The core of the company Jeff Smuylan has run has always revolved around radio. In some form or another, Emmis as a radio company has been around for four decades. And while he shows no signs of retiring, it’s clear Smulyan is steering his company away from the radio business.
After selling stations first Los Angeles then in St. Louis, Austin, and New York City, and closing the doors on NextRadio, Smulyan made it clear he wanted to be in businesses that grew faster than radio. For years Smulyan has said there’s no capital coming into radio and he strongly believed the radio industry needed to unite behind NextRadio if it was ever to have a chance to compete in a smartphone world.
On Thursday’s quarterly earnings call, Smulyan said, as of now, Emmis will continue to control its Indinapolis cluster of radio stations, Emmis headquarters in Indianapolis, WLIB in NYC (although they are in discussions to sell it), and ownership interest in WEPN-FM in New York, which is being leased to ESPN.
Following all the recent deal-making by Emmis, the company has a bank account brimming with $88 million in cash Smulyan is ready to invest. He says that what’s taken place over the past few years is the transformation of Emmis. “Make no mistake, we love radio, but we would also would like to tackle businesses that have a higher growth profile.” And that’s what Smulyan is on the hunt for now. He says he’s having discussions but nothing is imminent. You may recall, back in June, Emmis invested in Dave Beasing’s company Sound That Brands.
Smulyan went on to describe what he’s looking for. “We’re casting a wide net, looking for businesses with a history of growth that have scale. It will be a couple of businesses, several smaller businesses with $10-$25 million in cash flow. Businesses that are a little mature that we can make better. We hope to identify some by the end of this year. We have a chance to transform the company and I could not be happier.”
Jeff Smulyan what is the meaning behind B-Doe of KLBJ’s pinned tweet and what did you have buried deep in 103.5 Bob FM’s suggestion email 2014? You’ll find it quite horrifying. You very well may have followed krash kelly and chase rupe to hell knowing what you have in there.
“Make no mistake, we love radio, but we would also like to tackle businesses that have a higher growth profile.” “We have a chance to transform the company and I could not be happier.”
Jeff Smulyan et al are seeking greener (more profitable) pastures than traditional terrestrial radio, and are using their dwindling portfolio of stations to finance the re-inventing of Emmis; yes, Jeff is overseeing the “transformation” of Emmis, and he couldn’t be happier!
If every radio group would only follow Emmis’ lead there would soon be no traditional terrestrial radio, as all radio station owners would be sellers; but the catch-22 is that there would need to be other prospective radio groups acting as buyers of stations, thereby enabling owners (bent on exiting traditional terrestrial radio) to sell their stations.
How like investment banking this all sounds; and speaking of investment banking, at least what Jeff is doing at Emmis is not as monstrously perverse as what former investment banker David Field is doing with the Entercom radio group his father built.
Its my experience that groups like Apollo buys companies like COX and loots them.
1. The 40/40rule….If you are over 40 or make over 40 K you are gone…
2. Assets like towers and buildings are sold and leased back.
3. Automation/APC in TV stations get implemented and stations News/Production becomes one man bands.
4. sales is outsourced.
5. Cable companies get raped on Re transmission costs/payments.
Just a few examples I have had a front row seat to. The remaining carcass is thrown in to bankruptcy.
When retransmission’s income exceeds ad based and digital revenue…the red flags should be waiving!!!
Congratulations Jeff, one of the greats. If only every radio group was run like Emmis!
Today, finally, there is new capital coming into radio, the same team and money that started Sirius Satellite Radio…Apollo bought Cox and will INVEST in Cox.