Elkhart Investor Pushes Emmis Liquidation

September 14, 2007

Elkhart money manager Frank Martin said in a regulatory filing this morning that he conducted a video teleconference with Emmis Communications Corp. directors this week to express his deep dissatisfaction with the company's performance.

Martin, whose firm own 9.7 percent of Emmis stock, said in the filing that the company should seriously consider selling its radio stations and other holdings and "return capital to ... shareholders before [the company's] value may diminish further."

An Emmis spokeswoman was not able to provide a response by IBJ Daily's deadline.

Emmis shares traded late this morning at $6.10 each, up 20 cents on the day. The stock has fallen 28 percent this year, in part because of slumping advertising sales at the company's radio stations.

Martin has been publicly critical of Emmis CEO Jeff Smulyan for more than a year. Among other issues, he objects to a special class of stock Smulyan holds that gives him voting control of the company, even though his ownership stake is less than 20 percent.

In today's filing, Martin said that he and a Martin Capital colleague held the video conference call with Susan Bayh and four other outside Emmis directors.

During the meeting, Martin Capital "reiterated concerns about concentration of power and the apparent negative impact on corporate governance," the filing said. The firm also complained about the "lack of clarity of vision with regard to corporate strategy [and] the apparent reluctance to monetize the worth of valuable properties."

The filing said that Martin Capital closed the meeting by advocating liquidation, saying the dramatic step is justified in light of the company's "dismal long-term economic performance."

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