Standard General To Acquire WQHT/WBLS New York; Create New Public Traded Company
Financed by investment firm, Standard General, Mediaco Holding will purchase the the two stations and for $91.5 million in cash, a $5 million note, and 23.72% of the new company which will be distributed to Emmis shareholders. Emmis CEO Jeff Smulyan will also serve as CEO of the new company which will enter into a shared services agreement with Emmis while the employees remain on the Emmis payroll.
Both Standard General Managing Partner Soohyung Kim and Emmis CEO Jeff Smulyan indicate the company will seek additional media properties with Kim stating, “We’re thrilled to acquire two of New York’s legendary radio brands in HOT 97 and WBLS and work with Emmis to build on each brand’s success. These stations will form the foundation for a new public company that will invest in media assets and build on our successful track record of media investments.”
Emmis will retain Gospel 1190 WLIB and the license of 98.7 WEPN-FM, which is leased to Disney as well as its four stations and other properties in Indianapolis.
Emmis Communications Corporation (Nasdaq: EMMS) today announced that it has signed an agreement to form a new public company, Mediaco Holding, with New York investment firm Standard General. Mediaco Holding will purchase from Emmis two of its New York radio properties, WBLS-FM and WQHT-FM (HOT 97). Closing of the transaction is subject to FCC approval and other customary closing conditions, and is expected to occur later this year.
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. Emmis will distribute this common equity of Mediaco pro rata to its shareholders in a taxable dividend. 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 will continue to serve as Chairman and Chief Executive Officer 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.
“This is a landmark day in the forty year history of Emmis,” said Jeff Smulyan. “We look forward to continuing to manage two of the world’s most iconic radio brands in HOT 97 and WBLS and employ our award-winning New York team as we partner with Soo Kim and Standard General to form a new public company to invest in media opportunities. The transaction provides Emmis significant capital to aggressively pursue new business opportunities that align with our entrepreneurial spirit and management skills. We are also excited to work with Soo and Standard General to grow Mediaco Holding. We have already been evaluating great investment opportunities and I’m incredibly excited about the future. Today is a great day for the future of Emmis.”
“Our team is excited about partnering with Jeff and the Emmis management team in forming Mediaco Holding,” said Soo Kim. “We’re thrilled to acquire two of New York’s legendary radio brands in HOT 97 and WBLS and work with Emmis to build on each brand’s success. These stations will form the foundation for a new public company that will invest in media assets and build on our successful track record of media investments.”
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.
After this transaction and the previously announced sale of our partnership interest in Austin, Emmis will operate New York’s WLIB and WEPN (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, Indiana.
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.