Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Time Warner Inc (TWX), Salem Communications Corp (SALM): Broadcasting Company Looking Attractive After Refinancing

Camarillo, California-based radio broadcasting company Salem Communications Corp (NASDAQ:SALM) recently made two distinct announcements that could dramatically alter investors’ perceptions of the company. For starters, Salem indicated that it would increase its quarterly dividend payments by a whopping 43 percent and reward its shareholders with a full $.05 per quarter.

Time Warner Inc. (TWX)

At the same time, the company has also made definitive plans to refinance more than $200 million in outstanding long-term debt by issuing a massive tender offer. Taken together, these moves provide clear evidence that Salem’s cash flow situation has improved in a sustainable fashion. Although the company’s stock has already reacted favorably to these announcements, it may yet have more room to run. Investors who believe in Salem’s long-term viability as an independent niche broadcaster would do well to look at the company at these levels.

About Salem Communications

Salem Communications is a broadcasting company that operates in several major metropolitan markets across the United States. It primarily provides niche broadcasting services for Christian-focused talk and music programs as well as politically conservative talk radio personalities. However, it is important to note that it shies away from the bombast of many of the more recognizable political radio performers and caters its programming towards a younger, more explicitly religious audience. It also operates a number of online media properties, including,, and It also publishes some print magazines and journals for a similar audience. These include Townhall Magazine, Youthworker Magazine and Preaching Magazine. Salem earned $4.5 million on $229.2 million in gross 2012 revenues.


Salem Communications Corp (NASDAQ:SALM)’s two closest competitors are the privately held CBS Radio and Clear Channel Communications. However, the company does compete directly with several publicly traded print and online media companies, including Time Warner Inc (NYSE:TWX) and CBS Broadcasting (CBS). Time Warner Inc (NYSE:TWX) dwarfs Salem Communications Corp (NASDAQ:SALM) in many ways. Time Warner has $28 billion in sales vs. Salem’s $229 million. Even Time Warner’s margins are greater than Salem’s. In a sign of the changing print media environment, Time Warner Inc (NYSE:TWX) recently announced its decision to spin off the bulk of its magazine properties. The company appears poised to focus exclusively on its broadcast and online media segments. Although it does not have a significant radio broadcasting presence, any move that Time Warner Inc (NYSE:TWX) makes could have ripple effects for the much-smaller Salem.

Meanwhile, News Corp (NASDAQ:NWS)‘s soon-to-be spun-off Fox Broadcasting sister corporation could make life difficult for Salem as well. Of the major media companies, Fox is by far the most conservative and offers many programming options that compete directly with those offered by Salem Communications Corp (NASDAQ:SALM). While it seems clear that the political media ecosystem is large enough to absorb such competition, it is worth noting that Salem’s position within the religious-media niche is not assured. With News Corp’s $7.8 billion in cash, it could easily takeover its much smaller competitor. News Corp has margins lower than Time Warner but still larger than Salem.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.