Improving on a Good Thing

So what is the state of the radio industry?

At first, five radio group leaders, masters of the universe of station consolidation who were lined up onstage in a Century City ballroom to discuss the matter, sounded as if they were offering up so much puffery. After all, the mood was right.

The audience at the closing luncheon of the Radio & Records convention last weekend had just been treated to an energetic performance by pop jazz singer-guitarist George Benson. A private midnight party at Disneyland awaited. But as Erica Farber, publisher of Radio & Records, the industry journal that sponsored the three-day event, noted later, it was not long before the panelists opened up and “their hair came down.”

That was evident, as they took on such subjects as the increase in commercials, the decrease in the audience’s time spent listening, Arbitron’s imperfect ratings system and consolidation itself.

Scott Ginsburg, former chief executive officer of Chancellor Media with 108 stations, said that “all of us believe in two or three things--that there is no bigger force on the planet than radio, that nothing is growing faster, and that nothing would have a bigger impact on all our collective lives.”

Other panelists agreed. John Cullen, chief operating officer of Capstar, leading the station roster with 320 outlets, called this “a time of exceptional opportunity.” Norman Rau, chief executive officer of San Francisco-based Sandusky Broadcasting, proclaimed radio “growing and healthy.”

And Randy Michaels, chief executive officer of powerhouse Jacor Communications Inc.--ranking second with 197 stations nationally and the syndicator, through Premiere Radio Inc., of Rush Limbaugh and Dr. Laura Schlessinger--joked: “I’ll start by addressing some of these rumors that you’ve been hearing . . . that Chancellor, CBS, Jacor, Capstar are being purchased by Bill Gates, and all of our programs--Rick Dees, Rush Limbaugh, Dr. Laura--are going to be bundled with Windows 2000.”

That quickly led to a discussion of consolidation and whether big group owners might decide to exercise power by putting the best of the programs they syndicate onto their own owned-and-operated radio stations.

Michaels flatly called such a notion “shortsighted.” He said that it was in Jacor’s “enlightened self-interest” not to hurt competitors on programming matters because “the playing field is somewhat level,” indicating that other group owners might turn around and do the same to them. He noted that Jacor currently has “200-some contracts” with CBS on Jacor talent.

Later, asked about rumors of Limbaugh and Schlessinger, who air back-to-back on KFI-AM (640), going to Chancellor-owned KLAC-AM (570), Michaels dismissed such talk out of hand. “Rush and Laura are not going to KLAC. They’re staying at KFI. KFI has contracts--and [Rush and Laura] are the No. 1 and 2 shows in Los Angeles.”

Asked when those contracts end, he declined to answer but added, “Whatever people inside KLAC are saying, they are profoundly wrong. The contracts run well beyond” the couple of months that people at KLAC are discussing.

KFI program director David G. Hall, also asked about the time frame of the contracts, said with a chuckle: “I’m not going to tell you contracts specifically. But I agree wholeheartedly with Michaels that they’re not taking the shows off KFI.”

During a question-and-answer session with the convention panel, a female radio executive asked whether there was any way to make Arbitron “less arbitrary,” or to make the numbers more precise in fragmented markets. “Sure there is,” Michaels said, “but it’s more expensive . . . 10 times more sample, three times more accuracy.”

On another matter, Michaels said he worries about the decline in time spent listening by the audience. Ginsburg quickly agreed and later revealed that the figure has gone down about 15 minutes from a few years ago, when the average was 21 hours a week. He also pointed out that since 1994, the minutes per hour devoted to advertising has gone from a range of 10 to 12 on FM music stations to a range of 12 to 15 and from 14 to 15 to 18 to 20 on AM talk stations.

“They’re spending more for programming,” he explained, “and need to get a return on their investment.”

The convention audience applauded Ginsburg when he suggested that it’s time for stations to raise ad prices. “If we don’t do that right now in the very best of times, it’ll be impossible to do that when it hits the worst times.”

Meanwhile, Norman J. Pattiz, the founder and chairman of Los Angeles-based syndicator Westwood One who moderated the panel, bemoaned that even though radio in America is a $14-billion business, “I live in this town, and you’ll never get the best table at a power restaurant if you’re in the radio business. I can personally tell you, a couple hundred million bucks ain’t what it used to be.”

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New Man at KABC: “I’d like to be able to anticipate where I’m going to put my suitcase, and where our house is going to be,” Drew Hayes, newly appointed operations manager-program director at beleaguered KABC-AM (790), was saying this week, on the key matter of changes he intends to make at the station.

In other words Hayes, currently cleaning up matters at ESPN Radio Network in Bristol, Conn., where he was general manager, not unexpectedly and ever so amiably ducked.

“It’s going to take some time,” noted Hayes, himself a self-described “low-rated” morning talk-show host in Chicago a decade ago. “Talent is obviously a major component of what a radio station is, and I want to sit with people and talk to them and hear what they think and just sort of get into the marketplace. Having said that, we can’t really let a lot of grass grow under our feet.”

He added that he does not want to make any moves at KABC until the spring-quarter Arbitron numbers come down in mid-July.

Hayes is not coming in cold to KABC. He has some sense of the on-air personalities. He was in Los Angeles about a month ago, tuning in, and has regularly vacationed here. And in recent weeks, he’s also been listening from Disney-owned ESPN on a special phone line to Disney-owned KABC--whose 2.6% overall audience share for the first quarter of this year was the lowest in three years.

Before joining ESPN, Hayes had been operations director of WLS-AM in Chicago, where in 1989 he directed the transition from a music to talk format. Hayes, married with a 3-year-old son, turns 40 this Friday.