Townsquare Media (TSQ) risk factors, FY2024 10-K

Risks Related to Economic Conditions and Our Business

1. 01Macroeconomic factors such as inflation, rising interest rates, and changes in the economy have had, and may continue to have a material adverse effect on our business
2. 02Our business, financial condition and results of operations may be adversely affected if we are unable to acquire certain broadcast rights or our broadcast rights contracts are not renewed on sufficiently favorable terms
3. 03Our results are impacted by political advertising revenue, which can vary from even to odd-numbered years
4. 04If we are unable to retain our digital audience, our business may be adversely affected
5. 05To remain competitive, we must respond to changes in technology, services and standards that characterize our industry
6. 06In addition, some automobile manufacturers have removed AM radio functionality from their vehicles. Although Congress is considering legislation to maintain AM radio in vehicles, we cannot predict whether these legislative efforts will be successful, or their impact on our business
7. 07The failure or destruction of transmitter and other facilities that we depend upon to distribute our content could materially adversely affect our business, financial condition and results of operations
8. 08We are dependent on key personnel
9. 09Artificial intelligence presents new risks and challenges to our business
10. 10Increases in or new royalties could adversely impact our business, financial condition and results of operations
11. 11Our substantial indebtedness could have an adverse impact on us
12. 12Capital requirements necessary to operate our business or consummate acquisitions could pose risks

Risks Related to Our Industry and Competition

1. 13Our future revenue and earnings growth will be significantly impacted by our digital lines of business, which are subject to significant competition and rapidly changing technology
2. 14digital technologies we use or develop will be adequate, or that we will be able to establish our proprietary right to the technologies we rely upon
3. 15We may lose audience ratings, market share and advertising revenue to competing radio stations or other types of media competitors
4. 16Our success is dependent upon audience engagement with our content, which is difficult to predict
5. 17Ratings for broadcast radio stations and traffic or visitors to a particular website are also factors that are weighed when advertisers determine which outlets to use and in determining the advertising rates that the outlet receives

Risks Related to Acquisitions

1. 18There are risks associated with our acquisition strategy
2. 19concentration as part of its acquisition approval process, even where proposed assignments would comply with the numerical limits on local radio station ownership in the FCC’s rules and the Communications Act
3. 20Due to various market and financial conditions, we may not be able to successfully complete future acquisitions or future dispositions of our radio stations, or achieve the related benefits we anticipate

Risks Related to Our Financial Reporting and Accounting

1. 21We have remediated several material weaknesses in our internal control over financial reporting in prior years. If we experience additional material weaknesses in the future, our business may be harmed
2. 22Future losses could be caused by future asset impairment of our FCC licenses and/or goodwill
3. 23Given the current economic environment and the potential negative impact on our business, there can be no assurance that our estimates and assumptions regarding our forecasts, made for the purpose of our non-amortizable intangible fair value estimates, will prove to be accurate

Risks Related to Technology

1. 24New technologies could block our digital ads, and new restrictions on third-party cookies could harm our digital advertising business
2. 25A disruption, compromise, or breach of our systems or data due to a cybersecurity threat or incident could adversely affect our business
3. 26Our engagement of third-party service providers increases our exposure to security and data privacy risks
4. 27We rely on third parties to provide the technologies necessary to deliver content, advertising and services to our audience, and any change in the licensing terms, costs, availability, or acceptance of these formats and technologies could adversely affect our business

Risks Related to Governmental Regulation and Legislation

1. 28Our business depends upon licenses issued by the FCC, and if licenses are not renewed or we are out of compliance with FCC regulations and policies, our business could be materially impaired
2. 29The FCC has been vigorous in its enforcement of its rules and regulations, including its indecency and sponsorship identification rules, violations of which could have a material adverse effect on our business
3. 30We are required to obtain prior federal approval for each station acquisition, which approvals may be subject to our compliance with certain conditions, possibly including asset divestitures, which may be material
4. 31The information we collect and process is of increasing business importance and new or changing federal, state or international privacy legislation or regulation create uncertainty for our continued use of the information we collect and process
5. 32New or changing privacy legislation or regulation could hinder the growth of our digital properties

Risks Related to Our Smaller Reporting Company Status

1. 33We are a smaller reporting company and intend to avail ourselves of certain reduced disclosure requirements applicable to smaller reporting companies, which could make our common stock less attractive to investors
2. 34The public market for our Class A Common Stock may be volatile
3. 35We are subject to risks related to corporate social responsibility
4. 36We began paying quarterly cash dividends in 2023, although any future cash dividends will be at the discretion of our board of directors and other factors. You may not receive any return on investment unless you are able to sell your Class A common stock for a price greater than your purchase price
5. 37Anti-takeover provisions in our certificate of incorporation or bylaws may delay, discourage or prevent a change in control