Emmis strikes out in attempt to claim damages from Hungary

April 21, 2014

An international tribunal for settling financial disputes has issued a verdict of sorts for Indianapolis-based Emmis Communications Corp. In a  word, "Bocsanat."

That’s how you say “sorry” in Hungarian. An arbitration panel has ruled that the International Centre for the Settlement of Investment Disputes doesn’t have the jurisdiction to hear an appeal Emmis filed after Hungary took away its broadcast license for “SlagerRadio” in 2009.

For a dozen years, Emmis and co-investors operated the popular radio station that drew 3½ million listeners weekly. But the Republic of Hungary’s equivalent of the Federal Communications Commission later handed rights to the station to a political party in the former communist country of 9.9 million people.

A frustrating journey through the Hungarian justice system led Emmis and other investors in SlagerRadio to seek damages from Hungary through the ICSID, believing it would be the best forum for their claims. But on April 16, the ICSID issued a ruling saying it didn't have jurisdiction.

In a statement issued Monday, Emmis said it would explore other venues for appeal of the “unlawful” taking of the station. Emmis said it and its partners invested $170 million in Hungarian operations over the years.

Emmis CEO Jeff Smulyan said he was extremely disappointed in the decision.

“We are incredibly frustrated to be denied this international forum to remedy the egregious acts of the Hungarian government,” Smulyan said in a statement. "While the Hungarian government may have prevailed in this purely jurisdictional decision, unfortunately, the real losers are the Hungarian people."

Emmis “will evaluate over the coming weeks whether any other viable forums exist," according to Monday's statement.

The legal battle hasn’t been cheap for Emmis, which spent at least $1.8 million in legal fees for the Hungarian case during the nine months ending Sept. 30, according to its financial statements.

Emmis owns 22 stations in the United States, including in the major markets of New York and Los Angeles. Its Indianapolis properties include WIBC-FM 93.1, WLHK-FM “The Hank” 97.1 and WYXB-FM 105.7.

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