WEMP's Money...

[PhilHaircut]

When will it run out?

Let's say the station is around in 6 months and starts pulling in reasonably mediocre numbers.
And Merlin decides it's finally a finished product.

Will they really spend the money to market it? And will billboards and TV ads make a dent?

Couple a marketing budget with the staff salaries, the big boy salaries, rent, and other day-to-day
expenses. Does anybody see this place making a dime?

We can talk about how much we don't like the station all day, but if in six months/a year it's pulling
in a 1.0 12+ and those reasonably mediocre numbers in their key demos... what happens?

Do the money people just let it bleed cash til its all gone? Or do they step in at some point,
fire Sabo and hire somebody that can build a radio station on something more than a "hunch?"

Will WEMP get to celebrate its first birthday?

 

[TimeIsTight]

You can almost bet that the big bucks Chicago based investment outfit that is backing Merlin will give the new format at least a year to catch on.

Those MBA types have run all the numbers and have so much faith in the concept that they are in the process of trying to add more markets for Merlin's particular type of female leaning all news. Merlin is bidding on FM stations in Philadelphia and the Washington/Baltimore market, and said to be looking at FM stations in LA, Miami and Tampa as well as other major markets.

No doubt, the money for the billboard and TV ads are already in the budget, but suspect that most of the ad and promo money won't be spent until the first quarter of next year, when competition for attention is lower when compared with the coming holiday season.

The hurricane week ratings that came out today were for a seven day period that started only ten days after WEMP went to the news format. That 0.8 is hardly an indication of how things will go over the longer term and when the format is up to speed and the promotion kicks in. Look for yourself, during the August rating period when WEMP was mostly playing AC music, it had a larger cume than any NYC AM station with the exception of the two all newsers. Yes, it had a bigger cume than WFAN, WOR, and WABC, with no program hosts, and no promotion, a few weeks after dumping its rock format.

Its still way too early to write the idea off. Way too early!

 

[radioguy39nj]

As long as I've followed radio, new formats tend to be tested in smaller markets before it's tried in major markets. Merlin is going for New York and Chicago before other markets. That represents a huge investment!

 

[TimeIsTight]

That represents a huge investment! Smiley

Merlin has some huge money behind it from the Chicago-based private equity firm GTCR which has what it calls a "leadership strategy."

From its website: "As a leading private equity firm, GTCR pioneered “The Leaders Strategy” – finding and partnering with exceptional leaders as the critical first step in identifying, acquiring and building market-leading companies through acquisitions and organic growth."

Merlin's CEO Randy Michaels, and COO Walt Sabo both have the kind of long successful track records in the business that these investors seek.

GTCR has invested more than $8.5-billion this way over the last 30-years. Obviously, they are willing to invest many hundreds of millions of dollars in this female leaning all news major market concept, and are looking to move quickly into more markets in addition to New York and Chicago.

A similar investor group, Oaktree Capital Management, is the financial force behind Townsquare Media which recently acquired the Millennium stations in New Jersey and soon plans to own a couple of hundred radio stations in total. Oaktree has $83-billion worth of assets under management.

Merlin Media was formed three months ago, Townsquare was formed in March of last year.

Obviously, these deep pocketed investors behind them see great opportunity in the financial distress caused by the recent drop in radio station prices, and over leveraged owners who need to get out from under.

In the Townsquare case they are buying up as many non-major market stations as they can at new low prices, while Merlin is focused on grabbing the rare major market FM opportunity to create a new format category of top billing station.

These big investors can't wait for new programming concepts to be developed in smaller markets first, the opportunity to acquire stations is now, and they appear willing to scoop up as many top properties as they can while the opportunity is there.

 

[CTListener]

As long as I've followed radio, new formats tend to be tested in smaller markets before it's tried in major markets. Merlin is going for New York and Chicago before other markets. That represents a huge investment!

Sports radio wasn't tested in Utica before it was launched on WFAN. How did that work out?

 

[PhilHaircut]

I didn't get a chance to write this yesterday, but I tuned in for literally 1 minute in the morning just to see what they were talking about and I swear they were doing a story about "why beans make you fart." There was even a song! I'm not joking at all that was the story!!!

I'm going to go ahead and disagree with you TimeIsTight, everything millionaires and radio dinosaurs do isn't always gold. At some point GTCR is going to realize Randy and Walt are having them throw money down a sinkhole and will change their plan.

"Obviously, they are willing to invest many hundreds of millions of dollars in this female leaning all news major market concept, and are looking to move quickly into more markets in addition to New York and Chicago." And that will be their downfall.

 

[TimeIsTight]

I'm going to go ahead and disagree with you TimeIsTight, everything millionaires and radio dinosaurs do isn't always gold

Actually, I agree with you that everything millionaires and "radio dinosaurs" do isn't always gold. Faced with current low interest rates, and a troubled commercial real estate market, these investment firms are looking for ways to get a good return on their capital elsewhere. They make very educated gambles and hope to be right more often than wrong over the longer term.

In a case like this, where they are committing hundreds of millions of dollars to a new concept, they made up their minds before they spent a dime that they would give it years to succeed, probably three to five years. So unless these all news stations are all stuck at the very bottom of their local ratings piles for the next couple of years, and hemorrhaging money, the investors aren't going to panic and pull the plug. They certainly won't do that before a big promotion push, and at least a year.

While stories about "bean gas production" don't sound like "news" to me either, they are the kinds of information people actually find interesting and will generate buzz and water cooler talk that will help put the station on the map. We're talking about it, and probably thousands of others who heard it, mentioned it to people they know. Possibly, thousands of potential regular listeners heard about the station as a result and may check it out and add it to their presets.

 

[Dick Skinner]

I'm going to go ahead and disagree with you TimeIsTight, everything millionaires and radio dinosaurs do isn't always gold

While stories about "bean gas production" don't sound like "news" to me either, they are the kinds of information people actually find interesting and will generate buzz and water cooler talk that will help put the station on the map. We're talking about it, and probably thousands of others who heard it, mentioned it to people they know. Possibly, thousands of potential regular listeners heard about the station as a result and may check it out and add it to their presets.

Yeah, women love talk about flatulence. Just ask your wives and girlfriends. Oh, and the Three Stooges...women can't get enough of them either.

 

[DToTheJ]

FM News 101.9 doing a segment on flatulence... I see Merlin's hiring Steve Langford away from Howard 101 is already starting to pay dividends!

 

[nd2023]

I'm hoping FeMale News 101.9 fails. It's an embarrassment compared to WCBS and WINS and NPR. The only thing good is the traffic reports.

 

[Barry]

Speaking of traffic on WEMP, Merlin Media's primary financial backer, GTCR, has purchased Global Traffic Network. The source for this information is an article in InsideRadio.
That should lead to some interesting synergy between their news stations, and a traffic information provider.

 

[TimeIsTight]

Yeah, women love talk about flatulence. Just ask your wives and girlfriends.

Agreed, "our" wives and girlfriends would never discuss flatulence.

But, I worked for a while in a busy newsroom with a dozen or more women, who were graduates of some top universities, and otherwise "classy ladies." However, a major part of their daily conversations that I could overhear started this way:

Did you hear what Howard (Stern) said this morning??? And the giggles went on, and some of the topics were even more surprising to me than mere flatulence.

Sometimes it wasn't Howard who said something, it was John Debella from Philly, but the effect was the same......Watercooler BuZZ promoting a radio station!

I also had a young woman neighbor for whom what "Howard" talked about was what she would talk about to the neighborhood women over the backyard hedges. Listening to Howard was such an important part of her daily routine. Such is life.

I'm hoping FeMale News 101.9 fails. It's an embarrassment compared to WCBS and WINS and NPR. The only thing good is the traffic reports.

Those NYC traffic reports are very useful, and there is nothing else like them available on the FM dial. That fact alone my be enough to boost the AQH and Cume to a useful level. They are there every ten minutes in every daypart, predictable, and comprehensive. Folks who need good traffic info are likely to visit the frequency often even if they don't like the rest of the programming.

Sabo's NJ-101.5 proved the concept. I have known a lot of people who think some of the talk shows are dumb as dirt, but they still periodically listen and get counted because they rely on the NJ traffic when they are commuting.

 

[nd2023]

I kind of wish the earth would shake again just so we could hear FM News 101.9 make fun of the earthquake.

 

[DToTheJ]

Don't worry - we've got the postponed "Rapture" three weeks from today! And considering there was no "FM News 101.9" back on May 21, it will be interesting to hear how they will cover that (non-)event...

@TimeIsTight: NJ 101.5 must be doing something right if even their weekend music programming has a following - how many sources have you seen during the Merlin acquisition (Walter Sabo) news blitz refer to the station as "News/Oldies" WKXW?

...there is nothing else like them available on the FM dial...

I know you speak of 101.9's traffic reports when you write this - but this can certainly be said of the station itself... chocolate, anyone?

 

[TimeIsTight]

@TimeIsTight: NJ 101.5 must be doing something right if even their weekend music programming has a following - how many sources have you seen during the Merlin acquisition (Walter Sabo) news blitz refer to the station as "News/Oldies" WKXW?

DToTheJ: If I understand what you are asking correctly, I haven't taken any particular note of references to WKXW as a "News/Oldies" station in reports about Sabo's involvement with Merlin. Although, I don't think anybody in the radio business who has listened to the station in recent years would describe it exactly that way.

For what its worth, I do think the weekend music programming, which I wouldn't call "oldies" anymore, contributes greatly to NJ-101.5's weekly cume, and has gotten people to add the station to their car radio presets, and have the home radio dials on the frequency too.

But, radio ratings are broken out to dayparts and weekends are separated from weekdays, and the usefulness of the traffic reports and the specific NJ weather every 15-minutes, brings in a lot of listeners specifically just for those features. Without the unique NJ Traffic around the clock, the station's audience numbers would likely be noticeably lower, especially during the week. On the weekends, it might be argued that the traffic breaks up the music, but no radio programmer in their right mind would change the traffic reports on that station.

 

[leethalweapon]

So, WEMP has lost almost 1 million listeners in September... How long will it be before they start to build an audience? Anyone care to speculate on what their average audience will be, once they've settled down???

 

[DToTheJ]

Actually, those were former WRXP listeners. "WEMP gained few listeners" would be a more accurate way of making this point.

 

[Steve Green NEPA]

Might the push to the biggest markets have anything to do with the fact that those are all PPM markets? Perhaps someone in that $83 billion organization has uncovered a strong probability that PPMs eventually will treat such a type of station benevolently?

 

[TimeIsTight]

Might the push to the biggest markets have anything to do with the fact that those are all PPM markets? Perhaps someone in that $83 billion organization has uncovered a strong probability that PPMs eventually will treat such a type of station benevolently?

More likely it is the fact that about 30% of radio advertising dollars are spent in the top-10 markets. Along with that, large markets are needed to justify the high expense of a full professional news staff, and provide enough news worthy local things happening to fill a news day.

PPM's are just a more accurate and less biased way of determining who is hearing the station and when. Jingles, frequent IDs ect. no longer matter for diary entries, but just so the listeners know where to come back to to hear the format again.

Advertisers may be more interested in news listeners than music listeners because news is a foreground listening experience with most listeners paying closer attention to what is said on the air than on music stations which may be used for background. PPM can't differentiate that, while in diary markets people who weren't paying attention may forget to even log the station.

Stations can also squeeze more paying spots on news stations too.

 

[Steve Green NEPA]

Points noted, Time ... thanks.

Perhaps this concept is envisioned after a time (and subsidized) as some form of hybrid, syndicated national brand. Generous cutaways for local traffic and perhaps even local lifestyles. If so, such a concept is likely to go over better in Los Angeles and be more profitable. But New York, Washington, Philadelphia et al certainly can't hurt.

Sabo's concept of the talk-music mix (a reworking of the old full-service MoR) now can be remolded further into a talk-information mix. It is sort of like someone playing with a chemistry set that came as a gift from a rich uncle -- with no manual -- but OTOH, the support behind it seems confident that the neighborhood won't be blown up.

One obstacle is that demo candle burning away at both ends. There's no more 12-54 monopoly held by radio. I'd put the general reach at 30-40 on FM. In five years time -- if I read the publicized patience of that $83Billion Rich Uncle right -- that demo is not likely to be 35-45. It's more apt to be 35-40 because of the traditional marketing contempt shown to those with grey hair. And just as probable, other programmers during that time will step in with music-free FM programming to slice that small, ripe demo even further. Time may not be the ally here it once was.

In any case, I don't see this as pioneering. I look at it like another niche, with less music, borne of reaction, on a limping medium, with a bit of issue-forcing and bluff thrown in. The musical tastes of the desired 25-49 are oversaturated ; already being done. The talk tastes of that coveted demo on FM (and the female version at that) are still works in progress. Moreover, I doubt that males Michaels, Sabo, Salant or their $83B uncle have discovered or invented a concept that unlocks any mysteries or responses of the female gender any deeper than the superficial level.

Prospective sponsors who really seek that foreground attention for their messages via FM are going to want more than a 0.2 and a 0.5. Time will tell.