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"Local investors aim to extend Air America"

M

MattNC

The co-founders of Air America are forming a company to buy rural radio stations to spread the reach of the liberal-oriented radio network. Northbrook venture capitalists Anita and Shelley Drobny, who retain a minority interest in Air America, are seeking to raise an initial $5 million to buy eight or nine stations in communities with fewer than 100,000 residents. [Steven R. Strahler]

http://chicagobusiness.com/cgi-bin/news.pl?id=17726
 
Saving Both Sides Some Typing

(Quoting Chicago Business:)

> The co-founders of Air America are forming a company to buy
> rural radio stations to spread the reach of the
> liberal-oriented radio network. Northbrook venture
> capitalists Anita and Shelley Drobny, who retain a minority
> interest in Air America, are seeking to raise an initial $5
> million to buy eight or nine stations in communities with
> fewer than 100,000 residents. [Steven R. Strahler]

Here, let's save both sides in this "debate" from having to post their own replies...

(RIGHT) "Oh, great. Stuart Smalley gets inflicted on small town America. These libs can't win by the marketplace, so they have to buy in. Can't the Drobnys give that money to Hurricane Katrina relief instead? Don't REAL LIBS do that?"

(LEFT) "Glorious news! We have to invade the small towns. We have a vital mid-term election coming up in 2006, and we have to counter the right's LIES everywhere they are! This news is CRUCIAL for AMERICA'S FUTURE!"

There. No need for any more politically-based replies.

:D

-OA<P ID="signature">______________
Ohio Media Watch - <a target="_blank" href=http://ohiomedia.blogspot.com>http://ohiomedia.blogspot.com</a></P>
 
Re: Saving Both Sides Some Typing

> (Quoting Chicago Business:)
>
> > The co-founders of Air America are forming a company to
> buy
> > rural radio stations to spread the reach of the
> > liberal-oriented radio network. Northbrook venture
> > capitalists Anita and Shelley Drobny, who retain a
> minority
> > interest in Air America, are seeking to raise an initial
> $5
> > million to buy eight or nine stations in communities with
> > fewer than 100,000 residents. [Steven R. Strahler]
>
> Here, let's save both sides in this "debate" from having to
> post their own replies...
>
> (RIGHT) "Oh, great. Stuart Smalley gets inflicted on small
> town America. These libs can't win by the marketplace, so
> they have to buy in. Can't the Drobnys give that money to
> Hurricane Katrina relief instead? Don't REAL LIBS do that?"
>
>
> (LEFT) "Glorious news! We have to invade the small towns.
> We have a vital mid-term election coming up in 2006, and we
> have to counter the right's LIES everywhere they are! This
> news is CRUCIAL for AMERICA'S FUTURE!"
>
> There. No need for any more politically-based replies.

Actually, this isn't a bad idea, and it's probably the only way they'd ever get on the air in some states. Maybe they'll buy one of Northeast AL's tiny AMs so I don't have to put up with the frustrations of their buggy stream.



>
> :D
>
> -OA
>
 
Re: Saving Both Sides Some Typing

> (Quoting Chicago Business:)
>
> > The co-founders of Air America are forming a company to
> buy
> > rural radio stations to spread the reach of the


was in NY Post weeks ago. Chicago Business way behind.
>
 
Re: Saving Both Sides Some Typing

They can buy the stations, they just can't buy an audience. I'd have thought they'd have learned their lesson about brokering (or buying) the first time.

<P ID="signature">______________
Greetings from Ohio-where the governor wants everyone to know he's sorry.</P>
 
Re: Saving Both Sides Some Typing

> They can buy the stations, they just can't buy an audience.
> I'd have thought they'd have learned their lesson about
> brokering (or buying) the first time.

The lesson was that you have to raise enough money to pay the bills if you want to broker time. But if you raise enough money to BUY stations, that's a different story. It seems to work for Salem, even though the ratings for Salem's political talk stations are usually worse than Air America's ratings (especially in 25-54).
 
Re: Saving Both Sides Some Typing

You still have to have enough money to run the stations...and hopefully make a profit. That may be difficult in smaller markets. It seems that AAR is still in "win an election" mode..not the best business model.<P ID="signature">______________
Greetings from Ohio-where the governor wants everyone to know he's sorry.</P>
 
Re: Saving Both Sides Some Typing

> They can buy the stations, they just can't buy an audience.
> I'd have thought they'd have learned their lesson about
> brokering (or buying) the first time.

It sounds like the Drobnys are doing this separately from Air America, in which they have a stake, but don't own outright. So it really isn't the same as AAR brokering its way onto stations in their launch.

Sheldon Drobny is a businessman, and has made lots of money over the years. Maybe he thinks he can make some more by running the format he's ideologically aligned with? I dunno. I agree in principle, though, that running a business solely because you're trying to get your viewpoint across isn't good business.

-OA<P ID="signature">______________
Ohio Media Watch - <a target="_blank" href=http://ohiomedia.blogspot.com>http://ohiomedia.blogspot.com</a></P>
 
Re: Saving Both Sides Some Typing

> > They can buy the stations, they just can't buy an
> audience.
> > I'd have thought they'd have learned their lesson about
> > brokering (or buying) the first time.
>
> It sounds like the Drobnys are doing this separately from
> Air America, in which they have a stake, but don't own
> outright. So it really isn't the same as AAR brokering its
> way onto stations in their launch.
>
> Sheldon Drobny is a businessman, and has made lots of money
> over the years. Maybe he thinks he can make some more by
> running the format he's ideologically aligned with? I
> dunno. I agree in principle, though, that running a
> business solely because you're trying to get your viewpoint
> across isn't good business.

I agree that buying in doesn't make much sense. However, unlike an LMA where you pay rent you'll never see again, if he's buying in growth areas, the signals could increase in value and become a nice real estate investment (perhaps he learned that at the Salem School). Although I can think of a few horrible stations that would go for peanuts in top-100 markets rather than going out to the middle of nowhere.
 
Re: Saving Both Sides Some Typing

> > They can buy the stations, they just can't buy an
> audience.
> > I'd have thought they'd have learned their lesson about
> > brokering (or buying) the first time.
>
> It sounds like the Drobnys are doing this separately from
> Air America, in which they have a stake, but don't own
> outright. So it really isn't the same as AAR brokering its
> way onto stations in their launch.
>
> Sheldon Drobny is a businessman, and has made lots of money
> over the years. Maybe he thinks he can make some more by
> running the format he's ideologically aligned with? I
> dunno. I agree in principle, though, that running a
> business solely because you're trying to get your viewpoint
> across isn't good business.
>
> -OA

That's the same thing everyone was saying when the Drobny's put up the money for AAR -- 70 affiliates ago.
 
Re: Saving Both Sides Some Typing

> I agree that buying in doesn't make much sense. However,
> unlike an LMA where you pay rent you'll never see again,

Just a post to help with terminology...

In my experience...an LMA is somewhat different than a time-brokerage agreement. With an LMA, there is usually a clause that allows the party LMAing to purchase the station outright with a portion of the funds spent under the LMA going toward the purchase. It's like a lease with option to buy.

In a time-brokerage, usually the broker doesn't have or won't have the funds to out right buy the station, doesn't want to but the station, or the owner isn't interested in selling (ie the right offer hasn't been made).

IIRC, in all the deals where AAR was "patying for time", it was a time-brokerage agreement, not an LMA.<P ID="signature">______________



</P>
 
Drobnys' Effort Is Different From AAR

> That's the same thing everyone was saying when the Drobny's
> put up the money for AAR -- 70 affiliates ago.

But really, it's a different story here.

AAR never actually bought any radio stations. As someone pointed out below, they simply brokered the time on stations they were "running". It's the case with Inner City Broadcasting's WLIB/NYC, their flagship station and the only major station they still broker full-time (give or take overnights and a couple of weekend hours).

They're not buying WLIB. Inner City is not selling it. Inner City is basically letting them operate it in exchange for a financial consideration.

As AAR quickly found out, their road to success was not as a full-time station broker, but as a traditional syndicator. At one point, they decided to back away from their model of putting the network on stations 24/7. Heck, one local station - which carried AAR programming until a controversial management change - didn't even run Al Franken!

The Drobnys, however, *are* talking about buying radio stations, particularly in rural areas. If it's their goal to plant liberal talkers in smaller markets, and they hope to get financial success, they'd do well to look at which markets might be amenable to the format.

If this is all ideological, well, if Sheldon and Anita are willing to drop their own money on it, who's stopping them from losing it? Ditto, for that matter, for Salem's efforts to spread their own brand of conservative talk far and wide.

-OA<P ID="signature">______________
Ohio Media Watch - <a target="_blank" href=http://ohiomedia.blogspot.com>http://ohiomedia.blogspot.com</a></P>
 
Of course Salem is a publicly traded company...

So one wonders how long their investors will put up with pouring millions of dollars into AM talkers that are almost universally doomed to trail their direct format competitors -- often by a ridiculously wide margin.
 
Re: Drobnys' Effort Is Different From AAR

> AAR never actually bought any radio stations. As someone
> pointed out below, they simply brokered the time on stations
> they were "running". It's the case with Inner City
> Broadcasting's WLIB/NYC, their flagship station and the only
> major station they still broker full-time (give or take
> overnights and a couple of weekend hours).
>
> They're not buying WLIB. Inner City is not selling it.
> Inner City is basically letting them operate it in exchange
> for a financial consideration.

Why the company won't try to buy a 50kW in NY is beyond me. WEPN gets bad ratings so does Bloomberg's station.
 
Why Doesn't AAR Buy? Easy.

> > They're not buying WLIB. Inner City is not selling it.
> > Inner City is basically letting them operate it in
> exchange
> > for a financial consideration.
>
> Why the company won't try to buy a 50kW in NY is beyond me.
> WEPN gets bad ratings so does Bloomberg's station.

I think the easy answer is that AAR just does not have the money to buy that kind of station. Even less powerful AMs in that market are going for over $30 million. And FYI, WLIB itself is not 50KW...they're 10KW day, 30KW night (directional both).

As far as WBBR/1130 and WEPN/1050, both signals are, as far as I know, not for sale. (With the "everything's for sale at the right price" caveat, of course.) They serve a purpose for their parent companies.

-OA<P ID="signature">______________
Ohio Media Watch - <a target="_blank" href=http://ohiomedia.blogspot.com>http://ohiomedia.blogspot.com</a></P>
 
Re: Of course Salem is a publicly traded company...

> So one wonders how long their investors will put up with
> pouring millions of dollars into AM talkers that are almost
> universally doomed to trail their direct format competitors
> -- often by a ridiculously wide margin.

Probably as long as those investors are convinced that Salem is Doing God's Work. I sincerely doubt that most of the people who own Salem Communications stock own it with the intent of making money from it -- though I daresay someone who bought SALM in February of 2000 would have done better than if they had bought VIA or DIS or CCU at the same time.

Now, if some takeover artist comes along (is there a "T. Boone Pickins" equivalent in the radio business?) and buys up a majority percentage of Salem's stock so he can force the issue at a shareholders' meeting...<P ID="signature">______________
also known as tombetz.</P><P ID="edit"><FONT class="small">Edited by Tom Betz on 09/19/05 12:41 AM.</FONT></P>
 
Re: Of course Salem is a publicly traded company...

> Probably as long as those investors are convinced that Salem
> is Doing God's Work. I sincerely doubt that most of the
> people who own Salem Communications stock own it with the
> intent of making money from it -- though I daresay someone
> who bought SALM in February of 2000 would have done better
> than if they had bought VIA or DIS or CCU at the same time.
>
Of course Salem's financial success on AM was mainly built on block program sales. These were formerly a major component of the broadcast day on KRLA and other secular talkers, but recently Salem has cut back in order to clear more hours of its own and others' syndicated product. This means more dependence on spot sales with ratings that trail other talkers.

In a sense, Salem and other small players in talk have "drafted" off the success of Clear Channel and Infinity-owned talkers drawing cume to the AM band. If the trend of launching political talkers on FM continues, will it suck the wind out of smaller AM talkers like the Salemites? Granted, Salem can go on FM in Sacramento, but that's not an option for them everywhere...
 
Re: Drobnys' Effort Is Different From AAR

It's not really a different story. Conventional wisdom was that liberal talk radio was going to fail. It wasn't whether they were going to own, lease, or syndicate. Afterall, prior to 2004, there was no syndicated liberal talk radio for over 15 years and only a handful of liberal hosts in local markets. I don't know how many times that I read an article about liberal talk radio when I came across a quote like this one offered by Brian Maloney, the so-called Radio Equalizor.

"Remember that liberal talk shows have been tried many times before over the past decade with poor results in every instance. Alan Dershowitz, Bernie Ward, Mario Cuomo and Jerry Brown are some of the best known examples of leftists with radio talk shows that quickly failed."

Here are a few other early comments on Air America

Air America is doomed
By KEN BLACK
October, 2004

The doomed project started several months ago in a much ballyhooed media campaign that saw stories on just about every major network. If you have not heard about the recent troubles the network has been in, you are not alone. Although major media outlets and all the national network extensively covered the unveiling with a level of passion not normally seen among seasoned journalists, there have been relatively few mentions of Air America since they started getting into trouble.

Brian Maloney
Radio Equalizer
March, 2005

My contention is that if liberal talk radio can't find an audience in New York City, it certainly doesn't have a chance in San Antonio, Reno, Fresno and other places now gaining Air America stations that have small "progressive" populations.

Kevin McCollugh
May, 2004

Radio is a dynamic discipline. It must take you to a destination - and you must always be in pursuit of reaching that destination. Through the telling of good stories, radio can be used to inspire, educate, and inform. Liberals who have no use for being educated, informed, or inspired are not going to thrive in this world. Their messages are filled with bitterness, deceptions, distortions, and skepticism.

May. 15, 2004
The atmosphere is far too foul on Air America
By Michael Goodwin
NEW YORK DAILY NEWS

The signing of comedian and best-selling author Al Franken gave Air America a liberal drawing card. But if his three-hour show on Monday was typical, he could sink the ship instead of saving it.

Local Media: Still Breathing
Mediaweek
May 24, 2004
By Katy Bachman

It's no secret that Air America Radio, the liberal Talk radio network launched earlier this year, is struggling to survive. Top management has left in recent weeks, following the loss of several top-market affiliate clearances. But why, after arguably the biggest public-relations and press blitz the radio industry has ever seen, is the fledgling network teetering on the brink of disaster?

Neal Boortz
August, 2004

This is not something I would invest in


> > That's the same thing everyone was saying when the
> Drobny's
> > put up the money for AAR -- 70 affiliates ago.
>
> But really, it's a different story here.
>
> AAR never actually bought any radio stations. As someone
> pointed out below, they simply brokered the time on stations
> they were "running". It's the case with Inner City
> Broadcasting's WLIB/NYC, their flagship station and the only
> major station they still broker full-time (give or take
> overnights and a couple of weekend hours).
>
> They're not buying WLIB. Inner City is not selling it.
> Inner City is basically letting them operate it in exchange
> for a financial consideration.
>
> As AAR quickly found out, their road to success was not as a
> full-time station broker, but as a traditional syndicator.
> At one point, they decided to back away from their model of
> putting the network on stations 24/7. Heck, one local
> station - which carried AAR programming until a
> controversial management change - didn't even run Al
> Franken!
>
> The Drobnys, however, *are* talking about buying radio
> stations, particularly in rural areas. If it's their goal
> to plant liberal talkers in smaller markets, and they hope
> to get financial success, they'd do well to look at which
> markets might be amenable to the format.
>
> If this is all ideological, well, if Sheldon and Anita are
> willing to drop their own money on it, who's stopping them
> from losing it? Ditto, for that matter, for Salem's efforts
> to spread their own brand of conservative talk far and wide.
>
>
> -OA
 
Re: Why Doesn't AAR Buy? Easy.

> As far as WBBR/1130 and WEPN/1050, both signals are, as far
> as I know, not for sale. (With the "everything's for sale at
> the right price" caveat, of course.) They serve a purpose
> for their parent companies.

WEPN's "bad ratings" is misleading at best; sports stations are more niche than other formats, but deliver good numbers in demo and better than standard billing. WFAN has been tossed around here as always being in the top 10 nationally, and was once #1. WEPN is NYC's #1 all sports station... not that 620 is much competition yet.

Although, if ABC proceeds with divesting its radio properties, I guess it would be available. I might suggest buying a Korean station or 1660 or something.

WBBR serves as a trophy to the city's mayor and even with no effort brings in decent revenue (Mr. Eduardo?) by catering to another niche: wealthy executives.
 
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