Emmis Looking to Sell Stations

Emmis Communications is exploring the possibility of selling its television stations, the company said today. Indianapolis-based Emmis owns 16 TV stations and 25 radio stations, as well as a radio network, international radio stations and a small publishing division.

“Given the challenges facing over-the-air broadcasting today, it is necessary for us to focus on our existing radio holdings,” Emmis Chairman and CEO Jeff Smulyan said on a conference call with analysts. The company has hired The Blackstone Group as their financial advisor to broker possible deals.

The possibility of a sale signifies a dramatic shift in Smulyan’s stance on television. Less than 18 months ago, he unveiled a plan to air popular cable channels via digital broadcast. The idea never got off the ground, but it was a bullish attempt to produce a second revenue stream for broadcast stations and maximize digital spectrum.

Smulyan said he would consider selling the entire group or parceling off the stations. He also says television group President Randy Bongarten is investigating a management buyout in which Emmis might retain an interest in the stations.

Emmis owns five CBS stations, two WBs, three NBCs, five Fox affiliates and one ABC station. Its largest outlets are KOIN Seattle and WVUE New Orleans.

Also today, Emmis said its board of directors approved a “Dutch Auction” tender offer to buy back $400 million in stock. Smulyan said his company’s stock is undervalued, and the buyback is the “best possible use of capital.”