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BASIS OF PRESENTATION AND ORGANIZATION (Block)
 12 Months Ended
Dec. 31, 2017
Organization Consolidation And Presentation Of Financial Statements Abstract  
Business Description And Basis Of Presentation Text Block

1. BASIS OF PRESENTATION AND SIGNIFICANT POLICIES

Nature of Business – Entercom Communications Corp. (the “Company”) is the second-largest radio broadcasting company in the United States. The Company is also a leading local media and entertainment company with a nationwide footprint of stations including positions in all of the top 15 markets and 22 of the top 25 markets.

On February 2, 2017, the Company and its wholly-owned subsidiary (“Merger Sub”), entered into an Agreement and Plan of Merger (the “CBS Radio Merger Agreement”) with CBS Corporation (“CBS”) and its wholly-owned subsidiary CBS Radio, Inc. (“CBS Radio”). Pursuant to the CBS Merger Agreement, Merger Sub merged with and into CBS Radio with CBS Radio surviving as the Company’s wholly-owned subsidiary (the “Merger”). The parties to the Merger believe that the Merger was tax free to CBS and its shareholders. The Merger was effected through a stock for stock Reverse Morris Trust transaction.

The Merger was subject to approval by the Company’s shareholders and customary regulatory approvals. As a result of the Merger, the Company would have owned radio stations in seven markets in excess of the limits set forth in the Federal Communications Commission’s (the “FCC”) local radio ownership rule. In order to comply with this FCC rule, and to obtain clearance for the Merger from the Antitrust Division of the U.S. Department of Justice (“DOJ”), the Company agreed to divest a total of nineteen stations in such markets, consisting of eight stations owned by the Company and eleven stations owned by CBS Radio. Refer to additional information on divestitures in Note 3, Business Combinations.

On November 1, 2017, the Company entered into a settlement with the DOJ. On November 9, 2017, the FCC released an order, pursuant to the Communications Act of 1934, as amended, and the rules and regulations promulgated thereunder, approving the applications filed by CBS Radio and the Company requesting FCC consent to the CBS Radio Merger Agreement. Obtaining the FCC Consent, and its effectiveness in accordance with applicable law and the rules and regulations of the FCC, was a condition to the obligation of CBS, CBS Radio, the Company, and Merger Sub to the consummation of the Merger. On November 15, 2017, the Company’s shareholders voted to approve the Merger.

Upon obtaining all required approvals, the Merger closed on November 17, 2017. CBS Radio contributed net revenues from continuing operations of $133.6 million and income (loss) before income taxes (benefit) of $21.4 million since the date of acquisition. The results of CBS Radio have been included in the Company’s consolidated financial statements since the date of acquisition. Refer to Note 3, Business Combinations, for additional information.

The Company’s strategy focuses on providing compelling content in the communities it serves to enable the Company to offer its advertisers an effective marketing platform to reach a large targeted local audience. The principal components of the Company’s strategy are to: (i) focus on creating effective integrated marketing solutions for its customers that incorporate its audio, digital and experiential assets; (ii) build strongly-branded radio stations with highly compelling content; (iii) develop market leading station clusters; and (iv) recruit, develop, motivate and retain superior employees.

Revision of Prior Period Financial Statements for Digital Revenue Contracts

In connection with the preparation of the Company’s consolidated financial statements in the second quarter of 2017, the Company identified immaterial errors in prior periods relating to the netting of certain digital expenses against certain digital revenues. Since the Company acts as a principal in certain digital revenue contracts, the expenses should not have been netted against gross revenues. The impact of these errors was not material to any prior period. Consequently, the Company corrected the errors by increasing net revenues and station operating expenses on the consolidated statements of operations by the amounts below. As the two line items are adjusted by offsetting amounts, the corrections had no impact on income before taxes, income taxes (benefit), net income, earnings per share or diluted earnings per share, shareholders’ equity, cash flows from operations, or working capital. The corrections had no impact on the consolidated balance sheets or statements of cash flows.

The following tables include the revisions to the consolidated statements of operations for the interim and annual periods during 2017, 2016, and 2015:

Three Months
Ended
DescriptionMarch 31, 2017
(amounts in thousands) (unaudited)
Net revenues:
Prior to revision$97,452
Revision1,549
As revised$99,001
Station operating expenses, including
non-cash compensation expense:
Prior to revision$75,617
Revision1,549
As revised$77,166

Three Months Ended (unaudited)Year Ended
March 31,June 30,September 30,December 31,December 31,
Description2016
(amounts in thousands)
Net revenues:
Prior to revision$96,103$120,478$120,457$123,207$460,245
Revision9061,0931,1841,3434,526
As revised$97,009$121,571$121,641$124,550$464,771
Station operating expenses, including
non-cash compensation expense:
Prior to revision$71,715$82,639$82,905$81,485$318,744
Revision9061,0931,1841,3434,526
As revised$72,621$83,732$84,089$82,828$323,270

Three Months Ended (unaudited)Year Ended
March 31,June 30,September 30,December 31,December 31,
Description2015
(amounts in thousands)
Net Revenues:
Prior to revision$78,420$100,592$114,662$117,704$411,378
Revision5897308749103,103
As revised$79,009$101,322$115,536$118,614$414,481
Station operating expenses, including
non-cash compensation expense:
Prior to revision$59,367$70,000$81,241$77,103$287,711
Revision5897308749103,103
As revised$59,956$70,730$82,115$78,013$290,814

Reclassifications

Certain reclassifications have been made to the prior years’ statements of operations and balance sheets to conform to the presentation in the current year, which did not have a material impact on the Company’s previously reported financial statements. The Company elected to reclassify certain accrued benefits from the accrued expenses financial statement line item to the other current liabilities line item as these amounts are more closely aligned with accrued compensation. The Company also elected to separately present: (1) investments from deferred charges and other assets, net of accumulated amortization; and (2) restructuring charges from merger and acquisition costs in order to provide the users of the financial statements with additional insight into the Merger.