New Ownership Limits

[Menlo Bill]

7 AM, 7 FM, 7 TV's

That's it.

Current owners have one year to comply or FCC will assign calls that companies may keep.

 

[BossRadioDJ]

Are you stating your opinion of what the limits should be, or did you read that this is what the FCC has agreed the limits will be?

 

[tripton99]

I'd love to see a limit of one AM and one FM in each of the top 100 radio markets. It would never happen, but allowing Clear Channel to gobble up 1000 stations was the beginning of the end. CC's greed will result in 20 percent staff cutbacks this week. A report I saw suggested it would happen on Inauguration day so as to bury the story.
The new owners of CC, Bain Capital and Thomas Lee, the quintessential beancounters, know nothing and care nothing about radio.....only care about the bottom line. Having been a limited partner on ventures with the Lee company, I can attest to their narrow view. (Though their purchase and sale of Snapple many years ago made me a lot of money).

 

[RadioStarOne]

How long before Bain and Co. begin to liquidate CC into its component parts? Any guesses?

 

[KFodor]

No way any of this will happen. It's all wishful thinking. Period.

The money...and the politics behind it will not let it happen. Even with a democrat in the White House.

Some changes could be made. But those of you wishing for the 1970's to come back are fooling yourselves.

 

[tripton99]

To liquidate would require buyers and though everything has a price, CC's not gonna sell for the cents-on-the-dollar the market would dictate.
My guess is that the Mays family and a few high-placed execs who built this mess have already cashed-out big big time. they laughed all the way to the bank. The wiseguys behind the Clear Channel mess have, by themselves, destroyed the radio business to the point where it cannot be restored to anything resembling the golden days.

 

[BossRadioDJ]

The best scenario we can hope for is that the mega-group owners, such as Clear Channel, start paring back and sell out some of their stations (excuse me, "properties") to local owners -- or at least smaller group owners -- in places like San Francisco.

With equal measures of entrepreneurial spirit and a willingness to develop talent and entertain listeners, radio could be revived. It ain't completely dead yet; I still detect faint breathing and occasional twitches.

If there were stations available in the Bay Area, and investors willing to spend something, it could work.

Someone with more knowledge of communications law may know more about this, but I'm wondering if the California legislature could enact a law that would either (a) place limits on station ownership; (b) require a greater percentage of local ownership; or (c) require specific program content, such as live, local origination, news, public service announcements, etc.

Yes, I know that the FCC regulates these things, but, under an individual state's rights, I'm wondering if it's possible to do something like this. If the mega-owners are in such bad shape, they may not have enough money to pay the lobbyists to pay off the lawmakers...

Heck, wouldn't it be interesting if the supervisors in San Francisco tried to enact something? I wonder if Cammy Blackstone still works for Michaela Alioto-Pier. I'd bet she'd get something going in a snap.

Nah. The stations would just relocate their cities of license to Hayward or Albany.

"Blue sky ... nothin' but blue sky ... do I see..."

 

[Zeb Norris]

The best scenario we can hope for is that the mega-group owners, such as Clear Channel, start paring back and sell out some of their stations (excuse me, "properties") to local owners -- or at least smaller group owners -- in places like San Francisco.

With equal measures of entrepreneurial spirit and a willingness to develop talent and entertain listeners, radio could be revived. It ain't completely dead yet; I still detect faint breathing and occasional twitches.

If there were stations available in the Bay Area, and investors willing to spend something, it could work.

Someone with more knowledge of communications law may know more about this, but I'm wondering if the California legislature could enact a law that would either (a) place limits on station ownership; (b) require a greater percentage of local ownership; or (c) require specific program content, such as live, local origination, news, public service announcements, etc.

Yes, I know that the FCC regulates these things, but, under an individual state's rights, I'm wondering if it's possible to do something like this. If the mega-owners are in such bad shape, they may not have enough money to pay the lobbyists to pay off the lawmakers...

Heck, wouldn't it be interesting if the supervisors in San Francisco tried to enact something? I wonder if Cammy Blackstone still works for Michaela Alioto-Pier. I'd bet she'd get something going in a snap.

Nah. The stations would just relocate their cities of license to Hayward or Albany.

"Blue sky ... nothin' but blue sky ... do I see..."

A huge factor in the financial pressure to reduce staff... I mean um contain costs, is the debt service that companies have on their stations... um, I mean properties.

There was a lot of "irrational exuberance" in the price earnings ratios of the post de-reg deals, and a lot of undue optimism about how radio could increase it's share of the overall advertising buy.

To make it worse, the internet came along (what genius failed to see that coming?), and now the economy is tanking, which naturally impacts advertising.

But the bank still has to get paid first.

To get back to more of a mom and pop world, a lot of huge companies would have to go bankrupt and have their assets dealt with by the courts, and sold off for pennies on the dollar.

But in the meanwhile, the companies and their bankers will use every too at their disposal to prevent this. And they have better tools at their disposal than a bunch of DJs.

 

[weav]

The best scenario we can hope for is that the mega-group owners, such as Clear Channel, start paring back and sell out some of their stations (excuse me, "properties") to local owners -- or at least smaller group owners -- in places like San Francisco.

With equal measures of entrepreneurial spirit and a willingness to develop talent and entertain listeners, radio could be revived. It ain't completely dead yet; I still detect faint breathing and occasional twitches.

I kinda expect that it'll be the 2nd-tier markets like SJ (already in a trust) and such that'll get spun out. I also kinda expect that they won't be sold outright because they'd have to recognize a nasty loss in doing so. They may get LMA'd out before sold. Personally I keep hoping to hear dance tracks coming from one of the CC SJ properties...

 

[Menlo Bill]

In my opinion a rollback of ownership limits is not a throwback to the 70's but rather an affirmation that the airwaves do indeed belong to the public. I believe in much more rigid regulation of not only requiring a public file but in actual programming that focuses on the public interest. And I'm not talking about two hour PA blocks.

Major corporations certainly have the ability to broadcast in the public interest, surrounded by compelling programming, but, in my opinion, that is not happening at all.

I don't care how it happens but there needs to be more owners with more different ideas about how to do business.

Granted, in a market like this, it'll take a very wealthy owner with a mighty big love for radio to affect even one Bay Area station. The only Bay Area I may be able to have any affect on is Eureka/Arcata.

 

[TheBigA]

The reality is that it ain't the 1970s any more. Bringing back old regulations won't ensure a return to the past.

Clear Channel is looking to sell 400 stations right now. CBS has about 70 on the block. Citadel has another bunch. They're all out there waiting for someone who is qualified to buy them. No one is buying.

So bringing back the 7-7-7 rules will guarantee that about 3000 radio stations would go dark, putting even more people out of work. Is THAT what you want? Rich people don't have to buy old traditional media to reach the public any more. And the public doesn't need to listen to traditional media any more. It doesn't matter who owns the stations, those facts won't change.

In my opinion a rollback of ownership limits is not a throwback to the 70's but rather an affirmation that the airwaves do indeed belong to the public.

That is 1930s language. Completely irrelevant today. The people don't need the airwaves. They have their own network, and it's far more local and far more relevant than anything in mass media. Bringing back old laws won't change that fact. It just places a new layer of regulation on companies that are already in trouble.

I believe in much more rigid regulation of not only requiring a public file but in actual programming that focuses on the public interest. And I'm not talking about two hour PA blocks.

How much would you personally be willing to spend of your own money to make that happen? It could be a surcharge on products you buy, like they do in England. It might be a direct subscription fee like satellite. But advertiser-supported media simply can't deliver public interest programming in a market where the people can turn it off and watch other things. Public broadcasting is suffering from losses in membership due to the economy. NPR just laid off 7% of their staff, many in California. People simply are NOT that interested in so-called "public interest programming." No one pays for cable TV to see the public access channels.

I don't care how it happens but there needs to be more owners with more different ideas about how to do business.

Here's the only way it can happen: Government grants. And the government hasn't given grants in broadcasting for 25 years. You can't even get a Small Business Administration loan to buy a radio station. The bad news is that it won't make radio more popular. It'll just mean there will be more diverse ownership base, who will program to minorities, not the mass audience. That will further the Balkinization of American society, and further listenership losses in commercial radio.

 

[LKellerIII]

Jeez - thanks for throwing a bucket of cold water on our preconceived notions, Big A - way to go!

Unfortunately, you make good points. "It ain't the 70s anymore" is right, and that doesn't just apply to ownership limits and competition from "new" media. From what I have read, before de-regulation, there were hundreds of radio stations across the country that lost money, and barely made ends meet. If we were able to magically return to pre-dereg ownership limits, and those stations magically found individual business people or smaller corporations to buy them (rather than going dark), they would have a multitude of financial hurdles to jump over, and would have to cut air-talent and other staffing as deeply as Clear Channel and CBS are now.

Do we really think that these new owners wouldn't use syndicated programming, or modern technology, like voice-tracking? In 2006, I spent some time in rural Utah and Colorado. The radio stations there were owned by a few smaller station groups - I know that because they ran help-wanted ads on their own stations for sales people. Can you imagine being in radio sales, and spending your life driving over hundreds of miles of interstate and rural highways between towns to sell air-time to local businesses? Ugh. Anyway, these stations ran mostly local advertising, and almost all of their programming was syndicated music programming, with pre-recorded bumpers giving local call letters. They didn't even put up the money for VTed shows designed to sound local.

I've heard Clear Channel blamed for taking all the local content out of the stations they own in small markets, but the local owners have done it too. Why? Because it's available and it saves money.

I've had a number friends of in the radio business for decades. They started out in the business in the 70s working for low rated stations in LA (if they were lucky), or stations in small markets, if they weren't so lucky. They rarely had anything kind to say about their station owners, who were usually local businessmen who owned one or two stations, tops. For every Gene Autry (who understood radio, and was willing to spend money to make his stations the best), there seemed to be two penny-pinching a-holes who didn't care at all about programming, as long as their stations were making money.

Somewhat relevant to this discussion, there's an interesting discussion on the Los Angeles board - on one of their ever present KRTH threads. David Eduardo (our other resident cold water thrower) claims there are more professional radio people doing programming now than ever before. The postings relevant to this thread starts on page 9, and continues from there. Check it out if you get to LA this weekend... or I guess, you could just click on this link:

http://boards.radio-info.com/smf/index.php/topic,117159.80.html

 

[TheBigA]

Do we really think that these new owners wouldn't use syndicated programming, or modern technology, like voice-tracking?

The fact is that in the 1980s, long before deregulation, about half of the radio stations in this country turned their programming over to satellite delivered formats from companies like TranStar and Satellite Music Network. Before that, they used reel to reel tapes from Bonneville and Schulke. These stations were called "automated." I worked at a bunch of them. One college kid loading tapes up and carts up all day.

What is being proposed here is what radio has done since radio networks were born in the 1920s. This is NOT an ownership issue. If you return ownership limits to what they once were, the surviving radio stations will carry nationally syndicated programming just as they did BEFORE de-regulation.

 

[LKellerIII]

Do we really think that these new owners wouldn't use syndicated programming, or modern technology, like voice-tracking?

The fact is that in the 1980s, long before deregulation, about half of the radio stations in this country turned their programming over to satellite delivered formats from companies like TranStar and Satellite Music Network. Before that, they used reel to reel tapes from Bonneville and Schulke. These stations were called "automated." I worked at a bunch of them. One college kid loading tapes up and carts up all day.

What is being proposed here is what radio has done since radio networks were born in the 1920s. This is NOT an ownership issue. If you return ownership limits to what they once were, the surviving radio stations will carry nationally syndicated programming just as they did BEFORE de-regulation.

Right. Everybody remembers Bill Drake as the impresario of Boss Radio, which was a combination of live and local talent with formatics heard all over the country - but Drake was also the guy behind the automated "Hit Parade (Year)" and "Solid Gold" formats that were plugged into FM stations across the country in the late 60s and early 70s. Beautiful Music was automated, though some had live morning jocks (Bill Moen on KABL, for example).

I remember pre-deregulation FM radio in the Bay Area in the 1980s. There were a few bright spots like "The City" (KKCY) and KJAZ, and some entertaining stations like KYUU then X-100, and KKHI for classical music purists. It did seem like there were more opportunities for independent station owners back then. But on the whole, FM music was really dull - most stations had cut DJ input and formatics to almost zero. 3 or 4 stations used the same slogan: "More Music"(Call Letters), and a number were amateurishly automated ("K-Lite 93," and others). Mostly, in those days, I listened to KGO and KNBR because I found FM so boring.

It's funny how people look back on some of these mediocre stations fondly - like "Yes/No" Radio" KLOK-FM. Another example was K-101, which really bit in the decade after Gabbert sold it, with the exception of Dr. Don Rose, then Terry McGovern in the mornings.

 

[DavidKaye]

Someone with more knowledge of communications law may know more about this, but I'm wondering if the California legislature could enact a law that would either (a) place limits on station ownership; (b) require a greater percentage of local ownership; or (c) require specific program content, such as live, local origination, news, public service announcements, etc.

Yes, I know that the FCC regulates these things, but, under an individual state's rights, I'm wondering if it's possible to do something like this. If the mega-owners are in such bad shape, they may not have enough money to pay the lobbyists to pay off the lawmakers...

It'll never happen. Basically, when the federal government begins legislating in an area of law, the states are prohibited from passing laws in that area of law. It appears that some areas can be be made more restrictive than federal law, such as the ability of states to set higher minimum wages than federal law provides for.

But there's a showdown right now between California and the feds over vehicle emission standards. Though Calif has succeeded for decades in having tighter restrictions, the feds are now challenging that ability to regulate, saying that the states cannot change federal emission standards.

In the case of radio and TV ownership, regulation of broadcasting has come under the aegis of the Commerce Department, and the feds are given the ability in the Constitution to regulate commerce.

Two relevant sections:

Section 8 - Powers of Congress
To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

Amendment 10 - Powers of the States and People. Ratified 12/15/1791.
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

 

[davideduardo]

The best scenario we can hope for is that the mega-group owners, such as Clear Channel, start paring back and sell out some of their stations (excuse me, "properties") to local owners -- or at least smaller group owners -- in places like San Francisco.

Clear is down to 851 stations, with a few more to sell. The reason? The idea that statewide groups could improve the poor operating margins of smaller markets (remember, from the 50's through 1996, studies showed half of US stations had no profit), but this did not pan out. So many of the markets like Mankato and Lima and similar were sold off.

With equal measures of entrepreneurial spirit and a willingness to develop talent and entertain listeners, radio could be revived.

Radio reaches 238 million people. It is not dead, but it is in a huge battle with all kinds of new media. few entrepreneurs are going to spend what it takes on a station today, in the middle of the worst economy in about 80 years.

Right now, every business is just trying to survive.

 

[SFStatic]

Some small market stations in the midwest actually billed more in 2008 than 2007. Local ownership and relationships with local merchants really help in a rough market like this one.

 

[LKellerIII]

Some small market stations in the midwest actually billed more in 2008 than 2007. Local ownership and relationships with local merchants really help in a rough market like this one.

No argument there. My point above is that (IMO) a return to strict ownership limits would not bring a resurgence in programming creativity - nor would it mean more employment opportunities for air talent and programmers.

 

[pard]

Agree with you both. Darn!

 

[DavidKaye]

Some small market stations in the midwest actually billed more in 2008 than 2007. Local ownership and relationships with local merchants really help in a rough market like this one.

Currently I have yellow pages ads in four phone books. I have never been approached by any radio or TV stations to advertise with them. However, I've been approached by print. Now, why don't Bay Area radio and TV stations want my business?

New Pane (the Internet window contractor) got into radio solely because the owner is friends with KGO's Bill Wattenburg, who suggested that they advertise on KGO. Why hadn't the salespeople from any station approached him first? Or C. Crane. If memory serves, nobody from any station contacted Bob Crane. Instead, he contacted a couple stations about buying late night ads.

Radio stations are crying poor but they're simply not beating the bushes for business! Again, my tech support business is in plain sight in 4 phone books and yet I've never been approached by a broadcaster!