Isle TV stations’
parent seeks
TV unit spinoff

Emmis wants to split KHON,
KGMB and its other 13 stations
into a separate company

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By Rick Daysog
rdaysog@starbulletin.com

The owner of KHON-TV and KGMB 9 is looking to spin off its television division.

In a conference call with Wall Street analysts Tuesday, Indianapolis-based Emmis Communications Corp. said it wants to split its 15 television stations from its radio and magazine publishing businesses into two separate companies.

"I've said for some time that we need to separate our radio and television businesses," said Jeff Smulyan, Emmis' chief executive officer. "We are now actively exploring the taxable spinoff of our television division which we believe can be completed without significant tax consequences to Emmis or our shareholders."

Emmis -- which has been working with a number of financial advisers over the past year -- said the spinoff could be completed as early as February.

The company also said it may take on new partners that would invest in the new television company or acquire some of its assets.

Kate Healey, Emmis' director of media and investor relations, said the move should have no impact on the daily operations of the company's local stations, Fox affiliate KHON (channel 2) and CBS affiliate KGMB (channel 9).

Lynne Mueller, KGMB's general manager, could not be reached for comment. Bill Spellman, KHON's general manager, also was not available.

Emmis acquired KHON, which has the top-rated news show, and three mainland television stations from SF Broadcasting Co. in 1998 in a deal valued at $307 million. The company followed that up last year by acquiring KGMB from Lee Enterprises Inc. as part of a 15-station, $562.5 million deal.

Emmis operates the two stations under a temporary waiver from Federal Communications Commission rules, which would have required the company to sell one of them. With more than 2,600 employees nationwide, Emmis operates 15 television stations and 23 radio stations. The company also publishes Texas Monthly and Country Sampler magazines.