NAB Board Made the Right Call on Dereg

By Ed Levine, Paul Stone, and George Reed

Much has been written in the radio trades over the last week regarding the NAB Radio Board vote in favor of recommending to the FCC an update of its radio ownership rules. We’d like to give you our take.

Some in our business think the NAB board went too far in calling for significant relaxation of the rules; others think the board did not go far enough, arguing that for broadcasters to be competitive with our totally unregulated digital competitors, radio needs complete elimination of any ownership restrictions.

You can count us — as small- and medium-market radio station owners dedicated to localism and delivering great radio to our listeners — as strong supporters of the NAB Board recommendation. You can quibble over details of the specific board recommendation. But we say hats off to the NAB Board for facing down a tough issue, and for taking bold action that will allow radio operators the opportunity to achieve the scale needed to endure and thrive in the digital world of today.

The reality is this: radio ownership rules have remained unchanged for 22 years. Forget whether the consolidation ushered in by the 1996 Telecom Act was good or bad for listeners. What is undeniable is that the world has changed dramatically since 1996, and regulations on our business need to evolve with the times.

Radio faces challenges today that would have been unimaginable 22 years ago — or even five years ago. The competition for listeners — whether it’s from YouTube or Sirius/XM or Pandora or Spotify — is intense. And it’s growing. Moreover, we aren’t competing for advertising dollars just from radio stations across the street or even across state boundaries. Collectively, we’re losing ad business by the billions to digital companies like Google and Facebook. Case in point: BIA Kelsey analyzed the Syracuse market last year and found the following: Google, Facebook, and Bing combined exceeded the local advertising market of all the local Syracuse radio stations ($40.5 million to $32.5 million).

That’s not just an upstate New York problem; that’s a problem facing every radio station owner across America, and it’s only going to get worse. Digital platforms like Google and Facebook are unregulated business models hell-bent on eating local broadcasting’s ad-dollar lunch. And they could care less about FCC mandates of serving localism and the public’s “interest, convenience and necessity.”

As we see it, the NAB Radio Board faced two options: Option 1 was to bury its collective head in the sand and ignore a tsunami. Option 2 was to address the issue honestly, forthrightly, and directly, and present to Chairman Pai and his FCC colleagues some ideas that will keep free and local radio alive for our millions of listeners for decades to come. We think the NAB Radio Board chose the right option.

Ed Levine is President and CEO of Syracuse-based Galaxy Media, LLC, which owns 14 radio stations in Syracuse, Utica, and Rome, NY; Paul Stone is President of Southern Broadcasting Companies, which owns 33 radio stations in Virginia, Florida, Georgia, Alabama, and Tennessee; and George Reed is co-owner of Monticello Media, which owns six stations in Charlottesville, VA, and co-founder of Media Services Group, a brokerage firm.

Alpha Media Sells Two Virginia Radio Stations to Educational Media Foundation (Press Release)

Educational Media Foundation (EMF) has entered into an agreement to acquire WLFV-FM in Midlothian, VA and WARV-FM in Petersburg, VA, serving Richmond, VA from Alpha Media.

The purchase price is $2,000,000.*

George Reed of Media Services Group represented the Seller in this transaction.

Salina Radio Stations Acquired by Rocking M Media, LLC. (Press Release)

Salina, KS: (Wednesday, October 12, 2016) Alpha Media LLC and Rocking M Media, LLC announced today their formal filing with the Federal Communications Commission to transfer five of Alpha Media’s radio stations in Salina, Abilene and Manhattan Kansas to Rocking M Media.
The radio stations to be transferred are; KSAL-AM 1150; KSAL-FM 104.9; KABI-AM 1560; KYEZ-FM 93.7 and KBLS-FM 102.5.

Alpha Media CEO/President, Bob Proffitt commented on the announcement, “We’re happy for our employees in Salina to be joining such a great company. Rocking M Media is a strong force in Kansas radio and media.”

Rocking M Media President, Christopher Miller added, “RMM is so very excited to add the Alpha Media staff and stations to our family. They will be a great addition and will be instrumental in helping RMM promote the businesses and communities in and around our Salina and Abilene markets.”

Alpha Media was represented by George Reed of Media Services Group and Rocking M Media was represented by Gammon Miller media investment bankers.

About Alpha Media
Alpha Media, headquartered in Portland, Oregon was formed by veteran radio executive, Larry Wilson in August 2009 and initially acquired six Portland radio stations. After several acquisitions and this transaction, Alpha Media will own or operate 246 radio stations within 50 markets across the United States covering all formats including Top 40, Adult Contemporary, Spanish, Urban, News Talk, Sports, Rock, Country and more. In addition to the radio stations, Alpha Media owns the intimate performance venues, Skype Live Studio in Portland Oregon and Alamo Lounge in San Antonio, Texas. 

About Rocking M Media
In 2007 the Miller family established what has become known as Rocking M Media, LLC (RMM) as a business development company. The RMM group of 24 radio stations covers all of Central and Western Kansas and parts of Nebraska, Colorado, Oklahoma, Texas and Wyoming.
The principals of RMM are Monte and Doris Miller and their sons Christopher Miller and Quinn Miller and Christopher’s son Cale Miller. The Miller family has been developing businesses in Kansas for more than 100 years. They have owned newspapers, television stations and now radio stations. Monte Miller’s grandfather was A.Q. Miller, from Salina Kansas and he started the family media business with owning newspapers in Kansas and Colorado in the 1890’s. The Journalism School at Kansas State University is named The A.Q. Miller Family School of Journalism and Mass Communications.

As a business development company RMM focuses on the needs of entrepreneurs and business owners in its radio markets; by offering incubator office space with business training, radio advertising, digital media, social media and raising capital with its crowd funding site RuralGrowth.com.

RMM is as entrepreneurial as its clients and has launched other businesses that complement the RMM platform like; TodayInKansas.com a news portal that has its own radio network that broadcasts three Kansas news reports daily on 27 radio stations in Kansas, the Kansas Farm and Ranch Radio network the largest Ag radio network in the state, Wheat State Signs a sign company in Pratt, KS, KANBids.com an online auction site with auctions every two weeks where RMM sells local services and merchandise from its radio station advertisers. 

WVJT, LLC To Purchase WVMP-FM From Community Media Group, LLC (Press Release)

WVJT, LLC has entered into an agreement* to purchase WVMP (FM) in Roanoke, VA, from Community Media Group, LLC. The buyer is headed by Todd Robinson, who owns radio stations in Lynchburg, Bedford, Covington, Clifton Forge and Lewisburg West Virginia. The seller is headed by Dr. William E. Amos, who holds no other broadcast interests, but will become a shareholder of Community Media Group upon the closing of the transaction. WVMP will continue to be located at the Patrick Henry Hotel. 

WVJT, LLC began operating WVMP on August 1, 2016, under a local marketing agreement. According to Todd Robinson, "Our group is excited to become a part of such a wonderful community (Roanoke area) and look forward to continuing and expanding the fine broadcast services started by Dr. Amos and his very capable staff." 

According to Dr. Amos, "My workload as CTO of Meridium and other software ventures has increased. This month we will release a new version of our software and I need to spend more time working with Meridium customers and project teams making the transition to the new product line. I'm excited to be a shareholder of Todd's company and will assist as required. Being a shareholder of the group was important to me continue to promote the local market." He went on to say, "I'm quite proud of the gains the station has made over the past eight months in terms of revenue and improved signal. It's good to leave the station on an up note. The entire staff has done a remarkable job and I can't wait to see the impact of WVMP being affiliated with a group that provides complete market coverage." 

The purchase price is $600,000. 

George Reed of Media Services Group represented the Seller in this transaction. 

*Pending FCC Approval 

Beasley Broadcast Group + Greater Media

Thoughts on the $240 million deal. Read them here. 

NJ Broadcasting, LLC Closes on WWRL-AM In New York City (Press Release)

NJ Broadcasting, LLC, owned by Dr. Nimisha Shukla, closed on the purchase of WWRL-AM, New York City, from Access.1 Communications Corp. Access.1 is headed by Chesley Maddox-Dorsey. The station has been operated by NJ Broadcasting under an LMA since February 1. The purchase price was $7,000,000. 

WWRL-AM, 1600 kHz, programs for the large South Asian Community located throughout the Tri-State Area. Dr. Shukla, a Pediatric Physician, also owns 7 Days Pediatrics, located in Edison, New Jersey.

Tom McKinley and George Reed of Media Services Group represented the seller in this transaction.

Media Services Group Tops the Rankings Again (Press Release)

Media Services Group maintains the top spot in the broadcast brokerage rankings for 2015.*

• #1, Top radio broker
• #1, Top broadcast broker by number of radio stations sold
• #1, Top broadcast broker by number of total deals
• #1 and #6, Top brokered deals (excluding deals exclusively brokered by investment banks)

About Media Services Group: 

Media Services Group was founded in 1990 and has grown into one of the most successful media brokerage firms in the past decade. The firm offers brokerage, asset management, valuation and investment banking services to the broadcast and new media industries from offices throughout the U.S. For more information, please visit www.mediaservicesgroup.com

*Source: SNL Kagan Broadcast Investor: Deals & Finance (Edition: February 29, 2016)

NJ Broadcasting, LLC Purchases WWRL-AM (Press Release)

Chesley Maddox-Dorsey, CEO, Access.1 Communications Corp. is pleased to announce the sale of WWRL-AM, New York City, to NJ Broadcasting, LLC for $7,000,000.*  NJ Broadcasting is owned by Dr. Nimisha Shukla and will operate the station under an LMA beginning February 1, 2016.  WWRL-AM, 1600 kHz, will provide programming for the large South Asian Community located throughout the Tri-State Area.   

Dr. Shukla, a Pediatric Physician, who also owns, 7 Days Pediatrics, located in Edison, New Jersey, is now able to fulfill a long term desire to provide a voice to the South Asian Community  through a premium broadcast media platform on a 24 hour,7 day basis.   

George Reed and Tom McKinley, Media Services Group, represented the seller in this transaction.

*Pending FCC Approval    

Great Radio article in Forbes

Doug Schoen is a political strategist often seen on the cable news shows.  He recently published an article on radio which merits a read.  Click here: Radio: The All-But-Forgotten Medium With The Biggest Reach.

George
Media Services Group

Radio on Twitter

If you're new to Twitter and interested in following the radio industry, here is quick-start. Twitter recently added a "Lists" feature which allows users to group micro-bloggers into category specific lists. So now you can follow an entire list by simply clicking on it from your Twitter account.

You can follow me at: http://twitter.com/georgereedradio

I have a list of FCC attorneys: http://twitter.com/GeorgeReedRadio/fcc-attorneys

Other radio/media related lists which might be of interest:

http://twitter.com/Tachman/radio

http://twitter.com/johnschick/media-marketing

http://twitter.com/SteveGaines62/cville

http://twitter.com/radioguy49/radio

http://twitter.com/mediadude/radio

http://twitter.com/radioinsight/radiopeeps

http://twitter.com/mfhiatt/radio

http://twitter.com/chagota/radio-et-al

http://twitter.com/topramen/radio

http://twitter.com/ethernick/broadcasting

http://twitter.com/RicoG/radio-fools

http://twitter.com/StreamTheWorld/radio-industry

http://twitter.com/BruceBarber/radio

http://twitter.com/djmarc/ontheradio

http://twitter.com/MarkEdwards/broadcasting-buddies

http://twitter.com/KennedyCS/radio

http://twitter.com/iradiosales/faves

http://twitter.com/RL_Bynum/radio

http://twitter.com/red_and_nater/radio-tv-peeps

There are plenty more where these came from, but you have to start somewhere!

If you're brand new to Twitter, you might find this earlier article helpful: http://georgereedradiotv.blogspot.com/2009/10/hello-my-name-is-george-reed-and-i.html

George
http://www.mediaservicesgroup.com/location.cfm?id=3

"Time" magazine article on Larry Wilson: "Rescuing Radio"

If you're a fan of radio, and/or a fan of Larry Wilson, this is a must read:

http://www.time.com/time/magazine/article/0,9171,1933204-1,00.html

Radio Tunes Out Google in Rare Miss for Web Titan

http://online.wsj.com/article/SB124172645603997429.html

Here Lies NAB's David Rehr: RIP (Radio in Peril)

http://ericrhoads.blogs.com/ink_tank/

Radio: The Original Social Medium (and wireless before wireless was cool)

There was a time, not long ago, when radio was “cool.” It was creative and fun, and run by people who valued those traits above all. Even better, it was a great, high margin business.

I’m not talking about the 1940’s; I’m talking about the 60’s, 70’s and 80’s. This isn’t another “yearning for the good old days” piece. Instead, this is about radio’s future. But let’s look (or listen) backward first.

Radio was Facebook and Twitter before there was an Internet. It connected. It was one-on-one between the DJ and his/her listener. It set the tone for a community’s entertainment and informed it of the day’s news. It introduced new music. It was Facebook. It was fun and exciting. The DJ was “my DJ.”

But radio lost its focus:

“Just play the hits . . . do what’s safe.”

“No one wants local news anymore; besides, it is too expensive.”

“Let’s voice track the shift and save a few bucks; no one will notice.”

“Flying the morning show to the movie premier (or awards show, or NASCAR race, or fill-in-the-blank) is too expensive.”

And if that weren’t enough, we ran too many spots. Way too many spots.

Little by little, we chipped away at the cherished, intimate connection with our listener. And then it was gone. We became jukeboxes. Satellite radio won a PR war that radio didn’t even know it was fighting, repositioning the entire radio medium as “old” and “over.”

My own teenage daughters prefer their iPods; I bet that yours do too. Radio is boring.

So if my premise that we truly are (or were) the ultimate social medium is correct, how do we regain our footing? I’ll leave the specifics to the industry’s creative types, but here are a few starting thoughts:

• Bring back the stars. Find and hire talent; nurture them.
• Take some chances. Try something. If it doesn’t work, try something else.
• Break some rules. If a listener just wants more hits, she’ll get an iPod.
• Use the social networks to inform the tribe that you have something new.
• Get radio on all appliances. Have you seen the selection of radios at Target lately? Compare to the iPhone.
• Get the kids involved again. Listeners and staffers. Are the “kids” on your air staff all in their 30’s? Newsflash: they’re not kids!

Twenty years ago, every radio station broker knew ten GM’s working to own their own station. Today, those same GM’s simply want to make it to retirement (if they haven’t already been fired). There is no “bench,” no farm team. We are living a brain drain, or more accurately, a leadership and creativity drain. It is time to reconnect with our listener, with our tribe.

“What’s hard now is breaking the rules. What’s hard is finding the faith to become a heretic, to seek out an innovation and then, in the face of huge amounts of resistance, to lead a team and to push the innovation out the door into the world.”

Tribes, Seth Godin, 2008. http://www.amazon.com/Tribes-We-Need-You-Lead/dp/1591842336/ref=sr_1_1?ie=UTF8&s=books&qid=1241701570&sr=8-1

Those are my thoughts. What are yours?

George

Media Services Group

New York Times: Radio Giant Races Crisis in Cash Flow

http://dealbook.blogs.nytimes.com/2009/04/30/radio-giant-faces-crisis-in-cash-flow/?src=twttwt=nytimesdealbook

Buffett saw radio and newpaper problems in 1992

http://www.rbr.com/media-news/14268.html

Jim Boyle: "The worst of the storm may have passed."

http://ftp.media.radcity.net/ZMST/4-27.pdf

Restructuring An Entire Industry (Radio)

If predictions from the NAB Show are correct (and I believe they might be), the radio industry will undergo a complete financial restructuring in the next 12 to 24 months. A massive amount of debt will be converted to equity and/or written off. Yet there will be winners and losers.

Broadcast companies will be divided into two distinct camps by their lenders:

1) Good operators with bad balance sheets

2) Bad operators with bad balance sheets

Fortunately, there are a few operators with good balance sheets, but very few.


Good Operators with Bad Balance Sheets

• Excess debt will be converted to equity; remaining debt will be restructured with payment terms matching the companies' ability to pay.
• Owners will keep a stake and management will keep their jobs and be incentivized to perform under the new arrangement.

Bad Operators with Bad Balance Sheets

• Lenders will adopt a "throw out the bums" mentality.
• Assets will be liquidated, or in some cases, sold to entrepreneurs (and financed by the lender) who know how to make the business work.

So who are the winners and losers?

Winners

• Lenders who stay calm, carefully analyze their problems and possible solutions.
• Existing broadcasters without a leverage problem, particularly if they want to grow their business.
• Existing broadcasters who become pro-active in dealing with their problems.
• Entrepreneurs who know how to operate (and have been patiently waiting for a window to get in).
• Attorneys and smart, experienced broadcast restructuring consultants.
• Smart distressed debt buyers who pair up with entrepreneurial operators.

Losers

• Over-leveraged and under-operated broadcasting companies.
• Lenders who panic.
• Investors who bought into the over-leveraged and under-operated broadcasting companies.

Those are my thoughts . . . what are yours?

George
Media Services Group
http://www.blogger.com/www.MediaServicesGroup.com

Old Meets New: Priceless

As the radio industry struggles to find its place in a new media world (with all of the buzz centered on the digital universe), do the radio industry leaders "get it?" After spending much of this week at the NAB Show, I believe that a few do and many don't. The radio business is just not going to be like it was . . . ever again. So if you are struggling to understand what is really going on with our listener communities (and our advertisers), here are a few quick, easy, and cheap suggestions. Try them, and at least you will be able to converse with the black tee-shirt crowd.

Kids simply do not have the same passion for radio and TV that we, the Boomers, had when we were growing up. My focus group (daughters ages 16, 19, and 22) gets their music from multiple sources. And they live via texting, Facebook and iTunes. They are tired of hearing the same dull crap on the radio.

So here is your investment to teach the old dog a few new tricks:

1) Buy an iPhone. Cost: $300

2) Sign up a Twitter account http://www.twitter.com/. Cost: FREE
Search a subject (try your home town or "Radio") and follow some people.

3) Start a Facebook page. http://www.Facebook.com. Cost: FREE

4) Read "What Would Google Do?" http://www.amazon.com/s/ref=nb_ss_gw?url=search-alias%3Dstripbooks&field-keywords=what+would+google+do.
Cost: $17.81

5) Set up a My Yahoo or Alltop page http://www.yahoo.com/ http://www.alltop.com/ with relevant news and blogs. Cost: FREE

6) Seek out and listen to your programming people and make a few local sales calls while you're at it. Cost: FREE

7) Start thinking about how to program your station(s) to get your listening communities truly involved. Cost: PRICELESS

Those are my thoughts . . . what are yours?

George
Media Services Group

Now on Alltop.com

If you haven't already done so, you might want to check out Alltop http://www.alltop.com. It is a great way to organize news and blogs by subject. Search "Radio" to see everything that is available (which now includes this blog).

George