The sudden and unexpected departure early this year of morning personality Kurt Alexander—better known as “Big Boy”—from KPWR 105.9 FM Power 106 in Los Angeles was such a financial blow to Emmis Communications that it helped spur the company in April to open negotiations with lenders to get breathing room on loan covenants, according to a story in at the Indianapolis Business Journal.
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| Big Boy now on Real 92.3 FM |
Financial impact aside, Emmis’ top officers were personally hurt. The Indianapolis-based company discovered Alexander when he was working as a bodyguard more than 20 years ago and invested millions to turn him into a star. (As his fame rose, so did his weight, which topped 500 pounds before he slimmed down following 2010 gastric-reduction surgery—an odyssey chronicled in his book “An XL Life: Staying Big at Half the Size”).
Emmis now is tangling with Big Boy, 45, in court, arguing he owes $5 million for breaching his contract. The company contends “right of first refusal” language in the pact bound him to stay put after Emmis raised his salary from $1.45 million (plus bonuses and other benefits) to $3.5 million, matching iHeart’s offer.
The company is on track to win leeway on its debt ratios and also is tightening its belt, identifying $7 million in operating cost reductions for the fiscal year that will end in February 2016.
But it isn’t all about saving money. The company is paying up to lock in key talent at its L.A. and New York stations—an effort Emmis acknowledges has been made more difficult by public disclosure of the big dollars offered Big Boy. It also has rolled out an “enhanced commission structure” in L.A. and restructured commissions in New York to emphasize event sponsorships and digital sales, two growth areas.
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