Salem Media Group eliminates debt, gains new investor

Salem Media Group says it has substantially strengthened its financial position by repurchasing all US$159.4 million of its 7.125% senior secured notes due 2028 at a $37.1 million discount. The company financed the transaction with proceeds from a $40 million issuance of convertible preferred stock and an agreement to sell seven radio stations for $90 million.

The new strategic investor, The Christian Community Foundation, operating as WaterStone, acquired the $40 million in series B convertible preferred stock. WaterStone COO Rick von Gnechten, a former CFO of a Fortune 600 company, will oversee the investment. The preferred stock is convertible into Salem’s common stock, ensuring WaterStone a significant stake while introducing expertise in digital media to Salem’s operations.

“These transactions have transformed Salem’s balance sheet and capital structure,” said CEO David Santrella. “With no long-term debt except our revolving line of credit and the addition of WaterStone as a strategic investor, Salem is poised for new opportunities in digital media and beyond.”

Prominent markets

The company’s agreement to sell seven radio stations to Educational Media Foundation, operator of Christian networks K-LOVE and Air1, will generate $90 million. The stations include prominent markets such as Atlanta, Dallas and Los Angeles. EMF will begin operating the stations under an affiliation agreement in February 2025, with the sale expected to close in the first half of the year.

Edward G. Atsinger, Salem’s executive chairman, said, “This sale allows us to fully eliminate long-term debt while ensuring these stations continue their impactful work under EMF, a proven leader in Christian music programming.”

The company also extended its asset-based loan facility and retained Guggenheim Securities as its financial advisor for the debt repurchase. Salem’s leadership emphasized that these actions will enhance its ability to serve audiences across digital, radio and national ministry platforms.

You can read more details on Salem’s website here.