By Katherine Hamilton
Saga Communications said an activist investor that has nominated four people to its board of directors doesn't understand the broadcasting company's business or the strategy it is pursuing.
The Grosse Pointe Farms, Mich., company on Friday issued a statement following the nominations by Gate City Capital Management, which owns a 14% stake in the radio station owner.
"Saga has attempted to engage constructively with Gate City and will continue to do so," the company said. "Regrettably, Gate City appears to misunderstand Saga's business, the changing landscape in which the Company operates, and the strategy Saga is pursuing."
Saga said it is trying to refresh its board of directors and is in the process of recruiting a board member with digital marketing experience. It is also evaluating non-core asset sales and stock repurchases as it prioritizes a cost-effective digital strategy.
Gate City said in a January letter it was disappointed with Saga's financial results and the decline in its share price. It attributed the decline in profitability to an increase in expenses as Saga pursues a digital strategy.
"This additional spending appears to have been made with little consideration to the return on investment," Gate City founder Michael Melby wrote in the letter.
Gate City proposed Saga reduce its digital spending, implement cost cutting initiatives, refresh the board of directors and use its cash balance to aggressively repurchase stock.
Write to Katherine Hamilton at katherine.hamilton@wsj.com
(END) Dow Jones Newswires
March 07, 2025 14:44 ET (19:44 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
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