SGA US Equity☆

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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Form 10-K

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(Mark one)

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​ For the fiscal year ended December 31, 2020

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​ For the transition period for to

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Commission file number 1-11588

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SAGA COMMUNICATIONS, INC.

(Exact name of registrant as specified in its charter)

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(State or other jurisdiction of (I.R.S. Employer

incorporation or organization) Identification No.)

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73 Kercheval Avenue

Grosse Pointe Farms, Michigan 48236

(Address of principal executive offices) (Zip Code)

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Registrant’s telephone number, including area code:

(313) 886-7070

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Securities registered pursuant to Section 12(b) of the Act:

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Title of each class Trading Symbol Name of each exchange on which registered

Class A Common Stock, $.01 par value ​ SGA NASDAQ

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Securities registered pursuant to Section 12(g) of the Act: None

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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ◻No☑

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Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ◻No☑

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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☑ No ◻

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Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☑ No ◻

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

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Indicate by checkmark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑

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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑

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Aggregate market value of the Class A Common Stock and the Class B Common Stock (assuming conversion thereof into Class A Common Stock) held by nonaffiliates of the registrant, computed on the basis of the closing price of the Class A Common Stock on June 30, 2020 on the NASDAQ: $127,731,661.

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The number of shares of the registrant’s Class A Common Stock, $.01 par value, and Class B Common Stock, $.01 par value, outstanding as of March 4, 2021 was 5,042,752 and 937,641, respectively.

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DOCUMENTS INCORPORATED BY REFERENCE

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Portions of the Proxy Statement for the 2021 Annual Meeting of Stockholders (to be filed with the Securities and Exchange Commission not later than 120 days after the end of the Company’s fiscal year) are incorporated by reference in Part III hereof.

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Table of Contents

Saga Communications, Inc.

2020 Form 10-K Annual Report

Table of Contents

Page

​ PART I ​

Item 1. Business 4

Item 1A. Risk Factors 25

Item 1B. Unresolved Staff Comments 31

Item 2. Properties 31

Item 3. Legal Proceedings 31

Item 4. Mine Safety Disclosures 32

​ PART II ​

Item 6. Selected Financial Data 36

Item 7A. Quantitative and Qualitative Disclosures about Market Risk 50

Item 8. Financial Statements and Supplementary Data 50

Item 9A. Controls and Procedures 50

Item 9B. Other Information 53

​ PART III ​

Item 10. Directors, Executive Officers and Corporate Governance 53

Item 11. Executive Compensation 53

Item 14. Principal Accountant Fees and Services 53

​ PART IV ​

Item 15. Exhibits and Financial Statement Schedules 54

Signatures 88

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Forward-Looking Statements

Statements contained in this Form 10-K that are not historical facts are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In addition, words such as “believes,” “anticipates,” “estimates,” “plans,” “expects”, “guidance,” and similar expressions are intended to identify forward-looking statements. These statements are made as of the date of this report or as otherwise indicated, based on current expectations. We undertake no obligation to update this information. A number of important factors could cause our actual results for 2021 and beyond to differ materially from those expressed in any forward-looking statements made by or on our behalf. Forward-looking statements are not guarantees of future performance as they involve a number of risks, uncertainties and assumptions that may prove to be incorrect and that may cause our actual results and experiences to differ materially from the anticipated results or other expectations expressed in such forward-looking statements. The risks, uncertainties and assumptions that may affect our performance, which are described in Item 1A of this report, include our financial leverage and debt service requirements, dependence on key personnel, dependence on key stations, global, U.S. and local economic conditions, our ability to successfully integrate acquired stations, regulatory requirements, new technologies, natural disasters, terrorist attacks, information technology and cybersecurity failures and data security breaches and the effects of the ongoing COVID-19 pandemic. We cannot be sure that we will be able to anticipate or respond timely to changes in any of these factors, which could adversely affect the operating results in one or more fiscal quarters. Results of operations in any past period should not be considered, in and of itself, indicative of the results to be expected for future periods. Fluctuations in operating results may also result in fluctuations in the price of our stock.

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Table of Contents

PART I

Item 1. Business

We are a broadcast company primarily engaged in acquiring, developing and operating broadcast properties. As of February 28, 2021, we owned seventy-nine FM, thirty-five AM radio stations and seventy-nine metro signals serving twenty-seven markets, including Bellingham, Washington; Charleston, South Carolina; Columbus, Ohio; Des Moines, Iowa; Manchester, New Hampshire; Milwaukee, Wisconsin; and Norfolk, Virginia.

The following table sets forth information about our radio stations and the markets they serve as of February 28, 2021:

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​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ Market ​ Market ​ ​ ​ ​

​ ​ ​ ​ Ranking ​ Ranking ​ ​ ​ ​

​ ​ ​ ​ By Radio ​ By Radio ​ ​ ​ Target

Station ​ Market (a) ​ Revenue (b) ​ Market (b) ​ Station Format ​ Demographics

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FM:

WKLH Milwaukee, WI 31 42 Classic Rock Adults 40-64

WJMR Milwaukee, WI 31 42 Urban Adult Contemporary Adults 25-54

WNRG Milwaukee, WI 31 42 Contemporary Hits Adults 18-34

WSNY Columbus, OH 33 36 Adult Contemporary Women 25-54

WNND Columbus, OH 33 36 Classic Hits Adults 35-64

WNNP Columbus, OH 33 36 Classic Hits Adults 35-64

WLVQ Columbus, OH 33 36 Classic Rock Adults 40-64

WVMX Columbus, OH 33 36 Hot Adult Contemporary Women 25-44

WAFX Norfolk, VA 39 45 Classic Rock Adults 40-64

KSTZ Des Moines, IA 65 71 Hot Adult Contemporary Women 25-44

KSTZ-HD2 Des Moines, IA 65 71 Country Legends Adults 45-64

KIOA Des Moines, IA 65 71 Classic Hits Adults 35-64

KIOA-HD2 Des Moines, IA 65 71 Contemporary Hits Adults 18-34

KAZR-HD2 Des Moines, IA 65 71 Oldies Adults 45+

KOEZ Des Moines, IA 65 71 Soft Adult Contemporary Women 35-64

WMGX Portland, ME 71 99 Hot Adult Contemporary Women 25-44

WYNZ Portland, ME 71 99 Classic Hits Adults 35-64

WPOR Portland, ME 71 99 Contemporary Country Adults 25-54

WCLZ Portland, ME 71 99 Adult Album Alternative Adults 25-54

WAVF Charleston, SC 90 79 Adult Variety Hits Adults 25-54

WCKN Charleston, SC 90 79 Contemporary Country Adults 25-54

WMXZ Charleston, SC 90 79 Hot Adult Contemporary Women 25-44

WMXZ-HD2 Charleston, SC 90 79 Urban Adult Contemporary Adults 25-54

WXST Charleston, SC 90 79 Urban Adult Contemporary Adults 25-54

WAQY Springfield, MA 98 101 Classic Rock Adults 40-64

WLZX Springfield, MA 98 101 Alternative Rock Men 18-49

WOGK Ocala-Gainesville, FL 113 86 Contemporary Country Adults 25-54

WYND Ocala-Gainesville, FL 113 86 Classic Rock Adults 40-64

WNDD Ocala-Gainesville, FL 113 86 Classic Rock Adults 40-64

WNDN Ocala-Gainesville, FL 113 86 Classic Rock Adults 40-64

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​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ Market ​ Market ​ ​ ​ ​

​ ​ ​ ​ Ranking ​ Ranking ​ ​ ​ ​

​ ​ ​ ​ By Radio ​ By Radio ​ ​ ​ Target

Station ​ Market (a) ​ Revenue (b) ​ Market (b) ​ Station Format ​ Demographics

WZID Manchester, NH 134 197 Adult Contemporary Women 25-54

WMLL Manchester, NH 134 197 Classic Rock Adults 40-64

WZID-HD2 Manchester, NH 134 197 Classic Hits Adults 40-64

WZID-HD3 Manchester, NH 134 197 Country Legends Adults 45-64

WOXL Asheville, NC 153 156 Hot Adult Contemporary Women 25-54

WTMT Asheville, NC 153 156 Classic Rock Adults 40-64

WTMT-HD2 Asheville, NC 153 156 Classic Hits Adults 35-64

WTMT-HD3 Asheville, NC 153 156 Country Legends Adults 45-64

WOXL-HD2 Asheville, NC 153 156 Adult Album Alternative Adults 25-54

WOXL-HD3 Asheville, NC 153 156 Oldies Adults 45+

WSIG Harrisonburg, VA 167 247 Classic Country Adults 35-64

WQPO Harrisonburg, VA 167 247 Contemporary Hits Women 18-34

WQPO-HD2 Harrisonburg, VA 167 247 Oldies Adults 45+

WQPD-HD3 Harrisonburg, VA 167 247 Soft Adult Contemporary Adults 40-64

WMQR Harrisonburg, VA 167 247 Adult Contemporary Women 25-44

WWRE Harrisonburg, VA 167 247 Classic Hits Adults 35-64

WNAX Yankton, SD 181 253 Contemporary Country Adults 25-54

WNAX-HD2 Yankton, SD 181 253 Country Legends Adults 45-64

KISM Bellingham, WA N/A N/A Classic Rock Adults 40-64

KAFE Bellingham, WA N/A N/A Adult Contemporary Women 25-54

WKVT Brattleboro, VT N/A N/A Classic Hits Adults 35-64

WRSY Brattleboro, VT N/A N/A Adult Album Alternative Adults 25-54

WQEL Bucyrus, OH N/A N/A Classic Hits Adults 35-64

WLRW Champaign, IL N/A N/A Hot Adult Contemporary Women 25-44

WREE Champaign, IL N/A N/A Classic Hits Adults 35-64

WYXY Champaign, IL N/A N/A Classic Country Adults 45-64

WIXY Champaign, IL N/A N/A Country Adults 25-54

WIXY-HD2 Champaign, IL N/A N/A Rock Men 18-49

WIXY-HD3 Champaign, IL N/A N/A Contemporary Hits Adults 18-34

WLRW-HD2 Champaign, IL N/A N/A Oldies Adults 45+

WWWV Charlottesville, VA N/A N/A Classic Rock Adults 40-64

WQMZ Charlottesville, VA N/A N/A Adult Contemporary Women 25-54

WCNR Charlottesville, VA N/A N/A Adult Album Alternative Adults 25-54

WCVL Charlottesville, VA N/A N/A Contemporary Country Adults 25-54

WZZP Clarksville, TN — Hopkinsville, KY N/A N/A Rock Men 18-49

WRND Clarksville, TN — Hopkinsville, KY N/A N/A Classic Hits Adults 35-64

WCVQ-HD3 Clarksville, TN — Hopkinsville, KY N/A N/A Country Legends Adults 45-64

WHAI Greenfield, MA N/A N/A Adult Contemporary Women 25-54

WPVQ Greenfield, MA N/A N/A Contemporary Country Adults 25-54

WLHH Hilton Head, SC N/A N/A Classic Hits Adults 35-64

WOEZ Hilton Head, SC N/A N/A Soft Adult Contemporary Women 35-64

WVSC Hilton Head, SC N/A N/A Adult Contemporary Women 25-44

WVSC-HD2 Hilton Head, SC N/A N/A Oldies Adults 45+

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​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ Market ​ Market ​ ​ ​ ​

​ ​ ​ ​ Ranking ​ Ranking ​ ​ ​ ​

​ ​ ​ ​ By Radio ​ By Radio ​ ​ ​ Target

Station ​ Market (a) ​ Revenue (b) ​ Market (b) ​ Station Format ​ Demographics

WIII Ithaca, NY N/A N/A Classic Rock Adults 40-64

WQNY Ithaca, NY N/A N/A Contemporary Country Adults 25-54

WQNY-HD3 Ithaca, NY N/A N/A Alternative Rock Men 18-34

WYXL Ithaca, NY N/A N/A Adult Contemporary Women 25-54

WYXL-HD2 Ithaca, NY N/A N/A Adult Album Alternative Adults 25-54

WYXL-HD3 Ithaca, NY N/A N/A Sports Men 25-64

WFIZ Ithaca, NY N/A N/A Contemporary Hits Adults 18-34

WFIZ-HD2 Ithaca, NY N/A N/A Classic Hits Adults 35-64

KEGI Jonesboro, AR N/A N/A Classic Rock Adults 40-64

KDXY Jonesboro, AR N/A N/A Contemporary Country Adults 25-54

KJBX Jonesboro, AR N/A N/A Adult Contemporary Women 25-54

KJBX-HD2 Jonesboro, AR N/A N/A Country Legends Adults 45-64

KDXY-HD2 Jonesboro, AR N/A N/A Contemporary Hits Adults 18-34

KDXY-HD3 Jonesboro, AR N/A N/A Soft Adult Contemporary Women 35-64

WKNE Keene, NH N/A N/A Hot Adult Contemporary Women 25-54

WKNE-HD2 Keene, NH N/A N/A Soft Adult Contemporary Women 35-64

WKNE-HD3 Keene, NH N/A N/A Oldies Adults 45+

WSNI Keene, NH N/A N/A Adult Contemporary Women 25-44

WSNI-HD2 Keene, NH N/A N/A Adult Album Alternative Adults 25-54

WINQ Keene, NH N/A N/A Contemporary Country Adults 25-54

WINQ-HD2 Keene, NH N/A N/A Classic Country Adults 45-64

KMIT Mitchell, SD N/A N/A Contemporary Country Adults 25-54

KMIT-HD2 Mitchell, SD N/A N/A Soft Adult Contemporary Women 35-64

KMIT-HD3 Mitchell, SD N/A N/A Oldies Adults 45+

KUQL Mitchell, SD N/A N/A Classic Hits Adults 40-64

WRSI Northampton, MA N/A N/A Adult Album Alternative Adults 25-54

WLZX-HD2 Northampton, MA N/A N/A Classic Hits Adults 35-64

WLZX-HD3 Northampton, MA N/A N/A Oldies Adults 45+

KICD Spencer, IA N/A N/A Contemporary Country Adults 25-54

KMRR Spencer, IA N/A N/A Adult Contemporary Women 25-54

KMRR-HD2 Spencer, IA N/A N/A Oldies Adults 45+

KMRR-HD3 Spencer, IA N/A N/A Soft Adult Contemporary Women 35-64

WYMG Springfield, IL N/A N/A Classic Rock Adults 40-64

WDBR Springfield, IL N/A N/A Contemporary Hits Adults 18-34

WQQL Springfield, IL N/A N/A Classic Hits Adults 35-64

WLFZ Springfield, IL N/A N/A Contemporary Country Adults 25-54

WDBR-HD2 Springfield, IL N/A N/A Country Legends Adults 45-64

WDBR-HD3 Springfield, IL N/A N/A Oldies Adults 45+

AM:

WJYI Milwaukee, WI 31 42 Christian Adults 25-54

WJOI Norfolk, VA 39 45 Adult Standards Adults 45-64

KRNT Des Moines, IA 65 71 Sports Men 18-64

KPSZ Des Moines, IA 65 71 Christian Adults 25-54

WGAN Portland, ME 71 99 News/Talk Adults 35-64

WZAN Portland, ME 71 99 Country Legends Adults 45-64

WBAE Portland, ME 71 99 Soft Adult Contemporary Women 35-64

WVAE Portland, ME 71 99 Soft Adult Contemporary Women 35-64

WSPO Charleston, SC 90 79 Gospel Adults 25-54

WLZX Springfield, MA 98 101 Alternative Rock Men 18-49

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​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​ ​ Market ​ Market ​ ​ ​ ​

​ ​ ​ ​ Ranking ​ Ranking ​ ​ ​ ​

​ ​ ​ ​ By Radio ​ By Radio ​ ​ ​ Target

Station ​ Market (a) ​ Revenue (b) ​ Market (b) ​ Station Format ​ Demographics

WSVA Harrisonburg, VA 167 247 News/Talk Adults 35-64

WHBG Harrisonburg, VA 167 247 Sports ESPN Men 18-64

KGMI Bellingham, WA N/A N/A News/Talk Adults 35-64

KPUG Bellingham, WA N/A N/A Sports/Talk Men 18-64

KBAI Bellingham, WA N/A N/A Classic Hits Adults 40-64

WINQ Brattleboro, VT N/A N/A News/Talk Adults 35-60

WBCO Bucyrus, OH N/A N/A Classic Country Adults 45-64

WINA Charlottesville, VA N/A N/A News/Talk Adults 35-64

WVAX Charlottesville, VA N/A N/A Sports Talk Men 18-64

WKFN Clarksville, TN — Hopkinsville, KY N/A N/A Sports/Talk ESPN Men 18-64

WNZE ​ Clarksville, TN — Hopkinsville, KY ​ N/A N/A ​ News/Talk ​ Men 35-64

WHMQ Greenfield, MA N/A N/A Soft Adult Contemporary Adults 35-64

WPVQ Greenfield, MA N/A N/A Country Legends Adults 45-64

WNYY Ithaca, NY N/A N/A Oldies Adults 45+

WHCU Ithaca, NY N/A N/A News/Talk Adults 35-64

WKBK Keene, NH N/A N/A News/Talk Adults 35-64

WZBK Keene, NH N/A N/A Sports/Talk Men 18-64

WHMP Northampton, MA N/A N/A News/Talk Adults 35-64

KICD Spencer, IA N/A N/A News/Talk Adults 35-64

WTAX Springfield, IL N/A N/A News/Talk Adults 35-64

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(a) Actual city of license may differ from metropolitan market actually served.

(b) Derived from Investing in Radio 2020 Market Report.

Strategy

Our strategy is to operate top billing radio stations in mid-sized markets, which we define as markets ranked from 20 to 200 out of the markets summarized by Investing in Radio Market Report.

Programming and marketing are key components in our strategy to achieve top ratings in our radio operations. In many of our markets, the three or four most highly rated radio stations receive a disproportionately high share of the market’s advertising revenues. As a result, a station’s revenue is dependent upon its ability to maximize its number of listeners/viewers within an advertiser’s given demographic parameters. In certain cases we use attributes other than specific market listener data for sales activities. In those markets where sufficient alternative data is available, we do not subscribe to an independent listener rating service.

The radio stations that we own and/or operate employ a variety of programming formats, including Classic Hits, Adult Hits, Top 40, Country, Country Legends, Mainstream/Hot/Soft Adult Contemporary, Pure Oldies, Classic Rock, and News/Talk. We regularly perform extensive market research, including music evaluations, focus groups and strategic vulnerability studies. Our stations also employ audience promotions to further develop and secure a loyal following.

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We concentrate on the development of strong decentralized local management, which is responsible for the day-to-day operations of the stations we own and/or operate. We compensate local management based on the station’s financial performance, as well as other performance factors that are deemed to affect the long-term ability of the stations to achieve financial performance objectives. Corporate management is responsible for long-range planning, establishing policies and procedures, resource allocation and monitoring the activities of the stations.

Under the Telecommunications Act of 1996 (the “Telecommunications Act”), we are permitted to own as many as eight radio stations in a single market. See “Federal Regulation of Radio Broadcasting”. We seek to acquire reasonably priced broadcast properties with significant growth potential that are located in markets with well-established and relatively stable economies. We often focus on local economies supported by a strong presence of state or federal government or one or more major universities. Future acquisitions will be subject to the availability of financing, the terms of our credit facility, and compliance with the Communications Act of 1934 (the “Communications Act”) and Federal Communications Commission (“FCC”) rules.

Advertising Sales

Our primary source of revenue is from the sale of advertising for broadcast on our stations. Depending on the format of a particular radio station, there are a predetermined number of advertisements broadcast each hour. We determine the number of advertisements broadcast hourly that can maximize a station’s available revenue dollars without jeopardizing listening/viewing levels. While there may be shifts from time to time in the number of advertisements broadcast during a particular time of the day, the total number of advertisements broadcast on a particular station generally does not vary significantly from year to year. Any change in our revenue, with the exception of those instances where stations are acquired or sold, is generally the result of pricing adjustments, which are made to ensure that the station efficiently utilizes available inventory.

Advertising rates charged by radio stations are based primarily on a station’s ability to attract audiences in the demographic groups targeted by advertisers, the number of stations in the market competing for the same demographic group, the supply of and demand for radio advertising time, and other qualitative factors including rates charged by competing radio stations within a given market. Radio rates are generally highest during morning and afternoon drive-time hours. Most advertising contracts are short-term, generally running for only a few weeks. This allows broadcasters the ability to modify advertising rates as dictated by changes in station ownership within a market, changes in listener/viewer ratings and changes in the business climate within a particular market.

Approximately $86,562,000 or 84% of our gross revenue for the year ended December 31, 2020 (approximately $116,474,000 or 88% in fiscal 2019 and approximately $116,386,000 or 87% in fiscal 2018) was generated from the sale of local advertising for both continuing operations and discontinued operations. Additional revenue is generated from the sale of national advertising, network compensation payments, barter and other miscellaneous transactions. In all of our markets, we attempt to maintain a local sales force that is generally larger than our competitors. The principal goal in our sales efforts is to develop long-standing customer relationships through frequent direct contacts, which we believe represents a competitive advantage. We also typically provide incentives to our sales staff to seek out new opportunities resulting in the establishment of new client relationships, as well as new sources of revenue, not directly associated with the sale of broadcast time.

Each of our stations also engages independent national sales representatives to assist us in obtaining national advertising revenues. These representatives obtain advertising through national advertising agencies and receive a commission from us based on our net revenue from the advertising obtained. Total gross revenue resulting from national advertising for both continuing operations and discontinued operations in fiscal 2020 was approximately $16,361,000 or 16% of our gross revenue (approximately $15,914,000 or 12% in fiscal 2019 and approximately $18,110,000 or 13% in fiscal 2018). Gross national political revenue is included in these numbers.

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Competition

Radio broadcasting is a highly competitive business. Our stations compete for listeners and advertising revenues directly with other radio stations, as well as other media, within their markets. Our radio stations compete for listeners primarily on the basis of program content and by employing on-air talent which appeals to a particular demographic group. By building a strong listener base comprised of a specific demographic group in each of our markets, we are able to attract advertisers seeking to reach these listeners.

Other media, including broadcast television and/or radio (as applicable), cable television, newspapers, magazines, direct mail, the Internet, coupons and billboard advertising, also compete with us for advertising revenues.

The radio broadcasting industry is also subject to competition from new media technologies, such as the delivery of audio programming by cable and satellite television systems, satellite radio systems, direct reception from satellites, and streaming of audio on the Internet.

Seasonality

Our revenue varies throughout the year. Advertising expenditures, our primary source of revenue, is generally lowest in the first quarter. Additionally, given the disruptions in economic activity caused by the COVID-19 pandemic, our quarterly results in 2020 are not necessarily indicative of results that may be achieved in the future.

Environmental Compliance

As the owner, lessee or operator of various real properties and facilities, we are subject to various federal, state and local environmental laws and regulations. Historically, compliance with these laws and regulations has not had a material adverse effect on our business. There can be no assurance, however, that compliance with existing or new environmental laws and regulations will not require us to make significant expenditures of funds.

Human Capital Resources

Our key human capital management objectives are to attract, develop and retain top industry talent that reflects the diversity of the communities in which we broadcast. To support this goal, our human resources programs are designed to develop talent to prepare for key roles and leadership positions for the future; reward employees through competitive industry pay, benefits and other programs, instill our culture with a focus on ethical behavior and enhance our employees’ performance through investment in current technology, tools and training to enable our employees to operate at a high level.

As of December 31, 2020, we had approximately 607 full-time employees and 221 part-time employees, none of whom are represented by unions. We believe that our relations with our employees are good.

We employ several high-profile personalities with large loyal audiences in their respective markets. We have entered into employment and non-competition agreements with our President and with most of our on-air personalities, as well as non-competition agreements with our commissioned sales representatives.

We are committed to hiring, developing and supporting a diverse and inclusive workplace. Our management teams are expected to exhibit and promote honest, ethical and respectful conduct in the workplace. All of our employees must adhere to a code of conduct that sets standards for appropriate ethical behavior.

Available Information

You can find more information about us at our Internet website www.sagacommunications.com. Our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and any amendments to those reports are available free of charge on our Internet website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (the “SEC”).

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Federal Regulation of Radio Broadcasting

Introduction. The ownership, operation and sale of radio stations, including those licensed to us, are subject to the jurisdiction of the FCC, which acts under authority granted by the Communications Act. Among other things, the FCC assigns frequency bands for broadcasting; determines the particular frequencies, locations and operating power of stations; issues, renews, revokes and modifies station licenses; determines whether to approve changes in ownership or control of station licenses; regulates equipment used by stations; adopts and implements regulations and policies that directly or indirectly affect the ownership, operation and employment practices of stations; and has the power to impose penalties for violations of its rules or the Communications Act. For additional information on the impact of FCC regulations and the introduction of new technologies on our operations, see “Forward Looking Statements” and “Risk Factors” contained elsewhere in this report.

The following is a brief summary of certain provisions of the Communications Act and of specific FCC regulations and policies. Reference should be made to the Communications Act, FCC rules (Title 47 Code of Federal Regulation, Chapter I, Subchapters A and C) and the public notices and rulings of the FCC for further information concerning the nature and extent of federal regulation of broadcast stations.

License Renewal. Radio broadcasting licenses are granted for maximum terms of eight years, and are subject to renewal upon application to the FCC. Under its “two-step” renewal process, the FCC must grant a renewal application if it finds that during the preceding term the licensee has served the public interest, convenience and necessity, and there have been no serious violations of the Communications Act or the FCC’s rules which, taken together, would constitute a pattern of abuse. If a renewal applicant fails to meet these standards, the FCC may either deny its application or grant the application on such terms and conditions as are appropriate, including renewal for less than the full 8-year term. In making the determination of whether to renew the license, the FCC may not consider whether the public interest would be served by the grant of a license to a person other than the renewal applicant. If the FCC, after notice and opportunity for a hearing, finds that the licensee has failed to meet the requirements for renewal and no mitigating factors justify the imposition of lesser sanctions, the FCC may issue an order denying the renewal application, and only thereafter may the FCC accept applications for a construction permit specifying the broadcasting facilities of the former licensee. Petitions may be filed to deny the renewal applications of our stations, but any such petitions must raise issues that would cause the FCC to deny a renewal application under the standards adopted in the “two-step” renewal process. Failure to renew a license could have a material adverse effect on the Company’s business. Radio station licenses generally expire along with the licenses of all other radio stations in a given state. The FCC accepts renewal applications for various groups of radio stations every two months, the current cycle having begun in June 2019 and will conclude in June 2022 (when New York station licenses expire). During the cycle, we intend to timely file renewal applications, as required for the Company’s stations. We have filed applications for renewal of license of our radio stations in Virginia, North Carolina, South Carolina, Florida, Tennessee, Kentucky, Arkansas, Ohio, Illinois, Wisconsin and Iowa, which applications have been granted. Applications for renewal of license of our radio stations in South Dakota are pending. In January 2018, the FCC designated the renewal applications of two AM radio stations (not the Company’s) for hearing based on the stations’ records of extended periods of silence during and following their respective license renewal terms. Under the Communications Act, if a broadcast station fails to transmit signals for any consecutive 12-month period, the FCC license expires at the end of that period, unless the FCC exercises its discretion to extend or reinstate the license “to promote equity and fairness.” The FCC, to date, has rarely exercised such discretion. Further, the FCC has revoked the licenses of broadcast stations that failed to pay regulatory fees. The Company is current in the payment of regulatory fees to the FCC.

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The following table sets forth the market and FCC class of each of the broadcast stations that we own or operate with an attributable interest and the date on which each such station’s FCC license expires:

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​ ​ ​ FCC ​ Expiration Date of

Station Market (1) Station Class (2) FCC Authorization ​

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FM:

WOXL Asheville, NC C2 ​ December 1, 2027 ​

WTMT Asheville, NC C2 ​ December 1, 2027 ​

KISM Bellingham, WA C ​ February 1, 2022 ​

KAFE Bellingham, WA C ​ February 1, 2022 ​

WRSY Brattleboro, VT A ​ April 1, 2022 ​

WKVT Brattleboro, VT A ​ April 1, 2022 ​

WQEL Bucyrus, OH A ​ October 1, 2028 ​

WLRW Champaign, IL B ​ December 1, 2028 ​

WIXY Champaign, IL B1 ​ December 1, 2028 ​

WREE Champaign, IL B1 ​ December 1, 2028 ​

WYXY Champaign, IL B ​ December 1, 2028 ​

WAVF Charleston, SC C ​ December 1, 2027 ​

WCKN Charleston, SC C1 ​ December 1, 2027 ​

WMXZ Charleston, SC C2 ​ December 1, 2027 ​

WXST Charleston, SC C1 ​ December 1, 2027 ​

WWWV Charlottesville, VA B ​ October 1, 2027 ​

WQMZ Charlottesville, VA A ​ October 1, 2027 ​

WCNR Charlottesville, VA A ​ October 1, 2027 ​

WCVL Charlottesville, VA A ​ October 1, 2027 ​

WCVQ Clarksville, TN/Hopkinsville, KY C1 ​ August 1, 2028 ​

WZZP Clarksville, TN/Hopkinsville, KY A ​ August 1, 2028 ​

WVVR Clarksville, TN/Hopkinsville, KY C0 ​ August 1, 2028 ​

WRND Clarksville, TN/Hopkinsville, KY A ​ August 1, 2028 ​

WSNY Columbus, OH B ​ October 1, 2028 ​

WNNP Columbus, OH A ​ October 1, 2028 ​

WNND Columbus, OH A ​ October 1, 2028 ​

WVMX Columbus, OH A ​ October 1, 2028 ​

WLVQ Columbus, OH B ​ October 1, 2028 ​

KSTZ Des Moines, IA C ​ February 1, 2029 ​

KIOA Des Moines, IA C1 ​ February 1, 2029 ​

KAZR Des Moines, IA C1 ​ February 1, 2029 ​

KOEZ Des Moines, IA C0 ​ February 1, 2029 ​

WHAI Greenfield, MA A ​ April 1, 2022 ​

WPVQ Greenfield, MA A ​ April 1, 2022 ​

WMQR Harrisonburg, VA B1 ​ October 1, 2027 ​

WQPO Harrisonburg, VA B ​ October 1, 2027 ​

WSIG Harrisonburg, VA B1 ​ October 1, 2027 ​

WWRE Harrisonburg, VA A ​ October 1, 2027 ​

WOEZ Hilton Head Island, SC C3 ​ December 1, 2027 ​

WLHH Hilton Head Island, SC C3 ​ December 1, 2027 ​

WVSC Hilton Head Island, SC C3 ​ December 1, 2027 ​

WYXL Ithaca, NY B ​ June 1, 2022 ​

WQNY Ithaca, NY B ​ June 1, 2022 ​

WIII Ithaca, NY B ​ June 1, 2022 ​

WFIZ Ithaca, NY A ​ June 1, 2022 ​

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​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​ FCC ​ Expiration Date of ​

Station Market (1) Station Class (2) FCC Authorization ​

KEGI Jonesboro, AR C2 ​ June 1, 2028 ​

KDXY Jonesboro, AR C3 ​ June 1, 2028 ​

KJBX Jonesboro, AR C3 ​ June 1, 2028 ​

WKNE Keene, NH B ​ April 1, 2022 ​

WSNI Keene, NH A ​ April 1, 2022 ​

WINQ Keene, NH A ​ April 1, 2022 ​

WZID Manchester, NH B ​ April 1, 2022 ​

WMLL Manchester, NH A ​ April 1, 2022 ​

WKLH Milwaukee, WI B ​ December 1, 2028 ​

WHQG Milwaukee, WI B ​ December 1, 2028 ​

WNRG Milwaukee, WI A ​ December 1, 2028 ​

WJMR Milwaukee, WI A ​ December 1, 2028 ​

KMIT Mitchell, SD C1 ​ April 1, 2021 (4)

KUQL Mitchell, SD C1 ​ April 1, 2021 (4)

WNOR Norfolk, VA B ​ October 1, 2027 ​

WAFX Norfolk, VA C ​ October 1, 2027 ​

WOGK Ocala, FL C0 ​ February 1, 2028 ​

WYND Ocala, FL A ​ February 1, 2028 ​

WNDD Ocala, FL A ​ February 1, 2028 ​

WNDN Ocala, FL A ​ February 1, 2028 ​

WRSI Northampton, MA A ​ April 1, 2022 ​

WPOR Portland, ME B ​ April 1, 2022 ​

WCLZ Portland, ME B ​ April 1, 2022 ​

WMGX Portland, ME B ​ April 1, 2022 ​

WYNZ Portland, ME B1 ​ April 1, 2022 ​

KICD Spencer, IA C1 ​ February 1, 2029 ​

KMRR Spencer, IA C3 ​ February 1, 2029 ​

WLZX Springfield, MA A ​ April 1, 2022 ​

WAQY Springfield, MA B ​ April 1, 2022 ​

WYMG Springfield, IL B ​ December 1, 2028 ​

WLFZ Springfield, IL B ​ December 1, 2028 ​

WDBR Springfield, IL B ​ December 1, 2028 ​

WQQL Springfield, IL B1 ​ December 1, 2028 ​

WNAX Yankton, SD C1 ​ April 1, 2021 (4)

​ ​ ​ ​ ​ ​ ​ ​

AM: ​ ​ ​ ​ ​ ​ ​

WISE Asheville, NC B ​ December 1, 2027 ​

WYSE Asheville, NC D (3) December 1, 2027 ​

KGMI Bellingham, WA B ​ February 1, 2022 ​

KPUG Bellingham, WA B ​ February 1, 2022 ​

KBAI Bellingham, WA B ​ February 1, 2022 ​

WINQ Brattleboro, VT C ​ April 1, 2022 ​

WBCO Bucyrus, OH D (3) October 1, 2028 ​

WSPO Charleston, SC B ​ December 1, 2027 ​

WINA Charlottesville, VA B ​ October 1, 2027 ​

WVAX Charlottesville, VA C ​ October 1, 2027 ​

WQEZ Clarksville, TN/Hopkinsville, KY D (3) August 1, 2028 ​

WKFN Clarksville, TN D (3) August 1, 2028 ​

WNZE ​ Clarksville, TN ​ C ​ August 1, 2028 ​

KRNT Des Moines, IA B ​ February 1, 2029 ​

KPSZ Des Moines, IA B ​ February 1, 2029 ​

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​

​ ​ ​ ​ ​ ​ ​ ​

​ ​ ​ FCC ​ Expiration Date of ​

Station Market (1) Station Class (2) FCC Authorization ​

WHMQ Greenfield, MA C ​ April 1, 2022 ​

WPVQ Greenfield, MA D (3) April 1, 2022 ​

WSVA Harrisonburg, VA B ​ October 1, 2027 ​

WHBG Harrisonburg, VA D (3) October 1, 2027 ​

WHCU Ithaca, NY B ​ June 1, 2022 ​

WNYY Ithaca, NY B ​ June 1, 2022 ​

WKBK Keene, NH B ​ April 1, 2022 ​

WZBK Keene, NH D (3) April 1, 2022 ​

WFEA Manchester, NH B ​ April 1, 2022 ​

WJYI Milwaukee, WI C ​ December 1, 2028 ​

WJOI Norfolk, VA C ​ October 1, 2027 ​

WHMP Northampton, MA C ​ April 1, 2022 ​

WGAN Portland, ME B ​ April 1, 2022 ​

WZAN Portland, ME B ​ April 1, 2022 ​

WBAE Portland, ME C ​ April 1, 2022 ​

WGIN Portland, ME C ​ April 1, 2022 ​

KICD Spencer, IA C ​ February 1, 2029 ​

WLZX Springfield, MA D (3) April 1, 2022 ​

WTAX Springfield, IL C ​ December 1, 2028 ​

WNAX Yankton, SD B ​ April 1, 2021 (4)

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(3) Operates daytime only or with greatly reduced power at night.

(4) An application for renewal of license was timely filed and is pending.

Ownership Matters. The Communications Act prohibits the assignment of a broadcast license or the transfer of control of a broadcast licensee without the prior approval of the FCC. In determining whether to grant or renew a broadcast license, the FCC considers a number of factors pertaining to the licensee, including compliance with the Communications Act’s limitations on alien ownership; compliance with various rules limiting common ownership of broadcast, cable and newspaper properties; and the “character” and other qualifications of the licensee and those persons holding “attributable or cognizable” interests therein.

Under the Communications Act (Section 310(b)), broadcast licenses may not be granted to any corporation having more than one-fifth of its issued and outstanding capital stock owned or voted by aliens (including non-U.S. corporations), foreign governments or their representatives (collectively, “Aliens”). The Communications Act also prohibits a corporation, without FCC waiver, from holding a broadcast license if that corporation is controlled, directly or indirectly, by another corporation in which more than 25% of the issued and outstanding capital stock is owned or voted by Aliens. The FCC has issued interpretations of existing law under which these restrictions in modified form apply to other forms of business organizations, including partnerships. We serve as a holding company for our various radio station subsidiaries (where we could not have more than 25% of our stock owned or voted by Aliens).

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The FCC has adopted rules to extend to broadcast licensees the same rules and procedures that common carrier wireless licensees use to seek approval for foreign ownership, with broadcast-specific modifications.

The rules and procedures allow a broadcast licensee to request in a petition for declaratory ruling under Title 47 U.S.C. Section 310(b)(4):

The rules require the Company to seek specific approval only of foreign individuals or entities with a greater than 5 percent ownership interest (or, in certain situations, an interest greater than 10 percent).

The rules allow broadcast licensees that have foreign ownership rulings to apply those rulings to all radio and television broadcast licenses then held or subsequently proposed to be acquired by the same licensee and its covered subsidiaries and affiliates, regardless of the broadcast service (e.g., AM, FM, or TV) or the geographic area in which the stations are located.

The methodology provides a framework for a publicly traded licensee or controlling U.S. parent to ascertain its foreign ownership using information that is “known or reasonably should be known” to the company in the ordinary course of business.

For publicly traded licensees and U.S. parent companies (like the Company), the rules formalize the current equitable practice of recognizing a licensee’s good faith efforts to comply with Section 310(b) where the non-compliance was due solely to circumstances beyond the licensee’s control that were not known or reasonably foreseeable to the licensee.

We are permitted to own an unlimited number of radio stations on a nationwide basis (subject to the local ownership restrictions described below).

Under the rules, the number of radio stations one party may own in a local Nielsen Audio-rated radio market is determined by the number of full-power commercial and noncommercial radio stations in the market as determined by Nielsen Audio and BIA Advisory Services, LLC d/b/a BIA/Kelsey. Radio markets that are not Nielsen Audio rated are determined by analysis of the broadcast coverage contours of the radio stations involved.

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Under the Communications Act, and the FCC’s “Local Ownership Rule,” we are permitted to own radio stations (without regard to the audience shares of the stations) based upon the number of full-power commercial and noncommercial radio stations in the relevant radio market as follows:

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​ ​ ​

Number of Stations ​

In Radio Market Number of Stations We Can Own

​ ​ ​

15-29 Total of 6 stations, not more than 4 in the same service (AM or FM).

30-44 Total of 7 stations, not more than 4 in the same service (AM or FM).

45 or More Total of 8 stations, not more than 5 in the same service (AM or FM).

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In a decision of the United States Court of Appeals for the Third Circuit in Prometheus Radio Project v. FCC, 939 F.3d 567 (3d Cir. 2019) (“Prometheus”), the court vacated and remanded the Commission’s 2010/2014 Quadrennial Review Order on Reconsideration, 32 FCC Rcd 9802 (2017), which had modified the Commission’s media ownership rules by: (1) eliminating the newspaper/broadcast cross-ownership and radio/television cross-ownership rules; (2) revising the local television ownership rule by eliminating the “eight voices” test and permitting applicants to seek the combination of two top-four ranked stations in a given market on a case-by-case basis; and (3) deeming joint sales agreements between television stations to be non-attributable. By vacating the Order on Reconsideration, the Prometheus decision abrogated these rule changes and reinstated the prior media ownership rules adopted in the 2010/2014 Quadrennial Review Order, 31 FCC Rcd 9864 (2016). The court also vacated the Commission’s definition of an “eligible entity,” which had been adopted in the 2010/2014 Quadrennial Review Order. The reinstated rules (1) prohibit the common ownership of a daily print newspaper and a full-power broadcast station (AM, FM or TV) if the station’s service contour encompasses the newspaper’s community of publication); (2) prohibit an entity from owning two or more television stations and one radio station in the same market, unless the market meets certain size criteria; (3) reinstituted the so-called “Eight-Voices Test” and the “Top-Four Prohibition”; (4) disposed of a presumption for certain embedded markets (smaller markets, as defined by Nielsen Audio, that are included in a larger parent market) transactions; and (5) reinstated the attribution rule for television joint sales agreements. The disclosure requirement for shared service agreements involving commercial television stations was unchanged. The Court decision vacated a proposed “incubator” program to promote ownership diversity. On October 2, 2020, the U. S. Supreme Court granted certiorari in the case, sub nom., FCC v. Prometheus Radio Project (Docket 19-1231) and National Association of Broadcasters v. Prometheus Radio Project (Docket 19-1241). On January 19, 2021, the Supreme Court heard oral argument in the cases. In December 2018, the FCC adopted an NPRM to initiate the 2018 Quadrennial Review of its media ownership rules. The three rules subject to review are the Local Radio Ownership Rule, the Local Television Ownership Rule, and the dual network rule (which permits a television station to affiliate with an entity maintaining two or more broadcast television networks unless the two or more networks consist of two or more of the major networks (i.e., ABC, CBS, NBC and Fox) or one of these four networks and either the UPN or WB television network.) The FCC sought comment on whether, given the current state of the media marketplace, the FCC should retain, modify, or eliminate any of these rules. The Company cannot predict what if any, action the FCC may take as a result of its review or Supreme Court action.

New rules that could be promulgated under the Communications Act may permit us to own, operate, control or have a cognizable interest in additional radio broadcast stations if the FCC determines that such ownership, operation, control or cognizable interest will result in an increase in the number of radio stations in operation. No firm date has been established for initiation of this rule-making proceeding. New rules could restrict the Company’s ability to acquire additional radio and television stations in some markets. The Court and FCC proceedings are ongoing and we cannot predict what action, if any, the Court or the FCC may take to further modify its rules. Due to changes in local radio markets, the ownership of some of our radio stations, in the future, could exceed the current ownership limits imposed by the Local Ownership Rule. Their current ownership structure is “grandfathered” by the FCC. Absent a waiver, it might not be possible to sell all of them as currently configured in “clusters” to a single purchaser. The statements herein are based solely on the FCC’s multiple ownership rules in effect as of the date hereof and do not include any forward-looking statements concerning compliance with any future multiple ownership rules.

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All commercial broadcasters must file a “biennial” ownership report by December 1, 2021, describing the ownership of their stations as of October 1, 2021. The FCC eliminated the prior requirement to file with the FCC paper copies of certain agreements, corporate organization documents, and the like. Instead, a broadcaster is required to upload copies of these documents to the station’s online public inspection file, or provide a list of such documents and make them available to a requesting party. The FCC generally applies its ownership limits to “attributable” interests held by an individual, corporation, partnership or other association. In the case of corporations holding broadcast licenses, the interests of officers, directors and those who, directly or indirectly, have the right to vote 5% or more of the corporation’s stock (or 20% or more of such stock in the case of certain passive investors that are holding stock for investment purposes only) are generally attributable, as are positions of an officer or director of a corporate parent of a broadcast licensee. Currently, none of our directors has an attributable interest or interests in companies applying for or licensed to operate broadcast stations other than us.

The FCC’s ownership attribution rules (a) apply to limited liability companies and registered limited liability partnerships the same attribution rules that the FCC applies to limited partnerships; and (b) include an equity/debt plus (“EDP”) rule that attributes the other media interests of an otherwise passive investor if the investor is (1) a “major-market program supplier” that supplies over 15% of a station’s total weekly broadcast programming hours, or (2) a same-market media entity subject to the FCC’s multiple ownership rules (including broadcasters, cable operators and newspapers) so that its interest in a licensee or other media entity in that market will be attributed if that interest, aggregating both debt and equity holdings, exceeds 33% of the total asset value (equity plus debt) of the licensee or media entity. We could be prohibited from acquiring a financial interest in stations in markets where application of the EDP rule would result in us having an attributable interest in the stations. In reconsidering its rules, the FCC also eliminated the “single majority shareholder exemption” which provides that minority voting shares in a corporation where one shareholder controls a majority of the voting stock are not attributable; however, the FCC “suspended” the elimination of this exemption until the FCC resolved issues concerning cable television ownership. The FCC announced in 2016 that it would address this issue, among others, in a subsequent decision, but the FCC has so far taken no action on the matters.

In addition to the FCC’s multiple ownership rules, the Antitrust Division of the United States Department of Justice and the Federal Trade Commission and some state governments have the authority to examine proposed transactions for compliance with antitrust statutes and guidelines. The Antitrust Division has issued “civil investigative demands” and obtained consent decrees requiring the divestiture of stations in a particular market based on antitrust concerns.

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Programming and Operation. The Communications Act requires broadcasters to serve the “public interest.” Licensees are required to present programming that is responsive to community problems, needs and interests and to maintain certain records demonstrating such responsiveness. Complaints from listeners concerning a station’s programming often will be considered by the FCC when it evaluates renewal applications of a licensee, although such complaints may be filed at any time and generally may be considered by the FCC at any time. Stations also must follow various rules promulgated under the Communications Act that regulate, among other things, political advertising, sponsorship identification, the advertisement of contests and lotteries, obscene and indecent broadcasts, and technical operations, including limits on radio frequency radiation. In 2020, the FCC entered into a Consent Decree with Sinclair Broadcast Group, which agreed to pay a $48 million dollar fine to settle issues related to sponsorship identification violations, among other matters. The FCC also entered into a Consent Decree with Cumulus Radio to settle violations of the sponsorship identification requirements in connection with the broadcast of issue ads promoting a construction project in New Hampshire. There are other examples of FCC enforcement action for violation of the sponsorship identification requirements. A licensee that broadcasts or advertises information about a contest it conducts must fully and accurately disclose the material terms of the contest, and conduct the contest substantially as announced or advertised over the air or on the Internet. The disclosure of material terms must be made by either periodic disclosures broadcast on the station or written disclosures on the station's Internet web site. Violation of the rule can result in significant fines. In 2020, the FCC fined a broadcaster $5,200 for failing to conduct its contests as advertised by failing to award prizes in a timely manner. Another licensee entered into a Consent Decree with the FCC, paying a fine of $125,000 for, among other things, predetermining the outcome of a contest. The FCC requires the owners of antenna supporting structures (towers) to register them with the FCC. As an owner of such towers, our subsidiaries are subject to the registration requirements. On January 13, 2020, the FCC released an Order confirming a Consent Decree whereby the owner of several antenna structures agreed to pay the government a civil penalty of $1,130,000 and develop a Compliance Plan requiring reports for two years as a result of (1) failing to conduct required daily inspections of the lighting systems at 10 towers, (2) failing to completely log lighting failures at 7 towers, and (3) failing to timely notify the FCC of its acquisition of 2 towers. In 2017, the FCC eliminated the broadcast main studio rule. The FCC retained the requirement that stations maintain a local or toll-free telephone number to ensure consumers have ready access to their local stations. The FCC’s rules require cable operators, direct satellite TV providers, broadcast radio licensees, and satellite radio licensees to post public inspection files to the FCC's online database (the “online public inspection file” or “OPIF”) rather than maintaining them in a local public inspection file. The FCC believes posting these files to the OPIF renders the materials more widely accessible to the public. The Company’s radio stations post their public inspection files to the FCC’s website. The FCC has warned licensees of possible enforcement action if these files are found not to be in compliance at the time of license renewal. Because of inadvertent untimely posting of certain political records at stations owned by one of the Company’s subsidiaries, that subsidiary was obliged to enter into a Consent Decree with the FCC (FCC Order, DA 201263, released October 26, 2020). The Consent Decree requires Company employees responsible for performing, supervising, overseeing, or managing activities related to the maintenance of online political files to thoroughly understand the Company’s obligation to comply with laws regulating political broadcasting and to promptly report to the FCC any noncompliance with those laws. The affected subsidiary must file a report with the FCC by December 10, 2021, regarding its record of compliance with the political laws. The FCC in 2020 revised its rules governing the publication of local notice of the filing of certain broadcast applications. FCC licensees, like the Company, must maintain a tab on their station websites where the public can view the OPIF and a tab where notices describing pending applications must be posted, rather than printing such notices in local newspapers.

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The Company is required to pay (1) FCC filing fees in connection with its applications and (2) annual regulatory fees determined by the number and character of the radio stations the Company owns as of October 1 of each prior year.

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Equal Employment Opportunity Rules. Equal employment opportunity (EEO) rules and policies for broadcasters prohibit discrimination by broadcasters and multichannel video programming distributors. They also require broadcasters to provide notice of job vacancies and to undertake additional outreach measures, such as job fairs and scholarship programs. The rules mandate a “three prong” outreach program; i.e., Prong 1: widely disseminate information concerning each full-time (30 hours or more) job vacancy, except for vacancies filled in exigent circumstances; Prong 2: provide notice of each full-time job vacancy to recruitment organizations that have requested such notice; and Prong 3: complete two (for broadcast employment units with five to ten full-time employees or that are located in smaller markets) or four (for employment units with more than ten full-time employees located in larger markets) longer-term recruitment initiatives within a two-year period. These include, for example, job fairs, scholarship and internship programs, and other community events designed to inform the public as to employment opportunities in broadcasting. The rules mandate extensive record keeping and reporting requirements. In 2017, the FCC issued a Declaratory Ruling permitting broadcast stations to use the internet for job postings as their sole means of recruiting employees (so long as the postings reach all segments of the station’s community. The EEO rules are enforced through review at renewal time, and through random audits and targeted investigations resulting from information received as to possible violations. The FCC has not yet decided on whether and how to apply the EEO rule to part-time positions. Failure to observe these or other rules and policies can result in the imposition of various sanctions, including monetary forfeitures, the grant of “short” (less than the full eight-year) renewal terms or, for particularly egregious violations, the denial of a license renewal application or the revocation of a license. In an NPRM released June 21, 2019 (MB Docket No. 19-177), the FCC is reviewing the EEO rules. In the NPRM, the FCC seeks comment on its track record on EEO enforcement, whether the agency should make improvements to EEO compliance and enforcement, and invites comment on its audit program. The Company cannot predict whether, or if changes may be made as a result of this NPRM.

Time Brokerage Agreements. As is common in the industry, we have previously entered into what have commonly been referred to as Time Brokerage Agreements (“TBAs”) which are sometimes termed “Local Marketing Agreements.” Such arrangements are an extension of the concept of agreements under which a licensee of a station sells blocks of time on its station to an entity or entities which purchase the blocks of time and which sell their own commercial advertising announcements during the time periods in question. While these agreements may take varying forms, under a typical TBA, separately owned and licensed radio or television stations agree to enter into cooperative arrangements of varying sorts, subject to compliance with the requirements of antitrust laws and with the FCC’s rules and policies. Under these types of arrangements, separately-owned stations agree to function cooperatively in terms of programming, advertising sales, and other matters, subject to the licensee of each station maintaining independent control over the financing, programming and station operations of its own station. One typical type of TBA is a programming agreement between two separately-owned radio or television stations serving a common service area, whereby the licensee of one station purchases substantial portions of the broadcast day on the other licensee’s station, subject to ultimate editorial and other controls being exercised by the latter licensee, and sells advertising time during such program segments.

The FCC’s rules provide that a station purchasing (brokering) time on another station serving the same market will be considered to have an attributable ownership interest in the brokered station for purposes of the FCC’s multiple ownership rules. As a result, under the rules, a broadcast station will not be permitted to enter into a time brokerage agreement giving it the right to purchase more than 15% of the broadcast time, on a weekly basis, of another local station that it could not own under the local ownership rules of the FCC’s multiple ownership rules. The Company currently has no TBAs. Effective October 22, 2020, the FCC eliminated Title 47 C.F.R. § 73.3556, a rule that prohibited the duplication of programming on co-owned radio stations in the same market. A petition for reconsideration of that action as to FM duplication is pending. The Company cannot predict how the FCC may act on that petition.

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Other FCC Requirements.

Low Power FM Radio and “Franken FM” Stations. There exists a “low power radio service” on the FM band (“LPFM”) in which the FCC authorizes the construction and operation of noncommercial educational FM stations with up to 100 watts ERP with antenna height above average terrain (“HAAT”) at up to 30 meters (100 feet). This combination is calculated to produce a service area radius of approximately 3.5 miles. The FCC’s rules will not permit any broadcaster or other media entity subject to the FCC’s ownership rules to control or hold an attributable interest in an LPFM station or enter into related operating agreements with an LPFM licensee. Thus, absent a waiver, we could not own or program an LPFM station. LPFM stations are allocated throughout the FM broadcast band, (i.e., 88.1 to 107.9 MHz), although they must operate with a noncommercial format. The FCC has established allocation rules that require FM stations to be separated by specified distances to other stations on the same frequency, and stations on frequencies on the first, second and third channels adjacent to the center frequency. The FCC has granted construction permits and licenses for LPFM stations. As required by the Local Community Radio Act of 2010, the FCC in 2012 modified its rules to maintain its existing minimum distance separation requirements for full-service FM stations, FM translator stations, and FM booster stations that broadcast radio reading services via an analog subcarrier frequency to avoid potential interference by LPFM stations; and when licensing new FM translator stations, FM booster stations, and LPFM stations, to ensure that: (i) licenses are available to FM translator stations, FM booster stations, and LPFM stations; (ii) such decisions are made based on the needs of the local community; and (iii) FM translator stations, FM booster stations, and LPFM stations remain equal in status and secondary to existing and modified full-service FM stations. By Report and Order, released April 23, 2020, the FCC modified the LPFM technical rules in four main ways: (1) Expanding the permissible use of directional antennas; (2) expanding the definition of minor change applications for LPFM stations; (3) allowing LPFM stations to own FM boosters; and (4) permitting LPFM and Class D FM stations operating on the FM reserved band (channels 201 to 220) reserved band (channels 201 to 220) to propose facilities short-spaced to television stations operating on channel 6 (TV6) with the consent of the potentially affected stations. The FCC also took other less significant actions affecting the LPFM service.

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On January 5, 2012, the FCC released a Report to Congress on the impact that LPFM stations would have on full-service commercial FM stations. The FCC “found no statistically reliable evidence that low-power FM stations have a substantial or consistent economic impact on full-service commercial FM stations,” and that “low-power FM stations generally do not have, and in the future are unlikely to have, a demonstrable economic impact on full-service commercial FM radio stations.” Some LPFM stations that broadcast commercial announcements in violation of the law could have a negative economic impact on the Company’s stations. Although rule-compliant LPFM stations compete for audience with the Company’s full-power and FM translator stations, the Company cannot predict whether there will be future negative economic impact on its stations.

As part of the transition from analog to digital operations, the FCC sought comment in a 2014 NPRM on whether to allow LPTV stations (so-called “Franken FM” radio stations) on digital television channel 6 to continue to operate these analog FM radio-type services on an ancillary or supplementary basis. In December 2019, the FCC asked parties to update the record on this issue. By Public Notice released July 13, 2020, the FCC reminded LPTV and TV translator stations that, by July 13, 2021, all LPTV stations must terminate all analog television operations which may result in eliminating Franken FM stations. The owner of several channel 6 Franken FM stations in major markets, has proposed a system that might allow an analog subcarrier to be used on the main digital channel. The Company cannot predict whether the proposal will be successful.

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As a broadcaster, the Company is required to comply with the FCC rules implementing the Emergency Alert System (“EAS”). The Company’s stations must transmit Presidential messages during national emergencies and may transmit local messages, such as severe weather alerts and AMBER (America’s Missing: Broadcast Emergency Response) alerts. On January 7, 2021, the FCC’s Enforcement Bureau issued an “Enforcement Advisory” which highlighted EAS participants’ obligations, identified measures to improve the EAS, and warned that failure to comply with the EAS rules may subject a violator to sanctions including, but not limited to, substantial monetary forfeitures.

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Use of FM Boosters for Geo-Targeting. By NPRM released December 1, 2020, the FCC sought comment on whether to modify the FCC’s rules governing the operation of FM booster stations by FM radio broadcasters in certain limited circumstances. Through its NPRM, the FCC sought comment regarding changes to the booster station rules that could enable FM broadcasters to use FM booster stations to air “geo-targeted” content (e.g., news, weather, and advertisements) independent of the signals of the booster’s primary station within different portions of the primary station's protected service contour for a limited period of time during the broadcast hour. The Company cannot predict whether the FCC will adopt the proposed rules, and if adopted, whether the Company would use FM booster stations in this manner. The Company currently has no FM booster stations.

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Digital Audio Radio Satellite Service and Internet Radio. In adopting its rules for the Digital Audio Radio Satellite Service (“DARS”) in the 2310-2360 MHz frequency band, the FCC stated, “although healthy satellite DARS systems are likely to have some adverse impact on terrestrial radio audience size, revenues and profits, the record does not demonstrate that licensing satellite DARS would have such a strong adverse impact that it threatens the provision of local service.” The FCC granted two nationwide licenses, one to XM Satellite Radio, which began broadcasting in May 2001, and a second to Sirius Satellite Radio, which began broadcasting in February 2002. The satellite radio systems provide multiple channels of audio programming in exchange for the payment of a subscription fee. The FCC approved the application of Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. to transfer control of the licenses and authorizations held by the two companies to one company, which is now known as Sirius XM Radio, Inc. Various companies have introduced devices that permit the reception of audio programming streamed over the Internet on home computers and on portable receivers such as cell phones, in automobiles, and through so-called “smart speakers” like Amazon’s Alexa service. A number of digital music providers have developed and are offering their product through the Internet. Terrestrial radio operators (including the Company) are also making their product available through the Internet. To date, the Company has not perceived negative economic impact from DARS or Internet-streamed audio on the Company’s full-service stations and FM translators, possibly due, in part, to the possibility of confusion in the digital advertising market, but the Company cannot predict whether there will be future negative economic impact.

In-Band On-Channel “Hybrid Digital” Radio. The FCC’s rules permit radio stations to broadcast using in-band, on-channel (IBOC) technology that allows AM and FM stations to operate using the IBOC system developed by iBiquity Digital Corporation. This technology has become commonly known as “hybrid digital” or HD radio. Stations broadcast the same main channel program material in both analog and digital modes. HD radio technology permits “hybrid” operations, the simultaneous transmission of analog and digital signals with a single AM and FM channel. HD radio technology can provide near CD-quality sound on FM channels and FM quality on AM channels. HD radio technology also permits the transmission of up to three additional program streams over the radio stations (which streams do not count as separate radio stations under the multiple ownership rules.) At the present time, we are configured to broadcast in HD radio on 51 stations. On October 28, 2020, the FCC released a Report and Order, in which it adopted rules to allow AM radio stations to broadcast an all-digital signal using the HD Radio in-band on-channel (IBOC) mode termed “MA3.” In adopting the new rules, the FCC said that a voluntary conversion to all-digital broadcasting will benefit many AM stations and their listeners by improving reception quality and listenable coverage in stations' service areas. At this time, the Company has not made a decision on whether to convert any of its AM radio stations to all-digital operation.

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Use of FM Translators by AM Stations and Digital Program Streams. FM translator stations are relatively low power radio stations (maximum ERP: 250 Watts) that rebroadcast the programs of full-power AM and FM stations on a secondary basis, meaning they must terminate or modify their operation if they cause interference to a full-power station. The FCC permits AM stations to be rebroadcast on FM translator stations in order to improve reception of programs broadcast by AM stations. The Company intends to continue to use some of its existing FM translators in connection with some of its AM stations. The Company is using some of its existing FM translators to rebroadcast HD radio program streams generated by some of its FM stations, which is permitted by the FCC. In a 2015 Report and Order, Revitalization of the AM Service, the FCC announced an opportunity, restricted to AM licensees and permittees, to apply for and receive authorizations to relocate existing FM translator stations within 250 miles for the sole and limited purpose of enhancing their existing service to the public. To implement this policy, the FCC opened “filing windows,” the last one closing October 31, 2016. Some of the Company’s subsidiaries that are AM licensees, acquired FM translators during the filing window, and relocated them to their local markets to pair with some of the Company’s AM broadcast stations. The FM translators so acquired must rebroadcast the related AM station for at least four years, not counting any periods of silence. The FCC later opened two windows for the filing of applications for construction permits for new FM translators, the final window closing January 31, 2018. In the filing windows, qualifying AM licensees could apply for one, and only one, new FM translator station, in the non-reserved FM band to be used solely to re-broadcast the licensee’s AM signal to provide fill-in and/or nighttime service on a permanent basis. The Company filed applications in both windows and obtained some construction permits as a result. If the Company should decide that a subsidiary should sell or suspend operations of an AM station with such an FM construction permit or license, the subsidiary would also be required to sell or suspend operations of the FM translator. The FCC has adopted rules regarding FM translator interference (1) allowing FM translators to resolve interference issues by changing channels to any available same-band frequency using a minor modification application; (2) standardizing the information that must be compiled and submitted by a station claiming interference from an FM translator, including a required minimum number of listener complaints; (3) establishing interference complaint resolution procedures; and (4) establishing an outer contour limit for the affected station within which interference complaints will be considered actionable while providing for a process to waive that limit in special circumstances. Because FM translators are “secondary services”, they could be displaced by full power stations.

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Hart-Scott-Rodino Antitrust Improvements Act of 1976. The Federal Trade Commission and the Department of Justice, the federal agencies responsible for enforcing the federal antitrust laws, may investigate certain acquisitions. Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, an acquisition meeting certain size thresholds requires the parties to file Notification and Report Forms with the Federal Trade Commission and the Department of Justice and to observe specified waiting period requirements before consummating the acquisition. Any decision by the Federal Trade Commission or the Department of Justice to challenge a proposed acquisition could affect our ability to consummate the acquisition or to consummate it on the proposed terms. We cannot predict whether the FCC will adopt rules that would restrict our ability to acquire additional stations.

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Changes to Application and Assignment Procedures. FCC rules give Native American tribes a priority to obtain broadcast radio licenses in tribal communities. The rules provide an opportunity for tribes to establish new service specifically designed to offer programming that meets the needs of tribal citizens. In addition, the rules modified the FCC’s radio application and assignment procedures, assisting qualified applicants to more rapidly introduce new radio service to the public. These modifications (1) Prohibit an AM applicant that obtains a construction permit through a dispositive Section 307(b) preference from downgrading the service level that led to the dispositive preference; (2) Require technical proposals for new or major change AM facilities filed with Form 175 (i.e., FCC “short-form” Auction) applications to meet certain minimum technical standards to be eligible for further auction processing; and (3) Give FCC operating bureaus authority to cap filing window applications. In 2011, the FCC released its Third Report and Order which limits eligibility for authorizations associated with allotments added to the FM Table of Allotments using the “Tribal Priority” to the tribes whom the Tribal Priority was intended to benefit. In October 2018, the FCC released a “Second Further Notice of Proposed Rulemaking” as part of its ongoing effort to assist AM broadcast stations in providing full-time service to their communities. The FCC sought comment on technical proposals to reduce nighttime interference afforded to wide-area “Class A” AM radio stations to enable more local AM stations to increase their nighttime service. The Company has no Class A AM radio stations, but has Class B, Class C and Class D AM radio stations, some of which might benefit if the FCC’s changes its rules as proposed.

The Company pays for the use of music broadcast on its stations by obtaining licenses from organizations called performing rights organizations (e.g. BMI, ASCAP, SESAC and GMR), which, in turn pay composers, authors and publishers for their works. Federal law grants a performance right for sound recordings in favor of recording companies and performing artists for non-interactive digital transmissions and Internet radio. As a result, users of music, including the Company, are required to pay royalties for these uses through Sound Exchange, a non-profit performance rights organization. Periodically, bills have been introduced in Congress, that if passed, would have required the Company to pay additional fees to an organization called MusicFirst which would distribute the money to other entities. Efforts continue by certain organizations to persuade Congress to enact a law that would require such payments. Periodically, bills have been introduced in Congress that, if adopted, would require the Company to pay additional fees to one or more organizations that would distribute the money to performers or other entities. In late 2018, Congress passed the “Music Modernization Act” which was signed into law by the President. The law (1) improves compensation to songwriters and streamlining how their music is licensed; (2) enables legacy artists (who recorded music before 1972) to be paid royalties when their music is played on digital radio; and (3) provides a consistent legal process for studio professionals, including record producers and engineers to receive royalties for their contributions to music that they help to create. The law creates a blanket license for digital music providers to make permanent downloads, limited downloads, and interactive streams, creates a collective to administer the blanket license, and makes various improvements to royalty rate proceedings. This new law could impose an additional financial burden on the Company, but the extent of the burden would depend on how the fee payment requirement was structured. The Ask Musicians for Music (AM/FM) Act of 2019 was introduced on November 14, 2019 in both houses of Congress (116th Congress) and would require broadcasters to obtain permission before transmitting content owned by another person. The Company cannot predict whether this legislation will be enacted into law, and if so, whether there would be adverse impact on the Company’s business.

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On January 3, 2013, the FCC released the Sixth Further Notice of Proposed Rulemaking , which sought comment on the requirement that persons with attributable interests in broadcast licensees and other entities filing an FCC Ownership Report provide an “FCC Registration Number” (“FRN”) linked to their social security numbers. Questions had been raised about the security of the FCC’s Registration System where this data would be stored. On January 20, 2016, the FCC released its Report and Order, Second Report and Order and Order on Reconsideration that implemented a Restricted Use FRN (RUFRN) that individuals may use solely for the purpose of broadcast ownership report filings. The FCC stated its belief that the RUFRN would allow for sufficient unique identification of individuals listed on broadcast ownership reports without necessitating the disclosure to the FCC of individuals’ full Social Security Numbers (SSNs). The FCC eliminated the availability of the Special Use FRN (SUFRN) for broadcast station ownership reports, except in very limited circumstances. On January 4, 2017, the FCC’s Media Bureau issued an Order on Reconsideration denying petitions for reconsideration of the requirement, but on February 2, 2017, the FCC set aside the Order on Reconsideration and returned the petitions for reconsideration to pending status to be considered by the full FCC. The FCC is also seeking comment on whether to expand the biennial ownership reporting requirement to include interests, entities and individuals that are not attributable because of (a) the single majority shareholder exemption and (b) the exemption for interests held in eligible entities pursuant to the higher EDP threshold. The Company has utilized the single majority shareholder exemption in reporting ownership interests in the Company. The Company cannot predict whether these proposals will be adopted, and if so, whether information provided by those persons with a reportable attributable interest in the Company will be secure.

Proposed Changes. The FCC has under consideration, and may in the future consider and adopt, new laws, regulations and policies regarding a wide variety of matters that could, directly or indirectly, affect us and the operation and ownership of our broadcast properties. Application processing rules adopted by the FCC might require us to apply for facilities modifications to our standard broadcast stations in future “window” periods for filing applications or result in the stations being “locked in” with their present facilities. The FCC is authorized to use auctions for the allocation of radio broadcast spectrum frequencies for commercial use. The implementation of this law could require us to bid for the use of certain frequencies.

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Executive Officers

Our current executive officers are:

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Name Age Position

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Edward K. Christian 76 President, Chief Executive Officer and Chairman; Director

Samuel D. Bush 63 Senior Vice President, Treasurer and Chief Financial Officer

Marcia K. Lobaito 72 Corporate Secretary

Christopher S. Forgy 60 Senior Vice President of Operations

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Officers are elected annually by our Board of Directors and serve at the discretion of the Board. Set forth below is information with respect to our executive officers.

Mr. Christian has been President, Chief Executive Officer and Chairman since our inception in 1986.

Mr. Bush has been Senior Vice President since 2002 and Chief Financial Officer and Treasurer since September 1997. He was Vice President from 1997 to 2002. From 1988 to 1997 he held various positions with the Media Finance Group at AT&T Capital Corporation, including senior vice president.

Ms. Lobaito was the Director of Business Affairs and Corporate Secretary since our inception in 1986, Vice President from 1996 to 2005 and Senior Vice President from 2005 to 2020. Effective March 13, 2020, Ms. Lobaito retired from Senior Vice President and Director of Business Affairs. At our request, Ms. Lobaito continues to serve as Corporate Secretary.

Ms. Bobinski has been Senior Vice President/Finance since March 2012 and Chief Accounting Officer and Corporate Controller since September 1991. She was Vice President from March 1999 to March 2012. Ms. Bobinski is a certified public accountant.

Mr. Forgy has been Senior Vice President of Operations since May 2018. He was President/General Manager of our Columbus, Ohio market from 2010 to 2018 and was Director of Sales of our Columbus, Ohio market from 1995 to 2006. He has been with Saga for 20 years.

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Item 1A. Risk Factors

The more prominent risks and uncertainties inherent in our business are described in more details below. However, these are not the only risks and uncertainties we face. Our business may also face additional risks and uncertainties that are unknown to us at this time.

Risks Related to the Economy

Global Economic Conditions and Uncertainties May Continue to Affect our Business

We derive revenues from the sale of advertising and expenditures by advertisers tend to be cyclical and are reflective of economic conditions. Periods of a slowing economy, recession or economic uncertainty may be accompanied by a decrease in advertising. The global economic recession that began in 2008 caused a decline in advertising and marketing by our customers, which had an adverse effect on our revenue, profit margins and cash flows. Global economic conditions were slow to recover and remain uncertain. There can be no assurance that any of the economic improvements since the recession will be broad based and sustainable, especially in light of the further negative impact of the COVID-19 pandemic, or that they will enhance conditions in markets relevant to us. If economic conditions do not continue to improve, economic uncertainty increases or economic conditions deteriorate again; global economic conditions may once again adversely impact our business. Due to the continued uncertain pace of economic growth, we cannot predict future revenue trends. Further, there can be no assurance that we will not experience future adverse effects that may be material to our cash flows, competitive position, financial condition, results of operations, or our ability to access capital.

The volatility in global financial markets may also limit our ability to access the capital markets at a time when we would like, or need, to do so, which could have an impact on our flexibility to react to changing economic and business conditions. Accordingly, if the economy does not fully recover or worsens, our business, results of operations and financial condition could be materially and adversely affected.

The Ongoing COVID-19 Pandemic and Actions Taken by Governmental Authorities in Response to the Pandemic Could Adversely Affect Our Business, Results of Operations and Financial Condition

The ongoing COVID-19 pandemic and the measures taken to address the public health concerns resulting from the pandemic have resulted in disruptions to our business activity, volatility in the equity markets and credit markets, and uncertainty in the U.S. and global economic outlook. Such measures include travel restrictions and national border closings, restrictions on the conduct of non-essential business, closures of workplaces and schools, quarantines, shelter-in-place orders and social distancing orders. The measures have impacted and may further impact our business.

Recently implemented restrictions on business activity and uncertainty in the U.S. and global economic outlook has caused advertisers to adjust their purchasing plans and a deterioration in economic conditions globally and in the markets in which we operate may cause advertisers to reduce further purchases of advertising. Furthermore, this level of uncertainty may adversely affect our ability to develop information in order to prepare accurate financial forecasts.

In addition, restrictive measures imposed by federal, state and local authorities in the United States as well as health-related concerns related to working conditions, have had, and may continue to have an impact on our business operations. While we are not currently anticipating any material impact to our internal ability to operate our business as a results of the COVID-19 pandemic, we may temporarily lose the services of employees or experience interruptions in the normal conduct of businesses or operations of our systems, which could lead to inefficiencies’, and disruptions of our regular operations.

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Although we have undertaken a number or steps to mitigate the impact of the COVID-19 pandemic on our business, including a series of initiatives to control or reduce costs, such cost control measures are unlikely to completely offset declines in revenues. The extent to which COVID-19 impacts our business and financial position will depend on future developments, which are difficult to predict, including the severity and scope of the COVID-19 outbreak as well as types of measures imposed by governmental authorities to contain the virus or address its impact and the duration of those actions and measures.

We Depend on Key Stations

Historically our top five markets when combined represented 39%, 39%, and 41% of our net operating revenue for the years ended December 31, 2020, 2019 and 2018, respectively. Accordingly, we may have greater exposure to adverse events or conditions that affect the economy in any of these markets, which could have a material adverse effect on our revenue, results of operations and financial condition.

Local and National Economic Conditions May Affect our Advertising Revenue

Our financial results are dependent primarily on our ability to generate advertising revenue through rates charged to advertisers. The advertising rates a station is able to charge are affected by many factors, including the general strength of the local and national economies. Generally, advertising declines during periods of economic recession or downturns in the economy. Our revenue has been and is likely to be adversely affected during such periods, whether they occur on a national level or in the geographic markets in which we operate. During such periods we may also be required to reduce our advertising rates in order to attract available advertisers. Such a decline in advertising rates could also have a material adverse effect on our revenue, results of operations and financial condition.

Risks Related to Our Financing

We Have Substantial Indebtedness and Debt Service Requirements

At December 31, 2020 our long-term debt was approximately $10,000,000. We have borrowed and expect to continue to borrow to finance acquisitions and for other corporate purposes. Because of our indebtedness, a portion of our cash flow from operations is required for debt service. Our leverage could make us vulnerable to an increase in interest rates, a downturn in our operating performance, or a decline in general economic conditions. The credit facility is subject to mandatory prepayment requirements, including but not limited to, certain sales of assets, certain insurance proceeds, certain debt issuances and certain sales of equity. Any outstanding balance under the credit facility will be due on the maturity date of June 27, 2023. We believe that cash flows from operations will be sufficient to meet our debt service requirements for interest and scheduled payments of principal under the credit facility. However, if such cash flow is not sufficient, we may be required to sell additional equity securities, refinance our obligations or dispose of one or more of our properties in order to make such scheduled payments. We cannot be sure that we would be able to affect any such transactions on favorable terms, if at all.

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The expected London Inter-Bank Offered Rate (“LIBOR”) phase-out may have unpredictable impacts on contractual mechanics in the credit markets or the broader financial markets, which could have an adverse effect on our results of operations.

The U.K. Financial Conduct Authority, which regulates LIBOR, intends to cease encouraging or requiring banks to submit rates for the calculation of LIBOR after 2021. It is unclear whether LIBOR will cease to exist after that date, and there is currently no global consensus on what rate or rates will become acceptable alternatives. In the United States, the U.S. Federal Reserve Board-led industry group, the Alternative Reference Rates Committee, selected the Secured Overnight Financing Rate ("SOFR") as an alternative to LIBOR for U.S. dollar-denominated LIBOR-benchmarked obligations. SOFR is a broad measure of the cost of borrowing cash in the overnight U.S treasury repo market, and the Federal Reserve Bank of New York has published the daily rate since 2018. Nevertheless, because SOFR is a fully secured overnight rate and LIBOR is a forward-looking unsecured rate, SOFR is likely to be lower than LIBOR on most dates, and any spread adjustment applied by market participants to alleviate any mismatch during a transition period will be subject to methodology that remains undefined.