1) Paid down a good chunk of their term debt with sale of "stick" assets to Merlin.
2) Sale of "stick" assets will allow them to save on the order of $10 M a year in annual interest expense, while losing very LITTLE in income, since stick assets generated very little in EBITDA.
3) Company now has residual investment in Randy Michaels, a savvy player, and will realize gain or loss, on its retained interest, as I understand it, based upon its ratable share of the income of Merlin. If Michael's success comes quickly, that will show at EMMS just as quickly.
4) Company has committed for agreement to sell LA station to Grupo Radio Centro for $110 M, sometime in the next 4 or so years...which would further reduce debt. It would certainly be possible that this deal could close EARLIER than 4 years out.
5) Company's leverage ratio has been reduced significantly, dramatically reducing financial risk...and yet the stock still trades, puzzlingly, at what could only be referred to as a "distressed" level.
6) Company may be in position to eventually refinance debt, and free up possibility of buying back preferred stock at a discount, or otherwise dealing with that issue, and creating other forms of financial flexibility which facilitate a broader array of opportunities for them.
7) Possibility (certainly never out of the question, especially if the stock price stays this low, and/or if the company can manage to buy enough of the pfd. stock from the "dissenting" holders to prevent them from achieving an over 1/3 ownership), of CEO coming back in with another bid for the company (similar to 1 1/2 years ago). Previous bid was $2.40.
8) EMMS continues to generally outperform, overall, in the markets where it still has stations.
9) The new initiatives, talked about in today's conference call, could return the company to a growth posture.
10) Terrestrial radio isn't NEARLY dying as much as some people say it is. It still delivers GREAT audiences for advertisers.
Great post LTF.
I would add the following:
a) Emmis could expand/grow internationally. This is not something new for the firm. They already have a presence in Slovakia and Bulgaria.
b)Emmis could get bought out by a bigger player like Clear Channel or Citadel.
c) Emmis could spin off its digital properties into a separate company that could potentially grow to have a market cap greater than its parent
I highly doubt b and c. Smulyan is not looking to sell. (He tried to take the company private, in fact.)
However, you did remind me of one other thing: The KICKER potential of the lawsuit against the Hungarian government, for stealing EMMS's radio station, and our pending suit in the World Court, or wherever it is.
LTF its not like you to list a sale that may or may not happen in 4 years as a positive. That is fluff. That is the definition of uncertainty of risk. Why don't they sell it today? Yesterday? Something is not right.
The rest of it way too complicated. They clearly are "distressed" else they would issue one large low interest bond deal and clean up the entire financing mess. But they can't. They are struggling as much as ever.
Do I own 2.7% because as a rank speculation? Or do I own 2.7% because I think it is dirt cheap? I assure you, 100%, it is the latter. And I think its story, and the Street's SERIOUSLY MISPERCEIVING it, is worth telling.
The story is clear...to those who are willing to look beyond the negative shareholders' equity on the balance sheet. The story is more sophisticated than that. I just summarized it for you, and handed it to you on a silver platter...but you'd rather be cynical...and stupid.
And what does a LaPorte business's closing have to do with the fundamentals of EMMS? You're really out of your mind. Besides, I have NO family members that live in, or near, LaPorte.