Texas firm boosts stake in Emmis, wants talks

December 3, 2008

Luther King Capital Management Corp., a Fort Worth, Texas, money manager, has nearly doubled its stake in Indianapolis-based Emmis Communications Corp., a Securities and Exchange Commission filing says.

The firm increased its number of shares to nearly 2 million, or about 6.2 percent of the total available.

Luther King Capital also wants to discuss the direction of Emmis with managers and other investors, according to Bloomberg.

Luther King Capital's intentions in speaking with the company were not disclosed, and the firm did not respond to requests for comment.

Emmis spokeswoman Kate Snedeker said she is not aware of any contact from Luther King Capital.

If the firm wants to shake up Emmis, it wouldn't be the only investor with such intentions.

Elkhart-based Martin Capital Management for more than a year has called for major changes in Emmis operations to reverse a declining stock price. Emmis shares have slid to 30 cents apiece from $23.62 three years ago.

In July, Senior Partner Frank Martin fired off a scorching letter to lead director Susan Bayh in which he alleged she was indirectly responsible for the decline by not forcing better performance from CEO Jeff Smulyan. Martin urged Bayh, who is married to U.S. Sen. Evan Bayh, to divest Emmis assets.

Investors would have a difficult time forcing changes without going through Smulyan because he holds a special class of stock that gives him control over Emmis shares.

Emmis owns 23 radio stations. In Indianapolis, those properties include WFNI-AM 1070, WLHK-FM 97.1, WIBC-FM 93.1. WYXB-FM 105.7, and Network Indiana.

Emmis also publishes Indianapolis Monthly and similar magazines in other cities. About 245 of the company's 1,100 workers are in Indiana, mostly at its headquarters on Monument Circle.

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