Emmis Reports Revenue Drop, RIFs Underway

Emmis Communications Corporation today announced results for its third fiscal quarter ending November 30, 2015.

Emmis' radio net revenues for the third fiscal quarter were down 5.1%. Per Miller Kaplan reporting, which excludes barter revenues and syndication revenues, Emmis' third quarter radio revenues were down 5.2% compared to local radio market revenues up 0.2%.  The company reports Indianapolis, St. Louis, and Austin clusters all beat their markets for the quarter. Radio station in Los Angeles, KPWR-FM, was substantially off  due to the launch of a new direct competitor earlier this year.

Emmis' Publishing division revenues were down 7% for the quarter, and are flat year to date.

Station operating income for the third fiscal quarter was $16.3 million, compared to $18.1 million for the same quarter of the prior year.  For the third fiscal quarter, operating income was $11.6 million, compared to $13.1 million for the same quarter of the prior year.

"Radio industry growth has been disappointing in 2015," said Jeff Smulyan, CEO of Emmis.  "Our markets are down 2.4% through the first eleven months of 2015.  This general decline, coupled with the competitive situation in Los Angeles, led us to take a series of steps yesterday, including staff reductions and pay cuts for senior executives, to restructure our expenses to better align them with the current operating environment. We remain confident that we have the best team in media and the solution, in NextRadio, to return the radio industry to growth.  Our ratings are quite strong in most of our markets, and our investments in content, sales hiring and training, and NextRadio and Digonex will begin to yield stronger results in 2016."

The Indy Star is reporting the Indianapolis-based Emmis laid off 32 workers Wednesday, about 3 percent of its workforce across several markets.

"We've made some changes and they're very painful changes," Emmis CEO Jeff Smulyan said during a Thursday conference call. "This is always very, very hard for us."

Two days ago came word that the contract of Deon Levingston as VP/MM in NYC was not being renewed by Emmis.

In St. Louis comes word there were several people let go, including a DOS, GSM, account executives, and on-air personalities.

At least one Indaianapolis on-air employee has been laid off from WIBC 93.1 FM.  Mike Corbin, who was a news anchor and reporter for the station, tweeted Wednesday afternoon that he is no longer employed at WIBC. An Emmis spokeswoman confirmed that Corbin was one of the employees laid off.

I wish everyone at WIBC and Emmis the best. Are corporate pr/media in my future? Hmm. We shall see. mrcorb@sbcglobal.net

— Mike Corbin (@WIBC_MikeCorbin) January 6, 2016

Emmis spokeswoman Kate Healey Snedeker said in an email that a number of personnel and nonpersonnel actions were taken "to reduce expenses in its radio, publishing and corporate divisions."

"These reductions," Snedeker said, "which include reductions in force (primarily in Emmis’ radio division) and pay cuts by all senior executives, will help ensure our overall expense structure reflects current operating conditions and provides the flexibility to continue to invest in high-growth opportunities like NextRadio."

On Thursday's earning call with analysts, CEO Smulyan addmitted "certainly has been a challenging quarter for us which is not a surprise given the state of the industry and our particular challenges especially in Los Angeles."

Top Take Aways from the analysts' calls:

• "Ratings at Emmis are very, very good lately. New York HOT 97 is now number one 18 to 34 in the latest ratings books, that maybe less is tied for 25-54. The Point in St. Louis number one 18 to 34 and 18 to 49 and KSHE our rock station number one 25-54 and our new format KNOU is growing very, very nicely. In Indianapolis Hank-FM number two 18 to 34, B105 is number three 25-54, and in Austin KROX number one 18 to 34 and BOB-FM is our perpetually number one station both 18 to 49 and 25-54."
• "While we have challenges in Los Angeles we have a remarkably talented team there and really our ratings and performance across the rest of the company are very encouraging. But it has been a challenging quarter not only in the radio business but magazines and I think that comports with what we see as challenges that all media have."
• "2016 is going to be a better year thanks for politicals."
• "Yesterday we let 32 employees go. This is always very, very hard for us, that is about 3% of our workforce. These employees will be dearly missed and again this is a very tough situation for us but we felt that we needed to make those changes and we needed to reflect the realities of the economics that we are in."
• "We also made significant cuts in non-personnel spend. So when combined with personnel cuts, reduced operating expenses by approximately $7.5 million. One of them was challenging and cost reduction actions was that we did not renew the contract of Deon Levingston who was our General Manager in New York City. Deon is a wonderful guy and we thank him for his service. Deon had worked for Emmis and then was brought in when we acquired WBLS and WLIB and a very good guy and this was a difficult decision. Our current General Manager in Indianapolis, Charlie Morgan who has just done a remarkable job here will oversee New York on an interim basis for the next six or so months until we decide exactly what course of action we will follow."