NEW YORK — Emmis Communications came out with strong quarterly earnings Thursday and announced a flurry of station deals, including plans to acquire six radio stations from Sinclair Broadcast Group and swap four of those with Bonneville Group in exchange for Los Angeles station KZLM-FM.
“With this deal, Emmis will achieve both our immediate goal of reaching closure on Sinclair and more importantly, our long-term goal of owning a second FM in Los Angeles,” said Emmis Chairman-CEO Jeff Smulyan.
Emmis purchased the option to acquire the St. Louis stations from former Sinclair exec Barry Baker in 1999, but the two sides weren’t able to agree on an independent assessment of fair market value and went to court. Thursday’s agreement settles the legal dispute. Baker went to work with Barry Diller at USA Networks. He resigned from USA on Tuesday.
Plans for growth
The deals also bring Emmis’ radio station group to 23, making it the seventh largest nationwide in terms of revenue. Smulyan told Daily Variety his goal is to grow Indianapolis-based Emmis into the top five biggest radio groups and the top 10 TV station groups. Currently, Emmis owns 15 TV stations and is ranked about 16th in the country.
He is also moving forward with plans to separate the radio and TV sides of the business since the broadcast TV station biz has fallen out of favor with investors. He thinks Emmis stock is undervalued as Wall Street doesn’t give it credit for its radio, which is still a hot sector. The TV group will likely be spun out into a separate tracking stock.
On the earnings front, Emmis said first-quarter net profit jumped to $3.7 million from $241,000 the year before. Cash flow soared to $22 million from $12 million and revenue jumped 39% to $100 million.