Gate City Capital Management Withdraws Director Nominees for 2025 Annual Meeting at Saga Communications (SGA)

Market Cap: $75 million | Saga Communications, Inc., a broadcast company, acquires, develops, and operates broadcast properties in the United States.

Gate City Capital Management

On January 25, 2025, Michael Melby, Founder and Portfolio Manager of Gate City Capital Management, LLC, wrote to Warren Lada, Chairman of the Board expressing concern over the company's recent financial performance and declining stock price. Gate City, owning 13.8% of Saga's common stock, criticized the increase in expenses related to Saga's digital strategy, citing inadequate ROI assessment and turnover issues among digital employees and partners. They urged Saga to reduce digital spending, implement cost-cutting measures, refresh the board, align management incentives with shareholder value, repurchase shares aggressively, and halt acquisitions until profitability improves. Melby expressed readiness to collaborate on these initiatives to enhance shareholder value. Source

On February 10, 2025, Gate City Capital Management, LLC, notified Saga Communications, Inc.'s Corporate Secretary of its intent to nominate four individuals—Michael T. Melby, Nicholas J. Bodnar, Ryan A. Hornaday, and Christopher T. Young—for election to Saga's Board of Directors at the 2025 Annual Meeting. Source

On March 4, 2025, subsequent negotiations between Gate City and Saga to appoint one of Gate City’s nominees to the Board concluded without an agreement. Source

On March 13, 2025, Gate City Capital Management sent a Notice Letter to the company announcing its intention to nominate four directors—Michael T. Melby, Nicholas J. Bodnar, Ryan A. Hornaday, and Christopher T. Young—for election at the 2025 Annual Meeting. Gate City requested that these nominees be included in Saga's proxy statement. Additionally, Gate City may seek to inspect company's books and records under Florida law to communicate with other shareholders and gather further information for its proxy solicitation. Source

On March 26, 2025, Gate City Capital Management withdrew its director nominees for 2025 Annual Meeting, citing concerns over the negative impact of the Digital Transformation on profitability, cash flow, and share price. They highlighted poor financial results, increased corporate expenses, management's lack of stock purchases, and the ownership of non-core assets like the Saga House in Florida. Gate City recommended divesting these assets for shareholder returns and criticized Saga's limited search for a new board member with digital expertise, urging broader governance reforms. Source

TowerView

On April 7, 2023, the board recommended that Michael W. Schechter be elected to the Board at the company’s upcoming annual meeting.  Mr. Schechter is a non-controlling member of TowerView LLC (19%) Source