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Emmis posts big profit, but revenue shrinks

Scott Olson
January 12, 2012
Keywords
Emmis Communications, Media & Marketing, Radio, Radio Station Owners
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Emmis Communications Corp. posted an unusually large profit of $110.9 million in its latest quarter due to unusual circumstances involving the sale of radio stations and the repurchase of company preferred stock.

The Indianapolis-based media company on Thursday said profit for the fiscal third quarter ended Nov. 30 was $2.49 per diluted share compared with a loss of 4 cents per diluted share, or $1.7 million, for the same period in 2010.

Emmis turned a profit of $31.8 million on the sale of its portion of Merlin Media LLC to Chicago-based private equity firm GTCR for $120 million. The sale closed Sept. 1. Merlin operates radio stations WLUP-FM and WKQX-FM in Chicago, in addition to WRXP-FM in New York.

While the sale was profitable, the loss of Merlin's big-market radio stations dragged down revenue. Quarterly revenue fell 11 percent from the year before, to $39.8 million.

Overall radio revenue for the quarter fell 16.8 percent while publishing revenue increased 5.6 percent.

Emmis also repurchased $55.8 million in stock from preferred shareholders during the period to reduce its debt $80 million. Total debt at the end of 2011 was $240 million.

Emmis shares fell 6 cents, to 69 cents each, in morning trading. The company faces the risk of being delisted from the NASDAQ exchange in February if its stock remains priced under $1.

Despite the company’s struggles, Emmis CEO Jeff Smulyan said he was upbeat about its prospects.

“It’s been disappointing in terms of our revenue, but I think we’re poised to see 2012 as a breakout year for this company,” he said Thursday morning.

Emmis last quarter rolled out a high-definition radio application funded in part by a grant from the National Association of Broadcasters. The smart-phone app ultimately could become a feature in automobiles, Smulyan said.

“We think it’s a game-changer,” he said, “because it changes the way people consume radio.”

Emmis owns 17 FM and two AM radio stations nationwide and seven city and specialty magazines. Locally, it operates WFNI-AM 1070, WIBC-FM 93.1, WLHK-FM 97.1 and WYXB-FM 105.7, as well as Indianapolis Monthly magazine.
 

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  1. First, the Athenaeum is going to have to get past the hurdle with the Lockerbie residents and the agreement that the parcel would be residential. Second, and in my opinion, this prime piece of property should include parking, PLUS, a black box theater(s), some market rate and affordable artist housing and a plan to renovate and reconfigure the second story theater. I would negotiate to add the DeHaan property surface parking lot into the development mix, place a one story surface parking garage on the DeHaan lot on the street level (for the Dehaan tenants use during the daytime) and add a second story to the garage that would become an addition to the current second story theater and then change the direction of the theater by moving the stage across the alley and on top of the DeHaan lot parking. You can add all the stage elements that are currently missing from the Athenaeum stage to make it more attractive for use by Ballet, Opera and traveling productions. Plus, the theater changes would probably help solve some of the soundproofing issues. Alas,it does not seem to be a part of the strategic plan to conduct a study to determine best use of the property. Seems like the current plan is a quick and easy move that ignores the property best use/potential and any strategic property planning for the effect on future generations.

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