Posted by Bud on May 14, 2010 at 16:25:29:
Courtesy of Lewis Lazare at the Chicago Sun-Times:
Fast sale of 2 stations unlikely
May 14, 2010
BY LEWIS LAZARE | Sun-Times Columnist
Emmis Communications has signaled it might want to sell its two Chicago radio stations -- classic rock WLUP-FM (97.9) and alternative rock WKQX-FM (101.1).
But few in the local radio industry believe any sale is imminent. Jeff Smulyan, CEO of Indianapolis-based and publicly traded Emmis, wrote in his recent annual filing with the Securities and Exchange Commission that "we [Emmis] have ... two radio stations in Chicago where we believe the sale value could exceed the prospects for cash flow generation as part of our portfolio."
Obviously referring to Emmis' only two stations here, Smulyan went on to say Emmis might explore "from time to time" a sale of these stations. Emmis Chicago market manager Marv Nyren said he and his staff had been made aware of what Smulyan might be contemplating before his SEC filing was made. But Nyren declined to speculate about what his boss might do with the two Chicago stations. "Jeff has a long-term strategic plan for this company, and I think he will do whatever is required to execute it," said Nyren.
Local radio executives say it's unlikely Smulyan would be able to unload the Chicago radio stations quickly, for several reasons. For one thing, Smulyan is reportedly busy planning to take Emmis private, which may require him to generate cash to complete the process. But more important, according to local radio sources, all but the very best-performing radio stations in major markets are worth about a third of what they were as recently as five years ago. Sources said WLUP and WKQX could fetch about $50 million to $60 million each in this market.
WLUP and WKQX finished the recent Arbitron ratings in ties for 11th place and 14th place, respectively, among adults 25 to 54 in the March Arbitron book. Ad sales numbers at both Emmis properties are believed to be lower than those of some better-positioned competitors such as third-ranked Bonneville's classic hits WDRV-FM (97.1).
Still, Nyren insisted WKQX is in "the best shape it's been in in 10 years." And the Emmis Chicago boss said WLUP is emerging from a ratings slump that spanned several months last fall and winter and caused a drop in ad sales.