Emmis will power forward in Los Angeles with Rhythmic CHR KPWR-FM, but its Rhythmic Oldies project KMVN-FM is abandoning the format, the English language and eventually, Emmis itself. Grupo Radio Centro will be bringing in an Hispanic format from Mexico in an LMA/option carrying a seven year life span.
The price for KMVN, should Grupo exercice its option, will be $110M The LMA will be priced at $7M plus Emmis expenses annually – and Grupo will advance $14M to cover the first two years of the LMA immediately.
Grupo may exercise its option at any time during the seven-year term of the agreement and Emmis can force a decision at the end of the term. Both parties acknowledge that since Grupo is a foreign corporation, it may need to designate a qualified third party to actually buy the license to meet FCC domestic ownership requirements.
Grupo owns and operates 14 radio stations in Mexico, 11 of which are in the key Mexico City market.
“We are very pleased to announce this transaction, which will permit Radio Centro to broadcast the Company’s programming on an important FM radio station in the largest radio market in the United States in terms of revenue, Los Angeles, California,” commented Grupo CEO Carlos Aguirre. “This transaction promotes Radio Centro’s business strategy by allowing the Company an opportunity to leverage its international programming success despite the current recession.”
Emmis Chairman/CEO Jeff Smulyan added, “As we announced last year, we are exploring strategic alternatives, lowering debt and better positioning ourselves to face the current recession. We want to do what is right to get the best results for our shareholders and employees. While selling a station is always difficult, in making today’s announcement, we made substantial progress toward these goals.”
RBR/TVBR observation: With America’s largest markets absorbing the worst of the economic punishment being inflicted on the radio industry, this is the wrong time to be staging an expensive makeover at an underperforming station. It also makes it a good time to use the facility to shore up the rest of Emmis. Amazing that they had to go outside the country to find a trading partner – well, maybe not all THAT amazing.