|FCC gives radio more than it expected
Cross-ownership rules are history – and embedded radio markets get a break.
We expected the two 1975 cross-ownership rules (banning daily newspaper/broadcast and radio-TV tie-ups) to be voted out of existence, and that happened on a 3-2 party-line vote. But the surprise is that Jeff Warshaw’s lobbying about the inequity of the “embedded market” policy pays off. The change should benefit him and others around New York City and Washington DC. Warshaw’s Connoisseur argued that it made no sense to have stations it owns in Nassau-Suffolk count against stations it might own in Monmouth-Ocean. Arbitron long ago allowed the creation of embedded markets (and custom markets) within a larger metro – like New York. While the Commission didn’t rub out the rule, it adopts a “presumptive waiver” stance that will likely encourage dealmaking. Warshaw specifically thanks Republican Commissioners Mike O’Rielly and Brendan Carr for their statements during the meeting. He also name-checks Nielsen and BIA/Kelsey. But he tells this NOW Newsletter there’s more to be done in Washington –
Relaxing one reg is “Only a start to addressing FCC ownership rules.”
CEO Jeff Warshaw of Connoisseur got what he wanted from the Commission on embedded markets. And he says zapping the cross-ownership bans makes the rules “more closely reflect the realities of today’s media marketplace.” But there’s room to go on “the rules relating to radio ownership...as we believe the radio industry faces as much if not more change and disruption than do TV and newspapers.” Many operators want relief from the “sub-caps” that keep them from owning more than five AMs or five FMs in the same market. (You can have up to eight stations in markets with 45 or more signals, but no more than five in the same “service.”) But sub-caps can only be addressed in the next global “quadrennial review” of ownership rules. Commissioner Mike O’Rielly, for one, has an appetite for the discussion. Yesterday he said “It’s time to review the AM/FM sub-caps.” Chairman Ajit Pai congratulated the staff on completing this “modernization” proceeding and some items important to TV – but then he laughed and said it’s time to open the books on the 2018 review. That means soliciting more input and possibly commissioning new research to get a complete “record.”
TV got what it wanted from the Commission.
The Republican majority has no problem with Joint Service Agreements between non-owned stations that share – and maybe share too much, says Democratic Commissioner Mignon Clyburn. Gone is the “Eight voices test” in local markets, which wouldn’t let you own two TV stations in a market unless there are eight independently-owned TV stations. There can now be “exceptions to the prohibition on an entity owning two of the top four stations.” Though yesterday’s Order doesn’t touch on Chairman Pai’s desire to bring back the “UHF” discount that would effectively give Sinclair the room to get much bigger. It also doesn’t address TV’s “national ownership cap,” currently set at 39% of U.S. households. (With the UHF discount, that can be much larger.) Of course there’s no such national ownership rule in AM/FM. But to folks in radio, the FCC takes a very permissive attitude toward TV’s JSAs and SSAs (shared services agreements). The NAB’s been monitoring this process and Gordon Smith thanks the agency for reforming rules that “are not only irrational in today’s media environment...but they have also weakened the newspaper industry, cost journalism jobs, and forced local broadcast stations onto unequal footing with our national pay-TV and [pay] radio competitors.” Expect at least some court challenges to the FCC actions. The public interest group Free Press says it will take the FCC to court over rules that might impact the ownership prospects of women and minorities. But Chairman Pai has a ready answer to that -
FCC solicits input on a new “incubator program.”
Previous cycles of comments about ways to encourage new and non-traditional entrants often carried benefits for the large operators who showed some charity. And there’s a carrot in this concept, too. The FCC says it’s decided to establish an incubator program “in which established broadcasters would help facilitate entry by new voices by providing access to capital and/or technical expertise, to new entrants and small business.” It says the idea has “broad support,” and that’s true. This new incubator program wouldn’t mark the return of the discredited “minority tax certificate” – only Congress can do that. Expect the formal opening for comments soon.
D-Day for Entercom + CBS Radio.
“D” Day could stand for “done deal” and also for “David Field,” who’s at the top of the merged companies. He’ll be busy appearing in Philadelphia this morning and probably also New York City later on. David was an investment banker with Goldman Sachs before he joined the Philly-based company his father founded in the late 1960s. David was successively COO and Chief Financial Officer before becoming President in 1998. Now there’s a very bright spotlight on him – a chance for him to upgrade the visibility of radio in the eyes of Wall Street. There are also huge integration challenges, taking on a company that’s twice the size of Entercom. We knew when Entercom announced a batch of market managers and regionals that more news was TBA. But we didn’t know about New York –
Entercom wants “a fresh start” in New York City, and won’t keep market manager Marc Rayfield.
COO Weezie Kramer says “we want to thank Marc for his 25 years of service to CBS” – and of course Weezie knows Rayfield from her own 12 years at CBS. (She joined Entercom in 2000.) But Kramer says “The New York cluster has been through a lot of change over the past few years, and we felt there was a need for a fresh start.” For now, Denver-based John Fullam will also be “interim market manager” for the New York cluster that includes brands like classic hits WCBS-FM/101.1 and the twin all-newsers, “1010 WINS” and WCBS/880. Weezie carefully says “The title ‘interim manager’ means exactly what it says, as circumstances prevent us from naming the permanent manager today.” So Entercom must know who’s going to succeed Rayfield, but can’t go public yet. (That person must be at another company, right?) Kramer says Marc “has made innumerable contributions both in Philadelphia and New York.” He moved from Philly to New York in the Summer of 2015, as Scott Herman was elevated to COO. At that time, Rayfield was planning to keep his Main Line Philadelphia home and grab an apartment in New York. In his parting memo to staff yesterday Marc said of his quarter-century at CBS, “I would not trade that for the world.” He says he’s “worked every day since I was 14,” so some time off gives him time to get “energized for the second half of my career.” Marc’s contact info – MarcRayfield@Gmail.com and 215-260-7900.
Entercom builds its brand (maybe ringing a stock exchange bell on Monday?).
Some “CBS Radio” branding will go away immediately, in places like top-of-the-hour IDs – and there are a lot of those to change. Does that mean Entercom wants “CBS Radio” to be replaced by “Entercom?” Not necessarily. But brand-building, and making up ground with iHeart, will be important on places like Wall Street and Madison Avenue. Also - This NOW Newsletter hears that Entercom has sped up its digital transition away from the combined TV/radio “CBS Local” platforms. They haven’t been popular with radio people, who say it’s hard to quickly get to a specific radio station. The original timetable was to share with CBS Local for a year or more, but that’s supposedly been pushed up to this coming April – it not sooner. Look for Entercom to do more with CBS Radio’s “Radio.com.” Same with individual station apps, through Radio.com.
Entercom brings the MLB Minnesota Twins back to news/talk WCCO/830.
We know David Field’s enthusiastic about taking a national and regional approach to sports ad-sales, and the Twins will give his new President of Sports Mike Dee yet another franchise to pitch. While the move reported by the Minneapolis Star-Tribune may provide an object lesson for team owners who think they can mash together their sports franchises and their radio stations – it doesn’t automatically work. The Pohlad family controls the Twins, and its Northern Lights Broadcasting also owns alternative “Go 96.3” WQGO. But it was a lousy fit, just as Entercom discovered with alternative rock and Padres in San Diego, on KBZT/94.9. No such problem with Entercom’s newly-acquired WCCO, a legendary CBS Radio property. ’CCO had the Twins from “for the first 46 years of their existence,” says the Star Tribune. But they were claimed by Hubbard’s sports KSTP/1500, followed by the Pohlads in 2013. Entercom’s expected to keep the radio-booth team of Cory Provus and Dan Gladden. Baseball should sit comfortably on WCCO along with the NBA Timberwolves. Next move – is Entercom interested in buying the Pohlads’ radio twins, adding “Go 96.3” and its urban sister, “Go 95.3” WZGO? That’s in the Twin Cities Rumor Mill.
KABC L.A. news anchor accuses Senator Al Franken of sexual harassment – then accepts his apology.
Leeann Tweeden joins the #MeToo ranks with many other women, saying that then-full-time author/comedian Franken kissed and groped her during a USO tour in 2006. Franken wrote a skit for them to perform where they were supposed to kiss and there was a rehearsal – which Tweeden says went too far. She also says he groped her on a long-distance plane ride back to the U.S. Tweeden’s part of the “McIntyre in the Morning” show on Cumulus talker KABC/790, and her story was posted on the station website and discussed on-air. Franken quickly said he didn’t recall the incidents happening as she describes, but apologized in two statements. She quickly responded, and TheHill.com quotes her saying “Yes, I do accept that apology…People make mistakes. I’m not calling for him to step down” as a Senator. She says “that’s not my place to say that.” But Franken’s fellow Senators sure took note. The L.A. Times says Senator Majority Leader Mitch McConnell wants the Senate Ethics Committee to look into what happened – and Franken agreed that there should be an investigation. Meanwhile, further up the California coast in San Francisco, veteran radio personality Melanie Morgan claims she was the subject of harassing phone calls in 2000, after she and Franken both appeared on Bill Maher’s “Politically Incorrect” show on ABC-TV. The San Jose Mercury says Morgan posted the allegations of (non-sexual) stalking and harassment on a blog she co-founded, Media Equalizer. She says he wanted to continue the political argument.
For Delmarva Broadcasting Co. VP (and digital specialist) Mike Reath – “Time to take the show on the road.”
Also “off the road,” because Mike (a runner) is calling his own new company “Off Road Media Group,” offering “broadcast + digital sales strategies.” He’s spent over 27 years with the Steinman family-owned Delmarva Broadcasting, most recently as its VP. (The only VP, actually.) During that time, Reath says “We’ve been very deliberate at marrying digital and radio…and now’s the time to take the leap” and start helping other companies – mostly independent broadcasters – along the digital road. He admits that digital “has been a challenge in our industry.” But says “We as an industry have gotta do it.” Mike may be “a broadcaster at my core” – but he’s learned lessons. Today’s his last day at Delmarva, a company that bought its first station, WDEL Wilmington, Delaware, in 1931. Reath calls it “an extraordinary company, and I feel very fortunate to have been part of the growth” to the present-day ten stations. Monday’s the beginning of Mike’s experience leading Off Road Media Group. Mike’s at 215-867-5700 and the website is here.
How do you define AM/FM radio in 2017? Here’s the thumbnail from Nielsen -
From its latest “Total Audience Report” update for audio and visual content – “AM/FM radio is an away-from-home medium with employed users who listen 2.5 hours longer than those not employed. The audience is very consistent all year with very high reach and frequent usage at 5 out 7 days per week. Most listening goes to the listener’s favorite station, and there are many formats tailored to reach a large group with common interests.” If seeing terrestrial radio described as an “out-of-home medium” jars you, check Nielsen’s chart of “Distribution of AQH listening by location and daypart.” For the total broadcast week, 6am-midnight, only 32% is “at home.” Reflecting the mostly-employed nature of radio listeners, the “at-home” number is just 26% and 25% for middays and PM drive, respectively. While the at-home percentage rises to 43% and 41% for nights and weekends.
Two radio formats make double digits, measured by share of total AQH listening by adults.
#1 is country (an average 13.6 share of those 18+ in the Spring Nielsens) and #2 is Nielsen’s generously-defined “News/talk,” at 12.2%. Just a reminder that Nielsen’s Total Audience Report includes listening to some very popular NPR-affiliated not-for-profit news/talkers – so this isn’t necessarily evidence that commercial talk is over the moon. The rest of Nielsen’s Top 10 radio formats ranked by share – “AC Pop” (7.5%). CHR (7.0%). Classic rock (6.4%). Classic hits (5.9%). Hot AC (5.0%). Urban AC (4.2%). Contemporary Christian (3.6%). And urban contemporary (2.4%). Nielsen’s updated “Total Audience Report” is a free download with registration here.
A “no” vote on removing sub-caps.
Gary Burns, owner of Roanoke-Lynchburg-market Three Daughters Media, says “You asked for ‘strong opinions,’ and here is one I shared with the FCC in a letter to the Chairman” –
“Dear Chairman Ajit Pai, I am writing to add my voice to the many recent comments on sub-caps as they pertain to radio ownership rules…I am against changing the rules to allow an entity to own up to eight FM stations in a given market. If adopted, this major change will upset the competitive balance in many markets and will further devalue stations in the AM band. Most markets' leading broadcasters are already up to capacity on the number of stations they can own. If the rule changes, these broadcasters are likely to divest their AM stations in order to add two or three additional FMs. The result will devalue all the incumbent AM stations in a given market. History proves that more is not necessarily a good thing. The number one and two groups, iHeart Media and Cumulus, are teetering close to bankruptcy. In the case of Cumulus, the largest stations in that group would be subject to a potential second bankruptcy proceeding in a very short period.
“In my market, Roanoke-Lynchburg, iHeart has been warehousing stations in the Aloha Trust in the hope that the Commission relaxes the policy on sub caps, while ignoring fair-market value offers based on comparable sales. These stations have been languishing in the Trust for about 11 years despite my Petition to Deny, at the last renewal cycle. My Petition has been sitting at the Commission since October 2011 (File No. BRH-20110534ABG & BRH-21000524ABH) with no action by the Commission. Initially the Aloha Trust held three stations in Roanoke-Lynchburg. One was recalled when the number of stations in the market allegedly changed.” Burns says that by the way, “Only BIA, Nielsen and the FCC think” that Roanoke-Lynchburg should be a single market. Burns ends by thanking Chairman Pai “for all that you are doing on behalf of radio, especially AM radio…but relaxing the rules on AM stations would be contrary to your efforts to revitalize the AM band.” Note that modifying sub-caps is not part of the Commission’s agenda for tomorrow’s Open Meeting, though other aspects the ownership rules are. Sub-caps would presumably be part of the 2018 Quadrennial Review.
In its home market of Raleigh, Curtis Media launches “Just Right Country” as an extension of its easy oldies “Just Right Radio” (on WPTK/850 plus translators). The classic country edition of “Just Right” clears on the former WFNL/570 (now called WQDR) and a Raleigh translator at 100.3, W262CZ. WFNL had recently been simulcasting with 50,000-watt sister news/talk WPTF/680. Radio Insight says Just Right Country “creates a flanker for sister WQDR-FM/94.7, and a direct competitor to Triangle Marketing Associates’ ‘Country Superstars 102.3’ WKJO Smithfield.”
In Greenville, South Carolina, Salem tries “contemporary urban gospel” on its translator at 96.9, W245CH, licensed to Travelers Rest. It had once been doing AC, but the release from Salem says the new format is gospel/inspirational “Rejoice 96.9.” Salem’s using Reach Media’s Erica Campbell show in mornings and Willie Moore, Jr. for afternoons. Nights are handled by “Greenville’s own Darlene McCoy, hosing ‘The Nightly Spirit.’” More from Salem here.
A ownership dream comes true in eastern North Carolina, where the sales manager of classic country “97.9 the Bear” WNBB buys the company for $500,000. Diana Schulman also gets nice terms from seller Brad Eure. Most of the price - $375,000 - is in a seller note. As for the $125,000 cash due at closing, there’s a formula where Diana can earn payment credits based on monthly revenue targets. Two years ago, Brad Eure sold WNBB’s then-simulcast partner, “98.9 the Bear” WNBR, to the Educational Media Foundation (March 2, 2015 NOW Newsletter). It became not-for-profit contemporary Christian “K-Love” WLXB Bethel, NC. Now 100% of licensee Eure Communications, owner of “97.9 the Bear” WNBB, goes to Schulman. It’s a Class C2 licensed to Bayboro.
Iowa’s Brad Gendreau bought his first rental property at age 17, and he’s since expanded from real estate into car dealerships and even the “Iron Horse Fitness Clubs” in Clinton, Iowa and Savanna, Illinois. Now Gendreau Broadcasting buys an AM/FM in Clinton from Prairie Communications/WPW Broadcasting. The stations are variety hits “Mac 94.7” KMCN, a Class A, and full-service adult standards KCLN/1390, branded as “the Voice of the River Cities.” It has 1,000 watts daytime/91 watts at night, and no translator. Gendreau is paying $240,000 for the stations, plus another $110,000 for real estate. Seller Prairie Communications has eight other stations, including Quad Cities-market classic rock “Vintage 93.1” KMCS Muscatine. Seller’s broker for “Mac” and KCLN – Paramount Media Advisors.
Meet the Prometheus Radio figure behind many of today’s Low Power FMs, as he offers technical and other help to get five LPFMs going in the Seattle area – within just two weeks. Pete Tridish (like “Petri Dish”) says he’s assisted dozens of stations, but this trip is “definitely my record.” Pete’s partly responsible for today’s boom in community radio, after an early pirate-radio run-in with the Commission. Meet him doing his rounds in Seattle during an interview with TheStranger here.
Take 2 from yesterday’s mention of the NFL L.A. Rams changing hometown FM station from the just-disappeared “100.3 the Sound” KSWD to variety hits “93.1 Jack FM” KCBS-FM -Reader John Richards says “2017 is not the Rams’ first year back in southern California, but their second. However, it is the first year in town for the Los Angeles Chargers.”
Déjà vu, all over again – Scott Gilbert of The Radio Mall database says “I once worked for Capricorn Records in the Twin Cities, when top 40 KDWB was located in a field out in the middle of nowhere, east of St. Paul. It seemed to take forever to get there to drop off records that they would never play. The other day, while driving through a very populated area to get to the shopping center where Home Depot is located, I realized that the Home Depot is on the site of the former KDWB offices and studios. That phrase is true, ‘There used to be a radio station there.’” What’s your own favorite true radio story? Email “You Can’t Make This Up” – Tom@RTK-Media.com.
Entercom plans some immediate format changes, per the Rumor Mill – not just in San Diego, where country KSON moves from 97.3 to up to 103.7, replacing CHR “Energy” KEGY. We’ll survey the scene in Monday’s NOW.
Want to reach the readers of this NOW Newsletter, with your company’s marketing message? Or need to spread the net to fill a vacancy, with a Classified ad? Talk to our Kristy Scott. Reach her at Kristy@RTK-media.com or phone 818-591-6815. See you back first thing Monday morning - Tom