Emmis Communications wants out of the magazine industry. The long-time owner of regional and city magazines like Texas Monthly and Orange Coast intends to sell off all print assets except for Indianapolis Monthly.
This announcement comes as Emmis, publicly traded since 1994, seeks to privatize through E Acquisition Corporation, an Indiana corporation owned by Emmis CEO and controlling shareholder Jeffrey H. Smulyan.
The joint entity will be co-owned by unnamed directors, officers and shareholders of Emmis, who along with E Acquisition Corporation, made a non-binding proposal to acquire the outstanding publicly held shares of Emmis for $4.10 per share in cash.
In an announcement to staff on Thursday, Smulyan said the decision comes down to outstanding debt and diminished faith from shareholders.
“Unfortunately, Wall Street does not share our strongly held view of these businesses. Investors have fled the radio and magazine industries,” Smulyan said in the statement. “Trading volume in our stock has dwindled, meaning investors who want to sell are limited in their ability to do so.”
The privatization of the company and the sale of its properties are still tentative. Emmis has formed a special committee to take the company private but any movement will require approval of both its board of directors and shareholders.
The company also intends to sell off the New York City radio station WLIB-AM and its four radio stations in Terre Haute, Indiana. WLIB-AM was acquired in February 2014 along with WBLS-FM for $131 million, a transaction which the company claims nearly doubled its station operating income.
This isn’t the first reinvention for Emmis Communications, which also owns a marketing firm, Incite, launched in 2011; created and owns the radio broadcasting apps NextRadio and Tagstation; and has had a controlling interest in Digonex, a dynamic pricing software, since 2014. The company owned TV assets from 1998 to 2008. It also had a handful of international radio assets from 1997 to 2013.
Indianapolis Monthly was the first Emmis Publishing asset, acquired by the group in 1988. Up for grabs are Atlanta, acquired in 1993; Cincinnati, acquired in 1997; Texas Monthly, acquired in 1998; Los Angeles, acquired in 2000; and Orange Coast, acquired in 2007.
Emmis also owned Country Sampler — a publishing group that produced Country Sampler and Smart Retailer — from 1999 to 2012, when it was acquired by Annie’s.
In his announcement, Smulyan said that if sales are negotiated, Emmis will provide bonuses to employees who stay, and offer “generous severance packages” in the case of layoffs.
Check out columnist John Palumno's take on this topic in our Insiders section.