Emmis Reports Second-Quarter Financials, Smuylan Hints At The End Of NextRadio & TagStation

NextRadio No More?

EMMIS COMMUNICATIONS has released results for its second fiscal quarter ending FRIDAY, AUGUST 31st, 2018, but the big news for the industry is the apparent demise of the company's TAGSTATION division and NEXTRADIO initiative. EMMIS has been at the forefront of pushing the cellphone industry to activate FM tuner chips in devices, but the company, citing difficulty in funding the initiative itself with limited outside participation, signaled in its release today that it is winding down the operation.

"For the past several months, EMMIS and other companies in the radio industry have been working diligently to form a consortium that would own and operate the NEXTRADIO and TAGSTATION businesses," said EMMIS CEO/Chairman JEFF SMULYAN in a press release. "The participating companies envisioned using their collective scale and resources to build an attribution platform for the radio industry that would have provided the common language and measurement that radio advertisers are demanding. Unfortunately, the consortium has not been formed and these efforts appear to have been unsuccessful. Because EMMIS is unwilling and unable to continue to fund the NEXTRADIO and TAGSTATION businesses as they are currently structured, we plan to dramatically reduce the operations of these businesses and explore other means of eliminating the operating losses from these businesses in the coming months."

On the company's conference call, SMULYAN elaborated on TAGSTATION's apparent demise, "The major learning... (is that) we needed to do data attribution... we couldn't get the industry to come together." He said that the company needed to get more funding from outside and "we couldn't afford to fund R&D for the entire industry."

EMMIS' radio net revenues for the second fiscal quarter were $30.7 million, down from $41.8 million in the prior year. Sales of radio stations (KPWR/LOS ANGELES in AUGUST 2017 and four radio stations in ST. LOUIS on APRIL 30th, 2018) make the reported results not comparable year-over-year.

Pro forma for all radio station sales, EMMIS' second-quarter radio revenues as reported to MILLER KAPLAN, which excludes barter revenues and syndication revenues, were down 7% in markets that were down 4%. EMMIS' underperformance is principally due to weather-related issues for NEW YORK's Summer Jam in JUNE, which led to revenues declining 16% for the month. 

"EMMIS' radio revenues were up 2% in both JULY and AUGUST, and EMMIS' third quarter is off to a strong start with SEPTEMBER revenues up 1% and OCTOBER pacing up double digits, which would be our strongest month in four years," said SMULYAN. "Ratings remain strong in NEW YORK and continue to improve in INDIANAPOLIS. AUSTIN has rebranded KGSR as AUSTIN CITY LIMITS RADIO, the result of a multi-year licensing agreement with AUSTIN CITY LIMITS ENTERPRISES, LLC, creating an eclectic format sure to connect with AUSTIN listeners. Also, our dynamic pricing business, DIGONEX, has seen a surge of new clients in the last couple of months and we are more excited than ever about the prospects for that business moving forward."

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