It is a scenario that has sustained some broadcasters for years. What if overleveraged major radio groups ended up selling off stations to smaller operators? Would that not transfer control from Wall Street back to committed local broadcasters? Could it turn the clock back on radio’s post-1996 consolidation?
In the U.S., that scenario has largely failed to materialize. Stations that were earmarked for sale due to market caps languished for years in trusts. Religious broadcasters, usually with national franchises, have been the ones most able to expand. This week’s sale of Neuhoff Media/Lafayette, Ind., to Saga is a transfer from a smaller group to a well-respected medium-sized one. But it’s not repatriation from a major owner.
In Canada, however, that exact scenario began to unfold Feb. 8 when Bell Media announced it was selling 45 of its 103 radio stations to seven smaller groups: Vista Radio, Maritime Broadcasting, Durham Radio, My Broadcasting, Arsenal Broadcasting, Whiteoaks Communications, and ZoomerMedia.
The Bell divestiture is not exactly a feel-good story. It came amidst a new round of job cuts across Bell and parent company BCE Inc., many of them at local or network TV properties. It was also accompanied by a statement from Bell’s Legal and Regulatory officer declaring radio “not a viable business anymore,” adding that radio is headed “in the wrong direction.” The group has already turned off or sold a number of heritage AM stations.
For any owner, recapturing the spirit of ’95 will be challenging on either side of the border. Smaller groups still grapple with the contraction of the radio business and the fragmentation of the audience. Even before 1996, they were a prime customer (although not the only one) of syndicated automated formats, then satellite networks. Some small-market stations manage to field an entire staff; others use voice-tracking as extensively as major ownership.
Given the landscape, some Ross on Radio readers caution not to expect too much from such a change. Reader Don McCullen cites Merulo Media’s reported elimination of midday shifts this week. “Understand that smaller operators can be just as guilty of groupthink as the big ones,” says veteran PD Jerry Noble.
What then should a smaller owner do upon receiving stations from a major group? For many of the Ross on Radio readers posed that question, the first answer was “hire a sales staff” — even before reemphasizing local hosts. “The very first thing I would try to do is figure out where the revenue is going to come from and try to find and pay the greatest salespeople I could possibly muster up,” says veteran GM/PD and Musicom Academy host Pat Holiday.
“You [need] that sales staff, and they have to be able to make more money than they could selling cars or insurance. At three dollars a spot, that’s not happening,” says Brad Lovett. “I’d find local direct-sales ninjas with a passion for helping small businesses grow and who don’t give a rat’s ass about agency buys,” says researcher Matt Bailey.
Between due diligence on available revenue and the security of the transmitter site, “It’s a long list before I could even get to programming,” says news veteran Gil Gross. “I’m seeing a lot of stations that do their best to be local that are going under because the ad support and possible co-op dollars just don’t exist.”
The only counter on the importance of local sales is veteran researcher John Parikhal, who suggests looking beyond “the sagging program-interruption model, which everyone hates.”
For Pop Gold Radio’s Don Tandler, the priority is to “bring back local news … especially since so many small newspapers have folded.” Steacy Easton wants to see more “community small-scale reporting.” “While I might leverage personalities across the chain, every station would have a local news director with a dictate to find the drama in local government meetings,” says Bailey.
“Build a digital platform for both local sales and marketing that actually works with local businesses and can help drive listenership,” says RadioInsight publisher Lance Venta. “Without that, you have no chance to survive beyond 3-5 years.”
“First, I would not pretend that it’s Dec. 31, 1995, and that digital doesn’t exist, Facebook and Google haven’t decimated ad rates, and that national chains haven’t displaced old-line retailers,” says Lovett, who calls for “a Townsquare [Media] model” with its emphasis on digital. “Yes, I would love to say 24 hours of live jocks and talkative personalities, but I’m not convinced anyone would actually give a damn.”
But there are readers who hope smaller ownership will help restore greater localism. “Be micro-local with personality if everyone else is pulling in V/Ts from out of market,” says veteran GM/PD Sharon Taylor. “I would budget things to try to have a 24/7 live airstaff on at least one, if not all stations in my cluster,” says Scott Evans Littleton. “I would want storytellers on the air.” Sam D’Addieco cites Wheeling, W. Va.’s River Radio, whose Classic Hits station revived the heritage “WOMP-FM” name and staged a one-book market takeover before withdrawing from the Nielsen ratings.
One suggestion posited in this column before is the concept of small regional networks with 1-2 live personalities from each of several markets. I’ve also suggested that each market have 2-3 truly local stations, allowing larger groups to create true national brands, rather than in-between stations that are neither big nor satisfyingly local. Smaller groups are natural for that approach.
Smaller broadcasters are also likely to bring a different perspective. Major groups still sometimes try to position voice-tracking as the superior choice; smaller owners will be more straightforward about it being a matter of necessity. Large groups can commit to low-rated outlets to bolster a national footprint in a format; smaller operators need to succeed on every station.
If major groups sell and larger groups grow, industry unity becomes more important than ever. The jobs that have thwarted radio for 15 years — improving the streaming experience and making it easier to navigate; marketing not just themselves again but radio overall; and dealing with the clout of the majors themselves is all easier if broadcasters band together. It’s where we need the spirit of ’95 the most.
I love the ideas in the article, but most intractable of all is the U.S. tax code, which lets the church guys avoid taxes, giving them the money to buy radio stations.
American radio loses because government picks winners, and those winners often have religious ties. We’re a pseudo Judeo-Christian state that pays lip service to the separation of church and state.
right on . Hard to compete for us little guys
I assume the new owners of the mostly smaller markets will be more successful that Bell. The larger the company, the less success they seem to have outside of major markets. Most of them just aren’t set up to operate in markets that need 80-90% local sales, community interaction and street presence.
Along with all the good hopes for smaller companies acquiring stations from larger corporations, I would hope it wouldn’t put the smaller companies into a leveraged situation. Otherwise, it becomes a zero-sum game for radio industry.