Tribune, Emmis talking swap

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Tribune Broadcasting and Emmis Communications Corp. are discussing a possible
swap of TV and radio assets, Emmis CEO Jeff Smulyan confirmed.

As part of a possible deal, Emmis would get Tribune's Denver radio stations,
KOSI(FM) and KKHK(FM), which Tribune put on the block earlier this year. Emmis
already owns two stations in the market.

Smulyan, speaking at the UBS Warburg LLC media conference in New York, also
confirmed that the company was talking about other possible 'strategic
ventures,' including separating its collection of 15 TV stations from its radio
group so that investors can buy one or the other (or both).

One year ago, the company was considering issuing a tracking stock for its TV
group, just as the market for new stock offerings dried up in the face of
looming concerns about the economy.

Earlier this fall, Smulyan said, Emmis was close to making what he termed a
'strategic transaction' involving the TV group that was sidetracked when the
terrorist attacks occurred. 'But we're a lot closer today than we were a year
ago,' he added.

The company has spent $1.1 billion on TV stations, including its recent
acquisition of the Lee Enterprises Inc. group.

Smulyan also wouldn't rule out a bigger transaction in which the company no
longer remains independent, although he said that is 'less likely.'

In March, Emmis cut 120 jobs from its TV group as it integrated the Lee group
into its operations. Now, the company is in the process of instituting a
companywide 10 percent pay cut (in exchange for company stock) to avoid further
layoffs due to the recession.

The pay cut will translate to added cash flow of between $11 million and $14
million annually, chief financial officer Walter Berger said.

Emmis also said it amended its credit facility to allow for a total
debt-to-cash-flow ratio of 8.5 times.

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