All's fair on the airwaves
September 19, 2003
By Pete Schulberg, The Portland Tribune
When Trail Blazers Vice President Erin Hubert returns to the local radio wars in her new job as general manager of Portland's Entercom radio stations this November, she may have trouble finding any familiar turf.
Hubert spent 10 years in radio sales before joining the Blazer front office in 1991, but she will be stepping into a Portland radio scene that is a whole new, centrally controlled ballgame.
Local radio, once a combination of medium-sized companies and mom-and-pop outfits, has grown into a big, big business. Portland's radio powerhouses have merged and morphed themselves into the subsidiaries of three companies:
San Antonio-based Clear Channel Communications Inc., which owns 1,200 radio stations nationwide; New York-based CBS/Infinity Broadcasting (183 stations); and Bala Cynwyd, Pa.-based Entercom Communications Corp. (98 stations).
In the next couple of months, the Federal Communications Commission is expected to approve the $44 million sale to Entercom of country music station KWJJ (97.5 FM) and talk-station KOTK (1080 AM), both of which have been owned by Seattle-based Fisher Broadcasting.
That will bring to eight the number of Portland stations that Entercom will have under its wing -- one less than the maximum allowed under FCC guidelines established in the 1996 Telecommunications Act. The law deregulated the radio and television industry by loosening ownership restrictions and allowing companies to buy hundreds of radio stations. Previously, owners were limited to a mere handful.
Even further deregulation of radio ownership was included in new FCC rules announced this summer, which have been delayed by the courts and roundly criticized by both parties in Congress. On Tuesday, the U.S. Senate voted 55-40 to overturn the ownership rules.
"Radio stations are sounding more and more alike because they're programmed by executives at corporate headquarters hundreds of miles away," Sen. Russ Feingold, D-Wis., said on the Senate floor.
The changes in radio ownership, at least so far, haven't dramatically affected what Portland radio listeners hear on the city's 48 stations. (Editor's note: Portland station KPAM (860 AM) is owned by Robert Pamplin Jr., who also owns the Tribune. The author of this story is a former morning show host for the station.)
But the trend toward standardized formats devised by out-of-town programmers, consultants and researchers could well become more pronounced -- right along with a return on investment that only megamergers can bring. And the media giants that continue to gobble up radio stations say their newfound muscle can only make their product better.
"The growth allowed by (the 1996 law) produced economies of scale never previously possible," Mark Mays, Clear Channel's president and chief operating officer, said in response to recent legislation putting further controls on consolidation. "The industry reinvested much of its operational savings in ... improvements designed to make radio more consumer-driven than ever before."
The 19 Portland stations owned by the big three companies account for 63 percent of the Portland metropolitan listening audience, according to the spring Arbitron ratings (April, May and June). With that track record, it's a safe bet that Clear Channel, CBS/Infinity and Entercom will be on the lookout for even more properties to add to their Portland arsenals.
Creative force at risk
By helping to manage Entercom's stable of Portland radio stations, Hubert joins the ranks of a handful of general managers who pull the strings at the stations in the Portland market that attract the most listeners and generate the most revenue. She's expected to share managing duties with Entercom's Portland market manager, Jack Hutchison, who brought Hubert on board.
"Some of the most creative people I've ever met worked in radio," said Hubert, who headed up the sales department at the now-defunct KMJK (107.5 FM), which went through a succession of format changes before closing its doors.
But it is that creative force -- much of it from station employees in tune with the local audience -- that is frequently mentioned as one of the dangers of radio station consolidation. Homogenization has been a longtime trend in radio, starting with the rigid AM top 40 playlists of the '50s that sounded pretty much the same in Pittsburgh as in Portland -- and remain viable today even with the niche music formats from urban contemporary to light rock.
"A lot was lost when local control went away, and the new ownership never felt a tie to the community other than a financial one," says Robert Unmacht, a radio consultant based in Nashville, Tenn. "Wall Street is very demanding on what it wants as a return, and it couldn't care less how it gets there."
Clear Channel in particular has come under fire -- including a Justice Department probe on charges that it is restricting airplay of music groups not signing up with the company's concert promotion arm. And when the Dixie Chicks took on President Bush over the war in Iraq, Clear Channel axed them and their music from company stations.
"They're like a Swiss army knife," says Carl Widing, a radio consultant and former Portland radio program director, referring to fewer companies serving a wide variety of listeners. "They're cutting through each market, whatever tool they need to maximize audience shares and market revenue."
Revenues on the upswing
Now that the economy shows signs of improving, Portland stations may climb out of a three-year financial slump. Through August of this year, radio advertising revenues are up about 7.6 percent in the third quarter, according to the Portland Area Radio Council, with most of the increased revenue coming from national advertisers.
"I expect with the recovering economy, revenue will continue to grow," Hutchison says. It's already pretty substantial: According to the BIA Financial Network Inc., Portland's Entercom stations led the local market in 2002, grossing $39.9 million in ad revenues.
Entercom's classic rock station KGON (92.3 FM) -- anchored by the Los Angeles-based morning drive team of Mark and Brian -- was No. 1 in revenue with $10 million, followed closely by Clear Channel's KKCW (103 FM), which features longtime Portland morning personality Craig Walker.
While stations have consolidated their management, marketing, business, engineering and news departments, CBS/Infinity's adult rock KINK (102 FM) is unique in maintaining its "stand-alone" structure, headed by General Manager Stan Mak, who also ran the station when it was owned by Seattle's King Broadcasting.
"Nothing has really changed," Mak says. "We do news and information in the morning, still do 'KINK Considers' (editorials) and even expanded our community support programs."
Mak says he has every intention of continuing on the same track "as long as we deliver the goods."
Contact Pete Schulberg at firstname.lastname@example.org .