Emmis calls advertising climate 'incredibly weak'

Anthony Schoettle, The IBJ

aschoettle@ibj.com

Emmis Communications Corp. said today that the "advertising environment remains incredibly weak" and that it has hired a financial adviser to explore restructuring some of its debts.

The Indianapolis-based company, which has more than $400 million in debt, borrowed another $71 million April 10, according to a regulatory filing this morning.

Emmis said in the filing that domestic radio revenue in March was down 26 percent compared to a year earlier. It said April radio revenue was on pace to be down 32 percent.

The company also reported unaudited results for the fiscal fourth quarter, which ended Feb. 28. Revenue tumbled nearly 20 percent, to $68.5 million.

After factoring in $163.2 million in restructuring charges in the quarter, the company posted an operating loss of $166.7 million.

In today's filing, Emmis said it has hired Blackstone Advisory Services to assist the company as it explores "a possible amendment to the credit facility or a possible restructuring of certain of its liabilities."

Emmis Chief Operating Officer Patrick Walsh told IBJ this morning that he is confident the company is not at risk of bankruptcy. He said the new loan will be used "primarily for liquidity" during a challenging period.

Emmis stock has been pummeled as the company has grappled with a sharp decline in demand for advertising on its radio stations and in the city magazines it publishes.

The company's shares were trading late this morning at 33 cents, down 4 cents on the day.