iHeart – “There are three huge reach mediums in the U.S…And we’re the biggest.”

Bigger than Facebook or Google, claims iHeart President/COO/CFO Rich Bressler on yesterday’s fourth-quarter call. We’ve talked here about iHeart’s sense of exceptionalism, and the company truly believes it’s pulling away from the rest of the radio industry, by “transforming” itself into a large multimedia platform. To Bressler, 250 million Americans reached by iHeart and Clear Channel Outdoor make it bigger than TV – especially with younger listeners. Rich even says that TV is no longer “the reach medium,” since he says 1-in-4 Millennials don’t watch broadcast TV, and the fraction is more like 1-in-2 for 15-24 year olds. But as well as iHeart’s doing – industry-leading radio results, which we’ll get to – Bressler says “we continue to be significantly under-monetizing,” compared to the ratings. He’s happy about the increasing ratings, and also about sales initiatives like programmatic buying. iHeart’s a believer in that. Also in the Triton Digital measurement that’s available to agencies in Mediaocean and Strata. That “makes buying us as easy as the leading digital players,” says the multi-titled exec.

Or as iHeart’s Rich Bressler also tells analysts, “Consumers and advertisers are coming to regard broadcast and digital radio as the same thing.” He maintains that “broadcast radio is still our core.” But they’re intent on becoming a “multi-platform, digitally-savvy” media company that uses “the power of sound, the power of outdoor, the power of social media,” and more. Another reason that Bressler’s optimistic about iHeart’s reach – the more favorable webcasting rates from the Copyright Royalty Board that took effect in January. He says they’re “reducing our per-play rate by 32%” and “will encourage the growth of digital streaming” and create “a more sustainable marketplace.” He says his company will invest more in streaming and that “will benefit the entire music industry.”

If you exclude political revenues from a last-year/this-year Q4 comparison, iHeart’s radio revenues would’ve jumped 8%. Other radio operators have looked enviously at iHeart’s recent swell in national revenue, and probably wonder what’s going on inside iHeart-owned rep firm Katz. But the company also reports “increases in core local revenue” and digital, as well as growth in the networks division. (Rich Bressler singles out “increased performance” in the news/talk division of Premiere.) iHeart says it has “substantially outpaced the radio market, as measured by Miller Kaplan.” Strongest ad categories for Q4 were automotive, financial services, entertainment and food & beverages. Total revenues for Q4 improved from $854.3 million to nearly $899 million, up 5.2%. Operating expenses grew about the same, up 5.3%. What iHeart calls OIBDAN (a measure of cash flow inherited from the Mays-run Clear Channel) grew 5.1% to about $373.2 million. This current first quarter is pacing up 4.6% - and management predicts that “we will continue to see margin improvement. That’s a top priority.”

The company’s debt has never loomed higher, and they’re busy gnawing away on the short-term and medium-term questions of handling it. But no matter how proud management is about the operating results and its “transformation” into a 21st-century media titan, there’s that debt to ponder. A year ago the secured leverage ratio for iHeart Communications was 6.3-times. At the end of 2015 – 6.5-times. At Clear Channel Outdoor Holdings, the leverage widened from 6.4-times to 7.2-times. iHeart faces $197 million in debt maturities this year, $238 million in 2017 – and a whopping $939 million in 2018. Analysts are reminded by management of the 2014 sale of a 50% stake in Australian Radio Network, which brought in $220 million. And the sale of many broadcast tower assets to Vertical Bridge for an eventual $400 million or so. There are also profitable interactions from publicly-traded Clear Channel Outdoor, of which iHeartMedia owns about 90%. And short-term tactics like borrowing another $40 million from the “Receivables-based credit facility.” And raising $225 million in new senior notes sold by an international subsidiary that pay a hefty interest rate of 8.75%. Rolling together all of iHeart, including radio and outdoor and adjusting for foreign exchange rates, revenue grew 3% to $1.8 billion. But on an “as-reported” basis, revenues were flat. iHeart very helpfully posted its presentation online, and the slide deck is here.

With yesterday’s Digity closing, Alpha claims the mantle of “Fourth-largest company by station count.”

It’s now at 249 stations. Alpha Media also figures it’s become “the third-largest broadcast company in terms of market count.” It’s in 53 markets. Yes, the $264 million deal announced last August and filed in October crossed the finish line yesterday. Larry Wilson’s happy about all 116 new stations, from those in the largest markets of San Jose and West Palm to those in “Mason City, Iowa and Myrtle Beach, serving not only their town, but surrounding areas and communities.” Wilson gives a shout-out to Dean Goodman, principal of Digity, and Dean (possibly the possessor of the deepest radio voice among all group heads) acknowledges Alpha’s management team. That’s Larry Wilson, CFO Donna Heffner and President/CEO Bob Proffitt – the same management group that built and led the former Citadel. Deal credits on Alpha-Digity go to RBC Capital and Cooley LLP, financial advisor and transaction/regulatory counsel to Digity, respectively. And to broker George Reed of Media Services Group, for buyer Alpha.

Hard to tell if this is an iHeart corporate thing, but – The Times Union says “WGY has begun an online petition to oppose the changes” proposed as part of the FCC’s AM revitalization. The Commission wants to clip the contours of Class A AM stations like WGY Schenectady (a pioneering station originally owned by General Electric). The goal would be to let other stations expand their signals, to combat the increasing noise floor for AM and serve the communities that have grown up outside the contours of AM signals licensed in the 1940s, 1950s and even later. WGY’s asking listeners to help it “Save AM Radio” – and preserve the mission of stations like WGY, to serve large areas (especially at night). WGY asks fans to “let the FCC know you do not want to lose access to WGY’s programming at night.” Read its petition here.

Radio One’s working to fix its “poor performance” in radio, says its CEO.

At the top of yesterday’s Q4 call, CEO Alfred Liggins says “a large amount of that [shortfall] was ratings-related.” Later he admitted that “we’re not doing a good job, right now” in radio. Liggins is probably radio’s most unfiltered CEO, and while his candor makes some analysts shake their heads, it’s also refreshing. When he talks about “poor performance,” he means the basic mission of getting ratings, followed by revenues. Houston’s the biggest problem, followed by Atlanta and Indianapolis. (Alfred says “Washington is doing fantastic.”) Overall, Alfred tells yesterday’s Q4 call that 2015 was “a year we’re proud of” – particularly because the TV One cable business is more than pulling its weight, at a time when radio and the newer interactive business are both soft. How soft? CFO Peter Thompson says local radio revs in fourth quarter were off 8%, and national was down 6.2%. In the Miller Kaplan-surveyed markets where Radio One operates, the overall radio markets were down an average 2%. Radio One was down 7.3%. Category-wise, Automotive was up 13%. But Government (including political) was off 17% and Entertainment was down 16%. Telcom was flat. Putting it all together, Radio One’s radio revs declined 5.2% for the quarter. For this current quarter, Alfred says “radio continues to struggle, but it’s really about Houston.” He doesn’t mention last year’s management change, but his longtime Houston manager Doug Abernethy left and eventually surfaced as Entercom’s manager in Miami. Radio One did mention another kind of people issue –

Radio One CEO Alfred Liggins says the ratings have improved in some key markets, but they’re “down a number of account executives, across the company.” So they’ve been slow to monetize the improvements. He admits that “we got caught flat-footed” in some cases. Pulling back the focus, he does some education for analysts – “As the industry has matured, it has become more difficult to recruit folks into the business” in the area of sales. He says “It’s still absolutely possible to recruit good talent,” but it’s “not as free-flowing” as it once was. For Radio One, “what I need to stop from going down is the topline,” and that requires feet on the street. At Radio One’s majority-owned Reach Media syndication unit, fourth quarter revenues were up 1.3%, and expenses were 8.3% lower. Interactive revenues dropped about 12%, due to an expiring deal with the Monster recruitment site. They’re working hard on cutting expenses (operating expenses down 0.6% for the quarter).

That would be joining a long list of radio groups (like iHeart) who know the multiples for towers are literally twice what they are for stations. Looks like they’re expecting as much as $25 million in proceeds from that maneuver, and they’d probably park the cash in the piggy bank for now. One factor about selling tower real estate is how much the company would have to pay to lease it back. Another revenue contributor here in 2016 is political and issue advertising. Alfred Liggins says “We’re loving the tight Hillary Clinton-Bernie Sanders matchup.” On the Republican side, he quotes Donald Trump’s line about Hispanics and African-Americans loving him. Liggins’ take is that “Trump probably resonates more with a black audience than Mitt Romney” did in 2012. He predicts it’s “going to be a fight for our audience,” all the way to the November general election. Alfred says “I hope we benefit from that.” On a conference call that kept extending itself, Liggins took a swipe at Pandora, admitting that “they’re a competitor and they hurt our business. But if they can never really make any money, that competition’s going to subside.” Radio One’s company net loss for Q4 was $24.3 million, equivalent to 50 cents a share. That’s higher than the year-previous $13.5 million loss (28 cents a share). The very thinly-traded Radio One stock (“ROIA”) lost 15% yesterday, down 23 cents to $1.24.

• Let’s flip the usual “Radio has 93% reach” message, and say that only 6% to 7% of Americans aren’t reached every week by radio. That level holds across persons 12+, 18-49 and 25-54. A reminder that the yardstick in this takeout from Nielsen’s new “Audio Today: Radio 2016” report is weekly reach, not time-spent-listening. The 18-page pdf has sections on network radio, audience composition by generations (Millennials, Gen X, Boomers), Hispanics, African-Americans, “top-rated hours” and much more. Read the Nielsen report card called “Radio appealing far and wide” here.

• “Don’t sleep on weekends, when considering radio listening.” Radio’s ability to reach out-of-home listeners helps make it a reliable vehicle for advertisers to use in weekday drivetimes, says Nielsen. The morning drive (6am-10am) weekly reach for 25-54s is 73%, and it’s about 65%-66% for both 18-34s and those 55+. PM drive reach is even larger – 80% for persons 25-54, 75% for 18-34s and 70% for 55+. And here’s the weekend figure that Nielsen highlights – 76% of persons 25-54 are reached on Saturday/Sunday, and then an identical 72% reach for 18-34 and 55-plus. Again, we’re talking only about reach, not time spent listening. See the Nielsen dispatch (“Don’t sleep on weekends”) here.

• Nielsen reveals “American’s top formats in 2015,” and the list begins in Nashville (so to speak) with country at a 14.4% share of total listening. Most-heard song in the format last year – “Homegrown” by Zac Brown Band. #2 format with 10.7% is what Nielsen clumps together as News/Talk. #3 format at 8.0% is Pop CHR (“Uptown Funk” was the most-heard song). #4 is AC at 7.6% (Ed Sheeran’s “Thinking Out Loud”). #5 is Classic Rock (Aerosmith’s “Sweet Emotion”). The rest of the top ten – Hot AC, Classic hits, Urban AC and tied at #9, Contemporary Christian and Urban Contemporary. All-sports was right behind in #11, just 0.1 of share from CCM and Urban AC. Nielsen keeps you hip with lists of top-ten radio airplay and digital song sales (“Uptown Funk” tops both charts) and on-demand streams (“Trap Queen” by Fetty Wap).

A “Dear Licensee” letter dated February 24 is not what you want to receive from the FCC. That means the station’s been randomly selected as part of the 5% of radio/TV licensees who must fill out an EEO audit. If the station’s been maintaining good records all along, it shouldn’t be a big hassle, but it will take time. This is for “employment units” with five or more full-time employees, and the list of licensees selected goes from “A” (A.W.A.R.E. Inc. in Montana and AMFM Radio licenses – iHeart) to “Z” (Zimmer Radio of Mid-Missouri and Zoe Communications of Wisconsin). Read the FCC Public Notice about the first wave of 2016 EEO audits here. See which licensees are getting letters here.

CBS Radio gets more from Brooklyn’s Barclays Center than just the NBA Nets. Renewing with all-sports “Fan” WFAN-AM/FM (660/101.9) connects what CBS calls “other parts of the business at Barclays Center, including college basketball games under the Brooklyn Hoops-presented-by-Ticketmaster franchise, and joint-programmed concerts and live events.” Past non-sports events at the Barclays Center included “WFAN’s Big Hello to Brooklyn” – with the Red Hot Chili Peppers - and “WCBS-FM presents Smokey Robinson.” To CBS President Andre Fernandez, the Barclays Center/Nets renewal is part of making “aggressive investments in exclusive content our audiences can’t find anywhere else.”

America’s Broadcaster Traffic Consortium crosses the border into Canada, to help implement “the first in-vehicle HD Radio traffic service” in that country. Drivers can “view detailed information on local traffic conditions in real time on their vehicle’s audio display screen.” The data is transmitted using HD Radio subchannels from local stations. And we get an insight into why Canada finally went with the iBiquity-developed HD Radio standard, after dallying with the European out-of-band DAB. Honda’s the first automaker to join up. The Consortium (“BTC”) says it’s already covering The Greater Toronto and Hamilton Area in Ontario, plus Vancouver and Calgary. BTC President Paul Brenner says they’re working in conjunction with “HERE,” a mapping and location technology company with ownership by various carmakers.

Longtime NAB leader Eddie Fritts to be honored by the Broadcasters Foundation at the April NAB Show in Las Vegas. Several years ago the Foundation established the “Lowry Mays Excellence in Broadcasting Award,” and Lowry was certainly a partner with the Clear Channel co-founder in creating today’s radio industry. Fritts was president/CEO of the NAB for 23 years, from 1983 to 2006. Eddie’s always been a powerful speaker, and his remarks at the Wednesday, April 20 breakfast at the Encore Hotel should carry some weight. It’s a free breakfast, underwritten by Magid Associates, the National Association of Media Brokers, Nielsen, the TVB, the RAB and the NAB. Reserve a seat with an email to Info@theBofA.org or by calling 212-373-8250.

Milwaukee’s WLDB drops the “Trending Radio” handle and hot AC approach, reverting to the previous AC format and “B93.3” name. New slogan is “the 80s to Today,” and the Milwaukee Radio Alliance station’s website is here. As hot AC “Trending Radio,” the ratings didn’t budge much – from a 3.3 share in the September-book Nielsen PPMs (age 6+ AQH share, total week) up to a 3.7 in November, to a 2.9 in the Holiday book, and a 3.2 in January. Milwaukee Radio Alliance was being run by Bill Hurwitz when it raised the volume to hot AC (April 3, 2015 NOW). He was succeeded by Steve Kosbau when he retired from the Milwaukee group later in 2015. (Though Bill un-retired just before Christmas as the new head of the All-Pro Broadcasting stations in Riverside-San Bernardino. All-Pro is a partner in the Milwaukee Radio Alliance.)

In Colorado Springs, there’s a new “Mountain Country” on a recently-wedded AM/translator combo. This follows last year’s purchase of the two signals by Mountain Radio Group, and it brings the AM back to life. It’s at 1530 AM and was KCMN when previous owner Vic Michael bought it and paired it with a translator. He renamed the AM KKHI, then sold it plus the translator to Mountain Radio Group for $200,000. Now the AM’s on the air as KQSC. Follow the bouncing ball on translator K294CH – it’s recently gone from 106.7/Divide, Colorado to a construction permit for 107.3 Fountain, Colorado, and now an app for 107.3 Colorado Springs. Radio Insight has the introduction of the “Mountain Country” format, and says the musical flavor is “traditional country” and some Red Dirt country. Radio Insight adds that Mountain Radio principal David West “previously spent 11 years overseeing Air Force Academy’s cadet-run ‘97.7 KAFA’ and ten years on-air for Jones Radio Networks.”

“The 90s to Now” is the positioner for a format alteration in Halifax, Nova Scotia. Until August 2013, Newcap featured classic hits on CKUL as “Kool 96.5.” Then they switched it to adult alternative as “Radio 96.5.” After 2-1/2 years of that, Radio Insight says Newcap changes the format again, to hot AC, as “Mix 96.5.” The Facebook page says, “Yup, the music is better now.”

That $10 million sale of Houston non-com “Classical 91.7” KUHA/91.7 is all-cash. You read the ten-million dollar price here yesterday, and here are the very simple terms - cash-at-closing. It suggests that buyer KSBJ Educational Foundation has been saving up its pennies for the day when (as its president/CEO Tim McDermott says) they could buy a significant Houston signal for the Christian hip-hop/rock “NGEN” service. This being Texas, the sale document also gets very fussy about who has the oil and mineral rights underneath the real estate of the tower. Along with KUHA, KSBJ also gets 99-watt Houston translator K217GB at 91.3. Seller Houston Public Media, part of the University of Houston system, bought then-KTRU/91.7 from Rice University in 2010 for $9.5 million, and will make some money selling the station it turned into “Classical 91.7.” The Bach, Beethoven and Brahms will now be available on the HD2 signal of Houston Public Media’s news/talk KUHF/88.7. Brokers on the sale of 91.7 – Greg Guy of Patrick Communications and Scott Knoblauch. Pubradio blogger Ken Mills fills in the portrait of the buyer – from its tax filings for 2013, KSBJ had revenue of $8,768,000 and expenses of $8,007,000. But Ken says “KSBJ also operates a separate 501(c)(3) for its concert business, called KSBJ Special Events.” It reported $1,787,000 in revenue. Behind that, there’s “Ticket Servant,” which handles ticketing for KSBJ Special Events. It had 2013 revenue of $329,800. Add it all up and the 2013 revenue for this not-for-profit approached $11 million.

KQLZ is staying in New England – the North Dakota town named “New England.” This $70,000 sale of an FM should clear up a number of problems, including a stillborn community-of-license swap between the unrelated KQLZ/95.7 and KLTQ (at 97.9 or maybe 98.1). The swap never happened, and the parties tell the FCC that “while KLTQ is listed in the Consolidated Database as having New England as its community of license, and KQLZ as having Beulah as its city of license, in fact” it’s the reverse. The FCC granted construction permit apps to exchange cities of license, but they “were never implemented.” The parties will file to “undo the construction permits.” There’s also the woeful engineering history of KQLZ, the subject of last year’s request for Special Temporary Authority to remain silent. It pleaded that “As a result of a very hard winter in North Dakota, the supporting structure for KQLZ has become unstable.” The upshot? The owner of KLTQ (Steven A. Marks’ Dickinson-Belfield Broadcasting) is buying KQLZ from Synergy Broadcast North Dakota (Todd Mohr). Terms are $30,000 cash, and the balance of $40,000 in 30 monthly payments.

“When you can speak well of someone who fired you…” – Jay Walker, a Texas-based broadcast engineer and audio consultant, is talking about Ric Lippincott, who just died of pancreatic cancer. Jay says “Back when I was actively pursuing a major market job, Ric was on my ‘A list’ of weekly aircheck recipients. I usually felt lucky to even get form rejection letters, but Ric was one of the rare PDs who took the time to add additional comments and critiques in the margin, giving me encouragement and direction. Especially when he'd say ‘I look forward to your next package.’ It meant a lot. Since program directors networked, due to the old 'heard any good jocks?' query, I eventually was offered a job in Chicago. Thanks to Ric, I had the privilege of working at my 'dream' station. Later, Ric also fired me. As it sometimes goes in radio, Ric did not renew my contract, but it was business. I never took it personally, and I enjoyed keeping in touch years later. Ric was one of the good ones.” There’s a celebration of life for Ric Lippincott this Sunday, February 28 at the 94th Aero Squadron Restaurant in Van Nuys, California. That would’ve been meaningful to former Chicago and San Francisco PD Ric – he was also a commercial pilot. Ready to share your own story about being hired or fired? Email “You Can’t Make This Up” – Tom@RTK-Media.com.

"I love your email - it's a must-read every morning,” says Rob Walker, Alpha Media’s of Programming and Operations for Savannah-Hilton Head. Thanks for the vote of confidence, Rob – we’ll try to keep earning it, every day. Want to reach the slightly-addicted readers of this NOW Newsletter, with your company’s marketing message? Your contact is our Kristy Scott. She’s at Kristy@RTK-media.com or phone 818-591-6815. See you back first thing Monday morning - Tom