Archive for the ‘Radio Ownership’ Category

Betting on the future

Friday, October 9th, 2009

This is a followup to the “Why Talk is Moving to FM” post about a week ago.

I’m actually going to encourage you right wing nuts (and you know who you are!) to read the Huffington Post, specifically HERE.  Tamara Conniff is a former editor of Billboard Magazine, which means she really knows the music business and is not a light weight.

This article lays out the details behind the Performance Rights Act currently making its way through the U.S. Senate.  She supports the act, but lays out a factual description of what it is and what it could do.

While she supports the idea of the radio stations paying performers to play their music, she also raises the red flag of FM radio turning into a wasteland of right wing talk radio, sports talk and Spanish language programming.

(I tend to think some radio stations and companies would fail, but others would adapt and thrive even paying the “tax”)

Anyhow, put yourself in the shoes of a scared radio company owner.   You’re looking at the possibility that this thing still might pass.  If you wait for the 9th inning, and then decide to switch your music FM station to Talk, by that point the best syndicated shows and sports networks will already be pinned down in your market and you won’t have anything to put on the air (unless you produce it locally)

KKAT-AM in Utah and WNUW-FM in New Jersey (Philly area) have joined the list of recent switches from Music to Talk.

Look at the rate of this “format flips” as a barometer of if the NAB’s members think they are going to lose the fight with the music industry.    If they “flip” now, they can pin down the better shows to secure their future as a talk station.   If the performance rights act doesn’t pass, they can always flip back to computers playing random music in six months or a year (unless of course, they have a surge in ratings when they put on Glenn Beck and Rush Limbaugh :)).

Between a rock and a hard place

Thursday, September 17th, 2009

Sarah McBride of the WSJ (along with Mike Spector) write in this article about a problem which has taken some of the lenders by surprise, but people who follow this site closely have known about for months.

Citadel Broadcasting (which owns the former ABC radio network and a bunch of small market stations) failed to make an interest payment on August 15th and failed to come up with the money by September 15th, so they are in default for a 3rd time this year.

The problem is that if the lenders take any actions to sieze the company – either by bankruptcy or via a debt for equity swap, they immediately run into the FCC ownership caps.  The same lenders have interests in too many radio stations already, and are not allowed to “own” any more stations.  Some of the lenders are not allowed to own radio stations at all because they are non-US companies.   Most of the existing radio companies that could buy ABC radio stations at a fire sale can’t because they already are at the limits in ther major market ownerships.

So we’re stuck with a handful of “too big to fail” radio owners in limbo – everyone wants to take their losses and move on, but the process is frozen by the limits – and long term relaxing those limits would just reinvite the same problem down the road with even bigger “too big to fail” radio networks. 

Anyone out there with a billion or two to invest want to buy a radio network cheap?

CBS turning right?

Friday, September 4th, 2009

This could be BIG.

CBS radio tried out “hot talk” with Free FM which was a dismal failure.   If you run down the CBS owned & operated stations, CBS has been allergic to any kind of  ”right wing” talk radio.  KXNT in Vegas is about the only station that carries “hate talk”, and that’s just due to it being a former Infinity station they would probably rather sell off.

Well, down in Charlotte, North Carolina starting on September 14th, CBS is going to challenge WBT by converting a sleepy simulcast station to Conservative News Talk – including Beck, Hannity and Jason Lewis (who used to do local talk on WBT).

CBS crossing that psychic divide to entertain the possibility of giving listeners what they want to hear is a RBG  (really big deal).  I don’t doubt for a second that this lineup will succeed in Charlotte (I used to live there).  Charlotte is home to two of the country’s largest banks and very Conservative (or at least moderate).  

If Conservative Talk works in Charlotte, CBS owns a number of high power AM stations in major markets who might do the same.    KFWB in Los Angeles is changing Monday from All News to News/Talk (Dr Laura, Laura Ingraham, Smerconish).    I could easily see WINS or WCBS in New York flipped to News/Talk.   Citadel/ABC is VERY vulnerable right now to a frontal attack.

Maybe CBS also sees that the GE/NBC/Obama connections and someone remembers the history of radio in the 1920s.

Media Owner – NorthEast Public Radio

Wednesday, July 29th, 2009

When even people at NPR say you’ve crossed the line on being too partisan for a 501(c)(3) public radio station, you would think WAMC’s Alan Chartock would get the hint.

WAMC is a public radio station, with 9 satellite stations and a number of FM translators that operates in the Albany / Hudson Vally are of Northeastern New York.    Expressing his First Amendment rights to say whatever he wants on his radio station, he has many critics including “right wing hate” radio in Albany, and even has an entire web site that tracks every time he passes gas inappropriately.  [here].   The fact that a 9 term US Democratic Congressman sits on WAMC’s board might be a factor in some of this controversy.

Our profile of WAMC is located here – but before you come to any conclusions, you should probably take a listen to the station for a while here

Mr Chartoff may pop up on air just about any time he has something on his mind.

Radio Owner – Flinn Broadcasting

Tuesday, July 28th, 2009

George S Flinn, Jr. has at least one experience in his background that no other radio owner can claim – he has performed an ultrasound on a pregnant panda bear.

Dr Flinn is a native of Memphis, and operates a group of radiology clinics in the area.   He has also dabbled in owning radio stations, mostly in Memphis and Little Rock.   It would probably be accurate to say they are more of a hobby and investment than an intensely serious business operation.  Also taking up some of his time is his involvement in Shelby County politics, and his son also sits on the Memphis City Council.

If you would like to learn more about the Flinns and their radio stations, [here] is the profile.

Radio Owner – Backyard Broadcasting

Monday, July 27th, 2009

So you used to work for Sinclair Broadcasting, and you have been working for a couple years for a Private Equity firm in Boston.   You become aware that an old friend from Sinclair Radio is still hanging around his house with nothing to do.  You have a plan!

It’s 2002, the implosion of radio station license prices is becoming obvious to anyone paying attention.  You decide to fund a a new venture called Backyard Broadcasting to start acquiring small market radio stations in economically distressed areas like Western New York and manage them from a headquarters in Florida, more than 400 miles away from the nearest station your new company owns.

What could possibly go wrong with that plan?

If you have a crystal ball, see if you can predict the future by reading the profile located here.

Radio Owner – Minnesota Public Radio

Sunday, July 26th, 2009

People on radio need to be very careful about what they say without thinking about it ahead of time.

Back in 1981, Garrison Keillor of Prairie Home Companion fame, offered listeners a free poster for the fictional Powdermilk Biscuits if they wrote in.   Much to their surprise, 50,000 requests arrived in the mail – the printing cost alone was going to be $60,000 that MPR didn’t have.

MPR’s head William Kling smelled opportunity.    He decided to use the free poster to promote selling other types of merchandise like coffee mugs and T-Shirts.  It worked.  The sales more than covered the costs of the free posters.

As the venture grew more than MPR could handle, Mr Kling set up a for-profit venture in 1986 called Rivertown Trading Company to sell mugs, t-shirts, music CDs and other merchandise.    By 1998, the company was generating $200 million a year in sales, and by 2000 had generated a total of over $175 million in net income.   The money was plowed back into an endowment to fund the operations of MPR.

Public Radio is not immune to the problems hitting the radio business.   Having loaded up on well compensated staff during the good times, and now facing competition from other entertainment sources, and reductions in giving, Public radio is having to reduce staff and cancel programming that isn’t generating enough listener interest.

MPR has the largest network of full power FM public radio stations in the country, and has used them to leverage other income by renting tower space to cell phone companies and wireless broadband providers, as well as forming the backbone of the state’s EAS emergency communications network.

The beginning of the MPR story is here, but it’s a very complex story with many moving parts.   The key thing to take away from this is that “non profit” doesn’t mean you can’t make a lot of money.

Radio Owner – Jimmy Swaggart Ministries

Saturday, July 25th, 2009

If you’re old enough to remember Jim and Tammy Faye Bakker, you also probably remember Jimmy Swaggart.     Back in the 1980s, televangelism was all the rage.   Several of the ministries pointed fingers of sin at each other, and in 1988 culminated in Jimmy Swaggart being caught with a prostitute in a motel in Louisiana, for which he publicly repented, but not before many of his supporters and employees  parted ways with the ministry.

The Swaggart Ministry lives on, owning 27 full power radio stations and a network of FM Translators, as well as a presence on TV and holding meetings around the country.

The SonOfLife radio ministry was started in 1995, and you can see a few more details at the owner profile here.    I’ve been unable to locate any financial information about how much money they raise or what the money is spent on.

Radio Owner – Triad Broadcasting

Saturday, July 25th, 2009

So it’s 1999 and you’ve been working for Norwest bank in Minneapolis, which just merged with Wells Fargo out in California, and you’re wondering what to do with the rest of your life.

Then you have an idea – let’s hire a guy from California with radio experience and start buying us up some of them cheap radio stations in North Dakota and West Virginia.   Radio consolidation is happening like crazy and you can’t possibly lose.  You get Wells Fargo to bankroll your idea and go on a buying spree.

You spend all of Wells Fargo’s money just in time for the Clinton Era stock bubble to burst in September 2000, and the beginning of the collapse of the value of radio station licenses.   But not to worry – the President of your radio company lives only 1,400 miles away from the closest station he is managing.  What could possibly go wrong with that?

Triad’s biggest claim to fame is they briefly were the affiliate for Ed Schultz in his home town of Fargo North Dakota.

If you’re still interested after all of that exciting buildup, the profile is located [here].

Radio Owner – Bustos Media

Tuesday, July 21st, 2009

You’re a peasant from Mexico and you come to America with a dream.   You work doing hard farm labor and and clean schools as a janitor.

You have two sons with even bigger dreams.   One son goes to Berkeley and gets his Bachelor degree in Philosophy and Ethnic Studies.  Your other son goes to USF and gets a degree in Finance and an MBA from UCLA.

Combining their skills and some Venture Capital money, the brothers begin building a network of radio stations, and plastering Los Angeles and New York with 10,000 advertising billboards.   That company is named Z-Spanish Media.  In 2000, the company is sold to Entravision for about $450 million, and the debt and their investors are paid back.  (Entravision recently sold the billboard business to Lamar Advertising for $100 million)

Building on their prior success, the brothers founded Bustos Media in 2003 with new Private Equity capital and try for a repeat of their first success.  Because the company is privately held, there is no publicly available financial information.

Their story is located [here]