Grupo Radio Centro LMA's Emmis' KMVN
April 3, 2009 at 3:25 PM (PT)
Mexican broadcasting company GRUPO RADIO CENTRO has entered into a local marketing agreement with EMMIS RADIO where it will provide programming and sell advertising time on KMVN (MOVIN')/LOS ANGELES. The station is expected to flip to a Latin format on APRIL 15th. The Company also entered into a seven-year call and put option agreement with EMMIS to purchase the assets of KMVN- FM.
Under the LMA, GRUPO RADIO CENTRO will pay EMMIS $7 million per year, plus expenses incurred by EMMIS with respect to the station, and the Company has agreed to advance U.S. $14 million as prepayment for the first two years. The Company is entitled to exercise its call option to purchase KMVN under the Option Agreement at any time during its seven-year term, and EMMIS is entitled to require the Company to purchase the station assets during the seventh year of the term. The purchase price under the Option Agreement is $110 million.
"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 U.S. in terms of revenue, LOS ANGELES," GRUPO RADIO CENTRO CEO CARLOS AGUIRRE stated. "This transaction promotes RADIO CENTRO's business strategy by allowing the Company an opportunity to leverage its international programming success despite the current recession."
"As we announced last year, we are exploring strategic alternatives, lowering debt and better positioning ourselves to face the current recession," EMMIS Chairman/CEO JEFF SMULYAN stated. "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.
SMULYAN later added, ""I couldn't be prouder of our KMVN team. It is always difficult to part with a station and our people, but in these challenging times, it is the right decision for EMMIS."