|How Now, Dow Jones?
Wall Street Journal Radio network and MarketWatch are budget casualties at Dow Jones.
Dow is also shutting down its weekly “Sunday Journal” print product, syndicated to dozens of “partner newspapers,” and it’s turning off its “local-language websites in Germany and Turkey.” The larger picture that emerges is that Dow Jones intends to – perhaps really needs to - focus on faster-growing businesses. Executive Gerry Baker talks about “some hard choices about where we place our bets in a world of constrained resources.” What are they betting on? Baker says “We believe the primary opportunity for rapid growth of the Journal in the U.S. is the expansion of our core circulation – digital and in print – and continued increases in Marketwatch’s audience.” Baker praises the “outstanding journalism” produced by all the affected staffers – and the H.R. folks began meeting with them yesterday, ahead of the late-December shutdowns of various operations owned by News Corp. subsidiary Dow Jones that just aren’t growing fast enough.
Fewer sources for business news, and some very good people out on the sidewalk.
The Wall Street Journal Radio operation began in 1980 and has operations in Washington DC, South Brunswick, New Jersey and Manhattan. It’s been a reliable content partner for hundreds of stations in the all-news format, but also talk outlets and even some music stations that wanted more resources. The disappearance of its long-form morning “Wall Street Journal This Morning” is going to screw up the 2015 plans of some talk-based stations that use the Gordon Deal-hosted show in their pre-morning drive hours. (Some affiliates even repeat it.) Beyond the institutional loss, there’s the job-loss of professionals applying their talents to radio news. There are relatively few options for either their employment, or for radio programmers searching for replacement content. Bloomberg syndicates a business news product, and we’ll see how aggressive it gets in the coming weeks. There are other news providers who could ramp up their efforts in the area of business, economic and consumer news – and who might even offer jobs to the laid-off Wall Street Journal/MarketWatch staffers. Also -
Will Compass mount its own business radio service?
It has many of the requisite pieces, since Dow Jones last year gave it the ad sales component of Wall Street Journal Radio and then the affiliate sales, too. Former Wall Street Journal Radio execs Nancy Abramson and Susan O’Connell now work at Compass. And last night, Affiliate Sales chief Susan circulated a very judicious note advising stations that ”All of us at Compass Media Networks are working on opportunities to continue providing you with the excellent business news programming you’ve come to expect. This will take a few days to process.” O’Connell says “we would greatly appreciate your patience.” In other words – don’t jump in to something else, and keep the door open for us. Compass founder/CEO Peter Kosann has an extensive background in business radio, at Bloomberg, then Westwood as the MarketWatch product was developed and later as CEO of Westwood One, when it was a separate public company. If Kosann can quickly assemble the pieces of a business radio operation, 2015 could be an interesting year for Compass. And for sure, the last seven weeks of 2014 are going to be hectic for everybody around the Wall Street Journal radio operation. One more thing – there’s a thought by some folks in the news/talk community that the Media Matters advertiser campaign and StopRush effort are partly responsible for the Dow Jones decision –
Media buyers don’t always distinguish between talk radio and all-news.
The very first week of this Tom Taylor NOW Newsletter (November 8, 2012), we did a story about the “toxic” effect of the Limbaugh ad-boycott on talk and news programming far beyond the bounds of Rush’s “Excellence In Broadcasting” kingdom. Rush made his remarks about Sandra Fluke in late February 2012, and some advertisers began keeping their distance, thanks to an ongoing campaign. Truth is, a lot of national advertisers have always bought around controversial programming – not just in talk radio, but cable TV and other media. The Sandra Fluke episode just widened that circle and sensitized more advertisers and agencies. But busy media buyers don’t necessarily have time to figure out which stations run Rush Limbaugh and which ones don’t. They’ve just got to “deliver the buy” within its parameters, and they don’t want any flak from the clients, who don’t want any problems with third party groups. So buyers play it safe – and even the non-controversial Wall Street Journal products can get caught in the prop-wash. But it’s also clear from yesterday’s Dow Jones memos that there’s a bigger consideration, about radio, the Sunday Journal page and the two European websites not growing at a fast-enough clip. Media blogger Jim Romenesko has copies of the memos from William Lewis and Gerry Baker here.
“Major policy fight” between President Obama and FCC Chairman Wheeler?
The Washington Post contrasts the President’s statement this week about regulating broadband providers like utilities with what Commission Chairman Tom Wheeler told “officials from major web companies including Google, Yahoo and Etsy” – that Wheeler favors a more nuanced solution. He supposedly told the reps that “what you want is what everyone wants: an open Internet that doesn’t affect your business. What I’ve got to figure out is how to split the baby,” Solomon-like. Wheeler supposedly reminded the meeting that “I am an independent agency,” which doesn’t take orders from the White House. In fact, the Post story here suggests that Obama issued his pure-net neutrality statement partly to apply pressure on Wheeler. Meanwhile, AT&T wedges itself into the debate by announcing that it won’t pursue further investments on high-speed broadband in 100 markets until the business environment is clear. Reuters says that’s “the first business move by an Internet service provider in response to” the President’s lobbying effort. There could be more, from Comcast, Verizon, etc.
It’s pretty stark - Radio revenues down 8% at Radio One.
Stark, but not surprising, says CEO Alfred Liggins – he’d been guiding “down high singles” and the quarter actually finished better than it had recently been pacing. He’s always candid on his quarterly calls, sometimes to the point of being uncomfortable for some Wall Streeters, but his unfiltered comments are refreshing. No other CEO would say this - “It has never happened in the history of me running this company that all four of these markets [Houston, Atlanta, Washington DC, Baltimore] have taken a hit at the same time….that’s why I think it’s an anomaly.” He just can’t believe that the overall radio market in Atlanta will keep dropping 10%. But Liggins also offers some rational business explanations for the minus-8% revenue performance, and one of them is about Radio One’s largest market, Houston. The overall radio market across all operators there was flat in the quarter, according to Miller Kaplan. It’s just that Houston is where Radio One suffered from two big problems -
Houston’s new classic hip-hop “Boom” is exploding (and it’s cheap to run).
We’ve already done autopsies on the cause of death for Radio One’s “News 92” KROI. Alfred Liggins calls it “a valiant effort, and we tried hard...but we couldn’t get any significant ratings traction” and reveals that “we were losing about $1.5 million a year” on it. So the replacement for all-news is a classic hip-hop format named “Boom,” and Liggins shares the spectacular first weekly Nielsen PPMs. KROI’s previous week as News 92 was a 0.9 with age 12+ AQH. But in the first full week of Boom, the topline shot up to a 4-share, and Liggins says “we ranked #6 with 25-54 adults.” Not only that, Boom will be far less expensive to operate than a news operation. Radio One’s other misery in Houston began in January, when iHeart attacked Radio One’s vaunted urban AC “Majic 102” KMJQ and urban “97.9 The Box” KBXX. iHeart’s challenger is urban “93.7 the Beat” KQBT, and now with Majic, the Box and Boom lined up, Radio One feels better able to defend its position. Liggins predicts “a big win” with Boom. In the October Nielsen age 6+ PPMs, KMJQ ranked #1 with a 6.9 share, the Box was tied for #3 with a 5.9, and iHeart’s “Beat” was tied for tenth with a 4.1 share, in a market that Nielsen says is 17% African-American.
“We feel that we’ve bottomed out, and are coming out of this trough.”
Radio One says fourth-quarter pacings for radio are now just “minus 1.6%,” compared to the minus 8% for the recent third quarter. Detroit, Charlotte and Philadelphia are strong, helping to compensate for softness in Washington and Baltimore. Alfred Liggins says “the ratings and pacings are starting to improve in places like Atlanta.” But some of the Miller Kaplans are troubling – the overall Atlanta radio market was down 10.4% for the third quarter. D.C. decreased 7.1% and Baltimore dropped 4.1%. Liggins tells his call there’s “no single reason” for the market-by-market softness. To break it down for Radio One, CFO Peter Thompson says local was off 12.7% and national slipped 7%. The month of October was flat, November’s pacing down 5% and December’s pacing up about 1.6%. Interestingly, the digital Interactive One saw weaker revenues, though tight expense controls made the EBITDA look better. None of the analysts asked about digital, but most companies see it as an important vehicle for growth. The Reach Media syndication unit that includes Tom Joyner didn’t have a great quarter, but Liggins is confident that it’s “gonna rebound big going into 2015.”
A disappointing finish for political revenue, at Radio One.
Management didn’t specifically use the word “disappointing,” but check the numbers. They did $900,000 in political for this year’s second quarter – but just $507,000 in third quarter, mostly in Michigan and North Carolina. You’d expect the momentum for political spending to build in Q3, but it dissipated. As we’ve seen over and over with these CEO calls, political is all about having competitive races, and there were fewer of them than most people expected. North Carolina cooked up a spirited Senate race between Democratic incumbent Kay Hagan and Republican challenger Thom Tillis, and that helped Radio One in Charlotte and Raleigh. But overall, Radio One’s third quarter political take was actually less than in the last mid-term election year of 2010. Radio One stations took $584,000 of political then, versus $507,000 this time.
What’s happening with revenue shifts in radio’s largest markets?
Radio One’s Alfred Liggins tells Deutsche Bank analyst Aaron Watts that “if you’re going to spend more money in digital, you’re probably going to focus on making those shifts in a larger market first,” before you get to Charlotte. But he qualifies that and notes that the Houston radio market was flat, which makes it look pretty strong right now. Whatever digital shift might be happening elsewhere isn’t as much a factor in Houston. On Tuesday, Alfred met with the CEO of giant buying agency GroupM, and quizzed him about the surprising drop in cable upfront ad sales. Is that a function of money flowing to digital video and other platforms? The GroupM exec thinks “that’s a little bit of it, but not the vast majority of the driver…people are just being more cautious, sitting on the sidelines.”
Radio One has some hoops to jump through on the balance sheet.
Alfred Liggins says “we bought ourselves some relief” several years ago on what are called covenant ratios with lenders. Now it’s time to pay the piper. CFO Peter Thompson says the stepdowns – drops in the maximum permissible leverage ratios – are occurring quickly now. They drop from 8-times to 7.5-times and “then a full turn” early next year, so that 6.5-times will be the benchmark. You can expect more cost-cutting at radio, and taking some more dividends out of the TV One cable operation. The company believes that radio will improve, because the next stepdown is just a year away, to 6-times. But by then, Radio One hopes to “refinance out of that” with a new credit facility. Also very much on the mind of CEO Liggins and CFO Thompson is the TV One situation with longtime partner Comcast. There’s a “jump ball” provision where either party can buy out the other if they choose. Although Liggins doesn’t come out and say it, he’d much prefer to buy back the Comcast interest. He tells the call there are various creative ways to finance that, even given this recent disappointing quarter. And he’d rather not do it with his own Radio One stock, which isn’t at its most robust levels. After taking in all of yesterday’s numbers, Wall Street pounded the “ROIA” stock. It fell 18% yesterday, down 40 cents to $1.80 a share – its lowest finish since Spring 2013.
Radio One positions its failed “News 92” in a recent line of non-successes for the format.
Alfred Liggins says “that’s the history of these all-news FMs…a great idea, but in practice, it really hasn’t proven out to be a winner.” You may not agree with Alfred’s opinion, but the failure of Houston’s “News 92” KROI will probably deter other groups from considering all-news too seriously, when contemplating a format change. Liggins mentions the Merlin attempts at the format in New York, Chicago and Philadelphia, and those are all gone. But he lumps in the CBS-owned WNEW (99.1) that’s based in Washington DC and has recently started pointing more toward Maryland. Also Cumulus Media’s Atlanta-market news/talk WYAY (106.7). CBS and Cumulus would no doubt disagree with Liggins’ judgment about their track record with newer conversions. Meanwhile, the older generation of all-news outlets built and sustained mostly by Group W and CBS over the years continues to churn out revenue and cash flow.
Jeff Wilks and The Wicks Group sell their Fresno stations to One Putt.
Wicks Group-backed Wilks Broadcasting bought three FMs in Fresno back in early 2005 for the very pre-Recession price of $25 million. No price announced on this re-sale, nearly a decade later, but we'll do the comparison when the deal's at the Commission. The result is more consolidation in Fresno, with One Putt (the new combination of in-market players John Ostlund and Chris Pacheco) adding these three FMs – classic rock “95.7 the Fox” KJFX, a Class B. Alternative “New Rock 104.1” KFRR, a B licensed to Woodlake. And all-sports “105.5 the Game” KJZN, a B1 licensed to San Joaquin. One Putt is a venture of Ostlund’s JSA Broadcasting (AC “99.3 Jewel FM” KJWL, sports “ESPN 940” KFIG) and Pacheco’s Fat Dawgs 7 LLC (sports “790 the Deuce” KFPT and “Oldies 1430” KYNO). Wicks and Wilks recently closed on the $105.5 million sale of their Kansas City cluster to Steel City.
Tampa morning show producer loses his baby daughter in a traffic accident.
She was just six weeks old when she was hit by a car as her mom and her five-year-old brother were crossing a street, says TampaBay.com. The accident was Monday and the baby died yesterday. Her mom and brother are still in the hospital – while the extended family around Cox-owned talker “102.5 the Bone” WHPT is figuring out ways to assist. The producer works on Mike Calta’s morning show, and there’s a “support fund for [producer] Rob Gargulio’s family” here.
Is CBS planning to buy something? It just quietly filed an extensive “shelf offering” at the Securities and Exchange Commission that could be activated any time over the next three years, allowing it to quickly raise money from the sale of debt and/or stock. As usual with these things, the company is vague about why it would need all this extra cash, on short notice. The hodgepodge of financial instruments included issues of senior debt, senior subordinated debt, preferred stock, common stock (the stuff you can buy as “CBS”), Class B non-voting stock, plus warrants and guarantees. Read the prospectus here.
Spanish Broadcasting System is the last publicly-traded company to report its Q3, and in fact it’s the last to even announce when it would release numbers. We’ll see them late tomorrow afternoon, with management commenting on a Monday call. From the Rumor Mill – have there been recent layoffs at Miami-based SBS?
After endless speculation, YouTube will launch its own “Music Key” subscription service next week, says Julia Boorstin at CNBC. For the industry’s benchmark price of $9.99 a month, you get music with no commercials, music videos (natch) and what Boorstin calls “the ability to listen offline as well as online.” Google-owned YouTube will start with an invitation-only phase where you’d receive the first six months for free, then pay just $6.99 a month for a while. Your standard $9.99 a month also provides access to Google Play Music. Julia asks a pointed question – “People are used to YouTube being free…will they want to pay?”
“Pandora founder’s plans for 17-bedroom, 14-bath home jangles Marin neighbors,” according to the Marin Independent Journal. But if you could afford a place that includes a “meditation hut,” lap pool, separate caretaker apartment and two separate garages, why not? Tim Westergren was one of the founders of the company today known as Pandora. When it went public in June 2011, it made insiders like Tim and their backers a lot of money. In 2008, Tim had bought St. Eugene’s Hermitage, a former Russian Orthodox monastery, last year he reassured the neighbors that “our program [of dwelling] will be light on the land, and sustainably designed and built.” But the Marin paper says “judging by the many letters of opposition, most residents are aghast at the size of the project.”
There’s now an “Art Laboe Control Room” at the Museum of Broadcast Communications in Chicago. That honors the Southern California personality/entrepreneur who embodies (and heck, owns) "oldies but goodies." The act of generosity by Laboe was revealed by Bruce Dumont at Sunday’s National Radio Hall of Fame ceremony in Los Angeles. Don Barrett’s LARadio.com site has pics of the studio, which can be used by visiting radio hosts and students, as well as the induction ceremony itself, here.
“What does Sprint’s unlimited data plan say about NextRadio?” Mark Ramsey believes radio hasn’t paid enough attention to the latest strategy of Sprint, its lone wireless partner (so far) in the NextRadio/FM chip initiative. Sprint last month announced it was matching the unlimited-data plans innovated by T-Mobile, and researcher Ramsey says that “means that Sprint has calculated that they have more to gain by making what consumers want – unlimited data – more affordable than by emphasizing consumers’ ability to route around data caps” with an activated FM chip. More from Ramsey here.
Howie Carr is “done at WRKO,” per the Boston Globe. His contract with Entercom’s Boston talker WRKO (680) just expired, and the company tells the Globe that Howie’s last show was Friday, November 7. What’s next? The Globe hears he’s been talking with a smaller station in the market, but the rival he tried to jump to back in 2007 – Greater Media’s then-talk WTKK (96.9) – no longer exists. Entercom and Greater Media waged a tense legal battle over Carr’s services, which resulted in him (very grumpily) staying at WRKO. 96.9 is now rhythmic AC WBQT.
John B. Wells is demonstrating what ambitious personalities can achieve with the tools of 2014. In January, his weekend-hosting deal with Premiere’s Coast to Coast ended and in February he debuted his own three-hour daily “Caravan to Midnight” – as an online/app-based subscription affair. He says “not only has my audience followed me, but it continues to increase.” The next step is adding terrestrial radio, with Entercom’s talk WRKO Boston picking up “Caravan” for Saturday nights. Using John’s own Dallas-based C2M Network as a vehicle, he’s making Caravan available to other stations for use Monday-through-Friday, in any daypart. What’s the show like? C2M says Wells “expertly interviews high-profile guests who bring credible, frightening, entertaining and insightful perspectives” – the kind of territory he once explored for the late-night Coast To Coast. Former CBS Radio ad executive David Rubini is handling operations for C2M. He and Wells are scouting for additional talent.
Sam Bourquin trades himself to a different team in Northern Ohio and there’s a lot of that going on, right now. Sam’s moving from Digity’s talk-and-sports WHBC (1480) in Canton to Rubber City Radio’s talk WAKR in Akron (1590). He’ll host afternoons and bring along plenty of name recognition, from doing play-by-play for football, basketball, baseball, softball, and the PA announcing chores for the annual NFL Hall of Fame Game in Canton – very near where he grew up. Thom Mandel is president/GM of the Rubber City Radio Group, and there’s more from the station here.
How do you spell that? Mike Shannon says while he was at South Bend's WRBR, "A woman called the request line and asked for our address to send a letter. She then said, 'How do you spell WRBR?' I replied WRBR. She said, 'Yes, how do you spell it?' I again replied, WRBR, and she said 'NO, how do you spell it?' I replied 'Double u are be are.' You guessed it, a few days later, this woman's letter arrived with that on the front." Mike's now the GM, program director and morning host at "Stars 99.3" WBED-LP in Bedford, Indiana. Ready to share your own true story about radio? Email “You Can’t Make This Up” – Tom@RTK-Media.com.
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