Last July, Emmis Communications sold WVUE New Orleans to New Orleans Saints owner Tom Benson for $41 million, completing the sell-off of all 16 of its TV stations over three years and marking the end of the radio operator's decade-long foray into television.

Controlled and headed by Chairman-CEO Jeff Smulyan, Emmis remains a major radio operator with strong stations in New York, Los Angeles and Chicago and an expanding presence in Eastern Europe. Radio accounts for about 90 percent of the publicly traded company's revenue; the rest from a portfolio of city and regional magazines and a budding interactive division.

In this interview with TVNewsday Editor Harry A. Jessell, Smulyan says he got into TV believing that TV broadcasters could tap into the badly needed second revenue stream of retransmission consent fees. He got out when he concluded that the fees that stations could get were simply not enough.

An edited transcript:

Ten or 11 years ago, you began accumulating TV stations. Why?

We got into it probably for the same reason we got out. We looked at the business and said, this is a business that needs to be more entrepreneurial and we thought that we could bring that. Furthermore, it obviously needed a second revenue stream. We looked at the retransmission act of '92 and said, look, it's only a matter of time until these guys figure this out. Also, at the time, radio valuations were kind of crazy.

So why the turnaround? Why did you start unloading your TV stations in 2005?

We were right about it needing to be more entrepreneurial. It was an industry that had really been run, we felt, the same way for 40 years even though the world had changed dramatically. There really were very few entrepreneurs in television.

We also looked at retransmission consent from every angle. First, we said, this is something that you could probably get everybody to come together on. You could either get congressional relief or antitrust relief so that broadcasters could negotiate collectively or get some sort of mandatory arbitration.

If you remember in '92 when the broadcasters tried to get together, [then TCI President] John Malone was the first to get antitrust counsel to  raise questions about restraint of trade if broadcasters negotiated together. What's ironic about that is that the cable industry used to negotiate as a group through a whole series of measures. That was just John Malone's brilliance, really, in knocking the broadcasters off their game.

Why did you think broadcasters needed the ability to collectively bargain for retrans?

Because they had no leverage. By '96 or '97, the cable industry was getting stronger and the broadcasters were getting weaker. Today, 11 or 12 years later, broadcasters are just getting weaker and weaker.

But over the past three years, broadcasters, led by guys like Nexstar's Perry Sook and Sinclair's David Smith, have been able to get retrans money.

They're getting some, but not enough. We actually did a study on this to see what it would take to make the business work. We felt that you probably needed to get close to $1 a sub to compete for the best programming, whether it's sports or it's movies or now long-form drama or syndication. Almost everything is going to the other side of the fence.

ESPN is the best example. They get almost $4 [per sub] a month. They start with $5 billion in the bank before they sell a spot. How do you compete with that? You're going to lose everything.

I remember negotiating with Direct TV and they said it wasn't reasonable to ask for 15 cents for the CBS affiliate in Portland, Ore. At the same time they're paying ESPN with half of our audience $3.

So you think it's at least a buck or forget about it?

Well, I don't think you forget about it. I just think Haim Saban is right. Univision ought to be worth at least a dollar. The NBC affiliate in Indianapolis ought to be worth a dollar. It gets back to the same thing: What are people paying for? If the American public understood that they're paying for things they've never heard of and they're not paying for things they really care about. ...

Why didn't the legislative approach to retrans work?

You needed a unified industry and you never could get it. Now part of the reason is because the networks had cast their lot with the cable side and you and I both know that. It was very profitable for them. How can I argue with an ABC executive today who tells me that ESPN is worth 10 times as much as the ABC television network?

From a financial standpoint, how did you do in television?

We actually | More …