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Emmis posts big profit, but revenue shrinks

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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. Cramer agrees...says don't buy it and sell it if you own it! Their "pay to play" cost is this issue. As long as they charge customers, they never will attain the critical mass needed to be a successful on company...Jim Cramer quote.

  2. My responses to some of the comments would include the following: 1. Our offer which included the forgiveness of debt (this is an immediate forgiveness and is not "spread over many years")represents debt that due to a reduction of interest rates in the economy arguably represents consideration together with the cash component of our offer that exceeds the $2.1 million apparently offered by another party. 2. The previous $2.1 million cash offer that was turned down by the CRC would have netted the CRC substantially less than $2.1 million. As a result even in hindsight the CRC was wise in turning down that offer. 3. With regard to "concerned Carmelite's" discussion of the previous financing Pedcor gave up $16.5 million in City debt in addition to the conveyance of the garage (appraised at $13 million)in exchange for the $22.5 million cash and debt obligations. The local media never discussed the $16.5 million in debt that we gave up which would show that we gave $29.5 million in value for the $23.5 million. 4.Pedcor would have been much happier if Brian was still operating his Deli and only made this offer as we believe that we can redevelop the building into something that will be better for the City and City Center where both Pedcor the citizens of Carmel have a large investment. Bruce Cordingley, President, Pedcor

  3. I've been looking for news on Corner Bakery, too, but there doesn't seem to be any info out there. I prefer them over Panera and Paradise so can't wait to see where they'll be!

  4. WGN actually is two channels: 1. WGN Chicago, seen only in Chicago (and parts of Canada) - this station is one of the flagship CW affiliates. 2. WGN America - a nationwide cable channel that doesn't carry any CW programming, and doesn't have local affiliates. (In addition, as WGN is owned by Tribune, just like WTTV, WTTK, and WXIN, I can't imagine they would do anything to help WISH.) In Indianapolis, CW programming is already seen on WTTV 4 and WTTK 29, and when CBS takes over those stations' main channels, the CW will move to a sub channel, such as 4.2 or 4.3 and 29.2 or 29.3. TBS is only a cable channel these days and does not affiliate with local stations. WISH could move the MyNetwork affiliation from WNDY 23 to WISH 8, but I am beginning to think they may prefer to put together their own lineup of syndicated programming instead. While much of it would be "reruns" from broadcast or cable, that's pretty much what the MyNetwork does these days anyway. So since WISH has the choice, they may want to customize their lineup by choosing programs that they feel will garner better ratings in this market.

  5. The Pedcor debt is from the CRC paying ~$23M for the Pedcor's parking garage at City Center that is apprased at $13M. Why did we pay over the top money for a private businesses parking? What did we get out of it? Pedcor got free parking for their apartment and business tenants. Pedcor now gets another building for free that taxpayers have ~$3M tied up in. This is NOT a win win for taxpayers. It is just a win for Pedcor who contributes heavily to the Friends of Jim Brainard. The campaign reports are on the Hamilton County website. http://www2.hamiltoncounty.in.gov/publicdocs/Campaign%20Finance%20Images/defaultfiles.asp?ARG1=Campaign Finance Images&ARG2=/Brainard, Jim

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