as per today's 10q, NextRadio has to pay Sprint $15 million per year, in $3.75 million quarterly installments to pre-load the application on its phones. That money is raised by EMMS and other radio stations.
The first payment was due August 9. EMMS paid $800,000 of the fees, while the rest was raised by other stations. The second payment was due on December 12. $2.2 of the $3.75 was raised by other radio stations, EMMS has paid zero so far, and they owe money to Sprint but are in discussions. They say they believe Sprint is continuing to pre-load the app even though they are 'in arrears', but there are not certain.
I guess I'm naive, but I didnt think EMMS would have to pay significant sums to Sprint, I thought Sprint would add the app for free.
Its all on page 21 of the 10q, Note 5. Significant Events, Next Radio LLC - Sprint Agreement.
I looked kinda quick, so its always possible my understanding of the agreement is incorrect.
If you had listened to prior conference calls, this is no surprise. The dollar amounts may not have been disclosed but we knew the radio broadcasters would have to pay something to Sprint. The last I heard was that EMMS was hoping Cumulus Media and a couple other big players would sign on to this to bear some of the costs, which I don't think they had yet unless they mentioned that in todays release.
Really? Just like supermarkets let you put your selling item on their shelves for free? "Slotting fees" anyone? Slotting fees aren't even charges sellers pay for their products to be displayed on groceries' shelves but at their warehouses! Anyone who has any kind of distribution channel will request a fee just for the privilege they offer you to test your item for sale.
That is not to say the fee Sprint is charging maybe outrageous. However, the industry embraced it so there must have been detailed homework done regarding the benefits.
The thing I don't like about this company and may push me to sell is that management is always hustling with their partners. Be it shareholders or business partners. They are still not shareholders friendly. But they have been profitable for some time. And profits are growing.