Following a nationwide trend, the new owners of KRMX-FM (94.9) have signed a local marketing agreement with top-rated country station KSON, the first deal of its kind in San Diego County.
Under the terms of the agreement, the stations' sales staffs will sell advertising time for both stations. For example, an advertiser buying commercial time on KSON also will be offered a package deal that includes time on KRMX, which currently features an adult-contemporary music format. The agency that sells advertising time on KSON to national advertisers will also now represent KRMX as well.
KSON, which is owned by Jefferson-Pilot Communications, will also "assist" KRMX in programming, according to station officials. But Tim Sullivan of Anaheim Broadcasting, which took control of KRMX on Thursday, emphasized that the station will remain an independent entity, with its own programming and sales staffs. This is the first such venture for both companies.
Sullivan said the move won't affect the station's programming, although he said a final decision will be made on the future of the format sometime within the next 30 days.
KSON, which simulcasts a modern-country format on AM (1240) and FM (97.3), is one of the top-rated stations in San Diego County. KRMX, formerly KKYY, has been going through management and ownership turmoil for the past two years, and the problems have resulted in dismal ratings.
"The ability to pool the resources of KSON as well as ours, guys who are market leaders with great credibility, is very attractive," Sullivan said. "Going into an unsure year and a slow economy--from an expenses point of view, the deal makes sense."
So-called LMAs, local marketing agreements, are a new and controversial element of the radio industry. As stations look for ways to reduce overhead and generate additional revenues, LMAs are becoming more common. An LMA allows a station such as KRMX to create cash flow without spending as much money on marketing and sales, by linking up with a successful operation, and also provides stations such as KSON with multiple advertising packages for their clients, including the different demographics of a partner station.
LMAs are unregulated by the Federal Communications Commission, and there are no exact statistics of how many stations are operated in this manner. A bill is circulating in Congress that would restrict the agreements. Legislators are arguing that LMAs allow powerful broadcasters to control more than one signal in a market.
Sullivan said that under the terms of the LMA, KSON will be a partner operating KRMX, but that he will still have the final say on all decisions affecting KRMX. Neither Sullivan nor KSON General Manager Mike Stafford would discuss details of the agreement, but the pacts typically call for stations to split revenues from joint advertisements.
"Something like this has everybody 3 feet off the ground," Stafford said. "It makes us better as well as making them better."
The agreement stems in part from a longstanding personal relationship between Stafford and Sullivan. The two have known each other for more than 20 years, going back to when Stafford worked for KCBQ and Sullivan worked for a company that served as the station's national advertising representative.