Goodwill and other intangible assets

3 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

The following table displays goodwill, indefinite-lived intangible assets, and amortizable intangible assets as of March 31, 2021 and December 31, 2020 (in thousands):


	Mar. 31, 2021				Dec. 31, 2020
	Gross		Accumulated Amortization		Gross		Accumulated Amortization

Goodwill	$	2,981,587	$	—	$	2,968,693	$	—

Indefinite-lived intangibles:
Television and radio station FCC broadcast licenses	2,123,898		—		2,123,898		—
Amortizable intangible assets:
Retransmission agreements	235,215		(146,306)		235,215		(138,928)
Network affiliation agreements	309,503		(78,820)		309,503		(72,694)
Other	71,466		(26,216)		70,610		(23,960)
Total indefinite-lived and amortizable intangible assets	$	2,740,082	$	(251,342)	$	2,739,226	$	(235,582)

Our retransmission agreements and network affiliation agreements are amortized on a straight-line basis over their estimated useful lives. Other intangibles primarily include distribution agreements from our multicast networks acquisition, which are also amortized on a straight-line basis over their useful lives.

On January 27, 2021, we acquired Locked On Podcast Network LLC for $13.3 million cash, which consisted of a base purchase price of $13.8 million and a working capital adjustment of $0.5 million. Locked On produces daily podcasts for every team across the four major professional sports leagues, as well as major college sports teams. In connection with this acquisition, we recorded initial values for goodwill and a tradename of $12.9 million and $0.9 million, respectively. These amounts are based on preliminary valuations, and therefore, these assets are subject to change as additional information is obtained about the facts and circumstances that existed as of the acquisition date. The goodwill is calculated as the excess of the purchase price over the net fair value of the identifiable assets acquired and liabilities assumed, and represents the future economic benefits expected to arise from the acquisition that do not qualify for separate recognition, including assembled workforce, as well as future synergies that we expect to generate. The goodwill recognized is expected to be tax deductible for tax purposes.

Interim impairment assessment

We review our goodwill and intangible assets for impairment at least annually and also when events or changes in circumstances occur that indicate the fair value may be below its carrying amount. As discussed in our 2020 Form 10-K, after completing our annual impairment test in the fourth quarter of 2020, we had one television station FCC license and one radio station FCC license, with a combined carrying value of $67.2 million and individual impairment headroom of less than 5%. Therefore, these two FCC licenses are at a heightened risk of future impairment. During the first quarter, and considering the

negative effects COVID-19 has had and may continue to have on our AMS revenue and operating cash flows, we assessed whether it was more likely than not that either of these FCC licenses was impaired.

In performing these assessments, we analyzed the significant inputs used in the fair value determination of these FCC license assets. This included reviewing the trends in actual and forecasted advertising revenues and changes in the discount rate, both of which impact the fair value of these licenses. Based on the analysis performed, we concluded that neither of these FCC licenses was more likely than not impaired as of March 31, 2021. However, a sustained economic decline, including one resulting from the COVID-19 pandemic, could result in future non-cash impairment charges of our FCC licenses, and any related impairment could have a material adverse impact on our results of operations.