NEW YORK — For weeks, there have been rumours among several media brokers that Emmis Communications was nearing a deal involving at least one of its stations serving the New York Tri-State Area.
A long-awaited sale of WLIB-AM isn’t what’s in the news.
Rather, two of the four stations Emmis owns in Gotham are being “sold.”
That’s because the buyer is a newly formed company Emmis is forming, so it may partner with a private investment firm in an ownership similar in some ways to its now-concluded partnership with Sinclair Telecable in Austin.
In an announcement distributed early Monday (7/1), Emmis revealed that it has signed an agreement to form a new public company, Mediaco Holding.
It is a partnership with New York investment firm Standard General.
Mediaco will purchase from Emmis its two prized FMs superserving African American audiences in New York — Rhythmic WQHT-FM “Hot 97” and Urban WBLS-FM.
Emmis will receive $91.5 million in cash from Standard General to form the partnership, along with a $5 million note receivable. Emmis will also receive 23.72% of the common equity of Mediaco.
Emmis will distribute this common equity pro rata to its shareholders in a taxable dividend.
Mediaco will be a publicly traded company, and is expected to trade on NASDAQ.
Emmis will remain a separate public company, with its media holdings strictly tied to its four radio stations in Indianapolis and Indianapolis Monthly magazine; and WLIB. While it owns WEPN-FM 98.7, the station is operated through a long-term LMA agreement with ESPN Radio. Emmis is also the owner of dynamic pricing company Digonex and the property at 40 Monument Circle in Indianapolis, where Emmis is based.
It also presently is the owner of a “valuable” tower site in Whitestown, Ind. — hinting that a sale of this site could be in the future.
To be clear, Emmis will remain active in the management of WBLS and Hot 97 and provide “certain corporate services” to Mediaco through a management agreement.
Jeff Smulyan will continue in his role as Chairman/CEO of the company he founded, Emmis, and also serve as CEO of Mediaco.
Standard General will appoint a majority of the board of directors of Mediaco. Serving as Mediaco Chairman will be Soohyung Kim, CEO/Managing Partner and Chief Investment Officer at Standard General L.P.
No personnel changes are in the works, the companies assure.
And, all New York employees will continue to be Emmis employees, with Emmis benefits as part of an Employee Leasing Agreement with Mediaco.
Moelis & Co. acted as an advisor in this deal; Taft Stettinius & Hollister LLP served as legal counsel to Emmis.
Morgan Lewis & Bockius served as the legal counsel to Standard General.