INDIANAPOLIS, April 26, 2012 /PRNewswire/ -- Emmis
Communications (Nasdaq: EMMS) today announced a long-term Local
Programming and Marketing Agreement (LMA) with ESPN Radio to
provide programming and sell advertising on New York's 98.7FM. Emmis also entered into a
transaction to sell the intellectual property rights of Kiss FM,
the current format Emmis programs on 98.7FM, to YMF Media, who is
in the process of acquiring New
York radio stations WBLS-FM and WLIB-AM. In conjunction with
these transactions, Emmis also announced that it entered into a
loan agreement with a large insurance company. The total
consideration related to the proceeds from the loan agreement,
initial payment from the sale of Kiss FM intellectual property
rights, and the present value of certain loan reserves required
under the agreement with the insurance company which Emmis expects
to receive in the future, will be approximately $96 million. The long-term LMA is not tied to a
sale of the station. Transaction proceeds will be used to
repay amounts outstanding under Emmis' senior credit facility and
to pay transaction fees and expenses.
"We want to thank our loyal employees and especially the fans of
Kiss FM for an amazing 30 year run including several periods where
Kiss was the number one ranked station in New York," Emmis Chairman and CEO Jeff Smulyan said. "Recent changes in the way
radio ratings are measured made it very difficult for us to find
success with Kiss FM despite the great work of our Emmis New York
team. We hope the best parts of Kiss will continue to live on. With
enhanced financial flexibility we look forward to enhancing our
service to New York's urban
community at our award winning Hot97 brand."
This weekend Emmis New York plans to celebrate 30 years of Kiss
FM. Emmis purchased Kiss FM 98.7 in 1994.
"I have so many friends on the Kiss FM team and this is an
extraordinarily difficult decision for me, however the benefits to
the financial health of Emmis as a whole are significant. Coupled
with the sale of a controlling interest in three of our radio
stations to Merlin Media and the forthcoming sale of KXOS in
Los Angeles, we will have one of
the healthiest balance sheets in media thereby positioning Emmis
for future growth," Smulyan said.
The Emmis employees affected by today's announcement will
receive generous severance packages.
Paul, Weiss, Rifkind, Wharton & Garrison LLP and Wiley
Rein LLP served as legal counsel and Moelis & Company served as
financial advisor to Emmis.
Emmis Communications Corporation is a diversified media company,
principally focused on radio broadcasting. Emmis operates the 8th
largest publicly traded radio portfolio in the United States based on total listeners.
Emmis owns 18 FM and two AM radio stations in New York, Los
Angeles, St. Louis,
Austin (Emmis has a 50.1%
controlling interest in Emmis' radio stations located there),
Indianapolis and Terre Haute, IN.
Note: Certain statements included in this press release which
are not statements of historical fact, including but not limited to
those identified with the words "expect," "will" or "look" are
intended to be, and are, by this Note, identified as
"forward-looking statements," as defined in the Securities and
Exchange Act of 1934, as amended. Such statements involve known and
unknown risks, uncertainties and other factors that may cause the
actual results, performance or achievements of the Company to be
materially different from any future result, performance or
achievement expressed or implied by such forward-looking statement.
Such factors include, among others: general economic
and business conditions; fluctuations in the demand for advertising
and demand for different types of advertising media; our ability to
service our outstanding debt; increased competition in our markets
and the broadcasting industry; our ability to attract and secure
programming, on-air talent, writers and photographers; inability to
obtain (or to obtain timely) necessary approvals for purchase or
sale transactions or to complete the transactions for other reasons
generally beyond our control; increases in the costs of
programming, including on-air talent; inability to grow through
suitable acquisitions; changes in audience measurement systems new
or changing regulations of the Federal Communications Commission or
other governmental agencies; competition from new or
different technologies; war, terrorist acts or political
instability; and other factors mentioned in documents filed by the
Company with the Securities and Exchange Commission.
Emmis does not undertake any obligation to publicly update or
revise any forward-looking statements because of new information,
future events or otherwise.
SOURCE Emmis Communications