Emmis projects another down Qtr, But Smulyan optimistic


CEO Jeff Smulyan says he sees encouraging signs, but the guidance from Emmis for the current quarter is that it will again underperform a sluggish domestic radio industry, with KMVN-FM Los Angeles cited as the culprit. Results reported Friday for fiscal Q2 (June-August) had domestic radio revenues down 8.7% to 63.8 million and revenues for the entire company down 3.5% to 96.4 million. That was in line with the low expectations of Wall Street analysts.

For the current fiscal Q3 (September-November), Emmis says to expect domestic radio revenues to be down in the mid single digits. CFO Pat Walsh told analysts that for Q2, Emmis’ radio stations would have been in line with the markets, except for WRKS-FM New York and KMVN LA. For the current quarter, he says the Emmis stations will be in line with their markets except for KMVN. "We’re actually very encouraged by the things we’ve seen this quarter," Smulyan insisted as he began his quarterly conference call with analysts. He pointed to switching national representation to Katz, said ratings are up for most Emmis stations and that sales are improving.

RBR observation: Emmis going forward has three issues that may be challenging. 1) Emmis has Urban in NYC. PPM has not been kind to Urban. 2) WKQX is still suffering from the loss of Mancow.  It is 25th in the market 12+, plus the Alternative format is where technology is hitting first. Classic Rock WLUP is 16th 12+ and losing to Bonneville’s "Drive." 3) ‘Movin’ in LA has not caught on. Rick Dees is miscast and there are plenty of stations duplicating the music they play.

When you are challenged in New York, Los Angeles and Chicago, it doesn’t matter how your stations in Indianapolis are doing. Smulyan must execute formats better in 2008 or face another long year of little or no growth.