XML 23 R9.htm IDEA: XBRL DOCUMENT v3.21.1
Nature of Business
12 Months Ended
Dec. 31, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Nature of Business

1. NATURE OF BUSINESS

Nature of Business

Entravision Communications Corporation (together with its subsidiaries, hereinafter referred to collectively as the “Company”) is a diversified global media, marketing and technology company that, through its television and radio segments, reaches and engages U.S. Hispanics across acculturation levels and media channels. Additionally, the Company’s digital segment, whose operations are located primarily in Spain and Latin America, reaches a global market. Entravision’s operations encompass integrated marketing and media solutions, comprised of television, radio and digital properties and data analytics services. The Company’s management has determined that the Company operates in three reportable segments as of December 31, 2020, based upon the type of advertising medium, which segments are television, radio, and digital. As of December 31, 2020, the Company owns and/or operates 54 primary television stations located primarily in California, Colorado, Connecticut, Florida, Kansas, Massachusetts, Nevada, New Mexico, Texas and Washington, D.C. The Company’s television operations comprise the largest affiliate group of both the top-ranked primary television network of Univision Communications Inc. (“Univision”) and Univision’s UniMás network. The television segment includes revenue generated from advertising, retransmission consent agreements and the monetization of the Company’s spectrum assets. Radio operations consist of 48 operational radio stations, 38 FM and 10 AM, in 16 markets located in Arizona, California, Colorado, Florida, Nevada, New Mexico and Texas. Entravision also operates Entravision Solutions as its national sales representation division, through which it sells advertisements and syndicate radio programming to more than 100 markets across the United States. The Company operates a proprietary technology and data platforms that delivers digital advertising in various advertising formats that allow advertisers to reach audiences across a wide range of Internet-connected devices on its owned and operated digital media sites, the digital media sites of its publisher partners, and on other digital media sites it can access through third-party platforms and exchanges.

The Impact of the COVID-19 Pandemic on the Company’s Business

On March 11, 2020, the World Health Organization (the “WHO”) declared COVID-19 a pandemic. On March 13, 2020, a Presidential proclamation was issued declaring a national emergency in the United States as a result of COVID-19.

The COVID-19 pandemic has affected the Company’s business and, subject to the extent and duration of the pandemic and the continuing economic crisis that has resulted from the pandemic, is anticipated to continue to affect the Company’s business, from both an operational and financial perspective, in future periods.

In the quarter ended December 31, 2020, the global, U.S. and local economies declined at a slower rate than during earlier periods in 2020.  With the exception of political advertising during the height of the election cycle, the Company continued to experience significant cancellations of advertising and a significant decrease in new advertising placements in its television segment and especially its radio segment, continuing a trend that the Company had begun to experience since the last half of March 2020, although the Company experienced this decrease at a slower rate as the year progressed. The impact on the Company’s radio segment continues to be significantly greater than that on its television segment because radio audiences declined at a much greater rate, and maintained, as a result of fewer people commuting to work or driving in general as a result of a combination of lockdown, shelter-in-place, stay-at-home or similar orders that were still in effect in various parts of  the United States throughout most of 2020, and changes in personal behavior regardless of whether such lockdown, shelter-in-place, stay-at-home or similar orders were in effect in certain parts of the United States from time to time during this period.

To partially address this situation, the Company has continued to significantly reduce some of its advertising rates, primarily in its radio segment, although the rate of decrease in the Company’s advertising rates was at a slower pace during the quarter ended December 31, 2020 than during earlier periods in 2020 and has been somewhat moderated by political advertising in the Company’s inventory during the election cycle. The Company has also eased credit terms for certain of its advertising clients to help them manage their own cash flow and address other financial needs.

Primarily during the quarter ended March 31, 2020 and early in the quarter ended June 30, 2020, the Company engaged in a small number of layoffs and significant number of furloughs of employees as a result of the pandemic. During the quarter ended December 31, 2020 the Company terminated these previously furloughed employees. Severance expense associated with these terminations was not material. The Company will continue to monitor this situation closely and may institute such further layoffs or furloughs at a future date if it thinks such actions are appropriate. The Company has elected to defer the employer portion of the social security payroll tax (6.2%) as outlined within the Coronavirus Aid, Relief and Economic Security Act of 2020, commonly known as the CARES Act. The deferral is effective from March 27, 2020 through December 31, 2020. The deferred amount will be paid in two

installments and the amount will be considered timely paid if 50% of the deferred amount is paid by December 31, 2021 and the remainder by December 31, 2022.

In order to preserve cash during this period, the Company instituted certain cost reduction measures. On March 26, 2020, the Company suspended repurchases under its share repurchase program.  Effective April 16, 2020, the Company instituted a 2.5%-22.5% reduction in salaries company-wide, depending on the amount of then-current compensation. During the quarter ended December 31, 2020, these reductions were reversed and payments were restored retroactively, resulting in no financial impact on a fiscal year basis.  Effective May 16, 2020, the Company suspended company matching of employee contributions to their 401(k) retirement plans. The Company also reduced its dividend by 50% beginning in the second quarter of 2020, and it may do so in future periods. Additionally, effective May 28, 2020, the Board of Directors decreased its annual non-employee director fees by 20% for the Board year ending at the 2021 shareholders meeting. During the quarter ended December 31, 2020, these reductions were reversed and payments were restored retroactively, resulting in no financial impact on a fiscal year basis. The Company will continue to monitor all of these actions closely in light of current and changing conditions and may institute such additional actions as it may feel are appropriate at a future date.

The Company believes that its liquidity and capital resources remain adequate and that it can meet current expenses for at least the next twelve months from a combination of cash on hand and cash flows from operations.