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Goodwill and Other Intangible Assets
 12 Months Ended
Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill And Other Intangible Assets Goodwill and Other Intangible Assets
The carrying amount of goodwill, by operating segment is as follows:
(In thousands)Domestic Operations
International
and Other
Total
December 31, 2020$333,502 $352,905 $686,407 
Goodwill written off related to spin-off of a business unit— (476)(476)
Additions21,312 11,902 33,214 
Amortization of "second component" goodwill(1,344)— (1,344)
Foreign currency translation— (8,457)(8,457)
December 31, 2021353,470 355,874 709,344 
Purchase accounting adjustments(2,834)— (2,834)
Impairment charge— (40,717)(40,717)
Amortization of "second component" goodwill(1,344)— (1,344)
Foreign currency translation— (21,030)(21,030)
December 31, 2022$349,292 $294,127 $643,419 
As of December 31, 2022 and 2021, accumulated impairment charges totaled $163.8 million and $123.1 million, respectively.
The purchase accounting adjustments of $2.8 million to the carrying amount of goodwill in Domestic Operations in 2022 relate to the December 2021 acquisition of Sentai Holdings, a global supplier of anime content, including its anime-focused HIDIVE subscription streaming service.
The annual reduction of $1.3 million in the carrying amount of goodwill for the Domestic Operations segment is due to the realization of a tax benefit for the amortization of "second component" goodwill at SundanceTV. Second component goodwill is the amount of tax deductible goodwill in excess of goodwill for financial reporting purposes. In accordance with the authoritative guidance at the time of the SundanceTV acquisition, the tax benefits associated with this excess are applied to first reduce the amount of goodwill, and then other intangible assets for financial reporting purposes, if and when such tax benefits are realized in the Company's tax returns.
The addition of $21.3 million in the carrying amount of goodwill in Domestic Operations in 2021 relates to the acquisition of Sentai Holdings. The addition of $11.9 million in the carrying amount of goodwill in International and Other in 2021 relates to the acquisition of the remaining 50% interest in an equity method investment in which the Company previously owned a 50% interest.
Impairment Test of Goodwill
Goodwill
Goodwill is not amortized, but instead is tested for impairment at the reporting unit level annually as of December 1, or more frequently upon the occurrence of certain events or substantive changes in circumstances.
As of December 1, 2022, the Company performed a quantitative assessment for all of its reporting units. The fair values were determined using a combination of an income approach, using a discounted cash flow model (DCF), and a market comparables approach. The DCF model includes significant assumptions about revenue growth rates, long-term growth rates and enterprise specific discount rates. Additionally, the market comparables approach is determined using guideline company
valuation multiples. Given the uncertainty in determining assumptions underlying the DCF approach, actual results may differ from those used in the valuations.
Based on the valuations performed, in response to current and expected trends across the International television broadcasting markets, as well as a decrease in the valuation multiples used to estimate the fair value using the market approach, the fair value of the Company's AMCNI reporting unit declined to less than its carrying amount. As a result, the Company recognized an impairment charge of $40.7 million related to the AMCNI reporting unit, included in impairment and other charges in the consolidated statement of income. No impairment charges were required for any of the Company's other reporting units.
In addition to the annual impairment test, the Company is required to regularly assess whether a triggering event has occurred which would require an interim impairment test. As a result of the continuing impact of the COVID-19 pandemic in 2020, the Company qualitatively assessed whether it was more likely than not that goodwill and long-lived assets were impaired as of June 30, 2020. The Company considered the current and expected future economic and market conditions surrounding the COVID-19 pandemic and its impact on each of its reporting units. Further, the Company assessed the current forecasts (including significant assumptions about revenue growth rates, long-term growth rates and enterprise specific discount rates) and the amount of excess fair value over carrying value for each of its reporting units in the 2019 impairment test. In connection with the preparation of the second quarter 2020 financial information, the Company determined that a triggering event had occurred with respect to its AMCNI reporting unit, which required an interim impairment test to be performed as of June 30, 2020. As such, the Company performed a quantitative assessment for its AMCNI reporting unit. Based on the valuations performed, in response to the then current and expected trends across the International television broadcasting markets, the fair value of the Company's AMCNI reporting unit declined below its carrying amount. As a result, in June 2020, the Company recognized an impairment charge of $25.1 million related to the AMCNI reporting unit, included in impairment and other charges in the consolidated statement of income.
The determination of fair value of the Company's reporting units represents a Level 3 fair value measurement in the fair value hierarchy due to its use of internal projections and unobservable measurement inputs. Changes in significant judgments and estimates could significantly impact the concluded fair value of the reporting unit. Changes to assumptions that would decrease the fair value of the reporting unit would result in corresponding increases to the impairment of goodwill at the reporting unit.
The following table summarizes information relating to the Company's identifiable intangible assets:
(In thousands)December 31, 2022
Estimated
Useful Lives
Gross
Accumulated
Amortization
Net
Amortizable intangible assets:
Affiliate and customer relationships$634,000 $(373,240)$260,760 
6 to 25 years
Advertiser relationships 46,282 (34,443)11,839 
11 years
Trade names and other amortizable intangible assets105,338 (43,161)62,177 
3 to 20 years
Total amortizable intangible assets785,620 (450,844)334,776 
Indefinite-lived intangible assets:
Trademarks19,900 — 19,900 
Total intangible assets$805,520 $(450,844)$354,676 
(In thousands)December 31, 2021
Gross
Accumulated
Amortization
Net
Amortizable intangible assets:
Affiliate and customer relationships$649,543 $(354,673)$294,870 
Advertiser relationships 46,282 (30,235)16,047 
Trade names and other amortizable intangible assets111,151 (42,534)68,617 
Total amortizable intangible assets806,976 (427,442)379,534 
Indefinite-lived intangible assets:
Trademarks19,900 — 19,900 
Total intangible assets$826,876 $(427,442)$399,434 
Aggregate amortization expense for amortizable intangible assets for the years ended December 31, 2022, 2021 and 2020 was $41.5 million, $39.1 million and $42.2 million, respectively.
Estimated aggregate amortization expense for intangible assets subject to amortization for each of the following five years is:
(In thousands)
Years Ending December 31, 
2023$41,487 
202441,416 
202539,697 
202635,342 
202731,184 

Impairment Test of Long-Lived Assets
In June 2020, given the then continuing and expected future economic and market conditions surrounding the COVID-19 pandemic and its impact, the Company revised its outlook for the AMCNI business, resulting in lower expected future cash flows. As a result, the Company determined that sufficient indicators of potential impairment of long-lived assets existed and the Company performed a recoverability test of the long-lived asset groups within the AMCNI business. Based on the recoverability tests performed, the Company determined that certain long-lived assets were not recoverable and recognized an impairment charge of $97.1 million related primarily to certain identifiable intangible assets, as well as property and equipment, and operating lease right-of-use assets, which is included in impairment and other charges in the consolidated statement of income. Fair values used to determine the impairment charges were determined using an income approach, specifically a discounted cash flow model (DCF). The DCF model includes significant assumptions about revenue growth rates, long-term
growth rates and enterprise specific discount rates. Given the uncertainty in determining assumptions underlying the DCF approach, actual results may differ from those used in the valuations. No impairment charges for long-lived assets were required in 2021 or 2022.
Impairment Test of Identifiable Indefinite-Lived Intangible Assets
As of December 1, 2022, the Company performed a quantitative assessment for its indefinite-lived intangible assets. Based on the annual impairment test performed, no impairment charge was required. The Company's indefinite-lived intangible assets relate to SundanceTV trademarks, which were valued using a relief-from-royalty method in which the expected benefits are valued by discounting estimated royalty revenue relating to projected revenues covered by the trademarks.
Significant judgments inherent in estimating the fair value of indefinite-lived intangible assets include the selection of appropriate discount and royalty rates, estimating the amount and timing of estimated future revenues and identification of appropriate continuing growth rate assumptions. The discount rates used in the analysis are intended to reflect the risk inherent in the projected future cash flows generated by the respective intangible assets.