Emmis Communications 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 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.