CW Owner Acme May Delist From Nasdaq

Jamie Kellner of CWAcme Communications, the owner of five CW-affiliated stations, is considering pulling itself off the Nasdaq and expects to make a decision over the next six weeks. The company has been aggressively looking for ways to cut costs. And a delisting could save some $300,000 a year.

"We've looked at every possible way to reduce our expenses, and this is the last large chunk of money that we can find," said Chairman-CEO Jamie Kellner on a call to discuss second-quarter results. Kellner said the goal is to prevent the company from being a borrower and to control its destiny--so the merits of a delisting will be considered carefully. CFO Tom Allen said he expects a decision to be made by the end of the third quarter.

Company executives said they are open to input from leading investors on which way to go. Acme's shares were trading at about $1.40 on Friday, down nearly $3 per share from a 52-week high.



In the second quarter, net revenues were up 4% to $8.7 million, although Acme suffered a net loss after a series of write-offs. Net revenue at stations, despite the challenging economy, was up 3%.

The company has CW affiliates in five mid-size markets, ranging from DMA 44 (Albuquerque) to 85 (Madison). It has a CW-MyNetworkTV duopoly in Albuquerque, giving it six stations in mid-size markets overall. It also has an interest in the syndicated morning news/lifestyle show "The Daily Buzz," which had a 10% revenue increase in the second quarter.

Allen said expenses have been cut, including reduced compensation for Kellner and a shutdown of the corporate-graphics department. Other avenues are being explored, including the Nasdaq option.

The company has been shopping its stations--but with credit tight, the market for stations is less than robust, company officials said. "Stagnant" is how Kellner described it.

Executives feel they have an opportunity to sell their stations piecemeal to operators in markets that have one station and may want to establish a duopoly. Kellner said he's particularly frustrated by a lack of interest in the affiliates in Knoxville, Tenn. and Dayton, Ohio, which he said are performing well.

"It's too bad there's not somebody in each of those markets that [recognizes] how they can dramatically improve their total share of viewers--and therefore, share of advertising dollars--at a fair price," Kellner said.

Acme has sold five of its stations since 2002. It was formed by a Kellner-led team looking to build a mid-size station group to link with the WB network he used to head. The WB was the predecessor to CW.

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