by Longwei Deng

Emmis Communication Corporation’s Logo. Picture courtesy of Emmis.

Address:EMMIS Communications
One EMMIS Plaza
40 Monument Circle, Suite 700
Indianapolis, IN 46204

                                                                              Voice: (317) 266-0100 Fax:(317) 631-3750

Website: www.emmis.com

Background:

Emmis (the Hebrew word for “truth”) Communication Corporation (formerly Emmis Broadcasting) was founded in 1979 when its founder Jeff Smulyan purchased his first radio station, WSVL-FM Shelbyville, IN. Smulyan wanted to build a tower close to Indianapolis and broadcast a competitive signal into the market. This goal was realized when he changed his radio station from country music to adult contemporary form and also changed its name to WENS. WENS became very successful in the Central Indiana market and it also led Smulyan to purchase more radio stations throughout the country. Emmis Publishing was created in 1988 with the purchase of Indianapolis Monthly. Emmis also started its television business with the creation of Emmis Television in 1998.  In 1994, Emmis went public.[1]

Company Overview:

Emmis Communication Corporation is a diversified media company, but it principally focuses on radio broadcasting. The Radio Division brings more than 90% of the company’s overall cash flow. Emmis is the 8th largest publicly traded radio portfolio in United States in excess of 23 stations in 7 markets, including the nation’s top three markets- New York, Los Angeles and Chicago.It also operates the two most influential hip hop stations in the world, Power 106 in Los Angeles and HOT97 in New York City. [2][3]

Emmis Communication Corporation is the eighth largest radio company. It is publically traded on the NASDAQ Global Select Market. It boasts over 23 stations in 7 states. Current stock price is $1.75 per share.[2][4]

 Executives:

Jeff Smulyan, Chairman, President and CEO of Emmis. Picture courtesy of Emmis Website

Jeffrey H. Smulyan is the Chairman of the Board of Emmis Communications Corporation. In 1980, Smulyan formed and became principal shareholder of Emmis. As a principal shareholder, Smulyan led a group that bought the Seattle Mariners baseball team in 1989 and sold it in 1992. During that time, he served on the Mjor League Baseball owner’s Ownership and Television committees.[5]

Rick Cummings, President of Radio Division. Picture courtesy of Emmis Website 

Rick Cummings joined Emmis Broadcasting as its first Program Director at flagship station WENS-FM, 97.1 Indianapolis. He became the National Program Director for Emmis. In 2002, Rick became President of the Radio Division of Emmis Communication. [6]

Finance:

Emmis Communication Corporation is the eighth largest radio company. It is publicly traded on the NASDAQ Global Select Market. In 2010, it boasted revenues of $242 million. And it increased to $250 million in 2011[7]

For the Second Quarter this year, the company’s reported results are negatively impacted by station divestitures over the past year. But on a pro forma basis, net revenue for the second fiscal quarter increased 1%, from $54.4 million to $55 million. Pro forma radio net revenues increased from $41.1 million to $42.0 million. This growth in radio outpaced market growth in this quarter. Its latest stock price is $1.75 per share, which was less than 1%. [8]

Stock Portfolio for Emmis Communications. Chart courtesy of NASDAQ Global Select Market

“We are actively pursuing a refinancing of our entire capital structure that will dramatically reduce our interest expense and increase our free cash flow going forward,” Chairman Smulyan said during the Second Quarter conference. [8]

What’s happening:

In 2010, A Hungarian court ruled in favor of Emmis Communication Corporation- owned Slager Radio that the National Radio and Television Board (ORTT) illegally awarded a national radio broadcast contract to FM 1. This ruling shows that Slager was one of only two bids in the recent tender for Hungary’s two national radio. Emmis won the broadcasting license in 1997. Emmis and Slager invested $170 million in Hungary’s economy, provided employment to its all Hungarian staff in 12 years.  [9]

In 2009, Emmis announced that it had formed a strategic alliance with StreamTheWorld, which is a radio industry’s streaming technology and services company, to collect all Emmis radio stations on a complete new streaming platform. And also in 2011, Emmis entered a partnership with LA-based MediaLeaders to increase the use of social media to generate revenue and market share in both terrestrial and digital platforms. The MediaLeaders team is a grassroots social media strike that helps Emmis establish more connection with its listeners and advertises in a meaningful way. [10]

In September 2011, Emmis Communication Corporation announced the launch of Incite(inciteimpact.com),which is a full-service social impact marketing firm, tend to use its radio brands to drive community impact. Emmis built a team focused on delivering high-impact social marketing programs for nonprofit organizations, government agency and corporate clients to confront great social challenges, from climate change to transportation, education to community building. [11]

In January of 2011, the stock price of Emmis surged 42% as insiders speculated that the company could be close to selling off some of its radio stations. In that January, filing with the Securities and Exchange Commission, Emmis reported that it had the necessary cash to survive through this February. After that September, Emmis survived from that criss.

In November of 2011, “Emmis announced that it has launched a modified “Dutch auction” tender offer to purchased up to $6,000,000 in value of shares of its 6.25% Series A Cumulative Convertible Preferred Stock, par value $0.01 per share at a price per share not less that $12.50 and not greater that $15.56. ” A “Dutch auction” tender offer allows shareholders to indicate how many shares and at what price they want to tender their shares within the share price range.” [12]

In June 2112, Clear Channel Media and Entertainment announced an agreement to add 106 Cox Media Group and Emmis Communication radio stations to its iHeartRadio digital platform. This will result in more choices and better programming options for iHeartRadio users and also provide more convenient and advanced service for Cox and Emmis listeners. Cox Media Group and Emmis will continue to stream their stations on the station websites and smartphone apps. iHeartRadio has already reached 10 million registered users this past May.[13]

What’s next:

Emmis is building on the momentum of its successful  TagStation® product and introducing NextRadio, the app for FM and HD Radio enabled smartphones. NextRadio is being marked to the wireless industry as an app that shows the best radio listening experience on the smartphone. The product which is specific to local FM and HD Radio allows listeners to listen to local radio without using their data plan for pure internet streaming. “NextRadio™ leverages the efficiency and scalability of broadcast radio improved by the phone’s data channel to deliver an interactive artist and ad experience,” said Paul Brenner, Chief Technology Officer with Emmis Communications.  [14]

Sources:

[1]The Emmis Story. http://www.emmis.com/who-we-are/history.aspx

[2]What we do. http://www.emmis.com/what-we-do/radio/

[3]The Investor Overview. http://www.emmis.com/investors/

[4]NASDAQ Stock Quote. http://www.nasdaq.com/symbol/emms

[5]Jeff Smuylan. http://www.emmis.com/who-we-are/executives/smulyan.aspx

[6]Rick Cummings. http://www.emmis.com/who-we-are/executives/cummings.aspx

[7]2012 Quarter4 Report. http://www.emmis.com/Other/pdf/2012-Q4/Emmis_2-29-        2012_Form10K.pdf

[8]Emmis Communications Reports Solid Second Quarter Pro Forma Revenue    Growth.http://www.emmis.com/press/story.aspx?ID=1790065

[9]Emmis Triumphs in Hungarian Court.http://www.emmis.com/press/story.aspx?ID=1316728

[11] Emmis Communications Launches Incite. http://www.emmis.com/press/story.aspx?ID=1546571

[12] The Launch Of Modified “DUTCH  AUCTION”.http://www.emmis.com/press/story.aspx?ID=1579405

[13]Cox Media Group And EMMIS Communications Radio Stations Join iHeartRadio. http://www.emmis.com/press/story.aspx?ID=1728273

[14]What’s Next? http://www.emmis.com/press/story.aspx?ID=1812333