Emmis Exits Indianapolis Radio

[Ryan Williams]

The only major surprises are the timing and the buyer. Smulyan is 75, and his kids have no desire to be in the radio business.

I think that is right and why I was surprised with the news yesterday. Emmis has said multiple times they were divesting the stations outside of Indianapolis. I figured Indianapolis would happen eventually, but there hasn't been any indication this was a imminent consideration. And with this being the starting place, there is a lot of history and sentiment.

There are also a lot of new questions. Such as:

- Does this new Emmis with what appears to be a basket of speculative new businesses have the cash flow to pay for all the company infrastructure and management?

- Emmis still has a lot of experienced radio people. Are they all retiring or leaving? Rick Cummings?

- If so, what happens to management arrangement with MediaCo (WBLS/WQHT)?

- Two out of the three new businesses don't appear to be based in Indianapolis, without the local radio cluster, what happens to the prominent HQ?

- Where does that leave Indianapolis Monthly?

- The Emmis team formed a special purpose acquisition company a while back (Monument Circle Acquisition Corp.) with a lot capital. Did they ever buy anything?

 

[Hoosierky]

Indianapolis monthly is not part of the sale. According to WIBC this morning.

 

[TheBigA]

There are also a lot of new questions. Such as:

Here's what Smulyan told his employees:

https://radioink.com/2022/06/14/heres-what-emmis-ceo-jeff-smulyan-told-his-employees/

 

[Ryan Williams]

Indianapolis monthly is not part of the sale. According to WIBC this morning.

Right, but with all the other "old media" gone, Indianapolis Monthly sticks out like a sore thumb.

 

[Ryan Williams]

Here's what Smulyan told his employees:

https://radioink.com/2022/06/14/heres-what-emmis-ceo-jeff-smulyan-told-his-employees/

Thanks, I had not read that yet.

 

[tsherck]

Here is the Transaction Price for the Emmis/Urban One. Source: RBR.com:

Urban One on Friday disclosed in a SEC filing the results of its Board of Directors election, held Tuesday (6/14) at its annual shareholders’ meeting.

Buried at the end of the results: a short note about its proposed acquisition of Emmis Communications’ last remaining cluster, minus presently silent WFNI-AM, in Indianapolis.

The purchase price was disclosed.

While a Form 314 filing with the FCC has not yet transpired, Urban One tells the SEC that the transaction price was $25 million.
Urban One also believes that the transaction “would be accretive to earnings.”

Source: RBR.com

MODERATOR NOTE: This article was behind a firewall. Fair Usage only allows a short extract, not the whole article or a large part of it. We edited the post accordingly.

 

[Mikey Radio]

Here's what Smulyan told his employees:

https://radioink.com/2022/06/14/heres-what-emmis-ceo-jeff-smulyan-told-his-employees/

I often skim through the reader comments below articles like this one, as sometimes you can get a bit more detail or information than what's contained in the article, and you can also get a sense of how people (those commenting, anyway) feel about the situation in question. This comment was interesting:

Pete Probst jr
Just sad, why sell off what made you who you are. If you say you love radio than keep it and get rid of the other companies that you own. Be a true operator till the end of time. You say you love indy but yet your throwing it all away. Seen this happen to many times all-over the mighty $$. be a hoosier and take pride in what’s locally owned and operated keep it don’t sell.

This guy either has no clue about the radio business, or is just a keyboard commando senselessly talking out of his rear end. Yes, it's the end of an era and yes, there will be changes at the Indianapolis cluster, but no different than the changes and ebb and flow (mostly ebb in recent years, unfortunately) that have affected nearly all parts of the radio business for the past few decades.

As someone stated in another thread, Jeff Smulyan was respected by many as an owner, but he's 75 so he probably wants to slow down. Or move onto other things. He found a buyer and can cash out and move along or go and see the world. Good on him. If "Pete Probst Jr" is so concerned, let him gather a group of investors and buy the cluster for himself.

 

[davideduardo]

This guy either has no clue about the radio business, or is just a keyboard commando senselessly talking out of his rear end. Yes, it's the end of an era and yes, there will be changes at the Indianapolis cluster, but no different than the changes and ebb and flow (mostly ebb in recent years, unfortunately) that have affected nearly all parts of the radio business for the past few decades.

As someone stated in another thread, Jeff Smulyan was respected by many as an owner, but he's 75 so he probably wants to slow down. Or move onto other things. He found a buyer and can cash out and move along or go and see the world. Good on him. If "Pete Probst Jr" is so concerned, let him gather a group of investors and buy the cluster for himself.

I had the opportunity to work for Emmis and Jeff Smulyan for about 5 years as programmer and consultant for their Buenos Aires, Argentina AM-FM combo. It was a great and satisfying experience.

For those who don't know much about Jeff... I did my work without ever meeting him personally. Yet several years later, he was on a panel at an NAB convention and I was in the audience. When the panel was over, he got up and walked right over to where I was seated and thanked me for "making Mega and Radio 10 #1 on AM and FM". I was pretty amazed that he would recognize me and attach me to the Argentine experience.

 

[Ryan Williams]

While a Form 314 filing with the FCC has not yet transpired, Urban One tells the SEC that the transaction price was $25 million.
Urban One also believes that the transaction “would be accretive to earnings.”

Without knowing the billings and cashflow, it seems like a pretty good price for Emmis.

I doubt Radio Indiana is a big chunk of the 25 million. The two translators probably have a stick value of less than a million.

On the Radio One side, the "Radio Now" brand really is not worth much of anything and selling 96.3 will not do much to offset this large acquisition.

They might be able to get 2-3 million for it tops

 

[Perspective]

Not sure if there's any real value in contributing this information but here's what Emmis bought those stations for. 1979 price for 97.1 WSVL Shelbyville was a little over 1 million. In 1994 buys 1070 WIBC/93.1 WKLR for 26 million. In 1997 Emmis buys the TLC stations from Panache for 15 million and in 2001 sold TLC-AM 1310 and the intellectual property of WTLC-FM to Radio One for 8.5 million. Don't recall ever seeing a sale price for the 1070 transmitter site.

 

[PTBoardOp94]

I doubt Radio Indiana is a big chunk of the 25 million. The two translators probably have a stick value of less than a million.

The two translators have bigtime revenue attached, so "stick value" probably doesn't apply. Unless Urban One wishes to move "The Fan" to another signal.

 

[gr8oldies]

Without knowing the billings and cashflow, it seems like a pretty good price for Emmis.

I doubt Radio Indiana is a big chunk of the 25 million. The two translators probably have a stick value of less than a million.

On the Radio One side, the "Radio Now" brand really is not worth much of anything and selling 96.3 will not do much to offset this large acquisition.

They might be able to get 2-3 million for it top

Not sure if there's any real value in contributing this information but here's what Emmis bought those stations for. 1979 price for 97.1 WSVL Shelbyville was a little over 1 million. In 1994 buys 1070 WIBC/93.1 WKLR for 26 million. In 1997 Emmis buys the TLC stations from Panache for 15 million and in 2001 sold TLC-AM 1310 and the intellectual property of WTLC-FM to Radio One for 8.5 million. Don't recall ever seeing a sale price for the 1070 transmitter site.

I don't recall ever seeing land value as a separate line item in station sale paperwork back in the day

 

[Perspective]

I don't recall ever seeing land value as a separate line item in station sale paperwork back in the day

Not talking about back in the day. Just interested if anyone knows what Emmis sold the WFNI site just last year. Don't recall reading a number in the IBJ or Star.

 

[Ryan Williams]

The two translators have bigtime revenue attached, so "stick value" probably doesn't apply. Unless Urban One wishes to move "The Fan" to another signal.

I'm not disagreeing with you at all. Obviously the cash flow from The Fan far outweighs the stick value of the two translators, but it's hard to determine exactly what multiple to to apply to that cash flow when it is coming from a translator. They are class d signals with limited value apart from their current programming and like all translators considered secondary services.

(As a thought experiment, if Emmis was not exiting Indianapolis and was forced to turn off the translators, what would they do? Move The Fan to 97.1? Try to combine The Fan and WIBC?

Prior to this news, I expected them to try to acquire another FM facility for it, perhaps even WNOW.)

 

[Ryan Williams]

In 1997 Emmis buys the TLC stations from Panache for 15 million and in 2001 sold TLC-AM 1310 and the intellectual property of WTLC-FM to Radio One for 8.5 million. Don't recall ever seeing a sale price for the 1070 transmitter site.

Emmis is good at selling things to Radio One!

All jokes aside, I thought I remembered seeing a dollar amount for the land in Whitestown but I can't find it.

I've looked through some news sources as well as some EMMS annual and quarterly reports (they stopped issuing those reports it appears).

There is a mention of a mortgage of 23 million for Whitestown and the Monument Circle HQ.

Below is the current listing. It appears the plot has been broken up with most of the larger chunks already sold.

5875 Perry Worth Road Land for sale 0 SF Whitestown 46075 | United States | Cushman & Wakefield

www.cushmanwakefield.com

 

[Ryan Williams]

They might be able to get 2-3 million for it tops

The buyer is BBN and the price is 3.2 million. Missed it by almost 7%.

Also, our guess that the Radio Now IP and the 96.3 license would not find the same buyer turned out to be correct.

The WNOW calls are going to 96.3. I think we can likely mark the sale of the failed Radio Now as not happening.

https://radioinsight.com/headlines/229872/bible-broadcasting-acquires-96-3-indianapolis-license/

 

[AceBiscuits]

The buyer is BBN and the price is 3.2 million. Missed it by almost 7%.

Also, our guess that the Radio Now IP and the 96.3 license would not find the same buyer turned out to be correct.

The WNOW calls are going to 96.3. I think we can likely mark the sale of the failed Radio Now as not happening.

https://radioinsight.com/headlines/229872/bible-broadcasting-acquires-96-3-indianapolis-license/

The WNOW calls going to 96.3 does not mean that BBN is also getting the rest of the Radio Now intellectual property, as the article implies (Lance, feel free to correct me).

Emmis still has that to sell off to another operator, however the same thing was said about the IP of WRQX in DC when Cumulus sold the station to EMF, but that ultimately never came to fruition.

 

[neosolbrudda]

The end of an era...
As long as I've known WHHH existed, it's been on 96.3. Even when it was called "Hoosier 96.3".

 

[Ryan Williams]

The WNOW calls going to 96.3 does not mean that BBN is also getting the rest of the Radio Now intellectual property, as the article implies (Lance, feel free to correct me).

That is not what I implied nor what I got from Lance's post.

Radio Now is a failed brand. Who is going to want it? Cumulus already has ZPL. Why would iHeart want it. They have better brands in-house. It never made that big of a dent in Indiana and it also flamed out in Houston.

 

[Kent]

The end of an era...
As long as I've known WHHH existed, it's been on 96.3. Even when it was called "Hoosier 96.3".

I remember it being "Hoosier Hot 96" in 1999. That and 95.9 were the only two stations I couldn't get on my home stereo during my few months in Indy that year despite living right in town. Not being able to get WPZZ 95.9 didn't surprise me as it was south of town while I was on the northside, but I figured I'd be able to get 96.3. I did live practically underneath the big antenna farm, but I could still get a few out of market stations, including WKOA 105.3 and WWKI 100.5. 96.3 was nothing but noise.

Radio Now is a failed brand. Who is going to want it? Cumulus already has ZPL. Why would iHeart want it. They have better brands in-house. It never made that big of a dent in Indiana and it also flamed out in Houston.

Radio Now was successful when it was at 93.1. Of course, that was more than 10 years ago. I can't see anyone else wanting it either. If Cumulus were still having problems with 93.9, I'd say it should put the format there to block any potential competitor. 93.9 X, though, does better than Radio Now does today. Plus, I'm not aware of any Cumulus markets where it has multiple CHR's. It even took 93.9 out of the CHR battle after it got ZPL. A handful of operators, Cumulus included, provide their own competition with a couple derivatives of country or AC, but the CHR pie can't be sliced nearly as much, especially today.