Air America’s flight plan is still changing

When Air America’s Al Franken discusses his fellow talk radio hosts, he’s almost always baiting them for their conservative stances. But during a recent speech to a convention of skeptical radio hosts and executives, the liberal Franken struck a different tone. He was not only self-deprecating, but even gave grudging respect to archrival Rush Limbaugh.

The move gained Franken and Air America a few new friends in the business, and these days, the struggling liberal radio network needs all the friends it can get.

Two months after its ballyhooed launch, Air America finally has some encouraging ratings to show but no tested business plan. Almost all of the top executives have left or been pushed out. The network has successfully developed programs but failed to find stations to air them. It disappeared from Los Angeles airwaves after only a couple of weeks because of a financial dispute. Promises of imminent replacement affiliates in Los Angeles and other major cities were quietly dropped.

Now, those few executives who remain from the start-up have done an about-face. Rather than lease airtime on stations and keep ad money for themselves, Air America Radio is adopting the traditional approach to the business: soliciting deals with station groups to carry shows in exchange for shared advertising revenue.

The switch has put the management team in the awkward position of courting the industry, the same people who think that Air America shunned them at the beginning.

Talkers magazine publisher Michael Harrison, who organized the New Media Seminar in late May, said Franken’s more humble keynote speech was a smart move. “He could have had a disastrous encounter face to face with the powers that be in the business. Instead, he very cleverly and skillfully won a lot of friends,” Harrison said. Franken forged common ground by talking about such dear-to-radio issues as the 1st Amendment and the Federal Communications Commission, and insisted that liberal radio hosts aren’t anti-American. “This is the first time he conducted himself like a member of the broadcasting community rather than a politician,” Harrison said.

Franken, in an interview, joked that the speech was “probably the most I’ve acted like a politician instead of the least. And that’s why it worked, because it was a very carefully crafted speech. I didn’t think there was any percentage in being confrontational.... They didn’t want to hear my politics.”

He’s received good feedback from some of the 550 broadcasters who were there, he said, adding, “It was a home run, if I do say so myself.”

*

No outlet in L.A.

Whether such steps will be enough to keep the network on the air for the long term, or even through the November election, remains to be seen. The network is heard in 15 markets but not in cities such as Los Angeles, Chicago or San Francisco.

Air America President Jon Sinton said the network is negotiating with a station group that would bring Air America to several more markets, and “a number of major broadcasters have expressed interest.” He declined to be specific, saying, “I don’t want to jinx it.”

Despite what some see as a chastened attitude at the network, Sinton, one of the few survivors from the start-up, has retained a touch of the defiance that has marked Air America from the beginning.

“We’ve got a great business plan,” he said. “It helps that the trend numbers serve as proof of concept and we certainly have attracted a lot of investor interest since they came out.”

The “trend numbers” he referred to -- which Franken also loudly touted in public appearances in New York last week -- are an extrapolation from listener data collected by the ratings firm Arbitron, though not Arbitron’s official twice-yearly audience survey. In New York during April, its first month on the air, Air America attracted more listeners in the 25-to-54-year-old demographic from 10 a.m. to 3 p.m. than did WABC, where the popular Limbaugh is heard. Air America also beat WABC among the 18-to-34-year-old group. That’s specifically intriguing to many in the business since talk radio typically draws an older audience.

Air America had encouraging ratings in the evenings as well, when Janeane Garofalo is the host. But the morning drive-time numbers -- a particularly lucrative time period for radio stations -- weren’t as strong. The network had similarly encouraging results in Chicago, but it’s no longer heard there after a dispute with the station group it leased time from. Internet listening also has been heavy.

“People understand that this is a viable business,” Sinton said. “It satisfies a gaping hole in the talk radio market. It’s good for the radio business because it expands the potential audience and revenue pie. And it’s good for our country, because it expands and balances the political dialogue.”

*

What went wrong

What went wrong at the beginning is a matter of some debate. One senior executive involved in the start-up pinned the blame on ousted chairman and investor Evan Cohen, who “overstated the case” by saying the network had $20 million, enough to keep it afloat for two years.

Cohen has repeatedly declined to comment on his tenure at the network. Mark Walsh, the network’s former chief executive, also did not respond to requests for comment.

But many in the radio industry said Air America’s business model was simply wrong, noting that the plan to buy stations or lease airtime wasn’t practical because there aren’t enough outlets available. One program syndicator said Air America’s absence from another major industry convention, held by the trade publication Radio & Records in February, was widely seen as arrogant.

They claimed they had the remedy to everything wrong with the radio business, said Harrison, the Talkers magazine publisher. “They would buy stations, buy time. But they subsequently learned that the broadcast industry is self-contained and idiosyncratic. The new management has come to realize that in order to be broadcasters they have to work within the industry.”

Sinton, a longtime radio executive, defended the original approach to lease stations that Air America would control. “We thought that until we proved the concept, we would never get on other people’s radio stations. Air America didn’t have time or capital to do the traditional thing, he said, which was start small and work its way into big markets like New York -- where the advertising money is.

“We’ve now grown from an idea to an operating identity, and that operating identity has a surprisingly large audience interest,” Sinton said. “Major broadcast companies are now interested in affiliating with us, obviating the need to lease radio stations. We are able to work with a more traditional operating model, which gives us staying power.” Sinton nonetheless declined to provide many details to back up claims that Air America is now on firmer footing. “When you give timetables and get specific about it, you put pressure on yourself and look silly. I’m not going to fall into that trap.”

Does the network have enough money on hand to make it to November’s election?

“I sure hope so,” he said.

As for Franken, he gleefully announced Wednesday that he had received a paycheck, after forgoing pay for a few weeks while finances got sorted out. “I have confidence that it definitely will make it,” he said, “because we have an audience.”