Emmis Forms Mediaco, Spins WBLS, WHQT/NY
As a result of the transaction, Emmis will receive $91.5 million in cash, a $5 million note receivable, and 23.72% of the common equity of Mediaco. Mediaco will be a public company expected to be listed on NASDAQ, and Emmis will remain a separate public company, as well.
Emmis will remain active in the management of WBLS and HOT 97 and provide certain corporate services to Mediaco pursuant to a management agreement between the parties. Jeff Smulyan will be the Chief Executive Officer of Mediaco and continue to serve as Chairman & CEO of Emmis, which will remain a public company. Standard General will appoint a majority of the board of directors of Mediaco and Soohyung Kim, Chief Executive Officer, Managing Partner and Chief Investment Officer of Standard General L.P., will be Chairman of Mediaco.
No personnel changes are planned. All New York employees will continue to be Emmis employees with Emmis benefits as part of an Employee Leasing Agreement with Mediaco. Closing of the transaction is subject to FCC approval and other customary closing conditions, and is expected to occur later this year.
After this transaction and the previously announced sale of its partnership interest in Austin, Emmis will operate WLIB-AM and WEPN-AM/New York (through an LMA with ESPN Radio), four radio stations in Indianapolis, Indianapolis Monthly and Digonex, a dynamic pricing company. Emmis also owns its headquarters at 40 Monument Circle, Indianapolis, and a valuable tower site in Whitestown, IN. Moelis & Company acted as an advisor in this transaction, and Taft Stettinius & Hollister LLP served as legal counsel to Emmis. Morgan, Lewis & Bockius LLP served as legal counsel to Standard General.