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Emmis Begins TV Exodus

Wall Street smiled on Emmis Communications Corp. this week for a move that heralds the end of the company's seven-year run in the TV broadcast business. Emmis sold nine of its 16 television stations to three buyers for $681 million. The company's stock price jumped about 11 percent on the news of the sale, from around $21.30 to around $23.60 as of Friday morning. It was in May, right after Emmis shares hit a low of $15.29 that the company indicated it would put the TV properties on the block to lower its debt.

LIN TV Corp. bought five stations--in Mobile, Ala./Pensacola, Fla.; Terre Haute, Ind.; Green Bay, Wis.; Albuquerque, N.M., for $260 million. Journal Communications bought three -- in Fort Myers, Fla.; Omaha, Neb. and Tucson, Ariz. for $235 million. Gray Television purchased one station in the Huntington/Charleston, W.V., market for $186 million.

The nine stations represented 53 percent of Emmis TV station operating income for the fiscal year that ended Feb. 28, 2005, according to the company. The Chicago Tribune reported that the stations collectively sold for $481 million more than book value. Seven more Emmis stations -- in Orlando, Fla.; New Orleans; Portland, Ore.; Topeka and Wichita, Kan.; and in Honolulu--are still in play.

Emmis Chairman and CEO Jeff Smulyan said, "We continue to move forward on discussions relating to the remaining seven stations and will make additional announcements as appropriate."

The company will shift back into full radio mode once the TV station deals are done. Emmis holdings comprise the 10th largest radio group in the country, with stations in New York, Los Angeles, Chicago, Phoenix, St. Louis, Austin, Texas; Indianapolis and Terre Haute, Ind.

The Emmis TV exit also signals the end of a consortium of broadcasters seeking to develop a multichannel pay-TV business model. The concept, announced at NAB2004, was similar to one launched by USDTV, based in Salt Lake City. USDTV consolidates stations' spectrum not used for multicasts or hi-def transmissions and offers a multichannel service via a set-top receiver for $20 a month. Several broadcast groups got on board, but the effort never reached fruition.