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Radio One Acquires Cox Houston
- Thread starter Kent
- Start date
The distress started in 1990 with Docket 80-90 which allowed all the upgrades and move-ins. It made the market vastly less profitable even then because there was no revenue increase and more than 50% more FMs in the market.
I'm not so convinced that they will be sold together.
D
Deleted member 108832
Guest
Heck, it hasn't even been measured by Eastlan in over two years. Halted during the pandemic, and been on hold since. Well, it WAS a rated market at one time. Thanks for the clarification, Ryan.
D
Deleted member 108832
Guest
That's assuming both will be purchased by the same buyer, Bama. It's just as likely each facility will be sold separately.
It's not really consolidation. It's simply moving some stations from an investment group to a smaller minority-owned company. This is a tremendous step up, because the CEO is a second generation radio owner. His mom was a popular talk show host in Washington DC. She built the company from one station, WOL-AM, into the much larger company it is today. If anything, this is far better than the alternative, which is either more vulture capitalists or religious broadcasters. From what I can see, he sold his interest in a DC hotel to buy these stations. It's likely that no additional debt was incurred.
That happened when the FCC over-licensed the spectrum, adding so many stations that the existing owners couldn't stay in business. They went from 20 shares to 5 shares and had to cut their ad rates commensurately. There was a time when Houston had a lot fewer radio stations than it has now.
The FCC more or less "had" to do that. After Docket 80-90 allowed for A's to upgrade to B's and C's and all stations to move towards metros while new stations were dropped into markets that could barely support what they had, the only way to save radio was to allow consolidation and an expanded ownership allowance.
Still, in 1995 half of all stations were losing money.
Yet in most of the rest of the world where commercial radio could build national networks and own many stations, the industry was profitable. Go figure.
And not just Houston, but lots of other places. (Disclaimer: I worked in Houston radio in the mid-1980s. The FM dial there now is practically unrecognizable to me.)
The original idea of 80-90 was to provide an intermediate class of stations in Zone II between the big class C's and the small class A's - essentially to have class B stations in Zone II. That was actually a good idea. There were some metros with more than 100,000 people that only had class A's (Columbia, Mo. and Bryan-College Station, Texas are two examples I can think of). Having the intermediate class of stations made sense to address those situations. But the proposal got bloated all out of proportion and the result is the mess we have today.
At the time, the company I was with in Puerto Rico could not expand further on the Island due to ownership caps. So, as a trial we bought stations in Lake City and Tallahassee, FL in the later 1980s. Then Docket 80-90 essentially doubled the stations in each market, making Lake City impossible to make money in and driving Tallahassee way down.
I was involved with the "cause" in the cause and effect of Docket 80-90. It all sprung from Dick Friedman who owned a station I consulted in Puerto Rico who also owned a Class A half way between Naples and Fort Myers, FL. He tried filing to upgrade to a C, thinking it would not attract attention. However, upgrades opened up the door at the time to cross filings, and he got nine of them! He lost the license when several of the counter-filers teamed up and made the legal costs more than he could afford.
In the process, the FCC was forced to decide that upgrades should not be an invitation to loss of license, and the result was allowing not just upgrades but moves to different cities of license. At the same time, they opened the table of allocations, allowing some smaller markets to suddenly have three times the stations but with no increase in revenue.
Probably the worst example of the aftereffects of 80-90 that I know of is the Springfield, Mo. market which ballooned all out of proportion, with multiple move-ins. There's only so much money to go around in markets of that size.
I would have thought Houston would have been insulated from some of these effects thanks to the construction of the Senior Road sites in the early 1980s, but that doesn't appear to be the case. From what I recall, what's now KGLK (107.5) was the first rimshot, with coverage problems in the Montrose in central Houston.
Why does everyone always try to kill off 97.1, when it does well for the audience it serves for where the signal goes?
Yet it is about 32nd in market revenue. It's 65 dbu covers less than 25% of the market population.
Astros2023
Banned
Don't forget Houston was completely
mismanage. Currently the Cincinnati and Indianapolis Spanish stations don't sound like major market radio. Daniel Melendez has been deemed mediocre, at best consulting for Radio One. Melendez recommendations at any station in the past 10 years lack depth.
We should point out, at least in Houston, the addition of more signals from move-ins and upgrades allowed rapid growth in Hispanic targeted radio on FM. 93.3, 98.5, and 107.9 all wound up with Hispanic formats, and you can throw 104.9 and 106.5 in that category. 97.1 and 100.7 have also had Hispanic formats in the past. One can wonder what Hispanic targeted radio would look like here had those new signals never launched. Imagine if several of the Missouri City sticks were now in Spanish, without those drop-in signals?
You may be thinking of the KGOL days in the early 1980s when 107.5 was on a much shorter Brazoria County tower running a Christian music and preaching format. That signal had a lot of problems in Houston’s urban core, and could be quite choppy for listening in the car.
When KZFX launched on the frequency in 1986 it was with a new 2,000 tower which dramatically improved reception.
I would imagine the Classic Country format is quite popular in the Piney Woods region of Southeast Texas, where the station does a fine job of covering those rural areas. But the signal is inadequate for coverage of Houston metro. And the current format is a flanker for KKBQ, so while it fits into a cluster strategy, it likely would have sales problems as a stand-alone.
The 97.1 coverage of a large swath of southeast Texas makes it an attractive target for religious operators, who are looking for widespread geographic reach, not just specific targeted metro areas.
Old skewing format. Too bad we don’t have co-owned full signal Country stations in Houston that could complement each other, such as the KSCS/KPLX combo (Cumulus) in DFW, or KASE/KVET-FM (iHeart) in Austin.
The 97.1 signal would be an excellent simulcast partner for 92.1, as it was in the past. 97.1 is solid in booming Montgomery County, and the growing U.S. 59/I-69 corridor in the northeast of the market. Quite interested to see if 92.1 and 97.1 wind up with the same new owner, or go their separate ways. Of course that’s assuming they are the spinofffs, but I think everyone on this forum would be shocked if they were not.
Was that during the John Brown University ownership days?
Yes. I recall there was an interim owner for a year or so after JBU sold it. That interim owner built the upgraded signal which hit the air a few days before the format was flipped to Classic Rock KZFX under yet another new owner. Almost 40 years ago, so my recollection might be a little vague.
These days I guess you would call that interim owner a “flipper.”
I remember the launch, and that its format basically spelled the end for KRBE(AM)'s "classic rock" format (which could be quite eclectic at times) (in AM stereo - thread tie!). At the time, I was living near South Shepherd and Westheimer. There were spots where KZFX had a lot of interference, probably due to multipath. I always had trouble getting a clean signal for it at home.
The company I work for previously had a relationship with the University and I remember doing a deep dive one time on their radio ventures over the years. It struck me as being so interesting that a relatively small University in a little town in Arkansas owned radio stations in Los Angeles and Houston among others.
The flipper you are referring to I believe was a guy with the last name of Frankhouser. The way I heard the story.... he flipped that station before the ink was even dry on his purchase. I don't know what else or where else he was involved with radio.
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