CEO Sees Light Ahead Amid Dark Clouds
October 21, 2008 at 5:43 AM (PT)
Take a look at the stock price for EMMIS COMMUNICATIONS, and you'll see a sign of the troubled times, writes JOHN KETZENBERGER in THE INDIANAPOLIS STAR. At 49 cents a share, EMMIS has a market capitalization of $18 million. That's right. Investors think EMMIS, with leading radio stations in NEW YORK, LOS ANGELES, CHICAGO and INDIANAPOLIS, is worth just $18 million.
Any one of EMMIS' leading stations in the nation's three largest cities is worth more than what the market says the entire company's worth. Its string of city magazines is worth more than that. Such a low stock price for a company rich in assets normally means a change of control. Either someone would buy the company, or shareholders would make the management sell it off in pieces because the sum of its parts is more than the whole.
"WALL STREET's really down on radio right now," said UNIVERSITY OF INDIANAPOLIS radio station WICR GM SCOTT UECKER. "It's not that radio stations aren't making money, it's that the boxes of money just aren't as big as they once were."
EMMIS recently reported a small profit even as advertising revenue is slowing. The company's interactive division is an industry leader. A joint venture to put radio tuners in cell phones and then let them buy songs they hear has promise.
EMMIS CEO JEFF SMULYAN is tired of hearing about radio's demise. In an OCTOBER 10th note to employees, SMULYAN wrote, "It would be easy to fear the worst, to think we're in dire financial trouble. But nothing could be further from the truth."
The innovations being hatched, UECKER said, position EMMIS "to be one of the companies on the other side (of the recession) that can take advantage of the new media. But they have to get through this first."