings under the 2018 Credit Facility are subject to customary conditions precedent, as well as a requirement under the 2018 Credit Facility that (i) the Company’s total gross leverage ratio on a pro forma basis be not greater than 8:00 to 1:00 (this total gross leverage ratio test steps down as described below), (ii) neither of the administrative agents under the Company’s existing credit facilities nor the trustee under the Company’s existing senior secured notes due 2022 have objected to the terms of the new credit documents and (iii) certification by the Company that the terms and conditions of the 2018 Credit Facility satisfy the requirements of the definition of "Permitted Refinancing" (as defined in the agreements governing the Company’s existing credit facilities) and neither of the administrative agents under the Company’s existing credit facilities notifies the Company within five (5) business days prior to funding the borrowings under the 2018 Credit Facility that it disagrees with such determination (including a reasonable description of the basis upon which it disagrees).

The 2018 Credit Facility matures on December 31, 2022 (the "Maturity Date"). Interest rates on borrowings under the 2018 Credit Facility will be either (i) from the Funding Date to the Maturity Date, 12.875% per annum, (ii) 11.875% per annum, once 50% of the term loan borrowings have been repaid or (iii) 10.875% per annum, once 75% of the term loan borrowings have been repaid. Interest payments begin on the last day of the 3-month period commencing on the Funding Date.

The Company’s obligations under the 2018 Credit Facility are not secured. The 2018 Credit Facility is guaranteed on an unsecured basis by each entity that guarantees the Company’s outstanding $350.0 million 2017 Credit Facility (as defined below).

The Company is required to repay principal to the extent then outstanding on each quarterly interest payment date, commencing on the last business day in March 2019, equal to one quarter of 7.5% of the aggregate initial principal amount of all term loans incurred on the Funding Date to December 2019, commencing on the last business day in March 2020, one quarter of 10.0% of the aggregate initial principal amount of all term loans incurred on the Funding Date to December 2021, and, commencing on the last business day in March 2021, one quarter of 12.5% of the aggregate initial principal amount of all term loans incurred on the Funding Date to December 2022. The Company is also required to use 75% of excess cash flow (“ECF payment”) as defined in the 2018 Credit Facility, which exclude any distributions to the Company or its restricted subsidiaries in respect of its interests in the MGM National Harbor to repay outstanding term loans at par, paid semiannually and to use 100% of all distributions to the Company or its restricted subsidiaries received in respect of its interest in the MGM National Harbor to repay outstanding terms loans at par. During the three and nine months September 30, 2019, the Company repaid approximately $7.1 million and $21.3 million, respectively, under the 2018 Credit Facility. Included in the repayments made during the quarter ended September 30, 2019 was approximately $3.5 million in ECF payments in accordance with the agreement.

The 2018 Credit Facility contains customary representations and warranties and events of default, affirmative and negative covenants (in each case, subject to materiality exceptions and qualifications). The 2018 Credit Facility also contains certain financial covenants, including a maintenance covenant requiring the Company’s total gross leverage ratio to be not greater than 8.0 to 1.00 in 2019, 7.5 to 1.00 in 2020, 7.25 to 1.00 in 2021 and 6.75 to 1.00 in 2022. As of September 30, 2019, the Company was in compliance with all of its financial covenants under the 2018 Credit Facility.

As of September 30, 2019, the Company had outstanding approximately $170.7 million on its 2018 Credit Facility. The original issue discount in the amount of approximately $3.8 million and associated debt issuance costs in the amount of $875,000 has been reflected as an adjustment to the carrying amount of the debt obligation and amortized to interest expense over the term of the credit facility using the effective interest rate method. The amortization of deferred financing costs was charged to interest expense for all periods presented. The amount of deferred financing costs included in interest expense for all instruments, for the three months ended September 30, 2019 and 2018, was $986,000 and $718,000, respectively. The amount of deferred financing costs included in interest expense for all instruments, for the nine months ended September 30, 2019 and 2018, was approximately $2.9 million and $2.2 million, respectively.

MGM National Harbor Loan

Concurrently, on December 4, 2018, Urban One Entertainment SPV, LLC ("UONESPV") and its immediate parent, Radio One Entertainment Holdings, LLC ("ROEH"), each of which is a wholly owned subsidiary of the Company, entered into a credit agreement, providing $50.0 million in term loan borrowings (the "MGM National Harbor Loan") which was funded on December 20, 2018.

The MGM National Harbor Loan matures on December 31, 2022 and bears interest at 7.0% per annum in cash plus 4.0% per annum paid-in kind. The loan has limited ability to be prepaid in the first two years. The loan is secured on a first priority basis by the assets of UONESPV and ROEH, including all of UONESPV’s shares held by ROEH, all of UONESPV’s interests in MGM National Harbor, its rights under the joint venture operating agreement governing the MGM National Harbor and UONESPV’s obligation to exercise its put right under the joint venture operating agreement in the event of a UONESPV payment default or bankruptcy event, in each case, subject to applicable Maryland gaming laws and approvals. Exercise by UONESPV of its put right under the joint venture operating agreement is subject to required lender consent unless the proceeds are used to retire the MGM National Harbor Loan and any remaining excess is used to repay borrowings, if any, under the 2018 Credit Facility. The MGM National Harbor Loan also contains customary representations and warranties and events of default, affirmative and negative covenants (in each case, subject to materiality exceptions and qualifications).

As of September 30, 2019, the Company had outstanding approximately $51.6 million on its MGM National Harbor Loan. The original issue discount in the amount of approximately $1.0 million and associated debt issuance costs in the amount of approximately $1.7 million is being reflected as an adjustment to the carrying amount of the debt obligation and amortized to interest expense over the term of the obligation using the effective interest rate method. The amortization of deferred financing costs was charged to interest expense for all periods presented.

2017 Credit Facilities

On April 18, 2017, the Company closed on a senior secured credit facility (the “2017 Credit Facility”). The 2017 Credit Facility is governed by a credit agreement by and among the Company, the lenders party thereto from time to time and Guggenheim Securities Credit Partners, LLC, as administrative agent, The Bank of New York Mellon, as collateral agent, and Guggenheim Securities, LLC as sole lead arranger and sole book running manager. The 2017 Credit Facility provides for $350 million in term loan borrowings, all of which was advanced and outstanding on the date of the closing of the transaction.

The 2017 Credit Facility matures on the earlier of (i) April 18, 2023, or (ii) in the event such debt is not repaid or refinanced, 91 days prior to the maturity of the Company’s 2022 Notes (as defined below). At the Company’s election, the interest rate on borrowings under the 2017 Credit Facility are based on either (i) the then applicable base rate (as defined in the 2017 Credit Facility) as, for any day, a rate per annum (rounded upward, if necessary, to the next 1/100th of 1%) equal to the greater of (a) the prime rate published in the Wall Street Journal, (b) 1/2 of 1% in excess rate of the overnight Federal Funds Rate at any given time, (c) the one-month LIBOR rate commencing on such day plus 1.00%) and (d) 2%, or (ii) the then applicable LIBOR rate (as defined in the 2017 Credit Facility). The average interest rate was approximately 6.41% for 2019 and was 5.82% for 2018.

The 2017 Credit Facility is (i) guaranteed by each entity that guarantees the Company’s 2022 Notes on a pari passu basis with the guarantees of the 2022 Notes and (ii) secured on a pari passu basis with the Company’s 2022 Notes. The Company’s obligations under the 2017 Credit Facility are secured, subject to permitted liens and except for certain excluded assets (i) on a first priority basis by certain notes priority collateral, and (ii) on a second priority basis by collateral for the Company’s asset-backed line of credit.

In addition to any mandatory or optional prepayments, the Company is required to pay interest on the term loans (i) quarterly in arrears for the base rate loans, and (ii) on the last day of each interest period for LIBOR loans. Certain voluntary prepayments of the term loans during the first six months will require an additional prepayment premium. Beginning with the interest payment date occurring in June 2017 and ending in March 2023, the Company will be required to repay principal, to the extent then outstanding, equal to 1∕4 of 1% of the aggregate initial principal amount of all term loans incurred on the effective date of the 2017 Credit Facility. On December 19, 2018, upon drawing under the 2018 Credit Facility and MGM National Harbor Loan, the Company voluntarily prepaid approximately $20.0 million in principal on the 2017 Credit Facility. During the three and nine months ended September 30, 2019, the Company repaid $824,000 and approximately $2.5 million, respectively, under the 2017 Credit Facility. During the three and nine months ended September 30, 2018, the Company repaid $875,000 and approximately $2.6 million, respectively, under the 2017 Credit Facility.

The 2017 Credit Facility contains customary representations and warranties and events of default, affirmative and negative covenants (in each case, subject to materiality exceptions and qualifications) which may be more restrictive than those governing the 2022 Notes. The 2017 Credit Facility also contains certain financial covenants, including a maintenance covenant requiring the Company’s interest expense coverage ratio (defined as the ratio of consolidated EBITDA to consolidated interest expense) to be greater than or equal to 1.25 to 1.00 and its total senior secured leverage ratio (defined as the ratio of consolidated net senior secured indebtedness to consolidated EBITDA) to be less than or equal to 5.85 to 1.00.

The net proceeds from the 2017 Credit Facility were used to prepay in full the Company’s previous senior secured credit facility and the agreement governing such credit facility.

The 2017 Credit Facility contains affirmative and negative covenants that the Company is required to comply with, including:

(a)maintaining an interest coverage ratio of no less than:

§ 1.25 to 1.00 on June 30, 2017 and the last day of each fiscal quarter thereafter.

(b)maintaining a senior leverage ratio of no greater than:

§ 5.85 to 1.00 on June 30, 2017 and the last day of each fiscal quarter thereafter.

(c)limitations on:

§ liens;

§ sale of assets;

§ payment of dividends; and

§ mergers.

As of September 30, 2019, the Company was in compliance with all of its financial covenants under the 2017 Credit Facility.

As of September 30, 2019, the Company had outstanding approximately $321.5 million on its 2017 Credit Facility. The original issue discount is being reflected as an adjustment to the carrying amount of the debt obligations and amortized to interest expense over the term of the credit facility using the effective interest rate method. The amortization of deferred financing costs was charged to interest expense for all periods presented.

2022 Notes

On April 17, 2015, the Company closed a private offering of $350.0 million aggregate principal amount of 7.375% senior secured notes due 2022 (the “2022 Notes”). The 2022 Notes were offered at an original issue price of 100.0% plus accrued interest from April 17, 2015, and will mature on April 15, 2022. Interest on the 2022 Notes accrues at the rate of 7.375% per annum and is payable semiannually in arrears on April 15 and October 15, which commenced on October 15, 2015. The 2022 Notes are guaranteed, jointly and severally, on a senior secured basis by the Company’s existing and future domestic subsidiaries, including TV One.

In connection with the closing of the 2022 Notes, the Company and the guarantor parties thereto entered into a Fourth Supplemental Indenture to the indenture governing the 2020 Notes (as defined below). Pursuant to this Fourth Supplemental Indenture, TV One, which previously did not guarantee the 2020 Notes, became a guarantor under the 2020 Notes indentures. In addition, the transactions caused a “Triggering Event” (as defined in the 2020 Notes Indenture) and, as a result, the 2020 Notes became an unsecured obligation of the Company and the subsidiary guarantors and rank equal in right of payment with the Company’s other senior indebtedness.

The Company used the net proceeds from the 2022 Notes, to refinance a previous credit agreement, refinance certain TV One indebtedness, and finance the buyout of membership interests of Comcast in TV One and pay the related accrued interest, premiums, fees and expenses associated therewith.

The 2022 Notes are the Company’s senior secured obligations and rank equal in right of payment with all of the Company’s and the guarantors’ existing and future senior indebtedness, including obligations under the 2017 Credit Facility and the Company’s 2020 Notes (defined below). The 2022 Notes and related guarantees are equally and ratably secured by the same collateral securing the 2017 Credit Facility and any other parity lien debt issued after the issue date of the 2022 Notes, including any additional notes issued under the Indenture, but are effectively subordinated to the Company’s and the guarantors’ secured indebtedness to the extent of the value of the collateral securing such indebtedness that does not also secure the 2022 Notes. Collateral includes substantially all of the Company’s and the guarantors’ current and future property and assets for accounts receivable, cash, deposit accounts, other bank accounts, securities accounts, inventory and related assets including the capital stock of each subsidiary guarantor. Finally, the Company also had the Comcast Note (defined below) which was a general but senior unsecured obligation of the Company.

On February 24, 2015, the Company entered into a letter of credit reimbursement and security agreement. See Note 9 - Subsequent Events. As of September 30, 2019, the Company had letters of credit totaling $848,000 under the agreement for certain operating leases and certain insurance policies. Letters of credit issued under the agreement are required to be collateralized with cash.

Senior Subordinated Notes

On February 10, 2014, the Company closed a private placement offering of $335.0 million aggregate principal amount of 9.25% senior subordinated notes due 2020 (the “2020 Notes”). The 2020 Notes were offered at an original issue price of 100.0% plus accrued interest from February 10, 2014. The 2020 Notes were scheduled to mature on February 15, 2020. Interest accrued at the rate of 9.25% per annum and was payable semiannually in arrears on February 15 and August 15 in the initial amount of approximately $15.5 million, which commenced on August 15, 2014. The 2020 Notes were guaranteed by certain of the Company’s existing and future domestic subsidiaries and any other subsidiaries that guarantee the existing senior credit facility or any of the Company’s other syndicated bank indebtedness or capital markets securities. The Company used the net proceeds from the offering to repurchase or otherwise redeem all of the amounts then outstanding under its previous notes and to pay the related accrued interest, premiums, fees and expenses associated therewith. During the quarter ended December 31, 2018, in conjunction with entering into the 2018 Credit Facility and MGM National Harbor Loan, the Company repurchased approximately $243.0 million of its 2020 Notes at an average price of approximately 100.88% of par. During the quarter ended December 31, 2018, the Company recorded a loss on retirement of debt of approximately $2.8 million. This amount includes a write-off of previously capitalized debt financing costs and original issue discount associated with the 2020 Notes in the amount of $649,000 and also includes approximately $2.1 million associated with the premium paid to the bondholders. During the quarter ended September 30, 2018, the Company repurchased approximately $5.0 million of its 2020 Notes at an average price of approximately 97.25% of par. The Company recorded a net gain on retirement of debt of $120,000 for the quarter ended September 30, 2018. During the quarter ended June 30, 2018, the Company repurchased approximately $14.0 million of its 2020 Notes at an average price of approximately 95.125% of par. The Company recorded a net gain on retirement of debt of $626,000 for the quarter ended June 30, 2018. During the quarter ended March 31, 2018, the Company repurchased approximately $11 million of its 2020 Notes at an average price of approximately 97.375% of par. The Company recorded a net gain on retirement of debt of $239,000 for the quarter ended March 31, 2018. As of September 30, 2019 and December 31, 2018, the Company had approximately $0 and $2.0 million, respectively, of our 2020 Notes outstanding.

On January 17, 2019, the Company announced that it had given the required notice under the indenture governing its 2020 Notes to redeem for cash all outstanding aggregate principal amount of its Notes to the extent outstanding on February 15, 2019 (the "Redemption Date"). The redemption price for the Notes will be 100.0% of the principal amount of the Notes, plus accrued and unpaid interest to the Redemption Date. On February 15, 2019, the remaining 2020 Notes were redeemed in full.

Comcast Note

The Company also had outstanding a senior unsecured promissory note in the aggregate principal amount of approximately $11.9 million due to Comcast (“Comcast Note”). The Comcast Note bears interest at 10.47%, is payable quarterly in arrears, and the entire principal amount is due on April 17, 2019. The Company is contractually required to retire the Comcast Note in February 2019 upon redemption of the remaining 2020 Notes. On February 15, 2019, upon redemption of the remaining 2020 Notes, the Comcast Note was paid in full and retired.

Asset-Backed Credit Facility

On April 21, 2016, the Company entered into a senior credit agreement governing an asset-backed credit facility (the “ABL Facility”) among the Company, the lenders party thereto from time to time and Wells Fargo Bank National Association, as administrative agent (the “Administrative Agent”). The ABL Facility provides for $25 million in revolving loan borrowings in order to provide for the working capital needs and general corporate requirements of the Company. As of September 30, 2019 and as of December 31, 2018, the Company did not have any borrowings outstanding on its ABL Facility.

At the Company’s election, the interest rate on borrowings under the ABL Facility are based on either (i) the then applicable margin relative to Base Rate Loans (as defined in the ABL Facility) or (ii) the then applicable margin relative to LIBOR Loans (as defined in the ABL Facility) corresponding to the average availability of the Company for the most recently completed fiscal quarter.

Advances under the ABL Facility are limited to (a) eighty-five percent (85%) of the amount of Eligible Accounts (as defined in the ABL Facility), less the amount, if any, of the Dilution Reserve (as defined in the ABL Facility), minus (b) the sum of (i) the Bank Product Reserve (as defined in the ABL Facility), plus (ii) the aggregate amount of all other reserves, if any, established by Administrative Agent.

All obligations under the ABL Facility are secured by first priority lien on all (i) deposit accounts (related to accounts receivable), (ii) accounts receivable, (iii) all other property which constitutes ABL Priority Collateral (as defined in the ABL Facility). The obligations are also secured by all material subsidiaries of the Company.

The ABL Facility matures five years from the effective date, and as such, the maturity date is April 21, 2021.

Finally, the ABL Facility is subject to the terms of the Intercreditor Agreement (as defined in the ABL Facility) by and among the Administrative Agent, the administrative agent for the secured parties under the Company’s term loan and the trustee and collateral trustee under the senior secured notes indenture.

The Company conducts a portion of its business through its subsidiaries. Certain of the Company’s subsidiaries have fully and unconditionally guaranteed the Company’s 2022 Notes, the Company’s obligations under the 2017 Credit Facility, and the obligations under the 2018 Credit Facility. The Company’s interest in the MGM National Harbor Casino fully guarantees the MGM National Harbor Loan.

Future Minimum Principal Payments

Future scheduled minimum principal payments of debt as of September 30, 2019, are as follows:

								7.38%
								Senior
								Secured
	2018		MGM			2017		Notes
	Credit		National		Asset-backed	Credit		due April
	Facility		Harbor Loan		Credit Facility	Facility		2022		Total
	(In thousands)
October - December 2019	$	3,600		—	—	$	824	$	—	$	4,424
2020		20,884		—	—		3,297		—		24,181
2021		19,200		—	—		3,297		—		22,497
2022		127,062		51,578	—		3,297		350,000		531,937
2023		—		—	—		310,738		—		310,738
2024 and thereafter		—		—	—		—		—		—
Total Debt	$	170,746	$	51,578	—	$	321,453	$	350,000	$	893,777

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2019

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

8.    COMMITMENTS AND CONTINGENCIES:

Royalty Agreements

Musical works rights holders, generally songwriters and music publishers, have been traditionally represented by performing rights organizations, such as the American Society of Composers, Authors and Publishers (“ASCAP”), Broadcast Music, Inc. (“BMI”) and SESAC, Inc. (“SESAC”). The market for rights relating to musical works is changing rapidly. Songwriters and music publishers have withdrawn from the traditional performing rights organizations, particularly ASCAP and BMI, and new entities, such as Global Music Rights LLC (“GMR”), have been formed to represent rights holders. These organizations negotiate fees with copyright users, collect royalties and distribute them to the rights holders. We have arrangements with ASCAP, SESAC and GMR, and are in negotiations with BMI for a new agreement. If we are unable to reach an agreement with BMI, a court will determine the royalty we will be required to pay BMI. The changing market for musical works may have an adverse effect on us, including increasing our costs or limiting the musical works available to us.

Other Contingencies

The Company has been named as a defendant in several legal actions arising in the ordinary course of business. It is management’s opinion, after consultation with its legal counsel, that the outcome of these claims will not have a material adverse effect on the Company’s financial position or results of operations.

Off-Balance Sheet Arrangements

On February 24, 2015, the Company entered into a letter of credit reimbursement and security agreement. As of September 30, 2019, the Company had letters of credit totaling $848,000 under the agreement for certain operating leases and certain insurance policies. Letters of credit issued under the agreement are required to be collateralized with cash.

Noncontrolling Interest Shareholders’ Put Rights

Beginning on January 1, 2018, the noncontrolling interest shareholders of Reach Media have had an annual right to require Reach Media to purchase all or a portion of their shares at the then current fair market value for such shares (the “Put Right”). This annual right is exercisable for a 30‑day period beginning January 1 of each year. The purchase price for such shares may be paid in cash and/or registered Class D common stock of Urban One, at the discretion of Urban One. The noncontrolling interest shareholders of Reach Media did not exercise their Put Right for the 30‑day period ending January 30, 2019. Management, at this time, cannot reasonably determine the period when and if the put right will be exercised by the noncontrolling interest shareholders.

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ACQUISITIONS AND DISPOSITIONS (Details) - USD ($)			1 Months Ended		3 Months Ended	9 Months Ended
	Aug. 31, 2019	Aug. 08, 2018	May 02, 2017	Jan. 30, 2017	Jun. 30, 2017	Sep. 30, 2019	Sep. 30, 2018	Aug. 09, 2018
ACQUISITIONS AND DISPOSITIONS
Proceeds from Divestiture of Businesses				$ 25,000,000
Sale Leaseback Transaction, Net Proceeds, Investing Activities			$ 25,000,000
Sale And Leaseback Transaction Gain			$ 22,500,000
Sale and Leaseback Transaction, Gain (Loss), Net					$ 14,400,000
Sale Leaseback Transaction, Deferred Gain, Net					$ 8,100,000
Business Acquisition Purchase Price Allocation Indefinite Live Intangible Assets Land And Land Improvements								$ 1,100,000
Business Acquisition Purchase Price Allocation Indefinite Live Intangible Assets Towers								512,000
Proceeds from Sale of Property Held-for-sale						$ 13,500,000	$ 12,791,000
Proceeds from Property Plant and Equipment Received in Cash		$ 12,200,000
Red Zebra Broadcasting [Member]
ACQUISITIONS AND DISPOSITIONS
Business Acquisition Purchase Price Allocation Indefinite Lived Intangible Assets, Radio Broadcasting Licenses								2,000,000
Business Acquisition Purchase Price Allocation Indefinite Lived Intangible Assets Including Goodwill								91,000
Business Acquisition Purchase Price Allocation Indefinite Live Intangible Assets Advertiser Agreements								206,000
Business Acquisition Purchase Price Allocation Indefinite Live Intangible Assets Other Property And Equipment								$ 254,000
Detroit radio station [Member]
ACQUISITIONS AND DISPOSITIONS
Proceeds from Sale of Property Held-for-sale	$ 13,500,000	$ 12,700,000

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CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - shares	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period	15,000	58,190
Common Stock Class A [Member]
Stock Repurchased During Period, Shares	54,896	4,160
Common Stock Class D [Member]
Stock Repurchased During Period, Shares	2,588,796	3,062,574
Stock Issued During Period, Shares, New Issues	755,239

XML

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair value measurements on recurring and nonrecurring valuation techniques (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Contingent Consideration [Member] | Measurement Input, Price Volatility [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value Assumptions Measurement Rate	26.40%	34.60%
Contingent Consideration [Member] | Measurement Input, Discount Rate [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value Assumptions Measurement Rate	14.50%	15.00%
Employment Agreement Award [Member] | Measurement Input, Discount Rate [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value Assumptions Measurement Rate	11.00%	11.00%
Employment Agreement Award [Member] | Measurement Input, Long-term Revenue Growth Rate [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value Assumptions Measurement Rate	2.50%	2.50%
Redeemable Noncontrolling Interest [Member] | Measurement Input, Discount Rate [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value Assumptions Measurement Rate	10.50%	10.50%
Redeemable Noncontrolling Interest [Member] | Measurement Input, Long-term Revenue Growth Rate [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value Assumptions Measurement Rate	1.00%	1.00%

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GOODWILL AND RADIO BROADCASTING LICENSES - Additional Information (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2019
Radio Broadcasting Licenses [Member]
GOODWILL AND RADIO BROADCASTING LICENSES
Impairment charge (in millions)	$ 3.8	$ 3.8
Radio Market Reporting Units [Member]
GOODWILL AND RADIO BROADCASTING LICENSES
Goodwill, Impairment Loss	$ 2.7

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
COMPREHENSIVE INCOME	$ 5,687	$ 23,375	$ 9,845	$ 24,749
LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS	328	331	999	670
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$ 5,359	$ 23,044	$ 8,846	$ 24,079

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SEGMENT INFORMATION (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
SEGMENT INFORMATION
Net Revenue:		$ 111,055	$ 110,730	$ 331,075	$ 325,557
Operating Expenses (including stock-based compensation and excluding depreciation and amortization and impairment of long-lived assets):		75,995	70,296	233,694	229,903
Depreciation and Amortization:		2,593	8,333	14,451	24,869
Impairment of Long-Lived Assets:		0	0	3,800	6,556
Operating income (loss):		32,467	32,101	79,130	64,229
Capital expenditures by segment are as follows:		1,837	4,399	3,947	6,477
Total Assets:		1,261,501		1,261,501		$ 1,237,409
Radio Broadcasting
SEGMENT INFORMATION
Net Revenue:		46,467	45,958	132,528	131,924
Operating Expenses (including stock-based compensation and excluding depreciation and amortization and impairment of long-lived assets):		28,929	29,373	86,580	85,588
Depreciation and Amortization:		791	872	2,510	2,590
Impairment of Long-Lived Assets:				3,800	6,556
Operating income (loss):		16,747	15,713	39,638	37,190
Capital expenditures by segment are as follows:		1,406	2,663	2,269	3,232
Total Assets:		723,861		723,861		717,400
Radio Broadcasting | Intersegment Eliminations [Member]
SEGMENT INFORMATION
Net Revenue:		(480)	(200)	(1,627)	(1,956)
Reach Media
SEGMENT INFORMATION
Net Revenue:		10,917	10,822	36,660	33,721
Operating Expenses (including stock-based compensation and excluding depreciation and amortization and impairment of long-lived assets):		8,936	8,740	30,727	29,700
Depreciation and Amortization:		60	63	178	189
Operating income (loss):		1,921	2,019	5,755	3,832
Capital expenditures by segment are as follows:		31	37	97	83
Total Assets:		37,831		37,831		34,388
Digital
SEGMENT INFORMATION
Net Revenue:		8,170	8,749	23,280	23,454
Operating Expenses (including stock-based compensation and excluding depreciation and amortization and impairment of long-lived assets):		7,460	9,363	22,099	28,830
Depreciation and Amortization:		474	482	1,395	1,435
Operating income (loss):		236	(1,096)	(214)	(6,811)
Capital expenditures by segment are as follows:		348	327	1,066	1,087
Total Assets:		26,262		26,262		24,389
Cable Television
SEGMENT INFORMATION
Net Revenue:		45,981	45,401	140,234	138,414
Operating Expenses (including stock-based compensation and excluding depreciation and amortization and impairment of long-lived assets):		23,677	22,795	74,540	72,072
Depreciation and Amortization:		953	6,577	9,430	19,690
Operating income (loss):		21,351	16,029	56,264	46,652
Capital expenditures by segment are as follows:		15	474	173	573
Total Assets:		398,088		398,088		402,511
Corporate/Eliminations
SEGMENT INFORMATION
Net Revenue:	[1]	(480)	(200)	(1,627)	(1,956)
Operating Expenses (including stock-based compensation and excluding depreciation and amortization and impairment of long-lived assets):		6,993	25	19,748	13,713
Depreciation and Amortization:		315	339	938	965
Operating income (loss):		(7,788)	(564)	(22,313)	(16,634)
Capital expenditures by segment are as follows:		37	$ 898	342	$ 1,502
Total Assets:		$ 75,459		$ 75,459		$ 58,721

[1] Intercompany revenue included in net revenue above is as follows:

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INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
INCOME TAXES
Income Tax Expense (Benefit)	$ 6,535	$ (8,173)	$ 8,342	$ (10,914)
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest, Total	$ 12,222	$ 15,202	$ 18,187	$ 13,835
Effective Income Tax Rate Reconciliation, Percent			45.90%
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent			35.50%
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount			$ 1,900

XML

STOCKHOLDERS' EQUITY (Tables)

9 Months Ended

Sep. 30, 2019

STOCKHOLDERS' EQUITY

Schedule of Share-based Compensation, Stock Options, Activity

				Weighted-Average
				Remaining	Aggregate
	Number of	Weighted-Average		Contractual Term (In	Intrinsic
	Options	Exercise Price		Years)	Value
Outstanding at December 31, 2018	3,569,000	$	2.12	7.19	$	130,000
Grants	653,000	$	2.17
Exercised	15,000	$	1.90
Forfeited/cancelled/expired/settled	10,000	$	1.90
Balance as of September 30, 2019	4,197,000	$	2.13	6.95	$	296,000
Vested and expected to vest at September 30, 2019	4,143,000	$	2.13	6.93	$	295,000
Unvested at September 30, 2019	835,000	$	2.11	9.36	$	4,000
Exercisable at September 30, 2019	3,362,000	$	2.13	6.35	$	292,000

Schedule of Share-based Compensation, Restricted Stock Units Award Activity

		Average
		Fair Value
		at Grant
	Shares	Date
Unvested at December 31, 2018	2,124,000	$	1.85
Grants	2,380,000	$	2.15
Vested	(2,604,000)	$	1.92
Forfeited/cancelled/expired	(37,000)	$	2.34
Unvested at September 30, 2019	1,863,000	$	2.14

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
BASIC NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS
Net income attributable to common stockholders	$ 5,359	$ 23,044	$ 8,846	$ 24,079
Denominator:
Denominator for basic net income per share - weighted average outstanding shares	44,315,077	45,128,341	44,912,673	45,946,820
Effect of dilutive securities:
Stock options and restricted stock	1,803,625	2,334,017	2,052,572	2,429,542
Denominator for diluted net income per share - weighted-average outstanding shares	46,118,702	47,462,358	46,965,245	48,376,362
Net income attributable to common stockholders per share - basic	$ 0.12	$ 0.51	$ 0.20	$ 0.52
Net income attributable to common stockholders per share -diluted	$ 0.12	$ 0.49	$ 0.19	$ 0.50

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GOODWILL AND RADIO BROADCASTING LICENSES - Valuation of Goodwill (Details) - Radio Market Reporting Units [Member]	Sep. 30, 2018
Schedule of Goodwill, Radio Broadcasting Licenses And Other Intangible Assets [Line Items]
Discount Rate	9.00%
Minimum [Member]
Schedule of Goodwill, Radio Broadcasting Licenses And Other Intangible Assets [Line Items]
Year 1 Market Revenue Growth Rate Range	1.20%
Long-term Market Revenue Growth Rate Range (Years 6 - 10)	1.00%
Mature Market Share Range	9.00%
Mature Operating Profit Margin Range	21.70%
Maximum [Member]
Schedule of Goodwill, Radio Broadcasting Licenses And Other Intangible Assets [Line Items]
Year 1 Market Revenue Growth Rate Range	35.20%
Long-term Market Revenue Growth Rate Range (Years 6 - 10)	1.50%
Mature Market Share Range	15.60%
Mature Operating Profit Margin Range	31.80%

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Maturities of lease (Details) $ in Thousands	Sep. 30, 2019 USD ($)
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
For the remaining three months ending December 31, 2019	$ 3,229
2020	13,268
2021	12,479
2022	11,657
2023	9,963
Thereafter	19,837
Total future lease payments	70,433
Imputed interest	(17,947)
Total	$ 52,486

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CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
CONSOLIDATED STATEMENTS OF OPERATIONS
NET REVENUE	$ 111,055	$ 110,730	$ 331,075	$ 325,557
OPERATING EXPENSES:
Programming and technical including stock-based compensation of $23 and $30, and $70 and $30, respectively	30,412	30,982	91,886	93,504
Selling, general and administrative, including stock-based compensation of $263 and $166, and $460 and $582, respectively	36,125	36,530	114,080	112,413
Corporate selling, general and administrative, including stock-based compensation of $1,595 and $938, and $2,062 and $3,023, respectively	9,458	2,784	27,728	23,986
Depreciation and amortization	2,593	8,333	14,451	24,869
Impairment of long-lived assets	0	0	3,800	6,556
Total operating expenses	78,588	78,629	251,945	261,328
Operating income	32,467	32,101	79,130	64,229
INTEREST INCOME	45	33	131	194
INTEREST EXPENSE	21,589	18,987	65,743	57,423
GAIN ON RETIREMENT OF DEBT	0	(120)	0	(985)
OTHER INCOME, net	(1,299)	(1,935)	(4,669)	(5,850)
Income before provision for (benefit from) income taxes and noncontrolling interests in income of subsidiaries	12,222	15,202	18,187	13,835
PROVISION FOR (BENEFIT FROM) INCOME TAXES	6,535	(8,173)	8,342	(10,914)
CONSOLIDATED NET INCOME	5,687	23,375	9,845	24,749
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS	328	331	999	670
CONSOLIDATED NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$ 5,359	$ 23,044	$ 8,846	$ 24,079
BASIC NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS
Net income attributable to common stockholders	$ 0.12	$ 0.51	$ 0.20	$ 0.52
DILUTED NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS
Net income attributable to common stockholders	$ 0.12	$ 0.49	$ 0.19	$ 0.50
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic	44,315,077	45,128,341	44,912,673	45,946,820
Diluted	46,118,702	47,462,358	46,965,245	48,376,362

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Allowance for doubtful accounts receivable (in dollars)	$ 6,965	$ 8,249
Convertible Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Convertible Preferred stock, shares authorized	1,000,000	1,000,000
Convertible Preferred stock, shares outstanding	0	0
Common Stock Class A [Member]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	30,000,000	30,000,000
Common stock, shares issued	1,582,576	1,637,472
Common stock, shares outstanding	1,582,576	1,637,472
Common Stock Class B [Member]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	2,861,843	2,861,843
Common stock, shares outstanding	2,861,843	2,861,843
Common Stock Class C [Member]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	2,928,906	2,928,906
Common stock, shares outstanding	2,928,906	2,928,906
Common Stock Class D [Member]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	38,652,083	38,845,917
Common stock, shares outstanding	38,652,083	38,845,917

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ACQUISITIONS AND DISPOSITIONS

9 Months Ended

Sep. 30, 2019

ACQUISITIONS AND DISPOSITIONS

ACQUISITIONS AND DISPOSITIONS

2.    ACQUISITIONS AND DISPOSITIONS:

On October 20, 2011, we entered into a time brokerage agreement (“TBA”) with WGPR, Inc. (“WGPR”). Pursuant to the TBA, beginning October 24, 2011, we began to broadcast programs produced, owned or acquired by the Company on WGPR’s Detroit radio station, WGPR-FM. We pay a monthly fee as well as certain operating costs of WGPR-FM, and in exchange we retain all revenues from the sale of the advertising within the programming we provide. Under the terms of the TBA, WGPR has also granted us certain rights of first negotiation and first refusal with respect to the sale of WGPR-FM by WGPR and with respect to any potential time brokerage agreement for WGPR-FM covering any time period subsequent to the term of the TBA. The original term of the TBA was through December 31, 2014; however, in September 2014, we entered into an amendment to the TBA to extend the term of the TBA through December 31, 2019.

On August 31, 2019, the Company closed on its previously announced sale of assets of its Detroit, Michigan radio station, WDMK-FM and three translators W228CJ, W252BX, and W260CB for approximately $13.5 million to Beasley Broadcast Group, Inc. The Company recognized a loss of $509,000 on the sale of the station during the quarter ended September 30, 2019.

On January 30, 2017, the Company entered into an asset purchase agreement to sell certain land, towers and equipment to a third party for $25 million. On May 2, 2017, the Company closed on its previously announced sale, and is leasing certain assets back from the buyer as a part of its normal operations. The Company received proceeds of approximately $25.0 million, resulting in an overall net gain on sale of approximately $22.5 million, of which approximately $14.4 million was recognized immediately during the second quarter of 2017, and approximately $8.1 million which was deferred and was recognized into income ratably over the lease term of ten years. Upon adoption of ASC 842 on January 1, 2019, the unamortized portion of this deferred gain, net of tax, was recognized as a cumulative adjustment to equity.

On August 8, 2018, the Company closed on its previously announced sale of the assets of one of its Detroit, Michigan radio stations, WPZR-FM (102.7 FM), to Educational Media Foundation, of California, for total consideration of approximately $12.7 million, of which approximately $12.2 million was received in cash. As part of the deal, the Company received 3 FM translators that service the Detroit metropolitan area. These signals were combined with the existing FM translator to multicast the Detroit Praise Network. The Company recognized an immaterial loss on the sale of the station during the year ended December 31, 2018.

On August 9, 2018, the Company closed on its previously announced acquisition of the assets of the radio station The Team 980 (WTEM 980 AM) from Red Zebra Broadcasting. Upon closing, the Company also entered into an agreement with the Washington Redskins to ensure that all Redskins games, as well as pregame and postgame programming, will remain on The Team 980. The Company’s purchase accounting to reflect the fair value of assets acquired and liabilities assumed consisted of approximately $2.0 million to radio broadcasting licenses, $1.1 million to land and land improvements, $512,000 to towers, $91,000 to goodwill, $206,000 to advertiser agreements, and $254,000 to other property and equipment assets.

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STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2019

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY

6.    STOCKHOLDERS’ EQUITY:

Stock Repurchase Program

From time to time, the Company’s Board of Directors has authorized repurchases of shares of the Company’s Class A and Class D common stock. On May 5, 2018, the Company authorized repurchases of up to $5.0 million through December 31, 2018. In addition, on December 20, 2018, the Company authorized repurchases up to $1.0 million through December 31, 2019 and on May 10, 2019, the Company authorized repurchases up to $2.0 million through December 31, 2019. On July 1, 2019, the Company authorized repurchases up to $800,000 through December 31, 2019. As of September 30, 2019, there was no amount remaining under any of these authorizations with respect to the Company’s Class A and Class D common stock. Under open authorizations, repurchases may be made from time to time in the open market or in privately negotiated transactions in accordance with applicable laws and regulations. Shares are retired when repurchased. The timing and extent of any repurchases will depend upon prevailing market conditions, the trading price of the Company’s Class A and/or Class D common stock and other factors, and subject to restrictions under applicable law. When in effect, the Company executes upon stock repurchase programs in a manner consistent with market conditions and the interests of the stockholders, including maximizing stockholder value. During the three months ended September 30, 2019, the Company repurchased 6,345 shares of Class A common stock in the amount of $14,000 at an average price of $2.20 per share and repurchased 448,742 shares of Class D common stock in the amount of $975,000 at an average price of $2.17 per share.  During the three months ended September 30, 2018, the Company repurchased 3,928 shares of Class A common stock in the amount of $9,000 at an average price of $2.26 per share and repurchased 702,282 shares of Class D common stock in the amount of approximately $1.5 million at an average price of $2.15 per share.  During the nine months ended September 30, 2019, the Company repurchased 54,896 shares of Class A common stock in the amount of $120,000 at an average price of $2.19 per share and repurchased 1,709,315 shares of Class D common stock in the amount of approximately $3.5 million at an average price of $2.06 per share. During the nine months ended September 30, 2018, the Company repurchased 4,160 shares of Class A common stock in the amount of $9,000 at an average price of $2.26 per share and repurchased 2,463,350 shares of Class D common stock in the amount of approximately $5.1 million at an average price of $2.05 per share.

In addition, the Company has limited but ongoing authority to purchase shares of Class D common stock (in one or more transactions at any time there remain outstanding grants) under the Company’s 2009 Stock Plan and 2019 Equity and Performance Incentive Plan (as defined below). As of May 21, 2019, the 2019 Equity and Performance Incentive Plan will be used to satisfy any employee or other recipient tax obligations in connection with the exercise of an option or a share grant under the 2009 Stock Plan, to the extent that the Company has capacity under its financing agreements (i.e., its current credit facilities and indentures) (each a “Stock Vest Tax Repurchase”). During the three months ended September 30, 2019, the Company executed a Stock Vest Tax Repurchase of 13,264 shares of Class D Common Stock in the amount of $25,000 at an average price of $1.87 per share. During the three months ended September 30, 2018, the Company executed a Stock Vest Tax Repurchase of 20,787 shares of Class D Common Stock in the amount of $44,000 at an average price of $2.10 per share. During the nine months ended September 30, 2019, the Company executed a Stock Vest Tax Repurchase of 871,383 shares of Class D Common Stock in the amount of approximately $1.7 million at an average price of $1.94 per share. During the nine months ended September 30, 2018, the Company executed a Stock Vest Tax Repurchase of 599,224 shares of Class D Common Stock in the amount of approximately $1.1 million at an average price of $1.82 per share.

Stock Option and Restricted Stock Grant Plan

Our 2009 stock option and restricted stock plan ("the 2009 Stock Plan") was originally approved by the stockholders at the Company’s annual meeting on December 16, 2009. The Company had the authority to issue up to 8,250,000 shares of Class D Common Stock under the 2009 Stock Plan. Since its original approval, from time to time, the Board of Directors adopted and, as required, our stockholders approved certain amendments to and restatement of the 2009 Stock Plan (the “Amended and Restated 2009 Stock Plan”). The amendments under the Amended and Restated 2009 Stock Plan primarily affected (i) the number of shares with respect to which options and restricted stock grants may be granted under the 2009 Stock Plan and (ii) the maximum number of shares that can be awarded to any individual in any one calendar year. On April 13, 2015, the Board of Directors adopted, and our stockholders approved on June 2, 2015, an amendment that replenished the authorized plan shares, increasing the number of shares of Class D common stock available for grant back up to 8,250,000 shares. Our new stock option and restricted stock plan ("2019 Equity and Performance Incentive Plan"), currently in effect was approved by the stockholders at the Company's annual meeting on May 21, 2019. The Board of Directors adopted, and on May 21, 2019, our stockholders approved, the 2019 Equity and Performance Incentive Plan which is funded with 5,500,000 shares of Class D Common Stock.  As of September 30, 2019, 3,247,067 shares of Class D common stock were available for grant under the 2019 Equity and Performance Incentive Plan.

On August 7, 2017, the Compensation Committee awarded Catherine Hughes, Chairperson, 474,609 restricted shares of the Company’s Class D common stock, and stock options to purchase 210,937 shares of the Company’s Class D common stock. The grants were effective January 5, 2018, and vested on January 5, 2019.

On June 12, 2019, the Compensation Committee awarded Catherine Hughes, Chairperson, 393,685 restricted shares of the Company's Class D common stock, and stock options to purchase 174,971 shares of the Company's Class D common stock. The grants were effective July 5, 2019 and will vest on January 6, 2020.

On August 7, 2017, the Compensation Committee awarded Alfred Liggins, Chief Executive Officer and President, 791,015 restricted shares of the Company’s Class D common stock, and stock options to purchase 351,562 shares of the Company’s Class D common stock. The grants were effective January 5, 2018, and vested on January 5, 2019.

On June 12, 2019, the Compensation Committee awarded Alfred Liggins, Chief Executive Officer and President, 656,142 restricted shares of the Company's Class D common stock, and stock options to purchase 291,619 shares of the Company's Class D common stock. The grants were effective July 5, 2019 and will vest on January 6, 2020.

On August 7, 2017, the Compensation Committee awarded Peter Thompson, Chief Financial Officer, 270,833 restricted shares of the Company’s Class D common stock, and stock options to purchase 120,370 shares of the Company’s Class D common stock. The grants were effective January 5, 2018, and vested on January 5, 2019.

On June 12, 2019, the Compensation Committee awarded Peter Thompson, Chief Financial Officer, 224,654 restricted shares of the Company’s Class D common stock, and stock options to purchase 99,846 shares of the Company’s Class D common stock. The grants were effective July 5, 2019 and will vest on January 6, 2020.

On August 7, 2017, the Compensation Committee awarded 575,262 shares of restricted stock and 470,000 stock options to certain employees pursuant to the Company’s long-term incentive plan. The grants were effective August 7, 2017. 470,000 shares of restricted stock and 470,000 stock options will vest in three installments, with the first installment of 33% vesting on January 5, 2018, and the second installment vesting on January 5, 2019, and the remaining installment vesting on January 5, 2020.  105,262 shares of restricted stock immediately vested on August 7, 2017.

On October 2, 2017, Karen Wishart, our Chief Administrative Officer, as part of her employment agreement, received an equity grant of 37,500 shares of the Company’s Class D common stock as well as a grant of options to purchase 37,500 shares of the Company’s Class D common stock. The grants vest in equal increments on each of October 2, 2018, October 2, 2019 and October 2, 2020.

On June 12, 2019, the Compensation Committee awarded David Kantor, Chief Executive Officer - Radio Division, 195,242 restricted shares of the Company's Class D common stock, and stock options to purchase 86,774 shares of the Company's Class D common stock. The grants were effective July 5, 2019 and will vest on January 6, 2020.

Pursuant to the terms of the 2019 Equity and Performance Incentive Plan and subject to the Company's insider trading policy, a portion of each recipient's vested shares may be sold in the open market for tax purposes on or about the vesting dates.

Stock-based compensation expense for the three months ended September 30, 2019 and 2018, was approximately $1.9 million and $1.1 million, respectively, and for the nine months ended September 30, 2019 and 2018, was approximately $2.6 million and $3.6 million, respectively.

The Company granted 653,210 stock options stock options during the three and nine months ended September 30, 2019. The Company did not grant stock options during the three months ended September 30, 2018 and granted 732,869 stock options during the nine months ended September 30, 2018.

Transactions and other information relating to stock options for the nine months ended September 30, 2019, are summarized below:

				Weighted-Average
				Remaining	Aggregate
	Number of	Weighted-Average		Contractual Term (In	Intrinsic
	Options	Exercise Price		Years)	Value
Outstanding at December 31, 2018	3,569,000	$	2.12	7.19	$	130,000
Grants	653,000	$	2.17
Exercised	15,000	$	1.90
Forfeited/cancelled/expired/settled	10,000	$	1.90
Balance as of September 30, 2019	4,197,000	$	2.13	6.95	$	296,000
Vested and expected to vest at September 30, 2019	4,143,000	$	2.13	6.93	$	295,000
Unvested at September 30, 2019	835,000	$	2.11	9.36	$	4,000
Exercisable at September 30, 2019	3,362,000	$	2.13	6.35	$	292,000

The aggregate intrinsic value in the table above represents the difference between the Company’s stock closing price on the last day of trading during the nine months ended September 30, 2019, and the exercise price, multiplied by the number of shares that would have been received by the holders of in-the-money options had all the option holders exercised their options on September 30, 2019. This amount changes based on the fair market value of the Company’s stock.

There were no options exercised during the three months ended September 30, 2019  and there were 15,000 options exercised during the nine months ended September 30, 2019. There were no options exercised during the three months ended September 30, 2018 and there were 58,190 options exercised during the nine months ended September 30, 2018. No options vested during the three months ended September 30, 2019 and 834,530 options vested during the nine months ended September 30, 2019. No options vested during the three months ended September 30, 2018 and 831,937 options vested during the nine months ended September 30, 2018.

As of September 30, 2019, $561,000 of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of three months. The weighted-average fair value per share of shares underlying stock options was $1.54 at September 30, 2019.

The Company granted 1,499,723 shares of restricted stock during the three months ended September 30, 2019 and granted 2,379,962 shares of restricted stock during the nine months ended September 30, 2019. Each of the four non-executive directors received 25,000 shares of restricted stock or $50,000 worth of restricted stock based upon the closing price of the Company's Class D common stock on June 17, 2019. The Company did not grant restricted stock during the three months ended September 30, 2018 and granted 1,758,428 shares of restricted stock during the nine months ended September 30, 2018. Each of the four non-executive directors received 23,256 shares of restricted stock or $50,000 worth of restricted stock based upon the closing price of the Company's Class D common stock on June 15, 2018.  The restricted stock grants for the non-executive directors vest over a two-year period in equal 50% installments.

Transactions and other information relating to restricted stock grants for the nine months ended September 30, 2019, are summarized below:

		Average
		Fair Value
		at Grant
	Shares	Date
Unvested at December 31, 2018	2,124,000	$	1.85
Grants	2,380,000	$	2.15
Vested	(2,604,000)	$	1.92
Forfeited/cancelled/expired	(37,000)	$	2.34
Unvested at September 30, 2019	1,863,000	$	2.14

Restricted stock grants were and are included in the Company’s outstanding share numbers on the effective date of grant. As of September 30, 2019, approximately $2.3 million of total unrecognized compensation cost related to restricted stock grants is expected to be recognized over the weighted-average period of five months.

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2019

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

(a)Organization

Urban One, Inc. (a Delaware corporation referred to as “Urban One”) and its subsidiaries (collectively, the “Company”) is an urban-oriented, multi-media company that primarily targets African-American and urban consumers. Our core business is our radio broadcasting franchise which is the largest radio broadcasting operation that primarily targets African-American and urban listeners. As of September 30, 2019, we owned and/or operated 58 broadcast stations (including all HD stations, translator stations and the low power television station we operate) located in 15 of the most populous African-American markets in the United States. While a core source of our revenue has historically been and remains the sale of local and national advertising for broadcast on our radio stations, our strategy is to operate the premier multi-media entertainment and information content provider targeting African-American and urban consumers. Thus, we have diversified our revenue streams by making acquisitions and investments in other complementary media properties. Our diverse media and entertainment interests include TV One, LLC (“TV One”), an African-American targeted cable television network; our 80.0% ownership interest in Reach Media, Inc. (“Reach Media”) which operates the Tom Joyner Morning Show and our other syndicated programming assets, including the Rickey Smiley Morning Show, the Russ Parr Morning Show and the DL Hughley Show; and Interactive One, LLC (“Interactive One”), our wholly owned digital platform serving the African-American community through social content, news, information, and entertainment websites, including its Cassius, Bossip, HipHopWired and MadameNoire digital platforms and brands. We also hold a minority ownership interest in MGM National Harbor, a gaming resort located in Prince George’s County, Maryland. Through our national multi-media operations, we provide advertisers with a unique and powerful delivery mechanism to the African-American and urban audiences.

On January 19, 2019, the Company launched CLEO TV, a lifestyle and entertainment network targeting Millennial and Gen X women of color. CLEO TV offers quality content that defies negative and cultural stereotypes of today’s modern women. The results of CLEO TV’s operations will be reflected in the Company’s cable television segment.

Our core radio broadcasting franchise operates under the brand “Radio One.”  We also operate our other brands, such as TV One, Reach Media and Interactive One, while developing additional branding reflective of our diverse media operations and targeting our African-American and urban audiences.

As part of our consolidated financial statements, consistent with our financial reporting structure and how the Company currently manages its businesses, we have provided selected financial information on the Company’s four reportable segments: (i) radio broadcasting; (ii) Reach Media; (iii) digital; and (iv) cable television. (See Note 7 – Segment Information.)

Interim Financial Statements

(b)Interim Financial Statements

The interim consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In management’s opinion, the interim financial data presented herein include all adjustments (which include only normal recurring adjustments) necessary for a fair presentation. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations.

Certain reclassifications have been made to prior year sources of revenue to conform to the current year presentation as disclosed in Note 1 (d) – Revenue Recognition. These reclassifications had no effect on any other previously reported or consolidated total net revenue, net income or loss or any other statement of operations, balance sheet or cash flow amounts.

Results for interim periods are not necessarily indicative of results to be expected for the full year. This Form 10‑Q should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2018 Annual Report on Form 10‑K.

Financial Instruments

(c)Financial Instruments

Financial instruments as of September 30, 2019 and December 31, 2018, consisted of cash and cash equivalents, restricted cash, trade accounts receivable, asset-backed credit facility, long-term debt and redeemable noncontrolling interests. The carrying amounts approximated fair value for each of these financial instruments as of September 30, 2019 and December 31, 2018, except for the Company’s long-term debt. The 9.25% Senior Subordinated Notes, which were due in February 2020 (the “2020 Notes”) had a carrying value of approximately $2.0 million and fair value of approximately $2.0 million as of December 31, 2018. On January 17, 2019, the Company announced that it had given the required notice under the indenture governing its 2020 Notes to redeem for cash all outstanding aggregate principal amount of its Notes to the extent outstanding on February 15, 2019. On February 15, 2019, the remaining 2020 Notes were redeemed. The fair values of the 2020 Notes, classified as Level 2 instruments, were determined based on the trading values of these instruments in an inactive market as of the reporting date. The 7.375% Senior Secured Notes that are due in March 2022 (the “2022 Notes”) had a carrying value of approximately $350.0 million and fair value of approximately $343.0 million as of September 30, 2019. The 2022 Notes had a carrying value of approximately $350.0 million and fair value of approximately $332.5 million as of December 31, 2018. The fair values of the 2022 Notes, classified as Level 2 instruments, were determined based on the trading values of these instruments in an inactive market as of the reporting date. On April 18, 2017, the Company closed on a $350.0 million senior secured credit facility (the “2017 Credit Facility”) which had a carrying value of approximately $321.5 million and fair value of approximately $310.5 million as of September 30, 2019, and had a carrying value of approximately $323.9 million and fair value of approximately $305.8 million as of December 31, 2018. The fair value of the 2017 Credit Facility, classified as a Level 2 instrument, was determined based on the trading values of this instrument in an inactive market as of the reporting date. On December 20, 2018, the Company closed on a new $192.0 million unsecured credit facility (the “2018 Credit Facility”) which had a carrying value of approximately $170.7 million and fair value of approximately $174.2 million as of September 30, 2019, and had a carrying value of approximately $192.0 million and fair value of approximately $195.9 million as of December 31, 2018. The fair value of the 2018 Credit Facility, classified as a Level 2 instrument, was determined based on the trading values of this instrument in an inactive market as of the reporting date. On December 20, 2018, the Company also closed on a new $50.0 million secured credit loan (the “MGM National Harbor Loan”) which had a carrying value of approximately $51.6 million and fair value of approximately $57.8 million as of September 30, 2019, and had a carrying value of approximately $50.1 million and fair value of approximately $56.1 million as of December 31, 2018. The fair value of the 2018 MGM National Harbor Loan, classified as a Level 2 instrument, was determined based on the trading values of this instrument in an inactive market as of the reporting date. The senior unsecured promissory note in the aggregate principal amount of approximately $11.9 million (the “Comcast Note”) had a fair value and carrying value of approximately $11.9 million as of December 31, 2018. On February 15, 2019, the Comcast Note was paid in full and retired. The fair value of the Comcast Note, classified as a Level 3 instrument, was determined based on the fair value of a similar instrument as of the reporting date using updated interest rate information derived from changes in interest rates since inception to the reporting date. There was no balance outstanding on the Company’s asset-backed credit facility (the “ABL Facility”) as of September 30, 2019 and December 31, 2018.

Revenue Recognition

(d)Revenue Recognition

On January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers” which requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company elected to use the modified retrospective method, but the adoption of the standard did not have a material impact to our financial statements. In general, our spot advertising (both radio and cable television) as well as our digital advertising continues to be recognized when aired and delivered. For our cable television affiliate revenue, the Company grants a license to the affiliate to access its television programming content through the license period, and the Company earns a usage based royalty when the usage occurs, consistent with our previous revenue recognition policy. Finally, for event advertising, the performance obligation is satisfied at a point in time when the activity associated with the event is completed.

Within our radio broadcasting and Reach Media segments, the Company recognizes revenue for broadcast advertising at a point in time when a commercial spot runs. The revenue is reported net of agency and outside sales representative commissions. Agency and outside sales representative commissions are calculated based on a stated percentage applied to gross billing. Generally, clients remit the gross billing amount to the agency or outside sales representative, and the agency or outside sales representative remits the gross billing, less their commission, to the Company. For our radio broadcasting and Reach Media segments, agency and outside sales representative commissions were approximately $6.2 million and $6.0 million for the three months ended September 30, 2019 and 2018, respectively. Agency and outside sales representative commissions were approximately $17.2 million in each of the nine months ended September 30, 2019 and 2018.

Within our digital segment, including Interactive One, which generates the majority of the Company’s digital revenue, revenue is principally derived from advertising services on non-radio station branded but Company-owned websites. Advertising services include the sale of banner and sponsorship advertisements. Advertising revenue is recognized at a point in time either as impressions (the number of times advertisements appear in viewed pages) are delivered, when “click through” purchases are made, or ratably over the contract period, where applicable. In addition, Interactive One derives revenue from its studio operations, in which it provides third-party clients with publishing services including digital platforms and related expertise. In the case of the studio operations, revenue is recognized primarily through fixed contractual monthly fees and/or as a share of the third party’s reported revenue.

Our cable television segment derives advertising revenue from the sale of television air time to advertisers and recognizes revenue when the advertisements are run. Advertising revenue is recognized at a point in time when the individual spots run. To the extent there is a shortfall in contracts where the ratings were guaranteed, a portion of the revenue is deferred until the shortfall is settled, typically by providing additional advertising units generally within one year of the original airing. Our cable television segment also derives revenue from affiliate fees under the terms of various multi-year affiliation agreements based on a per subscriber fee multiplied by the most recent subscriber counts reported by the applicable affiliate. The Company recognizes the affiliate fee revenue at a point in time as its performance obligation to provide the programming is met. The Company has a right of payment each month as the programming services and related obligations have been satisfied. For our cable television segment, agency and outside sales representative commissions were approximately $3.4 million and $3.5 million for the three months ended September 30, 2019 and 2018, respectively. Agency and outside sales representative commissions were approximately $10.9 million and $10.4 million for the nine months ended September 30, 2019 and 2018, respectively.

Revenue by Contract Type

The following chart shows our net revenue (and sources) for the three and nine months ended September 30, 2019 and 2018:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
	(In thousands, unaudited)
Net Revenue:
Radio Advertising	$	50,813	$	51,293	$	144,958	$	144,358
Political Advertising		300		917		741		2,300
Digital Advertising		8,171		8,734		23,270		23,439
Cable Television Advertising		20,649		19,157		60,658		56,211
Cable Television Affiliate Fees		25,330		26,244		79,404		81,513
Event Revenues & Other		5,792		4,385		22,044		17,736
Net Revenue (as reported)	$	111,055	$	110,730	$	331,075	$	325,557

If economic conditions change, or other adverse factors outside our control arise, our operations could be negatively impacted.

Contract assets and liabilities

Contract assets (unbilled receivables) and contract liabilities (customer advances and unearned income and unearned event income) that are not separately stated in our consolidated balance sheets at September 30, 2019, December 31, 2018 and September 30, 2018 were as follows:

	September 30, 2019		December 31, 2018		September 30, 2018
	(Unaudited)		(In thousands)		(Unaudited)
Contract assets:
Unbilled receivables	$	5,968	$	3,425	$	4,268
Contract liabilities:
Customer advances and unearned income	$	3,403	$	3,766	$	4,588
Unearned event income		3,831		3,864		3,163

Unbilled receivables consists of earned revenue on behalf of customers that have not yet been billed. Customer advances and unearned income represents advance payments by customers for future services under contract that are generally incurred in the near term. Unearned event income represents payments by customers for upcoming events.

For customer advances and unearned income as of January 1, 2019, $250,000 and approximately $2.3 million, respectively, was recognized as revenue during the three and nine months ended September 30, 2019. For customer advances and unearned income as of January 1, 2018, $241,000 and approximately $2.0 million was recognized as revenue during the three and nine months ended September 30, 2018, respectively. For unearned event income as of January 1, 2019, approximately $3.9 million was recognized during the three and nine months ended September 30, 2019, as the event took place during the second quarter of 2019.  For unearned event income as of January 1, 2018, approximately $4.1 million was recognized during the nine months ended September 30, 2018, as the event took place during the second quarter of 2018.

Practical expedients and exemptions

We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within selling, general and administrative expenses.

We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less or (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

Launch Support

(e)Launch Support

The cable television segment has entered into certain affiliate agreements requiring various payments for launch support. Launch support assets are used to initiate carriage under affiliation agreements and are amortized over the term of the respective contracts. The Company did not pay any launch support for carriage initiation during the three and nine months ended September 30, 2019. For the three and nine months ended September 30, 2018, there was a non-cash launch support addition of $976,000 for carriage initiation. The weighted-average amortization period for launch support was approximately 7.8 years as of September 30, 2019, and approximately 7.8 years as of December 31, 2018. The remaining weighted-average amortization period for launch support was 5.3 years and 6.1 years as of September 30, 2019 and December 31, 2018, respectively. Amortization is recorded as a reduction to revenue to the extent that revenue is recognized from the vendor, and any excess amortization is recorded as launch support amortization expense. For the three months ended September 30, 2019 and 2018, launch support asset amortization of $106,000 and $106,000, respectively, was recorded as a reduction of revenue, and $151,000 and $0, respectively, was recorded as an operating expense in selling, general and administrative expenses. For the nine months ended September 30, 2019 and 2018, launch support asset amortization of $317,000 and $317,000, respectively, was recorded as a reduction of revenue, and $455,000 and $0, respectively, was recorded as an operating expense in selling, general and administrative expenses. Launch assets are included in other intangible assets on the consolidated balance sheets, except for the portion of the unamortized balance that is expected to be amortized within one year which is included in other current assets.

Barter Transactions

(f)Barter Transactions

For barter transactions, the Company provides broadcast advertising time in exchange for programming content and certain services. The Company includes the value of such exchanges in both broadcasting net revenue and operating expenses. The valuation of barter time is based upon the fair value of the network advertising time provided for the programming content and services received. For the three months ended September 30, 2019 and 2018, barter transaction revenues were $574,000 and $713,000, respectively. Additionally, for the three months ended September 30, 2019 and 2018, barter transaction costs were reflected in programming and technical expenses of $424,000 and $673,000, respectively, and selling, general and administrative expenses of $150,000 and $40,000, respectively. For the nine months ended September 30, 2019 and 2018, barter transaction revenues were approximately $1.7 million and $2.2 million, respectively. Additionally, for the nine months ended September 30, 2019 and 2018, barter transaction costs were reflected in programming and technical expenses of approximately $1.3 million and $2.1 million, respectively, and selling, general and administrative expenses of $451,000 and $121,000, respectively. The Company reached an agreement with a cable television provider related to an adjustment of previously estimated affiliate fees in the amount of approximately $2.0 million for the nine months ended September 30, 2018, as final reporting became available. As settlement of this agreement, the Company will receive approximately $2.0 million in marketing services that will be utilized in future periods.

Earnings Per Share

(g)Earnings Per Share

Basic earnings per share is computed on the basis of the weighted average number of shares of common stock (Classes A, B, C and D) outstanding during the period. Diluted earnings per share is computed on the basis of the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. The Company’s potentially dilutive securities include stock options and unvested restricted stock. Diluted earnings per share considers the impact of potentially dilutive securities except in periods in which there is a net loss, as the inclusion of the potentially dilutive common shares would have an anti-dilutive effect.

The following table sets forth the calculation of basic and diluted earnings per share from continuing operations (in thousands, except share and per share data):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
	(Unaudited)
	(In Thousands)
Numerator:
Net income attributable to common stockholders	$	5,359	$	23,044	$	8,846	$	24,079
Denominator:
Denominator for basic net income per share - weighted average outstanding shares		44,315,077		45,128,341		44,912,673		45,946,820
Effect of dilutive securities:
Stock options and restricted stock		1,803,625		2,334,017		2,052,572		2,429,542
Denominator for diluted net income per share - weighted-average outstanding shares		46,118,702		47,462,358		46,965,245		48,376,362
Net income attributable to common stockholders per share – basic	$	0.12	$	0.51	$	0.20	$	0.52
Net income attributable to common stockholders per share – diluted	$	0.12	$	0.49	$	0.19	$	0.50

Fair Value Measurements

(h)Fair Value Measurements

We report our financial and non-financial assets and liabilities measured at fair value on a recurring and non-recurring basis under the provisions of ASC 820, “Fair Value Measurements and Disclosures.” ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.

The fair value framework requires the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:

Level 1: Inputs are unadjusted quoted prices in active markets for identical assets and liabilities that can be accessed at the measurement date.

Level 2: Observable inputs other than those included in Level 1 (i.e., quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets).

Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value instrument.

As of September 30, 2019, and December 31, 2018, respectively, the fair values of our financial assets and liabilities measured at fair value on a recurring basis are categorized as follows:

	Total		Level 1		Level 2		Level 3
	(Unaudited)
	(In thousands)
As of September 30, 2019
Liabilities subject to fair value measurement:
Contingent consideration (a)	$	2,155		—		—	$	2,155
Employment agreement award (b)		26,374		—		—		26,374
Total	$	28,529	$	—	$	—	$	28,529
Mezzanine equity subject to fair value measurement:
Redeemable noncontrolling interests (c)	$	9,247	$	—	$	—	$	9,247
As of December 31, 2018
Liabilities subject to fair value measurement:
Contingent consideration (a)	$	2,831		—		—	$	2,831
Employment agreement award (b)		25,660		—		—		25,660
Total	$	28,491	$	—	$	—	$	28,491
Mezzanine equity subject to fair value measurement:
Redeemable noncontrolling interests (c)	$	10,232	$	—	$	—	$	10,232

(a)This balance is measured based on the income approach to valuation in the form of a Monte Carlo simulation. The Monte Carlo simulation method is suited to instances such as this where there is non-diversifiable risk. It is also well-suited to multi-year, path dependent scenarios. Significant inputs to the Monte Carlo method include forecasted net revenues, discount rate and expected volatility. A third-party valuation firm assisted the Company in estimating the contingent consideration.

(b)Each quarter, pursuant to an employment agreement (the “Employment Agreement”) executed in April 2008, the Chief Executive Officer (“CEO”) is eligible to receive an award (the “Employment Agreement Award”) amount equal to approximately 4% of any proceeds from distributions or other liquidity events in excess of the return of the Company’s aggregate investment in TV One. The Company reviews the factors underlying this award at the end of each quarter including the valuation of TV One (based on the estimated enterprise fair value of TV One as determined by a discounted cash flow analysis),  and an assessment of the probability that the Employment Agreement will be renewed and contain this provision. The Company’s obligation to pay the award was triggered after the Company recovered the aggregate amount of its capital contribution in TV One and only upon actual receipt of distributions of cash or marketable securities or proceeds from a liquidity event with respect to the Company’s aggregate investment in TV One. The CEO was fully vested in the award upon execution of the Employment Agreement, and the award lapses if the CEO voluntarily leaves the Company or is terminated for cause. A third-party valuation firm assisted the Company in estimating TV One’s fair value using a discounted cash flow analysis. Significant inputs to the discounted cash flow analysis include forecasted operating results, discount rate and a terminal value. In September 2014, the Compensation Committee of the Board of Directors of the Company approved terms for a new employment agreement with the CEO, including a renewal of the Employment Agreement Award upon similar terms as in the prior Employment Agreement. Prior to the quarter ended September 30, 2018, there were probability factors included in the calculation of the award related to the likelihood that the award will be realized. During the quarter ended September 30, 2018, management changed the methodology used in calculating the fair value of the Company’s Employment Agreement Award liability to simplify the calculation. As part of the simplified calculation, the Company eliminated certain adjustments made to its aggregate investment in TV One, including the treatment of historical dividends paid and potential distribution of assets upon liquidation. The Compensation Committee of the Board of Directors approved the simplified method which eliminates certain assumptions that were historically used in the determination of the fair value of this liability.

(c)The redeemable noncontrolling interest in Reach Media is measured at fair value using a discounted cash flow methodology. A third-party valuation firm assisted the Company in estimating the fair value. Significant inputs to the discounted cash flow analysis include forecasted operating results, discount rate and a terminal value.

There were no transfers in or out of Level 1, 2, or 3 during the nine months ended September 30, 2019. The following table presents the changes in Level 3 liabilities measured at fair value on a recurring basis for the nine months ended September 30, 2019:

			Employment		Redeemable
	Contingent		Agreement		Noncontrolling
	Consideration		Award		Interests
	(In thousands)
Balance at December 31, 2018	$	2,831	$	25,660	$	10,232
Net income attributable to noncontrolling interests		—		—		999
Distribution		(895)		(2,861)		—
Dividends paid to noncontrolling interests		—		—		(1,000)
Change in fair value		219		3,575		(984)
Balance at September 30, 2019	$	2,155	$	26,374	$	9,247
The amount of total (losses)/income for the period included in earnings attributable to the change in unrealized losses/income relating to assets and liabilities still held at the reporting date	$	(219)	$	(3,575)	$	—

Losses and income included in earnings were recorded in the consolidated statements of operations as corporate selling, general and administrative expenses for the employment agreement award for the three and nine months ended September 30, 2019 and 2018. Losses included in earnings were recorded in the consolidated statements of operations as selling, general and administrative expenses for contingent consideration for the three and nine months ended September 30, 2019 and 2018.

					As of
			As of		December 31,
		Significant	September 30, 2019		2018
		Unobservable	Significant Unobservable
Level 3 liabilities	Valuation Technique	Inputs	Input Value
Contingent consideration	Monte Carlo Simulation	Expected volatility	26.4	%	34.6	%
Contingent consideration	Monte Carlo Simulation	Discount Rate	14.5	%	15.0	%
Employment agreement award	Discounted Cash Flow	Discount Rate	11.0	%	11.0	%
Employment agreement award	Discounted Cash Flow	Long-term Growth Rate	2.5	%	2.5	%
Redeemable noncontrolling interest	Discounted Cash Flow	Discount Rate	10.5	%	10.5	%
Redeemable noncontrolling interest	Discounted Cash Flow	Long-term Growth Rate	1.0	%	1.0	%

Any significant increases or decreases in discount rate or long-term growth rate inputs could result in significantly higher or lower fair value measurements.

Certain assets and liabilities are measured at fair value on a non-recurring basis using Level 3 inputs as defined in ASC 820. These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances. Included in this category are goodwill, radio broadcasting licenses and other intangible assets, net, that are written down to fair value when they are determined to be impaired, as well as content assets that are periodically written down to net realizable value. For the nine months ended September 30, 2019, the Company recorded an impairment charge of approximately $3.8 million related to its Detroit market radio broadcasting licenses. The Company concluded these assets were not impaired during the three months ended September 30, 2019. For the nine months ended September 30, 2018, the Company recorded an impairment charge of approximately $2.7 million related to its Charlotte market goodwill and also a charge of approximately $3.8 million associated with our Detroit market radio broadcasting licenses. The Company concluded these assets were not impaired during the three months ended September 30, 2018.

Leases

(i)Leases

As of January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”) Topic 842, Leases, using the modification retrospective transition method. Prior comparative periods will be not be restated under this new standard and therefore those amounts are not presented below. The Company adopted a package of practical expedients as allowed by the transition guidance which permits the Company to carry forward the historical assessment of whether contracts contain or are leases, classification of leases and the remaining lease terms. The Company has also made an accounting policy election to exclude leases with an initial term of twelve months or less from recognition on the consolidated balance sheet. Short-term leases will be expensed over the lease term. The Company also elected to separate the consideration in the lease contracts between the lease and non-lease components. All variable non-lease components are expensed as incurred.

ASC 842 results in significant changes to the balance sheets of lessees, most significantly by requiring the recognition of right of use (“ROU”) assets and lease liabilities by lessees for those leases classified as operating leases. Upon adoption of ASC 842, deferred rent balances, which were historically presented separately, were combined and presented net within the ROU asset. The adoption of this standard resulted in the Company recording an increase in ROU assets of approximately $49.8 million and an increase in lease liabilities of approximately $54.1 million. Approximately $4.3 million in deferred rent was also reclassified from liabilities to offset the applicable ROU asset. The tax impact of ASC 842, which primarily consisted of deferred gains related to previous transactions that were historically accounted for as sale and operating leasebacks in accordance with ASC Topic 840 were recognized as part of the cumulative-effect adjustment to retained earnings, resulting in an increase to retained earnings, net of tax, of approximately $5.8 million.

Many of the Company’s leases provide for renewal terms and escalation clauses, which are factored into calculating the lease liabilities when appropriate. The implicit rate within the Company’s lease agreements is generally not determinable and as such the Company’s collateralized borrowing rate is used.

The following table sets forth the components of lease expense and the weighted average remaining lease term and the weighted average discount rate for the Company’s leases as of September 30, 2019, dollars in thousands:

Operating Lease Cost (Cost resulting from lease payments)	$	9,642
Variable Lease Cost (Cost excluded from lease payments)		116
Total Lease Cost	$	9,758
Operating Lease - Operating Cash Flows (Fixed Payments)	$	10,010
Operating Lease - Operating Cash Flows (Liability Reduction)	$	6,653
Weighted Average Lease Term - Operating Leases		5.83	years
Weighted Average Discount Rate - Operating Leases		11.00	%

As of September 30, 2019, maturities of lease liabilities were as follows:

For the Year Ended December 31,	(Dollars in thousands)
For the remaining three months ending December 31, 2019	$	3,229
2020		13,268
2021		12,479
2022		11,657
2023		9,963
Thereafter		19,837
Total future lease payments		70,433
Imputed interest		(17,947)
Total	$	52,486

Impact of Recently Issued Accounting Pronouncements

(j)Impact of Recently Issued Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016‑13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016‑13”). ASU 2016‑13 is intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This standard will be effective for interim and annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted for annual periods beginning after December 15, 2018. The Company has not yet completed its assessment of the impact of the new standard on its consolidated financial statements.

In August 2016, the FASB issued ASU 2016‑15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (A Consensus of the Emerging Issues Task Force)” (“ASU 2016‑15”). ASU 2016‑15 is intended to reduce differences in practice in how certain transactions are classified in the statement of cash flows. This standard will be effective for interim and annual reporting periods beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The Company adopted the new standard during the first quarter of 2018 and its adoption did not have a material impact on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017‑04, “Intangibles – Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment” (“ASU 2017‑04”). ASU 2017‑04 is intended to simplify the accounting for goodwill impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. This standard will be effective for interim and annual goodwill impairment tests beginning after December 15, 2019, with early adoption permitted on testing dates after January 1, 2017. The Company adopted the new standard during the first quarter of 2018 and its adoption did not have a material impact on its consolidated financial statements.

Redeemable noncontrolling interest

(k)Redeemable noncontrolling interest

Redeemable noncontrolling interests are interests in subsidiaries that are redeemable outside of the Company’s control either for cash or other assets. These interests are classified as mezzanine equity and measured at the greater of estimated redemption value at the end of each reporting period or the historical cost basis of the noncontrolling interests adjusted for cumulative earnings allocations. The resulting increases or decreases in the estimated redemption amount are affected by corresponding charges against retained earnings, or in the absence of retained earnings, additional paid-in-capital.

Investments - Cost Method

(l)Investments – Cost Method

On April 10, 2015, the Company made a $5 million investment in MGM’s world-class casino property, MGM National Harbor, located in Prince George’s County, Maryland, which has a predominately African-American demographic profile. On November 30, 2016, the Company contributed an additional $35 million to complete its investment. This investment further diversified our platform in the entertainment industry while still focusing on our core demographic. We account for this investment on a cost basis. Our MGM National Harbor investment entitles us to an annual cash distribution based on net gaming revenue. Our MGM investment is included in other assets on the consolidated balance sheets and its income in the amount of approximately $1.8 million and $1.7 million, for the three months ended September 30, 2019 and 2018, respectively, and approximately $5.2 million and $5.1 million, for the nine months ended September 30, 2019 and 2018, respectively, is recorded in other income on the consolidated statements of operations. The cost method investment is subject to a periodic impairment review in the normal course. The Company reviewed the investment and concluded that no impairment to the carrying value was required. As of December 4, 2018, the Company’s interest in the MGM National Harbor Casino secures the MGM National Harbor Loan  (as defined in Note 4 – Long-Term Debt.)

Content Assets

(m)Content Assets

Our cable television segment has entered into contracts to acquire entertainment programming rights and programs from distributors and producers. The license periods granted in these contracts generally run from one year to ten years. Contract payments are made in installments over terms that are generally shorter than the contract period. Each contract is recorded as an asset and a liability at an amount equal to its gross contractual commitment when the license period begins and the program is available for its first airing. Acquired content is generally amortized on a straight-line basis over the term of the license which reflects the estimated usage. For certain content for which the pattern of usage is accelerated, amortization is based upon the actual usage. Amortization of content assets is recorded in the consolidated statement of operations as programming and technical expenses.

The Company also has programming for which the Company has engaged third parties to develop and produce, and it owns most or all rights (commissioned programming). In accordance with ASC 926, content amortization expense for each period is recognized based on the revenue forecast model, which approximates the proportion that estimated advertising and affiliate revenues for the current period represent in relation to the estimated remaining total lifetime revenues as of the beginning of the current period. Management regularly reviews, and revises when necessary, its total revenue estimates, which may result in a change in the rate of amortization and/or a write-down of the asset to fair value.

Acquired program rights are recorded at the lower of unamortized cost or estimated net realizable value. Estimated net realizable values are based on the estimated revenues associated with the program materials and related expenses. The Company recorded an impairment and recorded additional amortization expense of $602,000 as a result of evaluating its contracts for recoverability for the three and nine months ended September 30, 2019. The Company did not record any additional amortization expense as a result of evaluating its contracts for recoverability for the nine months ended September 30, 2018. All produced and licensed content is classified as a long-term asset, except for the portion of the unamortized content balance that is expected to be amortized within one year which is classified as a current asset.

Tax incentives that state and local governments offer that are directly measured based on production activities are recorded as reductions in production costs.

Derivatives

(n)Derivatives

The Company recognizes all derivatives at fair value on the consolidated balance sheets as either an asset or liability. The accounting for changes in the fair value of a derivative, including certain derivative instruments embedded in other contracts, depends on the intended use of the derivative and the resulting designation.

The Company accounts for the Employment Agreement Award as a derivative instrument in accordance with ASC 815, “Derivatives and Hedging.” The Company estimated the fair value of the award at September 30, 2019, and December 31, 2018, to be approximately $26.4 million and $25.7 million, respectively, and accordingly adjusted its liability to this amount. The long-term portion is recorded in other long-term liabilities and the current portion is recorded in other current liabilities in the consolidated balance sheets. The expense associated with the Employment Agreement Award was recorded in the consolidated statements of operations as corporate selling, general and administrative expenses and was $860,000 and approximately $(6.6) million for the three months ended September 30, 2019, and 2018, respectively, and was approximately $3.6 million and $(3.7) million for the nine months ended September 30, 2019 and 2018, respectively.

The Company’s obligation to pay the Employment Agreement Award was triggered after the Company recovered the aggregate amount of its capital contribution in TV One and only upon actual receipt of distributions of cash or marketable securities or proceeds from a liquidity event with respect to the Company’s aggregate investment in TV One. The CEO was fully vested in the award upon execution of the employment agreement, and the award lapses if the CEO voluntarily leaves the Company, or is terminated for cause. In September 2014, the Compensation Committee of the Board of Directors of the Company approved terms for a new employment agreement with the CEO, including a renewal of the Employment Agreement Award upon similar terms as in the prior employment agreement. Prior to the quarter ended September 30, 2018, there were probability factors included in the calculation of the award related to the likelihood that the award will be realized. During the quarter ended September 30, 2018, management changed the methodology used in calculating the fair value of the Company’s Employment Agreement Award liability to simplify the calculation. As part of the simplified calculation, the Company eliminated certain adjustments made to its aggregate investment in TV One, including the treatment of historical dividends paid and potential distribution of assets upon liquidation. The Compensation Committee of the Board of Directors approved the simplified method which eliminates certain assumptions that were historically used in the determination of the fair value of this liability.

Related Party Transactions

(o)Related Party Transactions

Reach Media operates the Tom Joyner Foundation’s Fantastic Voyage® (the “Fantastic Voyage®”), a fund raising event, on behalf of the Tom Joyner Foundation, Inc. (the “Foundation”), a 501(c)(3) entity. The agreements under which the Fantastic Voyage® operates provide that Reach Media provide all necessary operations of the cruise and that Reach Media will be reimbursed its expenditures and receive a fee plus a performance bonus for the cruise. Distributions from operating income or operating revenues, depending upon the year, are in the following order until the funds are depleted: up to $250,000 to the Foundation, reimbursement of Reach’s expenditures, up to $1.0 million fee to Reach, a performance bonus of up to 50% of remaining operating income to Reach, with the balance remaining with the Foundation. For years 2020 through 2022, $250,000 to the Foundation is guaranteed. Reach Media’s earnings for the Fantastic Voyage® may not exceed $1.7 million in 2018 and 2019, nor $1.75 million in 2020 and thereafter. The Foundation’s remittances to Reach Media under the agreements are limited to its Fantastic Voyage®-related cash collections. Reach Media bears the risk should the Fantastic Voyage® sustain a loss and bears all credit risk associated with the related customer cabin sales. The agreement between Reach and the Foundation automatically renews annually unless termination is mutually agreed or unless a party’s financial requirements are not met, in which case that party not in breach of their obligations has the right, but not the obligation, to terminate unilaterally. As of September 30, 2019 and December 31, 2018, the Foundation owed Reach Media approximately $2.1 million and $208,000, respectively, under the agreements for the operations on the cruises.

For the nine months ended September 30, 2019, Reach Media's revenues, expenses, and operating income for the Fantastic Voyage were approximately $10.4 million, $8.7 million, and $1.7 million, respectively, and for the nine months ended September 30, 2018, approximately $9.3 million, $7.6 million, and $1.7 million, respectively. The Fantastic Voyage took place during the second quarters of both 2019 and 2018.

Additionally, Reach Media provides office facilities (including office space, telecommunications facilities, and office equipment) to the Foundation. Such services are provided to the Foundation on a pass-through basis at cost. Additionally, from time to time, the Foundation reimburses Reach Media for expenditures paid on its behalf at Reach Media-related events. Under these arrangements, as of September 30, 2019, and December 31, 2018, the Foundation owed $32,000 and $34,000, respectively, to Reach Media.

Karen Wishart is employed as an Executive Vice President, Chief Administrative Officer of the Company and as a Vice President of each of the Company’s subsidiaries. Ms. Wishart owns a controlling interest in a temporary staffing and recruiting services firm. Subsequent to Ms. Wishart’s hiring on October 2, 2017, on a limited basis, the staffing firm can continue to provide new staffing and/or recruiting services to the Company. However, the staffing firm will only be reimbursed for direct expenses actually incurred. During the three months ended September 30, 2019 and 2018 and during the nine months ended September 30, 2019, the Company did not pay any amount to the staffing and recruiting services firm.  During the nine months ended September 30, 2018, the Company paid the staffing and recruiting services firm $25,000.

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Programming And Technical [Member]
Allocated Share-based Compensation Expense	$ 23	$ 30	$ 70	$ 30
Selling, General and Administrative Expenses [Member]
Allocated Share-based Compensation Expense	263	166	460	582
Corporate Selling, General and Administrative [Member]
Allocated Share-based Compensation Expense	$ 1,595	$ 938	$ 2,062	$ 3,023

XML

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Convertible Preferred Stock [Member]	Common Stock Class A [Member]	Common Stock Class B [Member]	Common Stock Class C [Member]	Common Stock Class D [Member]	Total
BALANCE (As Revised) at Dec. 31, 2017	$ 983,582	$ (940,976)	$ 0	$ 2	$ 3	$ 3	$ 41	$ 42,655
Consolidated net income	0	24,079	0	0	0	0	0	24,079
Repurchase of common stock	(6,127)	0	0	0	0	0	(3)	(6,130)
Repurchase of share-based equity awards	(1,077)	0	0	0	0	0	0	(1,077)
Exercise of options for 15,000 and 58,190 shares of common stock	85	0	0	0	0	0	0	85
Adjustment of redeemable noncontrolling interests to estimated redemption value	(463)	0	0	0	0	0	0	(463)
Stock-based compensation expense	3,633	0	0	0	0	0	2	3,635
BALANCE at Sep. 30, 2018	979,633	(916,897)	0	2	3	3	40	62,784
BALANCE	978,628	(799,975)	0	2	3	3	39	178,700
Correction of tax adjustment	0	(3,559)	0	0	0	0	0	(3,559)
BALANCE (As Revised) at Dec. 31, 2018	978,628	(803,534)	0	2	3	3	39	175,141
Consolidated net income	0	8,846	0	0	0	0	0	8,846
Repurchase of common stock	(5,321)	0	0	0	0	0	(2)	(5,323)
Exercise of options for 15,000 and 58,190 shares of common stock	29	0	0	0	0	0	0	29
Adjustment of redeemable noncontrolling interests to estimated redemption value	984	0	0	0	0	0	0	984
Issuance of 755,239 shares of Class D common stock	1,609	0	0	0	0	0	0	1,609
Stock-based compensation expense	2,590	0	0	0	0	0	2	2,592
BALANCE at Sep. 30, 2019	978,519	(788,885)	0	2	3	3	39	189,681
Adoption of ASC 842	$ 0	$ 5,803	$ 0	$ 0	$ 0	$ 0	$ 0	$ 5,803

XML

GOODWILL AND RADIO BROADCASTING LICENSES - Goodwill Valuation Results (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
GOODWILL AND RADIO BROADCASTING LICENSES
Gross goodwill	$ 378,079
Accumulated impairment losses	(132,507)
Net goodwill at September 30, 2019	245,572	$ 245,572
Radio Broadcasting Segment [Member]
GOODWILL AND RADIO BROADCASTING LICENSES
Gross goodwill	155,000
Accumulated impairment losses	(101,848)
Net goodwill at September 30, 2019	53,152
Reach Media Segment [Member]
GOODWILL AND RADIO BROADCASTING LICENSES
Gross goodwill	30,468
Accumulated impairment losses	(16,114)
Net goodwill at September 30, 2019	14,354
Digital Segment [Member]
GOODWILL AND RADIO BROADCASTING LICENSES
Gross goodwill	27,567
Accumulated impairment losses	(14,545)
Net goodwill at September 30, 2019	13,022
Cable Television Segment [Member]
GOODWILL AND RADIO BROADCASTING LICENSES
Gross goodwill	165,044
Net goodwill at September 30, 2019	$ 165,044

XML

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($)			3 Months Ended		9 Months Ended		12 Months Ended
	Jan. 02, 2019	Jan. 01, 2019	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Dec. 20, 2018	Apr. 18, 2017	Nov. 30, 2016	Apr. 10, 2015
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Long-term Debt, Gross							$ 350,000,000
Debt Instrument, Fair Value Disclosure							$ 332,500,000
Revenue from Contract with Customer, Including Assessed Tax			$ 111,055,000	$ 110,730,000	$ 331,075,000	$ 325,557,000
Debt Instrument, Interest Rate, Stated Percentage							9.25%
Reassessed Estimated Fair Value of Award			26,400,000		26,400,000		$ 25,700,000
Related Party Transaction, Due from (to) Related Party, Total			2,100,000		2,100,000		208,000
Due to Related Parties			32,000		32,000		34,000
Operating Income (Loss)			32,467,000	32,101,000	79,130,000	64,229,000
Impairment and amartization expense			602,000		602,000
Operating Expenses, Total			78,588,000	78,629,000	251,945,000	261,328,000
Unearned Event Income					3,831,000	3,163,000	3,864,000
Selling, General and Administrative Expense, Total			36,125,000	36,530,000	114,080,000	112,413,000
Impairment of Long-Lived Assets Held-for-use			0	0	3,800,000	6,556,000
Operating Lease, Right-of-Use Asset			47,949,000		47,949,000		$ 0
Operating Lease, Liability			52,486,000		52,486,000
Accounting Standards Update 2016-02 [Member]
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Lease, Practical Expedients, Package [true false]		true
Operating Lease, Right-of-Use Asset		$ 49,800,000
Operating Lease, Liability		54,100,000
Cumulative Effect on Retained Earnings, Net of Tax	$ 5,800,000
Deferred Rent Credit		$ 4,300,000
Barter Transactions [Member]
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Revenue from Contract with Customer, Including Assessed Tax			574,000	713,000	1,700,000	2,200,000
Cost of Goods and Services Sold			424,000	673,000	1,300,000	2,100,000
Adjustment in Revenue				2,000,000
Marketing Services Fee Receivable			2,000,000		2,000,000
Selling, General and Administrative Expense, Total			150,000	40,000	451,000	121,000
Radio broadcasting and Reach Media segments [Member]
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Sales Commissions and Fees			6,200,000	6,000,000	17,200,000	17,200,000
Fantastic Voyage [Member]
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Operating Income Guarantee Through 2018 and 2019					1,700,000
Operating Income Guarantee Through 2020 and Thereafter					$ 1,750,000
Launch Support Assets [Member]
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Finite Lived Intangible Assets Weighted Average Amortization Period					7 years 9 months 18 days		7 years 9 months 18 days
Finite Lived Intangible Assets Remaining Weighted Average Amortization Period					5 years 3 months 18 days		6 years 1 month 6 days
Additional Non-cash Launch Support for Carriage Initiation				976,000		976,000
Amortization of Intangible Assets			106,000	106,000	$ 317,000	317,000
Selling, General and Administrative Expense, Total			151,000	0	455,000	0
Detroit Market Radio Broadcasting Licenses [Member]
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Impairment of Long-Lived Assets Held-for-use					3,800,000	3,800,000
Charlotte Market Radio Broadcasting Licenses [Member]
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Impairment of Long-Lived Assets Held-for-use						2,700,000
Tom Joyner Foundation Inc [Member]
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Reimbursement Expenditure Guarantee					$ 1,000,000
Percentage of Performance Bonus					50.00%
Tom Joyner Foundation Inc [Member] | Fantastic Voyage [Member]
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Operating Income Guarantee					$ 250,000
Chief Executive Officer [Member]
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Percentage Of Award Amount							4.00%
9.25% Senior Subordinated Notes due February 2020 [Member]
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Long-term Debt, Gross			$ 0		$ 0		$ 2,000,000
Debt Instrument, Fair Value Disclosure							2,000,000
Debt Instrument, Interest Rate, Stated Percentage			9.25%		9.25%
Senior Subordinated Notes due March 2022 [Member]
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Long-term Debt, Gross			$ 350,000,000		$ 350,000,000
Debt Instrument, Fair Value Disclosure			$ 343,000,000		$ 343,000,000
Debt Instrument, Interest Rate, Stated Percentage			7.375%		7.375%
MGM National Harbor Loan [Member]
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Long-term Debt, Gross			$ 51,600,000		$ 51,600,000
Debt Instrument, Face Amount			50,000,000		50,000,000
Other Income					5,200,000	5,100,000
ABL Facility [Member]
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Long-term Debt, Gross			0		0		0
Tv One Llc [Member]
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Sales Commissions and Fees			$ 3,400,000	3,500,000	$ 10,900,000	10,400,000
Reach Media Inc [Member]
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Noncontrolling Interest, Ownership Percentage by Parent			80.00%		80.00%
Reach Media Inc [Member] | Fantastic Voyage [Member]
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Revenue from Contract with Customer, Including Assessed Tax					$ 10,400,000	9,300,000
Operating Income (Loss)					1,700,000	1,700,000
Operating Expenses, Total					8,700,000	7,600,000
Customer Advances [Member]
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Revenue from Contract with Customer, Including Assessed Tax			$ 250,000	241,000	250,000	241,000
Unearned Event Income						4,100,000
Unearned Income [Member]
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Revenue from Contract with Customer, Including Assessed Tax			2,300,000	2,000,000	2,300,000	2,000,000
2017 Credit Facility [Member]
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Long-term Debt, Gross			321,500,000		321,500,000		323,900,000		$ 350,000,000
Debt Instrument, Fair Value Disclosure			310,500,000		310,500,000		305,800,000
Debt Instrument, Interest Rate, Stated Percentage									2.00%
Debt Instrument, Face Amount									$ 350,000,000
2018 Credit Facility [Member]
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Long-term Debt, Gross			170,700,000		170,700,000		192,000,000
Debt Instrument, Fair Value Disclosure			$ 174,200,000		$ 174,200,000		$ 195,900,000
Debt Instrument, Interest Rate, Stated Percentage							12.875%
Debt Instrument, Face Amount								$ 192,000,000
Staffing And Recruiting Services [Member]
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Related Party Transaction, Amounts of Transaction						25,000
Comcast Note [Member]
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Long-term Debt, Gross							$ 11,900,000
Debt Instrument, Fair Value Disclosure							11,900,000
Debt Instrument, Interest Rate, Stated Percentage			10.47%		10.47%
Debt Instrument, Face Amount			$ 11,900,000		$ 11,900,000
Employment Agreement Award [Member]
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Selling General And Administrative Expense (Benefit)			860,000	(6,600,000)	3,600,000	$ (3,700,000)
MGM National Harbor [Member]
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES [Line Items]
Long-term Debt, Gross			51,600,000		51,600,000		50,100,000
Debt Instrument, Fair Value Disclosure			57,800,000		$ 57,800,000		$ 56,100,000
Investment Owned, at Cost										$ 35,000,000	$ 5,000,000
Other Income			$ 1,800,000	$ 1,700,000

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SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2019

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

9.    SUBSEQUENT EVENTS:

On October 8, 2019, the Company entered into an amendment to its letter of credit reimbursement and security agreement and extended the term to October 8, 2024. Letters of credit issued under the agreement are required to be collateralized with cash.

XML

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2019

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.    ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

(a)Organization

Urban One, Inc. (a Delaware corporation referred to as “Urban One”) and its subsidiaries (collectively, the “Company”) is an urban-oriented, multi-media company that primarily targets African-American and urban consumers. Our core business is our radio broadcasting franchise which is the largest radio broadcasting operation that primarily targets African-American and urban listeners. As of September 30, 2019, we owned and/or operated 58 broadcast stations (including all HD stations, translator stations and the low power television station we operate) located in 15 of the most populous African-American markets in the United States. While a core source of our revenue has historically been and remains the sale of local and national advertising for broadcast on our radio stations, our strategy is to operate the premier multi-media entertainment and information content provider targeting African-American and urban consumers. Thus, we have diversified our revenue streams by making acquisitions and investments in other complementary media properties. Our diverse media and entertainment interests include TV One, LLC (“TV One”), an African-American targeted cable television network; our 80.0% ownership interest in Reach Media, Inc. (“Reach Media”) which operates the Tom Joyner Morning Show and our other syndicated programming assets, including the Rickey Smiley Morning Show, the Russ Parr Morning Show and the DL Hughley Show; and Interactive One, LLC (“Interactive One”), our wholly owned digital platform serving the African-American community through social content, news, information, and entertainment websites, including its Cassius, Bossip, HipHopWired and MadameNoire digital platforms and brands. We also hold a minority ownership interest in MGM National Harbor, a gaming resort located in Prince George’s County, Maryland. Through our national multi-media operations, we provide advertisers with a unique and powerful delivery mechanism to the African-American and urban audiences.

On January 19, 2019, the Company launched CLEO TV, a lifestyle and entertainment network targeting Millennial and Gen X women of color. CLEO TV offers quality content that defies negative and cultural stereotypes of today’s modern women. The results of CLEO TV’s operations will be reflected in the Company’s cable television segment.

Our core radio broadcasting franchise operates under the brand “Radio One.”  We also operate our other brands, such as TV One, Reach Media and Interactive One, while developing additional branding reflective of our diverse media operations and targeting our African-American and urban audiences.

As part of our consolidated financial statements, consistent with our financial reporting structure and how the Company currently manages its businesses, we have provided selected financial information on the Company’s four reportable segments: (i) radio broadcasting; (ii) Reach Media; (iii) digital; and (iv) cable television. (See Note 7 – Segment Information.)

(b)Interim Financial Statements

The interim consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In management’s opinion, the interim financial data presented herein include all adjustments (which include only normal recurring adjustments) necessary for a fair presentation. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations.

Certain reclassifications have been made to prior year sources of revenue to conform to the current year presentation as disclosed in Note 1 (d) – Revenue Recognition. These reclassifications had no effect on any other previously reported or consolidated total net revenue, net income or loss or any other statement of operations, balance sheet or cash flow amounts.

Results for interim periods are not necessarily indicative of results to be expected for the full year. This Form 10‑Q should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2018 Annual Report on Form 10‑K.

(c)Financial Instruments

Financial instruments as of September 30, 2019 and December 31, 2018, consisted of cash and cash equivalents, restricted cash, trade accounts receivable, asset-backed credit facility, long-term debt and redeemable noncontrolling interests. The carrying amounts approximated fair value for each of these financial instruments as of September 30, 2019 and December 31, 2018, except for the Company’s long-term debt. The 9.25% Senior Subordinated Notes, which were due in February 2020 (the “2020 Notes”) had a carrying value of approximately $2.0 million and fair value of approximately $2.0 million as of December 31, 2018. On January 17, 2019, the Company announced that it had given the required notice under the indenture governing its 2020 Notes to redeem for cash all outstanding aggregate principal amount of its Notes to the extent outstanding on February 15, 2019. On February 15, 2019, the remaining 2020 Notes were redeemed. The fair values of the 2020 Notes, classified as Level 2 instruments, were determined based on the trading values of these instruments in an inactive market as of the reporting date. The 7.375% Senior Secured Notes that are due in March 2022 (the “2022 Notes”) had a carrying value of approximately $350.0 million and fair value of approximately $343.0 million as of September 30, 2019. The 2022 Notes had a carrying value of approximately $350.0 million and fair value of approximately $332.5 million as of December 31, 2018. The fair values of the 2022 Notes, classified as Level 2 instruments, were determined based on the trading values of these instruments in an inactive market as of the reporting date. On April 18, 2017, the Company closed on a $350.0 million senior secured credit facility (the “2017 Credit Facility”) which had a carrying value of approximately $321.5 million and fair value of approximately $310.5 million as of September 30, 2019, and had a carrying value of approximately $323.9 million and fair value of approximately $305.8 million as of December 31, 2018. The fair value of the 2017 Credit Facility, classified as a Level 2 instrument, was determined based on the trading values of this instrument in an inactive market as of the reporting date. On December 20, 2018, the Company closed on a new $192.0 million unsecured credit facility (the “2018 Credit Facility”) which had a carrying value of approximately $170.7 million and fair value of approximately $174.2 million as of September 30, 2019, and had a carrying value of approximately $192.0 million and fair value of approximately $195.9 million as of December 31, 2018. The fair value of the 2018 Credit Facility, classified as a Level 2 instrument, was determined based on the trading values of this instrument in an inactive market as of the reporting date. On December 20, 2018, the Company also closed on a new $50.0 million secured credit loan (the “MGM National Harbor Loan”) which had a carrying value of approximately $51.6 million and fair value of approximately $57.8 million as of September 30, 2019, and had a carrying value of approximately $50.1 million and fair value of approximately $56.1 million as of December 31, 2018. The fair value of the 2018 MGM National Harbor Loan, classified as a Level 2 instrument, was determined based on the trading values of this instrument in an inactive market as of the reporting date. The senior unsecured promissory note in the aggregate principal amount of approximately $11.9 million (the “Comcast Note”) had a fair value and carrying value of approximately $11.9 million as of December 31, 2018. On February 15, 2019, the Comcast Note was paid in full and retired. The fair value of the Comcast Note, classified as a Level 3 instrument, was determined based on the fair value of a similar instrument as of the reporting date using updated interest rate information derived from changes in interest rates since inception to the reporting date. There was no balance outstanding on the Company’s asset-backed credit facility (the “ABL Facility”) as of September 30, 2019 and December 31, 2018.

(d)Revenue Recognition

On January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers” which requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company elected to use the modified retrospective method, but the adoption of the standard did not have a material impact to our financial statements. In general, our spot advertising (both radio and cable television) as well as our digital advertising continues to be recognized when aired and delivered. For our cable television affiliate revenue, the Company grants a license to the affiliate to access its television programming content through the license period, and the Company earns a usage based royalty when the usage occurs, consistent with our previous revenue recognition policy. Finally, for event advertising, the performance obligation is satisfied at a point in time when the activity associated with the event is completed.

Within our radio broadcasting and Reach Media segments, the Company recognizes revenue for broadcast advertising at a point in time when a commercial spot runs. The revenue is reported net of agency and outside sales representative commissions. Agency and outside sales representative commissions are calculated based on a stated percentage applied to gross billing. Generally, clients remit the gross billing amount to the agency or outside sales representative, and the agency or outside sales representative remits the gross billing, less their commission, to the Company. For our radio broadcasting and Reach Media segments, agency and outside sales representative commissions were approximately $6.2 million and $6.0 million for the three months ended September 30, 2019 and 2018, respectively. Agency and outside sales representative commissions were approximately $17.2 million in each of the nine months ended September 30, 2019 and 2018.

Within our digital segment, including Interactive One, which generates the majority of the Company’s digital revenue, revenue is principally derived from advertising services on non-radio station branded but Company-owned websites. Advertising services include the sale of banner and sponsorship advertisements. Advertising revenue is recognized at a point in time either as impressions (the number of times advertisements appear in viewed pages) are delivered, when “click through” purchases are made, or ratably over the contract period, where applicable. In addition, Interactive One derives revenue from its studio operations, in which it provides third-party clients with publishing services including digital platforms and related expertise. In the case of the studio operations, revenue is recognized primarily through fixed contractual monthly fees and/or as a share of the third party’s reported revenue.

Our cable television segment derives advertising revenue from the sale of television air time to advertisers and recognizes revenue when the advertisements are run. Advertising revenue is recognized at a point in time when the individual spots run. To the extent there is a shortfall in contracts where the ratings were guaranteed, a portion of the revenue is deferred until the shortfall is settled, typically by providing additional advertising units generally within one year of the original airing. Our cable television segment also derives revenue from affiliate fees under the terms of various multi-year affiliation agreements based on a per subscriber fee multiplied by the most recent subscriber counts reported by the applicable affiliate. The Company recognizes the affiliate fee revenue at a point in time as its performance obligation to provide the programming is met. The Company has a right of payment each month as the programming services and related obligations have been satisfied. For our cable television segment, agency and outside sales representative commissions were approximately $3.4 million and $3.5 million for the three months ended September 30, 2019 and 2018, respectively. Agency and outside sales representative commissions were approximately $10.9 million and $10.4 million for the nine months ended September 30, 2019 and 2018, respectively.

Revenue by Contract Type

The following chart shows our net revenue (and sources) for the three and nine months ended September 30, 2019 and 2018:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
	(In thousands, unaudited)
Net Revenue:
Radio Advertising	$	50,813	$	51,293	$	144,958	$	144,358
Political Advertising		300		917		741		2,300
Digital Advertising		8,171		8,734		23,270		23,439
Cable Television Advertising		20,649		19,157		60,658		56,211
Cable Television Affiliate Fees		25,330		26,244		79,404		81,513
Event Revenues & Other		5,792		4,385		22,044		17,736
Net Revenue (as reported)	$	111,055	$	110,730	$	331,075	$	325,557

If economic conditions change, or other adverse factors outside our control arise, our operations could be negatively impacted.

Contract assets and liabilities

Contract assets (unbilled receivables) and contract liabilities (customer advances and unearned income and unearned event income) that are not separately stated in our consolidated balance sheets at September 30, 2019, December 31, 2018 and September 30, 2018 were as follows:

	September 30, 2019		December 31, 2018		September 30, 2018
	(Unaudited)		(In thousands)		(Unaudited)
Contract assets:
Unbilled receivables	$	5,968	$	3,425	$	4,268
Contract liabilities:
Customer advances and unearned income	$	3,403	$	3,766	$	4,588
Unearned event income		3,831		3,864		3,163

Unbilled receivables consists of earned revenue on behalf of customers that have not yet been billed. Customer advances and unearned income represents advance payments by customers for future services under contract that are generally incurred in the near term. Unearned event income represents payments by customers for upcoming events.

For customer advances and unearned income as of January 1, 2019, $250,000 and approximately $2.3 million, respectively, was recognized as revenue during the three and nine months ended September 30, 2019. For customer advances and unearned income as of January 1, 2018, $241,000 and approximately $2.0 million was recognized as revenue during the three and nine months ended September 30, 2018, respectively. For unearned event income as of January 1, 2019, approximately $3.9 million was recognized during the three and nine months ended September 30, 2019, as the event took place during the second quarter of 2019.  For unearned event income as of January 1, 2018, approximately $4.1 million was recognized during the nine months ended September 30, 2018, as the event took place during the second quarter of 2018.

Practical expedients and exemptions

We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within selling, general and administrative expenses.

We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less or (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

(e)Launch Support

The cable television segment has entered into certain affiliate agreements requiring various payments for launch support. Launch support assets are used to initiate carriage under affiliation agreements and are amortized over the term of the respective contracts. The Company did not pay any launch support for carriage initiation during the three and nine months ended September 30, 2019. For the three and nine months ended September 30, 2018, there was a non-cash launch support addition of $976,000 for carriage initiation. The weighted-average amortization period for launch support was approximately 7.8 years as of September 30, 2019, and approximately 7.8 years as of December 31, 2018. The remaining weighted-average amortization period for launch support was 5.3 years and 6.1 years as of September 30, 2019 and December 31, 2018, respectively. Amortization is recorded as a reduction to revenue to the extent that revenue is recognized from the vendor, and any excess amortization is recorded as launch support amortization expense. For the three months ended September 30, 2019 and 2018, launch support asset amortization of $106,000 and $106,000, respectively, was recorded as a reduction of revenue, and $151,000 and $0, respectively, was recorded as an operating expense in selling, general and administrative expenses. For the nine months ended September 30, 2019 and 2018, launch support asset amortization of $317,000 and $317,000, respectively, was recorded as a reduction of revenue, and $455,000 and $0, respectively, was recorded as an operating expense in selling, general and administrative expenses. Launch assets are included in other intangible assets on the consolidated balance sheets, except for the portion of the unamortized balance that is expected to be amortized within one year which is included in other current assets.

(f)Barter Transactions

For barter transactions, the Company provides broadcast advertising time in exchange for programming content and certain services. The Company includes the value of such exchanges in both broadcasting net revenue and operating expenses. The valuation of barter time is based upon the fair value of the network advertising time provided for the programming content and services received. For the three months ended September 30, 2019 and 2018, barter transaction revenues were $574,000 and $713,000, respectively. Additionally, for the three months ended September 30, 2019 and 2018, barter transaction costs were reflected in programming and technical expenses of $424,000 and $673,000, respectively, and selling, general and administrative expenses of $150,000 and $40,000, respectively. For the nine months ended September 30, 2019 and 2018, barter transaction revenues were approximately $1.7 million and $2.2 million, respectively. Additionally, for the nine months ended September 30, 2019 and 2018, barter transaction costs were reflected in programming and technical expenses of approximately $1.3 million and $2.1 million, respectively, and selling, general and administrative expenses of $451,000 and $121,000, respectively. The Company reached an agreement with a cable television provider related to an adjustment of previously estimated affiliate fees in the amount of approximately $2.0 million for the nine months ended September 30, 2018, as final reporting became available. As settlement of this agreement, the Company will receive approximately $2.0 million in marketing services that will be utilized in future periods.

(g)Earnings Per Share

Basic earnings per share is computed on the basis of the weighted average number of shares of common stock (Classes A, B, C and D) outstanding during the period. Diluted earnings per share is computed on the basis of the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. The Company’s potentially dilutive securities include stock options and unvested restricted stock. Diluted earnings per share considers the impact of potentially dilutive securities except in periods in which there is a net loss, as the inclusion of the potentially dilutive common shares would have an anti-dilutive effect.

The following table sets forth the calculation of basic and diluted earnings per share from continuing operations (in thousands, except share and per share data):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
	(Unaudited)
	(In Thousands)
Numerator:
Net income attributable to common stockholders	$	5,359	$	23,044	$	8,846	$	24,079
Denominator:
Denominator for basic net income per share - weighted average outstanding shares		44,315,077		45,128,341		44,912,673		45,946,820
Effect of dilutive securities:
Stock options and restricted stock		1,803,625		2,334,017		2,052,572		2,429,542
Denominator for diluted net income per share - weighted-average outstanding shares		46,118,702		47,462,358		46,965,245		48,376,362
Net income attributable to common stockholders per share – basic	$	0.12	$	0.51	$	0.20	$	0.52
Net income attributable to common stockholders per share – diluted	$	0.12	$	0.49	$	0.19	$	0.50

(h)Fair Value Measurements

We report our financial and non-financial assets and liabilities measured at fair value on a recurring and non-recurring basis under the provisions of ASC 820, “Fair Value Measurements and Disclosures.” ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.

The fair value framework requires the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:

Level 1: Inputs are unadjusted quoted prices in active markets for identical assets and liabilities that can be accessed at the measurement date.

Level 2: Observable inputs other than those included in Level 1 (i.e., quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets).

Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value instrument.

As of September 30, 2019, and December 31, 2018, respectively, the fair values of our financial assets and liabilities measured at fair value on a recurring basis are categorized as follows:

	Total		Level 1		Level 2		Level 3
	(Unaudited)
	(In thousands)
As of September 30, 2019
Liabilities subject to fair value measurement:
Contingent consideration (a)	$	2,155		—		—	$	2,155
Employment agreement award (b)		26,374		—		—		26,374
Total	$	28,529	$	—	$	—	$	28,529
Mezzanine equity subject to fair value measurement:
Redeemable noncontrolling interests (c)	$	9,247	$	—	$	—	$	9,247
As of December 31, 2018
Liabilities subject to fair value measurement:
Contingent consideration (a)	$	2,831		—		—	$	2,831
Employment agreement award (b)		25,660		—		—		25,660
Total	$	28,491	$	—	$	—	$	28,491
Mezzanine equity subject to fair value measurement:
Redeemable noncontrolling interests (c)	$	10,232	$	—	$	—	$	10,232

(a)This balance is measured based on the income approach to valuation in the form of a Monte Carlo simulation. The Monte Carlo simulation method is suited to instances such as this where there is non-diversifiable risk. It is also well-suited to multi-year, path dependent scenarios. Significant inputs to the Monte Carlo method include forecasted net revenues, discount rate and expected volatility. A third-party valuation firm assisted the Company in estimating the contingent consideration.

(b)Each quarter, pursuant to an employment agreement (the “Employment Agreement”) executed in April 2008, the Chief Executive Officer (“CEO”) is eligible to receive an award (the “Employment Agreement Award”) amount equal to approximately 4% of any proceeds from distributions or other liquidity events in excess of the return of the Company’s aggregate investment in TV One. The Company reviews the factors underlying this award at the end of each quarter including the valuation of TV One (based on the estimated enterprise fair value of TV One as determined by a discounted cash flow analysis),  and an assessment of the probability that the Employment Agreement will be renewed and contain this provision. The Company’s obligation to pay the award was triggered after the Company recovered the aggregate amount of its capital contribution in TV One and only upon actual receipt of distributions of cash or marketable securities or proceeds from a liquidity event with respect to the Company’s aggregate investment in TV One. The CEO was fully vested in the award upon execution of the Employment Agreement, and the award lapses if the CEO voluntarily leaves the Company or is terminated for cause. A third-party valuation firm assisted the Company in estimating TV One’s fair value using a discounted cash flow analysis. Significant inputs to the discounted cash flow analysis include forecasted operating results, discount rate and a terminal value. In September 2014, the Compensation Committee of the Board of Directors of the Company approved terms for a new employment agreement with the CEO, including a renewal of the Employment Agreement Award upon similar terms as in the prior Employment Agreement. Prior to the quarter ended September 30, 2018, there were probability factors included in the calculation of the award related to the likelihood that the award will be realized. During the quarter ended September 30, 2018, management changed the methodology used in calculating the fair value of the Company’s Employment Agreement Award liability to simplify the calculation. As part of the simplified calculation, the Company eliminated certain adjustments made to its aggregate investment in TV One, including the treatment of historical dividends paid and potential distribution of assets upon liquidation. The Compensation Committee of the Board of Directors approved the simplified method which eliminates certain assumptions that were historically used in the determination of the fair value of this liability.

(c)The redeemable noncontrolling interest in Reach Media is measured at fair value using a discounted cash flow methodology. A third-party valuation firm assisted the Company in estimating the fair value. Significant inputs to the discounted cash flow analysis include forecasted operating results, discount rate and a terminal value.

There were no transfers in or out of Level 1, 2, or 3 during the nine months ended September 30, 2019. The following table presents the changes in Level 3 liabilities measured at fair value on a recurring basis for the nine months ended September 30, 2019:

			Employment		Redeemable
	Contingent		Agreement		Noncontrolling
	Consideration		Award		Interests
	(In thousands)
Balance at December 31, 2018	$	2,831	$	25,660	$	10,232
Net income attributable to noncontrolling interests		—		—		999
Distribution		(895)		(2,861)		—
Dividends paid to noncontrolling interests		—		—		(1,000)
Change in fair value		219		3,575		(984)
Balance at September 30, 2019	$	2,155	$	26,374	$	9,247
The amount of total (losses)/income for the period included in earnings attributable to the change in unrealized losses/income relating to assets and liabilities still held at the reporting date	$	(219)	$	(3,575)	$	—

Losses and income included in earnings were recorded in the consolidated statements of operations as corporate selling, general and administrative expenses for the employment agreement award for the three and nine months ended September 30, 2019 and 2018. Losses included in earnings were recorded in the consolidated statements of operations as selling, general and administrative expenses for contingent consideration for the three and nine months ended September 30, 2019 and 2018.

					As of
			As of		December 31,
		Significant	September 30, 2019		2018
		Unobservable	Significant Unobservable
Level 3 liabilities	Valuation Technique	Inputs	Input Value
Contingent consideration	Monte Carlo Simulation	Expected volatility	26.4	%	34.6	%
Contingent consideration	Monte Carlo Simulation	Discount Rate	14.5	%	15.0	%
Employment agreement award	Discounted Cash Flow	Discount Rate	11.0	%	11.0	%
Employment agreement award	Discounted Cash Flow	Long-term Growth Rate	2.5	%	2.5	%
Redeemable noncontrolling interest	Discounted Cash Flow	Discount Rate	10.5	%	10.5	%
Redeemable noncontrolling interest	Discounted Cash Flow	Long-term Growth Rate	1.0	%	1.0	%

Any significant increases or decreases in discount rate or long-term growth rate inputs could result in significantly higher or lower fair value measurements.

Certain assets and liabilities are measured at fair value on a non-recurring basis using Level 3 inputs as defined in ASC 820. These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances. Included in this category are goodwill, radio broadcasting licenses and other intangible assets, net, that are written down to fair value when they are determined to be impaired, as well as content assets that are periodically written down to net realizable value. For the nine months ended September 30, 2019, the Company recorded an impairment charge of approximately $3.8 million related to its Detroit market radio broadcasting licenses. The Company concluded these assets were not impaired during the three months ended September 30, 2019. For the nine months ended September 30, 2018, the Company recorded an impairment charge of approximately $2.7 million related to its Charlotte market goodwill and also a charge of approximately $3.8 million associated with our Detroit market radio broadcasting licenses. The Company concluded these assets were not impaired during the three months ended September 30, 2018.

(i)Leases

As of January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”) Topic 842, Leases, using the modification retrospective transition method. Prior comparative periods will be not be restated under this new standard and therefore those amounts are not presented below. The Company adopted a package of practical expedients as allowed by the transition guidance which permits the Company to carry forward the historical assessment of whether contracts contain or are leases, classification of leases and the remaining lease terms. The Company has also made an accounting policy election to exclude leases with an initial term of twelve months or less from recognition on the consolidated balance sheet. Short-term leases will be expensed over the lease term. The Company also elected to separate the consideration in the lease contracts between the lease and non-lease components. All variable non-lease components are expensed as incurred.

ASC 842 results in significant changes to the balance sheets of lessees, most significantly by requiring the recognition of right of use (“ROU”) assets and lease liabilities by lessees for those leases classified as operating leases. Upon adoption of ASC 842, deferred rent balances, which were historically presented separately, were combined and presented net within the ROU asset. The adoption of this standard resulted in the Company recording an increase in ROU assets of approximately $49.8 million and an increase in lease liabilities of approximately $54.1 million. Approximately $4.3 million in deferred rent was also reclassified from liabilities to offset the applicable ROU asset. The tax impact of ASC 842, which primarily consisted of deferred gains related to previous transactions that were historically accounted for as sale and operating leasebacks in accordance with ASC Topic 840 were recognized as part of the cumulative-effect adjustment to retained earnings, resulting in an increase to retained earnings, net of tax, of approximately $5.8 million.

Many of the Company’s leases provide for renewal terms and escalation clauses, which are factored into calculating the lease liabilities when appropriate. The implicit rate within the Company’s lease agreements is generally not determinable and as such the Company’s collateralized borrowing rate is used.

The following table sets forth the components of lease expense and the weighted average remaining lease term and the weighted average discount rate for the Company’s leases as of September 30, 2019, dollars in thousands:

Operating Lease Cost (Cost resulting from lease payments)	$	9,642
Variable Lease Cost (Cost excluded from lease payments)		116
Total Lease Cost	$	9,758
Operating Lease - Operating Cash Flows (Fixed Payments)	$	10,010
Operating Lease - Operating Cash Flows (Liability Reduction)	$	6,653
Weighted Average Lease Term - Operating Leases		5.83	years
Weighted Average Discount Rate - Operating Leases		11.00	%

As of September 30, 2019, maturities of lease liabilities were as follows:

For the Year Ended December 31,	(Dollars in thousands)
For the remaining three months ending December 31, 2019	$	3,229
2020		13,268
2021		12,479
2022		11,657
2023		9,963
Thereafter		19,837
Total future lease payments		70,433
Imputed interest		(17,947)
Total	$	52,486

(j)Impact of Recently Issued Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016‑13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016‑13”). ASU 2016‑13 is intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This standard will be effective for interim and annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted for annual periods beginning after December 15, 2018. The Company has not yet completed its assessment of the impact of the new standard on its consolidated financial statements.

In August 2016, the FASB issued ASU 2016‑15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (A Consensus of the Emerging Issues Task Force)” (“ASU 2016‑15”). ASU 2016‑15 is intended to reduce differences in practice in how certain transactions are classified in the statement of cash flows. This standard will be effective for interim and annual reporting periods beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The Company adopted the new standard during the first quarter of 2018 and its adoption did not have a material impact on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017‑04, “Intangibles – Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment” (“ASU 2017‑04”). ASU 2017‑04 is intended to simplify the accounting for goodwill impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. This standard will be effective for interim and annual goodwill impairment tests beginning after December 15, 2019, with early adoption permitted on testing dates after January 1, 2017. The Company adopted the new standard during the first quarter of 2018 and its adoption did not have a material impact on its consolidated financial statements.

(k)Redeemable noncontrolling interest

Redeemable noncontrolling interests are interests in subsidiaries that are redeemable outside of the Company’s control either for cash or other assets. These interests are classified as mezzanine equity and measured at the greater of estimated redemption value at the end of each reporting period or the historical cost basis of the noncontrolling interests adjusted for cumulative earnings allocations. The resulting increases or decreases in the estimated redemption amount are affected by corresponding charges against retained earnings, or in the absence of retained earnings, additional paid-in-capital.

(l)Investments – Cost Method

On April 10, 2015, the Company made a $5 million investment in MGM’s world-class casino property, MGM National Harbor, located in Prince George’s County, Maryland, which has a predominately African-American demographic profile. On November 30, 2016, the Company contributed an additional $35 million to complete its investment. This investment further diversified our platform in the entertainment industry while still focusing on our core demographic. We account for this investment on a cost basis. Our MGM National Harbor investment entitles us to an annual cash distribution based on net gaming revenue. Our MGM investment is included in other assets on the consolidated balance sheets and its income in the amount of approximately $1.8 million and $1.7 million, for the three months ended September 30, 2019 and 2018, respectively, and approximately $5.2 million and $5.1 million, for the nine months ended September 30, 2019 and 2018, respectively, is recorded in other income on the consolidated statements of operations. The cost method investment is subject to a periodic impairment review in the normal course. The Company reviewed the investment and concluded that no impairment to the carrying value was required. As of December 4, 2018, the Company’s interest in the MGM National Harbor Casino secures the MGM National Harbor Loan  (as defined in Note 4 – Long-Term Debt.)

(m)Content Assets

Our cable television segment has entered into contracts to acquire entertainment programming rights and programs from distributors and producers. The license periods granted in these contracts generally run from one year to ten years. Contract payments are made in installments over terms that are generally shorter than the contract period. Each contract is recorded as an asset and a liability at an amount equal to its gross contractual commitment when the license period begins and the program is available for its first airing. Acquired content is generally amortized on a straight-line basis over the term of the license which reflects the estimated usage. For certain content for which the pattern of usage is accelerated, amortization is based upon the actual usage. Amortization of content assets is recorded in the consolidated statement of operations as programming and technical expenses.

The Company also has programming for which the Company has engaged third parties to develop and produce, and it owns most or all rights (commissioned programming). In accordance with ASC 926, content amortization expense for each period is recognized based on the revenue forecast model, which approximates the proportion that estimated advertising and affiliate revenues for the current period represent in relation to the estimated remaining total lifetime revenues as of the beginning of the current period. Management regularly reviews, and revises when necessary, its total revenue estimates, which may result in a change in the rate of amortization and/or a write-down of the asset to fair value.

Acquired program rights are recorded at the lower of unamortized cost or estimated net realizable value. Estimated net realizable values are based on the estimated revenues associated with the program materials and related expenses. The Company recorded an impairment and recorded additional amortization expense of $602,000 as a result of evaluating its contracts for recoverability for the three and nine months ended September 30, 2019. The Company did not record any additional amortization expense as a result of evaluating its contracts for recoverability for the nine months ended September 30, 2018. All produced and licensed content is classified as a long-term asset, except for the portion of the unamortized content balance that is expected to be amortized within one year which is classified as a current asset.

Tax incentives that state and local governments offer that are directly measured based on production activities are recorded as reductions in production costs.

(n)Derivatives

The Company recognizes all derivatives at fair value on the consolidated balance sheets as either an asset or liability. The accounting for changes in the fair value of a derivative, including certain derivative instruments embedded in other contracts, depends on the intended use of the derivative and the resulting designation.

The Company accounts for the Employment Agreement Award as a derivative instrument in accordance with ASC 815, “Derivatives and Hedging.” The Company estimated the fair value of the award at September 30, 2019, and December 31, 2018, to be approximately $26.4 million and $25.7 million, respectively, and accordingly adjusted its liability to this amount. The long-term portion is recorded in other long-term liabilities and the current portion is recorded in other current liabilities in the consolidated balance sheets. The expense associated with the Employment Agreement Award was recorded in the consolidated statements of operations as corporate selling, general and administrative expenses and was $860,000 and approximately $(6.6) million for the three months ended September 30, 2019, and 2018, respectively, and was approximately $3.6 million and $(3.7) million for the nine months ended September 30, 2019 and 2018, respectively.

The Company’s obligation to pay the Employment Agreement Award was triggered after the Company recovered the aggregate amount of its capital contribution in TV One and only upon actual receipt of distributions of cash or marketable securities or proceeds from a liquidity event with respect to the Company’s aggregate investment in TV One. The CEO was fully vested in the award upon execution of the employment agreement, and the award lapses if the CEO voluntarily leaves the Company, or is terminated for cause. In September 2014, the Compensation Committee of the Board of Directors of the Company approved terms for a new employment agreement with the CEO, including a renewal of the Employment Agreement Award upon similar terms as in the prior employment agreement. Prior to the quarter ended September 30, 2018, there were probability factors included in the calculation of the award related to the likelihood that the award will be realized. During the quarter ended September 30, 2018, management changed the methodology used in calculating the fair value of the Company’s Employment Agreement Award liability to simplify the calculation. As part of the simplified calculation, the Company eliminated certain adjustments made to its aggregate investment in TV One, including the treatment of historical dividends paid and potential distribution of assets upon liquidation. The Compensation Committee of the Board of Directors approved the simplified method which eliminates certain assumptions that were historically used in the determination of the fair value of this liability.

(o)Related Party Transactions

Reach Media operates the Tom Joyner Foundation’s Fantastic Voyage® (the “Fantastic Voyage®”), a fund raising event, on behalf of the Tom Joyner Foundation, Inc. (the “Foundation”), a 501(c)(3) entity. The agreements under which the Fantastic Voyage® operates provide that Reach Media provide all necessary operations of the cruise and that Reach Media will be reimbursed its expenditures and receive a fee plus a performance bonus for the cruise. Distributions from operating income or operating revenues, depending upon the year, are in the following order until the funds are depleted: up to $250,000 to the Foundation, reimbursement of Reach’s expenditures, up to $1.0 million fee to Reach, a performance bonus of up to 50% of remaining operating income to Reach, with the balance remaining with the Foundation. For years 2020 through 2022, $250,000 to the Foundation is guaranteed. Reach Media’s earnings for the Fantastic Voyage® may not exceed $1.7 million in 2018 and 2019, nor $1.75 million in 2020 and thereafter. The Foundation’s remittances to Reach Media under the agreements are limited to its Fantastic Voyage®-related cash collections. Reach Media bears the risk should the Fantastic Voyage® sustain a loss and bears all credit risk associated with the related customer cabin sales. The agreement between Reach and the Foundation automatically renews annually unless termination is mutually agreed or unless a party’s financial requirements are not met, in which case that party not in breach of their obligations has the right, but not the obligation, to terminate unilaterally. As of September 30, 2019 and December 31, 2018, the Foundation owed Reach Media approximately $2.1 million and $208,000, respectively, under the agreements for the operations on the cruises.

For the nine months ended September 30, 2019, Reach Media's revenues, expenses, and operating income for the Fantastic Voyage were approximately $10.4 million, $8.7 million, and $1.7 million, respectively, and for the nine months ended September 30, 2018, approximately $9.3 million, $7.6 million, and $1.7 million, respectively. The Fantastic Voyage took place during the second quarters of both 2019 and 2018.

Additionally, Reach Media provides office facilities (including office space, telecommunications facilities, and office equipment) to the Foundation. Such services are provided to the Foundation on a pass-through basis at cost. Additionally, from time to time, the Foundation reimburses Reach Media for expenditures paid on its behalf at Reach Media-related events. Under these arrangements, as of September 30, 2019, and December 31, 2018, the Foundation owed $32,000 and $34,000, respectively, to Reach Media.

Karen Wishart is employed as an Executive Vice President, Chief Administrative Officer of the Company and as a Vice President of each of the Company’s subsidiaries. Ms. Wishart owns a controlling interest in a temporary staffing and recruiting services firm. Subsequent to Ms. Wishart’s hiring on October 2, 2017, on a limited basis, the staffing firm can continue to provide new staffing and/or recruiting services to the Company. However, the staffing firm will only be reimbursed for direct expenses actually incurred. During the three months ended September 30, 2019 and 2018 and during the nine months ended September 30, 2019, the Company did not pay any amount to the staffing and recruiting services firm.  During the nine months ended September 30, 2018, the Company paid the staffing and recruiting services firm $25,000.

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INCOME TAXES

9 Months Ended

Sep. 30, 2019

INCOME TAXES

INCOME TAXES

5.    INCOME TAXES:

The Company uses the estimated annual effective tax rate method under ASC 740‑270, “Interim Reporting” to calculate the provision for income taxes. The Company recorded a provision for income taxes of approximately $8.3 million on pre-tax income from continuing operations of approximately $18.2 million for the nine months ended September 30, 2019, which results in a tax rate of approximately 45.9%. This tax rate is based on an estimated annual effective rate of 35.5%. The Company recorded discrete tax provision expense of approximately $1.9 million primarily due to provision to return adjustments related to state apportionment.

In accordance with ASC 740, “Accounting for Income Taxes”, the Company continues to evaluate the realizability of its net deferred tax assets by assessing the likely future tax consequences of events that have been realized in the Company’s financial statements or tax returns, tax planning strategies, and future profitability. As of September 30, 2019, the Company believes it is more likely than not that these deferred tax assets will be realized.

The Company is subject to the continuous examination of our income tax returns by the IRS and other domestic tax authorities. We believe that an adequate provision has been made for any adjustments that may result from tax examinations. The Company does not currently anticipate that the total amounts of unrecognized tax benefits will significantly change within the next twelve months.

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COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Standby Letters Of Credit [Member]
COMMITMENTS AND CONTINGENCIES
Fair Value Disclosure, Off-balance Sheet Risks, Face Amount, Liability	$ 848,000

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STOCKHOLDERS' EQUITY - Stock options (Details) - USD ($)	3 Months Ended	9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
STOCKHOLDERS' EQUITY
Number of Options, Grants	653,210	653,210	732,869
Number of Options, Exercised		15,000	58,190
Employee Stock Option [Member]
STOCKHOLDERS' EQUITY
Number of Options, Outstanding at Beginning of Year		3,569,000
Number of Options, Grants		653,000
Number of Options, Exercised		15,000
Number of Option, Forfeited/cancelled/expired/settled		10,000
Number of Options, Balance at End of Year	4,197,000	4,197,000		3,569,000
Number of Options, Vested and expected to vest	4,143,000	4,143,000
Number of Options, Unvested	835,000	835,000
Number of Options, Exercisable	3,362,000	3,362,000
Weighted-Average Exercise Price, Outstanding at Beginning of Year (in dollars per share)		$ 2.12
Weighted-Average Exercise Price, Grants (in dollars per share)		2.17
Weighted-Average Exercise Price, Exercised (in dollars per share)		1.90
Weighted-Average Exercise Price, Forfeited/cancelled/expired/settled (in dollars per share)		1.90
Weighted-Average Exercise Price, Balance at End of Year (in dollars per share)	$ 2.13	2.13		$ 2.12
Weighted-Average Exercise Price, Vested and expected to vest (in dollars per share)	2.13	2.13
Weighted-Average Exercise Price, Unvested (in dollars per share)	2.11	2.11
Weighted-Average Exercise Price, Exercisable (in dollars per share)	$ 2.13	$ 2.13
Weighted-Average Remaining Contractual Term, Outstanding (in years)		6 years 11 months 12 days		7 years 2 months 9 days
Weighted-Average Remaining Contractual Term, Vested and expected to vest (in years)		6 years 11 months 5 days
Weighted-Average Remaining Contractual Term, Unvested (in years)		9 years 4 months 10 days
Weighted-Average Remaining Contractual Term, Exercisable (in years)				6 years 4 months 6 days
Aggregate Intrinsic Value, Outstanding	$ 296,000	$ 296,000		$ 130,000
Aggregate Intrinsic Value, Vested and expected to vest	295,000	295,000
Aggregate Intrinsic Value, Unvested	4,000	4,000
Aggregate Intrinsic Value, Exercisable	$ 292,000	$ 292,000

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LONG-TERM DEBT (Tables)

9 Months Ended

Sep. 30, 2019

LONG-TERM DEBT

Schedule of long-term debt

	September 30, 2019		December 31, 2018
	(Unaudited)
	(In thousands)
2018 Credit Facility	$	170,746	$	192,000
MGM National Harbor Loan		51,578		50,066
2017 Credit Facility		321,453		323,926
9.25% Senior Subordinated Notes due February 2020		—		2,037
7.375% Senior Secured Notes due April 2022		350,000		350,000
Asset-backed credit facility		—		—
Comcast Note due April 2019		—		11,872
Total debt		893,777		929,901
Less: current portion of long-term debt		22,981		38,706
Less: original issue discount and issuance costs		14,607		17,438
Long-term debt, net	$	856,189	$	873,757

Schedule of future scheduled minimum principal payments

								7.38%
								Senior
								Secured
	2018		MGM			2017		Notes
	Credit		National		Asset-backed	Credit		due April
	Facility		Harbor Loan		Credit Facility	Facility		2022		Total
	(In thousands)
October - December 2019	$	3,600		—	—	$	824	$	—	$	4,424
2020		20,884		—	—		3,297		—		24,181
2021		19,200		—	—		3,297		—		22,497
2022		127,062		51,578	—		3,297		350,000		531,937
2023		—		—	—		310,738		—		310,738
2024 and thereafter		—		—	—		—		—		—
Total Debt	$	170,746	$	51,578	—	$	321,453	$	350,000	$	893,777

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Contract assets and liabilities (Details) - USD ($) $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Contract assets:
Unbilled receivables	$ 5,968	$ 4,268	$ 3,425
Contract liabilities:
Customer advances and unearned income	3,403	4,588	3,766
Unearned event income	$ 3,831	$ 3,163	$ 3,864