SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of allowance for expected credit loss

The changes in the allowance for expected credit loss are as follows:


	As of December 31, 2023
	(In thousands)
Balance at Beginning of Period⁽¹⁾	$	8,643
Charged to Expense, net		2,552
Less: Deductions		(2,557)
Balance at End of Period	$	8,638

(1) The allowance for expected credit loss as of January 1, 2023 includes $0.6 million cumulative-effect adjustment of the adoption of ASU 2016-13.

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

Contract assets and contract liabilities that are not separately stated in the Company’s consolidated balance sheets at December 31, 2023 and 2022 were as follows:


	December 31, 2023		December 31, 2022

	(In thousands)
Contract assets:
Unbilled receivables	$	5,437	$	12,597
Contract liabilities:
Customer advances and unearned income	$	4,851	$	6,123
Reserve for audience deficiency		12,779		9,629
Unearned event income		4,864		5,708

Schedule of future estimated launch support amortization expense

Future estimated launch support amortization related to launch assets for years 2024 through 2028 and thereafter is as follows:


	(In thousands)
2024	$	4,980
2025		4,980
2026		3,409
2027		237
2028		68
Thereafter		6

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

As of December 31, 2023 and 2022, respectively, the fair values of the Company’s financial assets and liabilities measured at fair value on a recurring basis are categorized as follows:


	Total		Level 1		Level 2		Level 3

	(In thousands)
As of December 31, 2023
Liabilities subject to fair value measurement:
Employment Agreement Award (a)	$	22,970	$	—	$	—	$	22,970

Mezzanine equity subject to fair value measurement:
Redeemable noncontrolling interests (b)	$	16,520	$	—	$	—	$	16,520

Assets subject to fair value measurement:
Cash equivalents - money market funds (d)	$	193,769	$	193,769	$	—	$	—

As of December 31, 2022
Liabilities subject to fair value measurement:
Employment Agreement Award (a)	$	25,741	$	—	$	—	$	25,741

Mezzanine equity subject to fair value measurement:
Redeemable noncontrolling interests (b)	$	25,298	$	—	$	—	$	25,298

Assets subject to fair value measurement:
Available-for-sale securities (c)	$	136,826	$	—	$	—	$	136,826
Cash equivalents - money market funds (d)		39,798		39,798		—		—
Total	$	176,624	$	39,798	$	—	$	136,826

(a)

Pursuant to an employment agreement, 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 reporting period including the valuation of TV One (based on the

estimated enterprise fair value of TV One as determined by the income approach using a discounted cash flow analysis and the market approach using comparable public company multiples). Significant inputs to the discounted cash flow analysis include revenue growth rates, future operating profit, and discount rate. Significant inputs to the market approach include publicly held peer companies and recurring EBITDA multiples. Please refer to Note 16 – Subsequent Events of the Company’s consolidated financial statements for more details.

(b)

The redeemable noncontrolling interests in Reach Media are measured at fair value using a discounted cash flow methodology as of December 31, 2022. Significant inputs to the discounted cash flow analysis include revenue growth rates, future operating profit margins, and discount rate. As of December 31, 2023 the fair value is measured using an exit price methodology. Significant inputs to the exit price analysis include revenue growth rates, future operating profit margins, discount rate and an exit multiple.

(c)

During the three months ended June 30, 2023, the Company completed the sale of its MGM Investment. The investment in MGM National Harbor was preferred stock that had a non-transferable put right and is classified as an available-for-sale debt security. The investment was initially measured at fair value using a dividend discount model. Significant inputs to the dividend discount model included revenue growth rates, discount rate and a terminal growth rate. At December 31, 2022, the investment’s fair value was measured using a contractual valuation approach. This method relied on a contractually agreed upon formula established between the Company and MGM National Harbor as defined in the Second Amended and Restated Operating Agreement of MGM National Harbor, LLC (“the Agreement”) rather than market-based inputs or traditional valuation methods. As defined in the Agreement, the calculation of the put was based on operating results, Enterprise Value and the Put Price Multiple. The inputs used in this measurement technique were specific to the entity, MGM National Harbor, and there are no current observable prices for investments in private companies that are comparable to MGM National Harbor. The inputs used to measure the fair value of this security were classified as Level 3 within the fair value hierarchy. Throughout the periods from the fourth quarter of 2020 up until the third quarter of 2022, the Company relied on the dividend discount model for valuation purposes based on the facts, circumstances, and information available at the time. During the fourth quarter of 2022, the Company adopted the contractual valuation method described above as it believes it more closely approximates the fair value of the investment at that time.

(d)	The Company measures and reports its cash equivalents that are invested in money market funds and valued based on quoted market prices which approximate cost due to their short-term maturities.

Schedule of significant unobservable input value

For Level 3 liabilities measured at fair value on a recurring basis, the significant unobservable inputs used in the fair value measurements were as follows:


			As of		As of
			December 31,		December 31,
			2023		2022
		Significant
		Unobservable	Significant Unobservable
Level 3 liabilities	Valuation Technique	Inputs	Input Value
Employment Agreement Award	Discounted cash flow	Discount rate	10.0	%	10.5	%
Employment Agreement Award	Discounted cash flow	Operating profit margin range	35.0% - 42.3	%	33.7% - 46.6	%
Employment Agreement Award	Discounted cash flow	Revenue growth rate range	(2.1)% - 2.5	%	(4.1)% - 4.2	%
Employment Agreement Award	Market Approach	Average recurring EBITDA multiple	6.3 - 6.5	x	6.6	x
Redeemable noncontrolling interests	Discounted cash flow	Discount rate	12.5	%	11.5	%
Redeemable noncontrolling interests	Discounted cash flow	Operating profit margin range	24.5% - 31.9	%	25.8% - 29.8	%
Redeemable noncontrolling interests	Discounted cash flow	Revenue growth rate range	1.2% - 16.5	%	0.2% - 32.2	%
Redeemable noncontrolling interests	Discounted cash flow	Exit Multiple	4.0	x	N/A

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


	Years Ended December 31,
	2023			2022

	(Dollars In thousands)
Operating lease cost (cost resulting from lease payments)	$	12,738		$	12,822
Variable lease cost (cost excluded from lease payments)		127			40
Total lease cost	$	12,865		$	12,862

Operating lease - operating cash flows (fixed payments)	$	13,761		$	13,978
Operating lease - operating cash flows (liability reduction)	$	10,362		$	9,935

Weighted average lease term - operating leases		5.94	years		4.85	years
Weighted average discount rate - operating leases		11.66	%		11.00	%