Emmis, Sinclair Telecable Forge Agreement; LBJ Family Exits Radio

Emmis, Sinclair Telecable Forge Agreement; LBJ Family Exits Radio
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Emmis Communications has signed an agreement with Sinclair Telecable Inc. to purchase just over 50% of a six-station radio cluster in Austin for approximately $105 million.
Sinclair has operated radio stations since 1997 in a partnership with LBJ Broadcasting Co. As part of the transaction, Emmis will purchase the LBJ stake in the partnership and the LBJ family cashes out of radio. The family owned/operated radio stations in the Austin market for 60 years.
The radio stations involved in the agreement are news/talker KLBJ(AM); rock formatted KLBJ(FM); adult alternative KGSR(FM); another alternative station, KROX(FM); oldies station KEYI(FM) and KXMG(FM), which is a Christian station.
Emmis Chairman/CEO Jeff Smulyan, said he felt that this was an opportunity the corporation could not pass up: "This transaction does not have a material impact on our debt leverage, and makes us a major player in an exceptional growth market."
Sinclair will contribute the assets of KEYI(FM) to the partnership, leaving Emmis with a 50.1 percent interest and Sinclair with a 49.9 percent interest. Emmis will manage the day-to-day operations of the stations. The agreement gives Emmis an option to buy Sinclair's interest in five years. Subject to regulatory approvals, the deal is expected to close in Q2.

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