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RELATED PARTY TRANSACTIONS
 12 Months Ended
Dec. 31, 2025
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS
15. RELATED PARTY TRANSACTIONS
Estrella Put Right and Equity Clawback
On March 6, 2025, the shareholders of MediaCo approved the Proposal and the Put Right became exercisable for 7,051,538 shares of Class A common stock.
On May 1, 2025, the Put Right was exercised by Estrella Media, Inc. and MediaCo acquired 100% of the equity interests of Estrella and certain subsidiaries of Estrella. As a result of the exercise of the Put Right, Estrella became a wholly owned subsidiary of the Company. In connection with the Put Right and the previously executed Asset Purchase Agreement related to the acquisition of Estrella’s assets, the Company entered into an equity purchase agreement on May 1, 2025, that includes certain clawback provisions applicable to HPS, including parties that are considered related parties of the Company.
Pursuant to these provisions, under specified circumstances defined in the equity purchase agreement and the Asset Purchase Agreement, including the occurrence of certain losses or other financial obligations incurred by the Company in connection with the Estrella transactions, the Company may have the right to require such investors to return or forfeit a portion of the equity interests previously issued to them. In addition, certain debt instruments issued in connection with the transaction may also be subject to similar clawback or repayment provisions.
The potential exercise of these clawback provisions could result in the reduction or cancellation of equity interests held by such related party investors and the repayment or forfeiture of related debt obligations. The magnitude and timing of any such clawback would depend on the occurrence and amount of qualifying losses or obligations as defined in the applicable agreements and could be material to the Company’s consolidated financial statements. During 2025, as a result of the increase in the uncertain tax position and corresponding interest and penalties described in Note 14, the Company reduced equity by $7.9 million pursuant to the equity clawback feature. As of December 31, 2025, $7.9 million of equity interests were subject to clawback, while no debt instruments have been subject to clawback. See Note 1 — Summary Of Significant Accounting Policies.
Convertible Promissory Note
On November 25, 2019, we issued a convertible promissory note to Emmis (such note, the “Emmis Convertible Promissory Note”) in the amounts of $5.0 million. Through December 31, 2023, there were annual interest amounts paid in kind on the Emmis Convertible Promissory Note such that the principal balance outstanding as of December 31, 2024 was $6.5 million. The Emmis Convertible Promissory Note matured on November 25, 2024 and was settled in cash.
The Company recognized interest expense of $0.8 million related to the Emmis Convertible Promissory Note for the year ended December 31, 2024.
Convertible Preferred Stock
On December 13, 2019, in connection with the purchase of Fairway, the Company issued to SG Broadcasting 220,000 shares of MediaCo Series A Convertible Preferred Stock. In April 2024, all outstanding shares of Series A preferred stock were converted in accordance with their terms into 20.7 million shares of MediaCo Class A common stock.
Prior to being converted, the MediaCo Series A preferred stock ranked senior in preference to the MediaCo Class A common stock, MediaCo Class B common stock, and the MediaCo Class C common stock. Pursuant to the Articles of Amendment that established the terms of the Series A preferred stock, issued and outstanding shares of MediaCo Series A preferred stock accrued cumulative dividends, payable in kind, at an annual rate equal to the interest rate on any senior debt of the Company (see Note 7 — Long-Term Debt, Warrants, And Series B Preferred Stock), or if no senior debt is outstanding, 6%, plus additional increases of 1% on December 12, 2020 and each anniversary thereof.
Dividends on Series A Convertible Preferred Stock held by SG Broadcasting were $0.0 million and $0.9 million for the years ended December 31, 2025 and 2024.
Second Lien Term Loan
On April 17, 2024, in connection with the consummation of the Estrella Acquisition, the Company entered into a $30.0 million second lien term loan credit facility (the “Second Lien Credit Agreement” or the “2L Term Loan”) with HPS Investment Partners, LLC (“HPS”), as administrative and collateral agent, and certain financial institutions affiliated with HPS. HPS is a significant shareholder of the Company and, as such, the Second Lien Credit Agreement constitutes a related-party transaction.
The Second Lien Credit Agreement was recorded at its fair value of $26.5 million on April 17, 2024, and will be accreted up to its principal balance over the term of the loan. The 2L Term Loan bears interest at a rate of SOFR + 6.00%, which may be paid-in-kind (“PIK”) at the Company’s election. During 2024, the Company elected to PIK the 6.00% spread monthly. Interest expense recognized on the 2L Term Loan, including both cash and PIK interest, totaled approximately $3.3 million and $2.4 million for the years ended December 31, 2025 and 2024, respectively. The outstanding balance owed to HPS as of December 31, 2025, was $30.4 million, inclusive of PIK interest accreted to principal.
Additional details regarding the Second Lien Credit Agreement are provided in Note 7 — Long-Term Debt, Warrants, And Series B Preferred Stock.
Consulting Agreements & Other Activity
In October 2023, we entered into agreements with five consultants that are currently employed by affiliates of Standard General. One of the agreements had a term that expired on February 1, 2024 and was billed at an hourly rate of $125 per hour. One of the agreements, billed at a rate of $8,400 per month expired on May 31, 2024. Two of the agreements billed at rates of $6,000 and $12,000 per month were extended through September 30, 2024. One agreement may be terminated at any time by either party and is billed at $18,000 per month, plus expenses. For the year ended December 31, 2024, $0.4 million, of fees were incurred related to these agreements. These agreements were terminated as of September 30, 2024.
In March 2024, we made payments of $15,000 to the National Association of Investment Companies, of which a member of our board of directors is the President & CEO.
On October 29, 2024, the Company and Standard Media Group LLC (“SMG”) entered into an Employee Leasing Agreement, effective as of October 1, 2024 (the “Leasing Agreement”). Under the Leasing Agreement, the Company will obtain the services of several SMG employees to serve various roles for the Company, including with respect to the legal, digital products, broadcast IT, and news operations function. The Leasing Agreement is an at-cost arrangement, with the Company paying only for a percentage of the actual cost of employing each leased employee, with no markup or service fees above the Company’s share of the actual fully-loaded cost of each leased employee. For the years ended December 31, 2025 and 2024, $0.7 million and $0.2 million of fees were incurred related to this agreement, none of which were paid as of December 31, 2025.
On April 17, 2025, the Company and Paducah Television Operations LLC (“PTO”), a subsidiary of SMG, entered into a Support Agreement, effective as of April 17, 2025 (the “PTO Support Agreement”) and continues for a term of six months unless terminated earlier by either party with 30 days written notice. On November 5, 2025, an amendment was entered into to extend the term of this agreement for an additional 12 months. Under the PTO Support Agreement, the Company will provide operational support to PTO, including, but not limited to, finance and legal assistance, human resources, sales, and production of certain marketing materials. In return for providing these services, the Company will receive payment at the mutually agreed upon rate. For the year ended December 31, 2025, $3.3 million of fees were earned related to this agreement and were recorded in other income on the condensed consolidated statements of operations. $0.8 million of these fees were still owed to the Company as of December 31, 2025.