Emmis privatization effort still on hold

A group of preferred shareholders Friday evening refused to vote on an effort by Emmis Communications Corp. Chairman Jeff
Smulyan to take the company private. It was the fifth such setback for Smulyan in four weeks since he began his privatization
effort.

Company officials said discussions continue with the group of eight shareholders, which holds 38 percent of Emmis preferred
shares.

A date for a new shareholders meeting won’t be determined until Monday, Emmis officials said.

The dissident group holds enough shares to prevent Smulyan from winning two-thirds approval from preferred shareholders to
convert their shares into bonds—at 60 cents on the dollar—in exchange for the attractive interest rate of 12 percent.

Emmis shares closed at $2.02 Friday, down 7 cents from a week ago. The stock remained below Smulyan’s offer of $2.40
per share, indicating there is doubt that the company's founder can pull off his plan. Smulyan’s offer through his
JS Acquisition Inc. and New York private equity firm Alden Global Capital values the company at about $90 million.

Smulyan’s proposal also requires approval from the holders of a majority of Emmis shares, a threshold Smulyan likely
would be able to meet.

Founded by Smulyan in 1981, Indianapolis-based Emmis owns 23 radio stations in the United States and publishes regional magazines
in seven cities, including Indianapolis Monthly. It also operates radio stations in Slovakia and Bulgaria.

The company’s audience base has been trimmed by competition from satellite radio and iPods at the same time advertisers
have funneled more dollars to the increasing number of websites and cable television channels.

Over the past four years, Emmis’ revenue has swooned by 33 percent, to $243 million. Its continuing operations have
wracked up losses of more than $430 million.

That performance has caused Emmis’ share price to plunge since the last time Smulyan tried to take the company private
in May 2006. At that time, Smulyan’s buyout group offered $15.25 per common share, but could not come to terms with
the company’s board of directors.