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Embattled Emmis hanging in there: local media firm's market value in free fall as radio industry takes beating on Wall St.

Article Excerpt
Emmis Communications Corp. shares tumbled to a paltry $1.30 apiece this month, upping the pressure on CEO Jeff Smulyan to report at least a morsel of good news when the battered radio company announces quarterly results Oct. 10.

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For more than two years, Smulyan, 61, has been unflaggingly optimistic during quarterly Smulyan conference calls. But since early 2007, Emmis' stock has fallen 84 percent, shrinking the company's stock market value from $307 million to $48 million.

The troubles have cast uncertainty over one of Indianapolis' highest-profile businesses. The company employs more than 1,100 workers--including 245 in Indiana, most of those at its Monument Circle headquarters.

"The radio industry, and that includes Emmis, has a very bad cold," said Doug Ferber, senior associate for Star Media Group, a Dallas-based firm that advises media companies. "And right now, there's no proof there's a remedy."

Smulyan is undaunted. "I know we're the only media company here in Indiana, so people go, 'Oh my gosh,'" Smulyan said. "But this is not a problem specific to Emmis. All of us have traded in lockstep: Entercom, Radio One, CBS and Clear Channel.

"We must show good top-line growth, and we're working on that. But really, 1 think Wall Street's response is an overreaction. This is a problem of perception, not consumption."

Smulyan points to New York-based Arbitron Co. ratings that indicate radio stations nationwide attract more than 260 million listeners each week, a slight increase from a decade ago.

Investors--and advertisers--have lost enthusiasm for radio as competition intensifies from other media options, including the iPod, satellite radio and the Internet.

Emmis' bottom line has taken a big hit as a result. The company has reported three straight quarters of financial losses as radio revenue--which accounts for two-thirds of the company's business--remained weak. Its U.S. radio revenue in the fiscal year that ended...

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