Indianapolis-based Emmis Communications Corp. has terminated 35 staffers involved in its NextRadio and TagStation businesses, Emmis CEO Jeff Smulyan said Friday.
Emmis announced in October a decision to “dramatically reduce” the operations of NextRadio and TagStation after tens of millions of dollars in losses.
The company told employees about the job cuts last week.
Paul Brenner, president of NextRadio and TagStation, will remain with the company. Brenner has been with Emmis—in various executive roles—since 1998.
“After exploring several alternatives, we have made the difficult decision to dramatically reduce the scope and scale of our operations, which includes the termination of 35 employees of these businesses,” Smulyan said in a written statement.
Smulyan said the workers are being given “generous severance packages,” and added that Emmis “will provide certain product support and maintenance for the foreseeable future” related to NextRadio and TagStation.
“We wish our colleagues well. They have done all that is asked of them and more,” Smulyan wrote in a memo to staffers Dec. 7. “We just fell short. Impacted employees received severance packages that will get them through the holiday season.”
NextRadio, which began in 2012, was intended to be an industry-wide effort to make mobile phones act like smart portable radios. But Smulyan said in October that the consortium he had hoped to build never materialized.
“NextRadio and TagStation are efforts that I and many others championed and spent enormous energy supporting,” Smulyan wrote to his staffers. “We believed in the success of these businesses. To come to this day is a difficult one, not just for the employees directly impacted, but for Emmis and the radio industry.”
Emmis officials announced during an October earnings call with analysts that the company has lost $7.6 million on NextRadio in the last 12 months alone.
The type of loss Emmis had this year with NextRadio “has been going on year after year,” Smulyan told IBJ this fall.
Smulyan continually said there was considerable support for NextRadio, which allowed cell phones using an app to tune into FM radio with various enhancements not available through a traditional radio, and allowed advertisers to more directly target listeners with tailored messages. But Smulyan admitted that support “was 10 miles wide and a tenth of a mile deep.”
After years of negotiations, Emmis finally got a buy-in from a number of major cell phone carriers to allow their cell phones to activate a chip so the FM radio app would work.
But Emmis’ negotiations with other radio operators weren’t as successful. Some within the industry said cash-strapped radio operators didn’t have enough money to support the effort. Two of the nation’s biggest radio operators—Clear Channel and Cumulus Media—have been in bankruptcy.
Smulyan said Emmis could no longer afford to pay for an industry-wide initiative essentially on its own.