Mediaco Holding Inc.

Company Overview

Business Model: MediaCo Holding Inc. is an owned and operated multi-media company focused on radio, television, and digital advertising, premium programming, and events. The Company generates revenue primarily from advertising sales across its audio, video, and digital platforms, supplemented by income from events (sponsorships and ticket sales), licensing, and syndication. MediaCo Holding Inc. targets Black, Hispanic, and multicultural consumers, aiming to reflect, inform, and amplify these communities through culture, news, and entertainment.

Market Position: MediaCo Holding Inc. operates two radio stations in New York City (WQHT(FM) and WBLS(FM)) and, following the Estrella Acquisition, has expanded its footprint to include network, content, digital, and commercial operations for 11 radio stations (Los Angeles, CA; Houston, TX; Dallas, TX) and nine television stations (Los Angeles, CA; Houston, TX; Denver, CO; New York, NY; Chicago, IL; Miami, FL). The Company's established media brands hold leading positions in their respective local market segments. MediaCo Holding Inc. engages over 35 million unique visitors monthly through its diverse portfolio, offering free, ad-supported streaming and terrestrial entertainment, music, and news. The Company differentiates itself by offering premier content for diverse audiences in growing demographics, which provides an advantage in competing for advertisers prioritizing culturally relevant marketing.

Recent Strategic Developments:

• Estrella Acquisition (April 17, 2024): MediaCo Holding Inc. acquired substantially all assets of Estrella Broadcasting, Inc. (excluding certain broadcast assets held by Estrella entities, which are consolidated as a Variable Interest Entity or "VIE"), and assumed related liabilities. This acquisition significantly expanded MediaCo Holding Inc.'s national footprint and diversified its content portfolio, establishing it as a leading multi-platform media network serving U.S. Hispanic audiences. Key Estrella brands joining MediaCo Holding Inc. include the EstrellaTV network, its linear and digital video content business, and eight free ad-supported television ("FAST") channels (EstrellaTV, Estrella News, Cine EstrellaTV, Estrella Games, EstrellaTV Mexico, Curiosity Explora, Curiosity Motores, and Curiosity Animales).
• Digital and Streaming Growth: The Company has aggressively worked to harness broadband and mobile media distribution, capitalizing on the rapidly growing FAST marketplace, creating highly interactive direct-to-consumer ("D2C") apps and websites, and leveraging digital video on D2C platforms, YouTube, and connected TV publishers, vMVPDs, and OEMs. Digital revenue increased 452% year-over-year in 2024.
• Operational Efficiency Initiatives: MediaCo Holding Inc. is consolidating video operations across network TV, local TV, and digital, and has invested in technology solutions to streamline business processes. Involuntary termination costs of $1.4 million were incurred in 2024 as part of a plan to close and relocate certain studio and marketing operations following the Estrella Acquisition.
• Fairway Outdoor Advertising Divestiture (December 9, 2022): MediaCo Holding Inc. sold its Fairway outdoor advertising business to The Lamar Company, L.L.C. for $78.6 million, representing a strategic shift in its business.

Geographic Footprint: MediaCo Holding Inc. operates exclusively in the United States. Its primary operational regions and key markets include:

• New York, NY: Two owned and operated radio stations (WQHT(FM), WBLS(FM)) and one television station (WASA).
• Los Angeles, CA: Four radio stations (KBUE(FM), KBUA(FM), KEBN(FM), KVNR(AM)) and one television station (KRCA).
• Houston, TX: Three radio stations (KQQK(FM), KTJM(FM), KNTE(FM)) and one television station (KZJL).
• Dallas-Ft. Worth, TX: Three radio stations (KBOC(FM), KZZA(FM), KNOR(FM)).
• Denver, CO: One television station (KETD).
• Chicago, IL: One television station (WESV).
• Miami, FL: Four television stations (WGEN, WGEN-LD, WVFW, W12DI).
• Riverside-San Bernardino, CA: One radio station (KRQB(FM)). The EstrellaTV network is broadcast by television stations in various states serving 48 designated market areas.

Financial Performance

Revenue Analysis

Profitability Metrics:

• Gross Margin: Not explicitly disclosed.
• Operating Margin: -29.5% (2024) vs. -20.9% (2023)
• Net Margin: -1.4% (2024) vs. -22.9% (2023)

Investment in Growth:

• R&D Expenditure: Not explicitly disclosed as a separate line item.
• Capital Expenditures: $1.3 million (2024) vs. $1.7 million (2023)
• Strategic Investments: Cash paid in acquisitions, net of cash acquired, was $13.0 million in 2024, primarily for the Estrella Acquisition.

Business Segment Analysis

Audio Segment

Financial Performance:

• Revenue: $57.5 million (+77.6% YoY)
• Operating Margin: -2.6%
• Key Growth Drivers: The Estrella Acquisition significantly contributed to the revenue increase.

Product Portfolio:

• Radio stations: WQHT(FM) and WBLS(FM) in New York City; 11 radio stations in Los Angeles, CA, Houston, TX, and Dallas, TX (from Estrella Acquisition).
• Digital operations: Enhanced website and app platforms, digital radio distribution.
• Events: Fiestas Patrias, Hot 97's Summer Jam, and other local community events, including sponsorships and ticket sales.
• Content: Rhythmic Contemporary Hit Radio, Urban Adult Contemporary, Regional Mexican, Spanish Contemporary Hit, Classic Country, Vietnamese language, Classic Rock formats.

Market Dynamics:

• Competitive positioning within segment: Established nationally recognized media brands with strong brand identity. Focus on Hip Hop, R&B, and Hispanic audiences.
• Key customer types and market trends: Local, regional, and national advertisers targeting Black, Hispanic, and multicultural consumers. Competition for advertising revenue is high, with shifts in audience tastes and technology use.

Video Segment

Financial Performance:

• Revenue: $38.0 million (new segment in 2024 due to acquisition)
• Operating Margin: -39.1%
• Key Growth Drivers: Entirely driven by the Estrella Acquisition in April 2024.

Product Portfolio:

• Television stations: Nine television stations in Los Angeles, CA, Houston, TX, Denver, CO, New York, NY, Chicago, IL, and Miami, FL.
• Network: EstrellaTV network, offering Spanish-language programming including originals, topical entertainment, reality, news, and comedy.
• Digital channels: Eight free ad-supported television ("FAST") channels (EstrellaTV, Estrella News, Cine EstrellaTV, Estrella Games, EstrellaTV Mexico, Curiosity Explora, Curiosity Motores, and Curiosity Animales) on Over-the-top platforms.
• Content: Influential linear and digital video content business.

Market Dynamics:

• Competitive positioning within segment: Unique aggregation of Spanish-language programming.
• Key customer types and market trends: Local, regional, and national advertisers. New digital formats (Live and Interactive) are differentiating the video businesses and growing viewership. Scaling across FAST and connected devices to grow video advertising inventory.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: $7 thousand (11,304 shares) in 2024; $0.8 million (629,880 shares) in 2023.
• Dividend Payments: $0.9 million in preferred stock dividends in 2024; $2.4 million in preferred stock dividends in 2023.
• Dividend Yield: Not disclosed.
• Future Capital Return Commitments: A share repurchase plan authorized up to $2.0 million in Class A common stock, with approximately $1.0 million remaining as of December 31, 2024. The Company currently intends to retain future earnings for business use and has no plans to pay dividends on common stock in the foreseeable future.

Balance Sheet Position:

• Cash and Equivalents: $4.4 million (2024) vs. $3.8 million (2023)
• Total Debt: $70.2 million (2024) vs. $6.5 million (2023)
• Net Cash Position: $(65.7) million (2024) vs. $(2.6) million (2023)
• Credit Rating: Not disclosed.
• Debt Maturity Profile:
  • 2025: $0
  • 2026: $10.0 million (First Lien Term Loans)
  • 2027: $4.9 million ($2.6 million First Lien, $2.3 million Second Lien)
  • 2028: $6.5 million ($3.5 million First Lien, $3.0 million Second Lien)
  • 2029: $53.6 million ($28.9 million First Lien, $24.8 million Second Lien)
  • After 2029: $60.0 million (Series B Preferred Stock)

Cash Flow Generation:

• Operating Cash Flow: $(19.9) million (2024) vs. $(5.6) million (2023)
• Free Cash Flow: $(21.1) million (2024) vs. $(7.2) million (2023)
• Cash Conversion Metrics: Not explicitly disclosed.

Operational Excellence

Production & Service Model: MediaCo Holding Inc. operates as a brand and content company, reflecting, informing, and amplifying multicultural communities through culture, news, and entertainment. The Company distributes audio content over digital and terrestrial radio, and video content digitally (apps for mobile/connected TVs, third-party partner apps, FAST platforms, MVPDs) and on network/local TV. It produces events, including securing artists and venues for major concerts like Hot 97's Summer Jam, and also promotes third-party events.

Supply Chain Architecture: Not explicitly detailed.

Key Suppliers & Partners:

• Financial Partners: White Hawk Capital Partners, LP (First Lien Term Loan), HPS Investment Partners, LLC (Second Lien Term Loan), B. Riley Securities, Inc. (At Market Issuance Sales Agreement), BTIG, LLC and Moelis & Company LLC (At-The-Market Sales Agreement).
• Content & Licensing: Estrella Broadcasting, Inc. (Estrella Acquisition), Emmis Communications Corporation (former convertible promissory note holder), American Society of Composers, Authors, and Publishers, Broadcast Music, Inc., SESAC, Inc., Global Music Rights (performing rights organizations).
• Technology & Data: Nielsen Audio, Inc. (radio/TV ratings), third-party distribution partners (FAST channels), YouTube, connected TV publishers, vMVPDs, OEMs.
• Operational Partners: Standard Media Group LLC (Employee Leasing Agreement for legal, digital products, broadcast IT, and news operations functions).
• Former Business Partners: The Lamar Company, L.L.C. (purchaser of Fairway outdoor advertising business).
• Local Marketing Agreement: Little Saigon Radio Broadcasting, Inc. (for KVNR(AM)).

Facility Network:

• Studios & Offices: Leased studios and principal executive offices in Burbank, CA, and Manhattan, NY, with leases expiring in October 2039.
• Manufacturing: Owns television production facilities for programming.
• Research & Development: Not explicitly detailed as separate facilities, but investments are made in market research, data analysis, and creative talent.
• Distribution: Owns or leases other smaller properties for studios and transmitter/antenna sites.

Operational Metrics: Not explicitly disclosed (e.g., capacity utilization, efficiency measures, quality indicators).

Market Access & Customer Relationships

Go-to-Market Strategy:

• Direct Sales: Local and most regional advertising sales are handled by the stations' sales staff.
• Channel Partners: National advertising sales are made by specialized firms compensated on a commission-only basis.
• Digital Platforms: Distribution of video and audio content through owned-and-operated apps and websites, third-party partner apps, Free Ad-Supported Streaming TV ("FAST") platforms, multichannel video programming distributors ("MVPDs"), YouTube, connected TV publishers, vMVPDs, and OEMs.

Customer Portfolio:

• Enterprise Customers: Advertisers (local, regional, national) across various industries.
• Customer Concentration: Approximately 27% of total spot radio advertising revenues were derived from national sales in 2024, and approximately 32% of television advertising revenues were derived from national sales in 2024.
• Target Audience: Primarily Black, Hispanic, and multicultural consumers.

Geographic Revenue Distribution:

• United States: All operations are exclusively within the United States. Revenue is generated from markets including New York, NY, Los Angeles, CA, Houston, TX, Dallas-Ft. Worth, TX, Chicago, IL, Denver, CO, Miami, FL, and Riverside-San Bernardino, CA.
• Growth Markets: Focus on reaching multicultural audiences, which are described as growing demographics.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The U.S. traditional radio and television broadcasting industries are mature, with stalled growth rates. This is attributed to the rise of new media (Internet, telecommunication companies, cable interconnects, social networks) gaining advertising share, and the fragmentation of audiences due to satellite radio, audio/video streaming services, and podcasts. Opportunities exist in harnessing broadband and mobile media distribution, particularly in the rapidly growing FAST marketplace, interactive direct-to-consumer apps, and digital video.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• Broadcasting Stations: Other radio and television stations and station groups in respective market areas, some with larger clusters and more financial resources.
• Other Advertising Media: Newspapers, cable, magazines, outdoor advertising, transit advertising, the Internet, satellite radio, streaming services, direct marketing, and mobile and wireless device marketing.
• Content Providers: Major networks and networks creating specialty programming for demographically similar audiences.

Emerging Competitive Threats:

• New Media: Internet-distributed media, telecommunication companies, cable interconnects, social networks.
• Audience Fragmentation: Satellite radio, audio and video streaming services, and podcasts.
• Automotive Technology: Advanced, interactive dashboard technology (e.g., Apple CarPlay, Google Android Auto) offering alternative audio entertainment.
• Programmatic Buying: Emerging trend in broadcast industry, widely adopted in digital advertising.
• Artificial Intelligence: Alternative or new technologies that could provide superior services.

Competitive Response Strategy: MediaCo Holding Inc. attempts to improve its competitive position through programming and promotional campaigns aimed at targeted demographic groups, sales efforts designed to attract advertisers seeking diverse audiences, and leveraging its digital reach and brand recognition for national digital advertising. The Company invests in award-winning entertainment and news programming, sports, music, and lifestyle content, and distributes content as free, ad-supported to maintain audience accessibility.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics:

• Weak Economic Conditions: Advertising is a discretionary expense, declining disproportionately during economic downturns, recessions, or periods of persistent inflationary pressures and higher interest rates. This can lead to reduced ad budgets across industries (e.g., automotive, retail, technology).
• Competition & Audience Loss: Intense competition from other broadcast stations, station groups, and diverse media (newspapers, cable, magazines, Internet, streaming, satellite radio, mobile). Shifts in population, demographics, audience tastes, and technology use can cause loss of market share, requiring increased promotion or other expenses.
• Acquisition Integration: Risks associated with combining acquired businesses (Estrella Acquisition), including loss of key employees, disruption of ongoing business, inconsistencies in standards, and failure to realize anticipated benefits or cost savings.
• Summer Jam Sensitivity: Event revenue is highly sensitive to rapidly changing public tastes and dependent on securing popular artists, with potential for losses if public reception is poor or artists cancel.
• Controlled Company Status: SG Broadcasting LLC controls approximately 96.1% of voting interests, limiting influence of Class A common stock holders on corporate matters and potentially discouraging change-of-control transactions.
• Nasdaq Delisting Risk: Failure to meet Nasdaq continued listing requirements (minimum closing price, market capitalization, shareholders' equity) could lead to delisting, reducing liquidity and market price of Class A common stock.

Operational & Execution Risks

Supply Chain Vulnerabilities: Not explicitly detailed. Capacity Constraints: Not explicitly detailed. Technology & Innovation:

• Rapid Technological Changes: Broadcasting industry is subject to rapid technological changes, evolving industry standards, and new competition (satellite-delivered programs, streaming, podcasts, personal digital audio devices, HD Radio, LPFM, interactive dashboard technology, programmatic buying, AI). Failure to acquire new technologies or introduce new services timely and cost-effectively could adversely affect competitiveness.
• Intellectual Property Infringement: Increased patent and IP infringement claims against broadcasters due to technological advancements.
• FCC License Dependence: Business heavily depends on maintaining FCC licenses, which are subject to renewal every eight years. Failure to renew or imposition of adverse conditions could materially affect operations.
• Programming Costs: Significant costs for purchasing television programming in advance, with risk of not recouping costs if shows are not popular or are replaced early.
• Content Risk: Ill-conceived or mistimed on-air statements or social media posts could offend audiences/advertisers, infringe third-party rights, or violate FCC rules (e.g., indecency), leading to ratings decline, revenue loss, license challenges, or litigation. Misalignment with public/consumer taste could negatively impact advertising demand.
• Internal Systems Failure: Dependence on proper functioning of internal business processes and information systems. Failures, interruptions, or cyber-attacks could disrupt operations, compromise data integrity/privacy, harm reputation, and incur significant costs or liabilities.
• Restructuring Risks: Past and potential future restructuring activities may not be successful or generate expected cost savings, and can create unanticipated negative impacts.

Financial & Regulatory Risks

Market & Financial Risks:

• Indebtedness Restrictions: Terms of current and future long-term debt (First Lien Term Loan, Second Lien Term Loan) may impose significant operating and financial restrictions, limiting ability to incur additional debt, pay dividends, make acquisitions, or respond to market changes.
• Cash Flow for Debt Service: Significant cash required to service indebtedness, dependent on future cash generation which is subject to economic, financial, competitive, legislative, and regulatory factors beyond control.
• Interest Rate Risk: Exposure to variable interest rates on long-term debt (SOFR-based), affecting interest expense. A 100 bps change in floating rates could change interest expense by $0.5 million annually (based on 2024 borrowings).
• Inflation: Inflation affects costs for employee compensation, equipment, and third-party services, potentially impacting operating results if not mitigated. Regulatory & Compliance Risks:
• FCC Regulations: Extensive and changing regulation by the FCC (Communications Act of 1934, Telecommunications Act of 1996) covering license grants/renewals, ownership restrictions (local radio, local TV, national TV, foreign ownership), assignments/transfers of control, programming content (public interest, children's educational, obscenity/indecency), sponsorship identification, EEO, contest promotions, advertising in children's programs, technical operations, and RF radiation limits. Violations can lead to fines, short-term renewals, or license revocation.
• Copyright Royalties: Obligation to pay royalties to performing rights organizations (ASCAP, BMI, SESAC, GMR) for musical compositions and to copyright owners (artists, record companies) for sound recordings streamed over the Internet. Potential for increased royalty rates or negotiation costs if organizations change or new ones emerge.
• Potential Terrestrial Performance Royalties: Legislation is regularly introduced that would require payment of performance royalties to artists/record companies for music played on terrestrial broadcast stations, which could adversely impact costs.
• New Laws/Regulations: Congress and FCC may adopt new laws/regulations (spectrum use fees, ownership rule modifications, local community service requirements, political broadcasting changes, technical/frequency allocation, alcohol advertising restrictions, RF radiation safety, public interest obligations, tax deductibility limits for advertising) that could affect operations, profitability, or acquisition ability.
• Material Weakness in Internal Control: Identified material weakness in controls over accounting for business combinations (Estrella Acquisition), including oversight of third-party valuation specialists and data completeness/accuracy for intangible asset valuation. This could lead to material misstatements, affect investor confidence, and incur significant remediation costs.

Geopolitical & External Risks

External Events: Operating results can be adversely affected by acts of war, terrorism, global health crises (e.g., COVID-19 pandemic), and natural catastrophes (hurricanes, floods, tornadoes, earthquakes, wildfires). Such events can cause advertising revenue declines, operational disruptions (e.g., destruction of transmitter facilities), and uninsurable losses.

Innovation & Technology Leadership

Research & Development Focus: Core Technology Areas:

• Digital Content & Distribution: Substantial emphasis on enhancing distribution of video and audio content through digital and mobile platforms. This includes developing emerging business opportunities in the FAST marketplace, creating highly interactive direct-to-consumer ("D2C") apps and websites, and harnessing digital video on D2C platforms, YouTube, and connected TV publishers, vMVPDs, and OEMs.
• Content Development: Investments in market research, data analysis, and creative talent to produce unique and compelling content that meets target audience needs and reinforces brand image.
• Operational Technology: Investment in technology solutions to streamline business processes and enhance operational efficiency.

Innovation Pipeline: New digital formats (including Live and Interactive) are being developed to differentiate video businesses and grow viewership. The Company aims to scale video advertising inventory across FAST and connected devices. In the Audio Segment, growth is supported by enhanced website and app platforms, leveraging events and shows for listenership and community engagement.

Intellectual Property Portfolio:

• Patent Strategy: Not explicitly detailed.
• Licensing Programs: Licensing of programs and other material to radio and television stations for distribution.
• IP Litigation: Not explicitly detailed, but acknowledges increased patent and other intellectual property infringement claims against broadcasters due to technological advancements.

Technology Partnerships:

• Distribution Partners: Third-party distribution partners for eight FAST channels on Over-the-top platforms.
• Platform Partners: YouTube, connected TV publishers, vMVPDs, and OEMs for digital video distribution.

Leadership & Governance

Executive Leadership Team

Leadership Continuity: All executive officers were appointed in 2024. The Company's success depends on the leadership and performance of its media management teams and other key personnel.

Board Composition: MediaCo Holding Inc. has a majority of independent directors and its Compensation Committee consists entirely of independent directors. The Company does not have a Nominating and Corporate Governance Committee.

Human Capital Strategy

Workforce Composition:

• Total Employees: 407 full-time and part-time employees as of December 31, 2024, a significant increase from 116 at December 31, 2023, primarily due to the Estrella Acquisition.
• Geographic Distribution: Employees are located across the Company's operational markets in the United States.
• Skill Mix: The Company seeks to attract, retain, and develop high-quality talent and subject matter experts in the media sectors, including on-air personalities and hosts of syndicated programs.
• Diversity Metrics: Over 88% of employees are Black, Hispanic, or Asian, and 41% are female.

Talent Management: Acquisition & Retention:

• Hiring Strategy: Focus on attracting and retaining qualified key personnel in a highly competitive environment.
• Retention Metrics: Not explicitly disclosed, but the Company strives to create strong teams and a vibrant culture through core values of integrity, innovation, excellence, and safety.
• Employee Value Proposition: Offers fair and competitive compensation and benefits programs, fosters an inclusive environment, provides a safe workplace, and offers opportunities for community involvement. Sales employees are incentivized through commission programs, and executives/certain other employees receive long-term equity awards.

Diversity & Development:

• Diversity Metrics: Committed to providing a work environment free of discrimination and harassment, respecting and embracing diversity of thought and experience. A diverse workforce is believed to produce more innovative insights and solutions.
• Development Programs: Implementing annual goal-setting and performance management processes.
• Culture & Engagement: Prioritizes a workplace where growth, success, and enjoyment go hand in hand.

Environmental & Social Impact

Environmental Commitments: Not explicitly detailed.

Supply Chain Sustainability: Not explicitly detailed.

Social Impact Initiatives:

• Community Investment: A guiding principle is making a difference in the communities served. Corporate social responsibility initiatives are a core part of the culture. The Company uses its resources and products to drive societal change, collaborating with local and national organizations to improve health and public safety, ensure a sustainable environment, promote arts, education, and cultural diversity, and support advertising standards.
• Product Impact: Stations participate in community programs, fundraisers, and activities benefiting various causes, including Hip Hop has Heart, the Harlem Chamber of Commerce, the Sarcoidosis Foundation, New York Cares, American AIDS Foundation, and the Queens Police Service Area Community Counsel. MediaCo Holding Inc. has a relationship with the Universal Hip Hop Museum. The Company aims to educate, understand, guide, and amplify audience voices, particularly through dedicated news programming.

Business Cyclicality & Seasonality

Demand Patterns:

• Seasonal Trends: Results of operations are usually subject to seasonal fluctuations. Revenues and operating income are typically highest in the second calendar quarter, largely due to the timing of the Company's largest concert (Summer Jam in June). Results are usually lowest in the first calendar quarter, partly due to retailers cutting back advertising spending after the holiday season.
• Economic Sensitivity: Advertising is considered a discretionary business expense, and spending tends to decline disproportionately during economic recessions or downturns, or due to persistent inflationary pressures and higher interest rates.

Planning & Forecasting: Not explicitly detailed.

Regulatory Environment & Compliance

Regulatory Framework: Industry-Specific Regulations:

• FCC Licensing: Broadcasting in the U.S. is subject to the Federal Communications Commission ("FCC") under the Communications Act of 1934. Stations operate under FCC licenses, ordinarily granted for maximum terms of eight years and subject to renewal. MediaCo Holding Inc.'s WQHT(FM) and WBLS(FM) licenses were renewed through June 2030.
• Ownership Restrictions: FCC rules limit the number of radio and television stations that may be commonly owned in a local market and nationally. The FCC's 2018 quadrennial review eliminated the Radio/Television Cross-Ownership Rule but made local ownership rules for television stations more restrictive, expanding the "Top-Four Prohibition" to include LPTV stations and multicast streams. The 2022 quadrennial review is pending. Foreign ownership restrictions also apply (no more than one-fifth of capital stock owned/voted by Non-U.S. Persons for direct license holders, and generally no more than one-fourth for indirect control if FCC finds it not in public interest).
• Programming & Operations: Broadcasters are required to serve the "public interest," present programming responsive to community needs, and meet educational/informational needs of children (for TV). Federal law prohibits obscene material at any time and indecent material during specified hours. Sponsorship identification ("payola") requirements mandate disclosure for paid programming. Stations must comply with rules on political advertising, equal employment opportunities, contest promotions, advertising in children's programs, and technical operations (including radio frequency radiation limits).
• Copyright & Royalties: Payment of royalties to performing rights organizations (ASCAP, BMI, SESAC, Global Music Rights) for musical compositions and to copyright owners (artists, record companies) for Internet streaming of sound recordings. Legislation is regularly introduced that would require performance royalties for terrestrial broadcast, which could increase costs.
• New Technologies Regulation: FCC has authorized LPFM service, satellite digital audio radio service (Sirius XM), terrestrial digital audio broadcasting ("HD Radio"), and all-digital AM operations.

Trade & Export Controls: Not explicitly detailed.

Legal Proceedings: From time to time, stations are parties to various legal proceedings arising in the ordinary course of business. Management believes there are no legal proceedings pending against the Company that are likely to have a material adverse effect.

Tax Strategy & Considerations

Tax Profile:

• Effective Tax Rate: The provision for income taxes for continuing operations was $320 thousand in 2024 and $308 thousand in 2023. The federal statutory income tax rate is 21%. The computed income tax provision at the federal statutory rate was $(206) thousand in 2024 and $(1,494) thousand in 2023.
• Deferred Taxes: Net deferred tax liabilities were $2.9 million in 2024 and $2.8 million in 2023.
• Valuation Allowance: A valuation allowance of $33.0 million was recorded against deferred tax assets in 2024 ($16.6 million in 2023), as management determined it was more likely than not that certain assets would not be fully realized.
• Net Operating Losses (NOLs): As of December 31, 2024, the Company had $41.7 million of federal NOLs (which do not expire) and $46.8 million of state NOLs (some expiring in 2039).
• Unrecognized Tax Benefits: The estimated value of net uncertain tax positions was approximately $0.4 million as of December 31, 2024 and 2023, reported as a noncurrent liability.

Geographic Tax Planning: The Estrella Acquisition resulted in filing in additional state jurisdictions, impacting the provision for income taxes.

Tax Reform Impact: Not explicitly detailed.

Insurance & Risk Transfer

Risk Management Framework: The Audit Committee is responsible for overseeing risk management, with cybersecurity being an integral part of the Company's overall risk management program. Management, including the Chief Technology Officer, Chief Financial Officer, and General Counsel, assesses and manages cybersecurity threats. The Senior Vice President of Information Technology and Infrastructure leads the cybersecurity program. Risk assessments are developed to identify the probability, immediacy, and potential magnitude of information security risks. Internal experts conduct regular audits and tests, and the cybersecurity program is periodically assisted by independent third-party consultants.

Insurance Coverage: MediaCo Holding Inc. generally carries insurance covering catastrophes (e.g., hurricanes, floods, tornadoes, earthquakes, wildfires), but cannot assure that proceeds will offset rebuilding costs or lost income. Insurance covers some risks related to content dissemination (e.g., ill-conceived on-air statements), but others are effectively uninsurable.