Updated at 9:15am Pacific to reflect reports of layoffs at Los Angeles magazine.
The final “Hour” for Emmis Communications’ ownership of its monthly magazines serving Atlanta, Cincinnati, Los Angeles and Orange County, Calif., has transpired.
In a late Tuesday announcement and 8-K filing with the Securities & Exchange Commission, the Indianapolis-based company closed on the sale of the four publications to Hour Media Group LLC.
Emmis quietly made the sale on Thursday (Feb. 23) for $6.5 million, according to a different SEC filing associated with the transaction. A 10% cash deposit has been made by Hour to the escrow account of Emmis held at WashingtonFirst Bank. Moelis & Company represented Emmis as the broker in this transaction.
Employee transitions are set to be finalized by March 31. It was not officially known if layoffs will be seen across the publications, although the asset purchase agreement spells out that Hour Media “shall provide COBRA benefits for all Transferred Employees,” with Emmis reimbursing the company for those expenses. A report on LA Weekly‘s website says six women have already been let go as part of the sale to Hour Media. Among those departing, as confirmed via individual Tweets: Editor-at-Large Amy Wallace and Editor-in-Chief Mary Melton. The publisher, the head of digital strategy, and the copy chief were also reportedly let go, according to LA Weekly.
This makes the sale of the publications a bit of a fire sale. In October 2016, Emmis sold venerable glossy publication Texas Monthly to Genesis Park LP, an affiliate of a private equity firm led by Paul Hobby for $25 million.
Hour Media is a Detroit-based company that publishes five Motor City-focused publications: Hour Detroit, Detroit Home, dbusiness, Metro Detroit Bride, and Detroit Home Improvement. Editorial, sales and circulation are based in Troy, Mich. With its headquarters in Royal Oak, Mich., Hour Media has 11-50 employees, based on its LinkedIn profile.
Hour Media has been rapidly growing in recent years. In July 2013, it agreed to acquire American Public Media Group’s publishing division, Greenspring Media Group — publisher of 14 magazines. The price was not publicly disclosed. Then, in January, Hour Media agreed to purchase Palm Beach Media Group — bringing the company’s total number of magazines to 70, not counting custom titles seen across the U.S.
Conversely, Emmis has now divested all its publishing assets except for its hometown Indianapolis Monthly, which it intends to continue to operate.
“We have been honored to own and operate these marquee titles, with some of the most dedicated, creative employees in the business,” Emmis Chairman/CEO Jeff Smulyan said in a statement released late Tuesday. “We wish all of them well, and hope they enjoy tremendous success in the future.”
Emmis first announced on August 18, 2016, that it was pursuing strategic alternatives for its Publishing Division, sans Indianapolis Monthly. Emmis announced the sale of Texas Monthly on October 13, 2016.
“It is always difficult to make a decision to sell, but this step helps us to continue to address our debt leverage and to focus on our growth initiatives,” Smulyan concluded.
With a price that was not publicly revealed and shown only in an SEC filing not readily discoverable, some may question if Emmis received a trickle of offers, and if Hour Media was the best of a mediocre lot of suitors based on the offer price.
The short closing time is also unique, with just one week for employees to prepare for a change in ownership.
Hour Media Group is led by CEO Stefan Wanczyk.