NERW 10/22/2012: After the Bell/Astral Deal

In this week’s issue… Bell/Astral is off: what now? – What can Cumulus do with WFME? – Where will Family Radio go on AM? – Airstaff shakeup in Syracuse – WCME debuts in Maine

By SCOTT FYBUSH

*Over the last decade or so, this column has repeatedly wondered just how far the authorities in CANADA will allow media consolidation to proceed before deciding enough is enough. Late last week, just as we were processing the latest round of FM-cluster consolidation in the biggest market in the U.S. (about which, more in a moment), the CRTC declared that line had been reached, denying Bell’s C$3.38 billion proposal to add Astral Media’s 84-station radio group and 20-network cable TV portfolio to its existing roster of media and communications holdings.

When we outlined the potential size of a Bell/Astral combination in the March 19 edition of NERW, it seemed like the perfect combination for Bell: Bell would propose to spin off radio stations that exceeded local market caps (as indeed it did), but would still end up with a much larger radio footprint that included plenty of smaller Ontario markets and a toehold in French-language Quebec radio that Bell had been lacking. On the TV side, Astral’s French-language cable holdings would have meshed nicely with Bell’s CTV broadcast and cable empire. And from all we could see back in March, there was no reason to think the CRTC would have departed from its usual policy of rubber-stamping every bit of consolidation that came its way.

But then came Montreal – and what just might have been the little bit of over-reach that doomed the entire deal. In addition to Astral’s two French-language FMs, Bell would have ended up with its own CKGM (990, moving to 690) and Astral’s three stations, CJAD (800), CJFM (95.9) and CHOM (97.7). That was one station too many for the English-language side of the Montreal market, but Bell didn’t want to put any of those stations up for sale, so it instead proposed converting CKGM from English-language “TSN Radio” to French-language “RDS Radio,” a move that would have shifted the signal into the French side of the market where the Bell/Astral combination would have remained beneath the ownership cap.

And even that move might well have passed CRTC muster…if Bell hadn’t just gone before the agency a few months earlier to plead for a signal upgrade for CKGM. Bell made some big promises during that hearing, arguing that it needed to shift “TSN 990” to 690 in order to better serve the Anglo audience that’s predominantly based on the west side of the Montreal market. Against the backdrop of the language politics that have once again been flaring in Quebec this year, it’s no wonder that Montreal’s Anglophones felt angered and betrayed when Bell proposed to flip CKGM, just as the station was in the midst of making its big frequency change. Interventions opposing the Bell/Astral sale and the CKGM flip began pouring into the CRTC in record numbers, so many of them that CRTC officials openly complained that their summer holidays had to be cancelled to give them time to review all the public comments.

In the end, the CRTC says it received just shy of 10,000 public interventions “from broadcasters, distributors, independent producers and creative groups, citizen and consumer advocacy groups as well as from individuals from all parts of Canada.”

The CRTC’s response was scathing: “The proposed transaction would not only remove the last major independent, non-integrated broadcaster from the system, but transfer its undertakings to the largest vertically integrated broadcaster and telecommunications service provider in Canada. With the combination of the largest and third largest participants in discretionary television services (by revenue), one entity would control more than 63% of revenues from French-language discretionary services. This would represent more than five times the revenues generated by the next largest competitor in that market.” And despite Bell’s contention that the Astral deal would create an entity that could provide real competition to Quebecor’s dominant conglomeration of cable TV, broadcast and newspapers, the CRTC says it is “of the view that BCE did not demonstrate how the proposed transaction, which would result in the vast majority of French-language programming services being held by two large, vertically integrated competitors, would invigorate competition.”

Bell fared no better with its radio proposals. The CRTC says its proposed spinoffs of ten stations (including FM pairs in Ottawa and Toronto) “can be viewed as an attempt by BCE to trade underperforming stations for successful ones, which would not provide a benefit to the Canadian broadcasting system or create the conditions for healthy competition.” Oh, and as for CKGM? The CRTC didn’t say much about that proposal even as it rejected it – but it did indicate that it expects Bell to live up to its promise to continue to operate the station as an English-language outlet if the switch to French were not approved.

*What happens now? Bell quickly fired back at the CRTC with a petulant press release, vowing to appeal the denial to the federal cabinet, which has already said it won’t overturn the CRTC’s decision. In Montreal, media guru Steve Faguy reports that “privately,” staffers at CKGM were “thrilled” at the stay of execution they received…and that questions are already swirling about what might become of Bell’s plans for RDS Radio. The French-language network would have filled a void created when Cogeco abruptly flipped Montreal’s CKAC (730) from sports to provincially-subsidized traffic reports, but if it’s not going to happen on 690, the AM options have slimmed dramatically in recent years as other broadcasters have applied for and been granted new signals on previously-vacated channels including 600 (TTP’s proposed English-language talker), 850 (a newly-proposed TTP French-language sports-talker), 940 (TTP’s French-language talker) and 990 (Evanov’s Radio Fierte, due to launch next year after CKGM vacates 990 for good).

And then there’s Astral, which still holds a valuable portfolio of radio and cable networks, and is still presumably a target for acquisition by someone else. Could a smaller (but still substantial) player like Shaw, Corus, Newcap or Vista (which just received the CRTC’s blessing to buy Haliburton’s Ontario stations) or Evanov take a run at some or all of Astral? About the only players we can categorically exclude are Cogeco and Quebecor, which would create an even greater concentration of Quebec media ownership.

*While Canada pushes back against ownership consolidation, the trend pushes ever forward in NEW YORK, where the third big station sale this year had the market talking last week.

As you know from our mid-week update, Cumulus is adding a third station (or fourth, depending on how you look at it) to its New York cluster with the acquisition of WFME (94.7 Newark) from Family Stations.

MONDAY MORNING UPDATE: We now know the price tag for the deal – as rumored, Cumulus will pay Family $40 million for the WFME license, and will transfer WDVY (106.3 Mount Kisco) in northern Westchester County to Family. Family will lease Cumulus the current WFME transmitter facility for a dollar a year for five years, and then $1,000 a month for the following five years – unless Cumulus moves WFME into New York City, in which case it will pay Family an additional $8.5 million (if it moves as a B1) or $10 million (if it moves as a class B signal.)

Now that the initial buzz around the deal has had a few days to die down, let’s take a deep, NERW-style look (based, as usual, on a mix of our own market analysis, insight from trusted industry sources and some informed speculation) on what Cumulus can do with its new toy:

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• How does WFME’s signal compare to the market’s big guns? There’s a reason Cumulus could pay only $40 million for the Class B signal on 94.7, as compared to CBS Radio’s big $75 million deal for Merlin’s WRXP (101.9) a week earlier. On paper, both signals look reasonably similar, with the big distinction being WFME’s more westerly transmitter site. The 13-mile difference in transmitter locations (WRXP with most of the market’s big FMs at the Empire State Building, WFME up at First Mountain in West Orange, New Jersey) naturally means a less-than-complete overlap in coverage: on paper, what WFME gains from its added reach into the western fringe of the market out in Morris and Somerset counties, it loses in much more densely-populated parts of Nassau and Suffolk counties on Long Island. But it’s worse than that in the real world: even after Family Stations moved WFME to a slightly higher antenna location (with slightly reduced power) on an adjacent tower earlier this year, 94.7 still suffers from multipath and the only-in-New York sort of “terrain blockage” that comes from being outside Manhattan. That costs WFME some potential listenership on the east side of Manhattan and across the East River in Brooklyn and Queens. Even so, 94.7 is still the next-best commercial FM signal in the market that’s not coming from Empire…which of course brings us to the $35 million question:
• So…can it be moved to Manhattan? Contrary to what you’ll read elsewhere, there are only a handful of other signals that would restrict 94.7 from making that big 13-mile move to join the rest of the dial in Manhattan. As we’ve noted here previously, Cumulus also owns one of those stations, co-channel WMAS-FM (94.7 Enfield CT/Springfield MA), and that substantially eases the burden of negotiating a mutual change in facilities. Such a move would have been a slam-dunk back when WMAS-FM was licensed to Springfield itself and could have been downgraded to a B1 or even a class A signal from its present transmitter site along the Connecticut River in downtown Springfield. The change in its city of license complicates matters somewhat, but not so much as to make WMAS-FM an insurmountable obstacle to a 94.7 New York move-in. The bigger issue, as we’ve also noted here in the past, is Connoisseur’s WWSK (94.3 Smithtown) out on Long Island. That class A signal is fully-spaced to the present WFME in West Orange, and that means there’s no grandfathering to allow a move like the one that brought Cumulus’ WFAS-FM (103.9) from White Plains down to the Bronx, second-adjacent to Clear Channel’s WKTU (103.5) and WAXQ (104.3) on Empire. Without delving too deeply into the arcane minutiae of the allocations process, it appears to us that Cumulus’ biggest allocation challenge in moving WFME to Manhattan will hinge on whether Connoisseur can be persuaded to move WWSK east – and if the WWSK signal can be made directional enough (and reduced enough in power) to avoid creating any additional interference to its own grandfathered short-spaced co-channel partners, WYBC-FM New Haven and WJLK-FM Asbury Park. There’s one other technical consideration here: it’s not clear that there’s any more room on the master antennas at Empire to fit in another class B signal. That, too, is a surmountable obstacle, since there is room for more RF on the master antenna a few blocks away at Four Times Square. A 94.7 signal from there would operate at higher power and somewhat lower antenna height than Empire, slightly preserving the big advantage that WFME has now in New Jersey, where its 23.5 kW ERP gives it a bit more “oomph” for building penetration than the Empire stations enjoy with just 6 kW from their elevated perch.
• How about a swap with WBAI? The logic is impeccable: Pacifica’s WBAI (99.5) enjoys a class B (though slightly less than full-power) signal on a commercial channel from Empire, and it’s suffering from the latest in a never-ending series of financial crises that’s left it hard-pressed to pay the high cost of tower rent there. A swap with Cumulus for the 94.7 signal could leave WBAI with a pretty decent signal and a pile of cash to resolve its fiscal issues, but as much sense as that might make, it appears highly unlikely to actually happen. Blame Pacifica’s congenital inability to make tough decisions like that – and also, perhaps, blame CBS and Merli, whose WRXP deal clearly set a $75 million “stick value” for an Empire B, which means Pacifica now has a high benchmark from which to even begin negotiating. And if Cumulus had intended to spend $75 million for an Empire B, logic suggests it would simply have done so in the first place.
• And what will Cumulus program on the new signal? Sources inside 2 Penn Plaza tell us the programming brass at the local level (WABC 770/WPLJ 95.5) hasn’t been told yet what the company plans to do with the new signal, and it’s entirely possible that a final decision hasn’t even been made yet. In a PPM-based, short-term world, there really aren’t that many wild options for 94.7’s immediate future. There’s talk, of course – Cumulus just signed Michael Savage to its growing syndication roster, and the addition of a “WABC-FM” could bolster the aging demographics of the current talk lineup on 770. There’s the possibility of some sort of AC or classic hits to flank WPLJ as it competes against CBS Radio’s WCBS-FM (101.1) and WWFS (102.7) and Clear Channel’s WLTW (106.7). There’s at least the possibility that Cumulus may try to strike quickly to grab the alt-rock audience that had started to build over at WRXP (101.9) before Merlin announced that station’s sale to CBS. And there’s the format that always seems to surface as a New York possibility, country. If nothing else, it could be a good fit for 94.7’s current suburban-heavy signal…and it might be a better gamble on a $40 million signal than if Cumulus had bought a full-price Empire signal. As for the message-board chatter about 94.7 picking up the new CBS Sports Radio network, don’t bet on it – that’s a lot of expensive signal just to provide New York clearance for a national network, and the betting line is that CBS Sports will eventually replace WFAN on the 660 half of that upcoming simulcast. There’s one other piece of the Cumulus cluster’s future that is still hanging – what will become of WFAS-FM (103.9 Bronxville), the class A signal that Cumulus moved from Westchester County down to the Bronx, only to end up keeping it licensed at the Westchester location instead of licensing the Bronx transmitter. Could it yet play a role as part of a larger Cumulus/New York City operation?
• Whither Family Radio? After the financial chaos of last year’s failed end-of-the-world prediction, Family’s rushed sale of Philadelphia’s WKDN (106.9, now Merlin’s WWIQ) left the network with no broadcast outlet in that market. It’s now rectifying that with the purchase of Greater Media’s WPEN (950), but Family doesn’t want to disappear from New York for that long. It’s already reportedly in the hunt for an AM signal to replace WFME, and that too is provoking lots of speculation. There’s no reason we can see for any of the city’s biggest operators to sell, so it’s pretty easy to rule out Salem’s WMCA (570) and WWDJ (970), any of CBS Radio’s three AMs, ESPN Radio’s WEPN (1050), Bloomberg’s WBBR (1130), Disney’s WQEW (1560), or, of course, WOR (710), where the ink is just drying on Clear Channel’s purchase contract. Univision Radio’s WADO (1280) is a long-shot possibility. Multicultural Broadcasting controls many of the remaining AMs with decent signals over the city (WPAT 930, WKDM 1380, WNSW 1430, WZRC 1480, WWRU 1660), and it makes good money leasing time on those facilities. What’s left? Several smaller signals such as WWRV (1330), WWRL (1600), WSNR (620) and WLIB (1190), and of those, YMF Broadcasting’s WLIB may be the likeliest candidate. Since its sale from Inner City Broadcasting, WLIB has been an almost-forgotten station, operating out of the Emmis studios downtown as an adjunct to sister station WBLS (107.5). Its signal is the best of the various “possibly for sale” AMs, and it has far less sentimental value to YMF than it did to Inner City. And then there’s WFME-TV (Channel 66/RF 29), Family’s little-known TV outlet that’s never even gained widespread cable carriage across the New York market; it appears no changes are in the offing there.

*Elsewhere in New York, the big action last week came in Syracuse, where Hunter Scott and Josh Grosvent disappeared very abruptly from their morning show on Cumulus’ WAQX (95.7 Manlius) after dropping a series of clues about a “zombie attack” on the show’s Twitter feed on Monday and on the air on Tuesday. On Wednesday, the news broke that crosstown Galaxy had dismissed most of the airstaff at WKRL (100.9 North Syracuse)/WKRH (106.5 Minetto)/WKLL (94.9 Frankfort-Utica). Gone from “K-Rock” were Dex Mitchell (mornings), Nixon (middays/PD) and Candace Curby (nights). And on Thursday, CNYRadio.com confirmed the speculation: Scott and Grosvent had signed on as the new morning team at K-Rock. By Friday morning, Cumulus had served a cease-and-desist letter on Scott, Grosvent and Galaxy; instead of signing on at 6 on Friday morning at K-Rock, Scott and Grosvent reportedly spent an hour and half talking things over with Galaxy CEO Ed Levine before deciding to go on the air anyway.

“Slavery was outlawed 150 years ago in this country,” Levine told the Post-Standard on Friday. Scott and Grosvent say they can’t possibly be in violation of the terms of their expired Cumulus contract, which required them to at least negotiate in good faith for a new contract before heading across town. That, the duo says, is because Cumulus refused to talk to them…until the moment the C&D letter arrived. Will there be legal fireworks coming as the 95X/K-Rock battle enters its next chapter? Bet on it.

*In Albany, Laura Daniels has departed morning drive at Pamal’s WYJB (95.5) – and she says she’s now headed for a morning shift in Buffalo, with speculation pointing to the vacant chair at Townsquare’s WJYE (96.1).

*NEW JERSEY‘s most unusual radio station is about to expand its reach in New York’s Rockland County. WFMU (91.1 East Orange) has been relaying its freeform independent programming into the Orange County area for many years now on WMFU (90.1 Mount Hope), and now it’s adding a translator to fill part of the gap between the two signals. WFMU’s licensee, the nonprofit Auricle Communications, will pay Digital Radio Broadcasting $125,000 for translator W219DQ (91.7 Dillyville), but it’s moving the translator from its present location in Orange County, where it’s been relaying Sound of Life’s WLJP (89.3 Monroe), to New City in Rockland County. Once the translator moves to 91.9, it will have new calls W220EG – and we suspect the main reason it’s worth so much to WFMU to be heard in Rockland and Orange counties has to do with the station’s long-running “Jewish Moments in the Morning” show, and with the huge population of Hasidic Jews in the region.

*The biggest AM array in PENNSYLVANIA has fallen silent for now. With nine towers, the 10 kilowatt signal of WKGE (850 Johnstown) has been a challenge to maintain for several owners and operators.

Most recently, it’s been owned by Birach Broadcasting (best known for its leased-time ethnic stations) and operated by Mike McKendree’s “Edge” talker, WWGE (1400 Loretto) – but that lease ended last week, and now 850 is silent under special temporary authority. Birach has put the station up for sale and is actively seeking buyers through Pittsburgh broker Ray Rosenblum; in the meantime, it may return to the air with an interim format.

There’s a new LMA in Hazleton, where WAZL (1490) is broadcasting nonstop Christmas music while new operator Ken Medek’s KMCS Broadcasting LLC prepares a variety hits format to take the air in January. Medek is better known, of course, as “Doc Medek,” morning man at Philadelphia’s WXTU (92.5) and former Wilkes-Barre/Scranton jock at WGGY and WKRZ.

*TV People on the Move: Pittsburgh’s WTAE (Channel 4) has named a new news director. He’s Justin Antoniotti, inbound from Hearst sister station WYFF in Greenville, S.C. to replace the departed Alex Bongiorno. And over at NBC affiliate WPXI (Channel 11), the hunt is on for a replacement for news director Mike Goldrick, who’s leaving after three years on the North Side to become vice president of news at NBC O&O WRC (Channel 4) in Washington.

*It was a busy radio week in MAINE, starting in Bangor, where “Mike and Mike” are ending a 15-year run at Blueberry Broadcasting’s “Kiss” (WKSQ 94.5 Ellsworth), with Mike Dow heading to WBAK (104.7 Belfast) and sister station WABK (104.3 Gardiner) and Mike Elliott joining Katrina Walls on WBFB (97.1 Bangor) and its “Bear” country sisters in Rockland and Bar Harbor, WMCM (103.3) and WLKE (99.1).

Up the coast in Brunswick, Jim Bleikamp became the second independent local AM operator in the region last week when he flipped the switch to return WCME (900) to the airwaves. It was a long road back for the little station, which had started out as WCME back in 1955 and spawned an FM sister on 98.9 that eventually became Portland-market WCLZ-FM.

A sale of the FM station took away the AM facility on the FM tower, and the silent license was sold to Bob Bittner, who kept it alive through brief periods diplexing on his own WJTO (730 Bath) tower before selling the license to Bleikamp, who’s best known for his long run as the voice of the Wall Street Journal‘s radio service. And Bleikamp (with the assistance of engineer extraordinaire Mark Humphrey) in turn went through a long fight to find a new tower site.

Now the fight is done, and the station took the air to the sounds of John Lennon’s “Number 9 Dream” on Tuesday, kicking off a new full-service format that Bleikamp describes as “70s-focused hits with some surprises in the form of “lost” classics and rock ‘n roll from the garage,” and that he says will ultimately evolve into “local-local-local,” with a morning show and hourly local newscasts coming in a month or so.

*In NEW HAMPSHIRE, questions are still swirling around the sudden departure of Chris Garrett from the PD chair at Clear Channel sister stations WGIR-FM (101.1 Manchester) and WHEB (100.3 Portsmouth). The “Doctor of Rock” started at WGIR almost 30 years ago, moved to WHEB a few years later, and eventually added WGIR-FM back to his portfolio when Clear Channel combined management of both stations.

*Christmas music returned to the eastern MASSACHUSETTS airwaves this week, at least for HD Radio owners. CBS Radio’s WODS (103.3 Boston) was usually one of the first stations to start ho-ho-ho’ing this time of year, but its main channel flipped from classic hits to top-40 “Amp” earlier this year, and so this year the Christmas tunes are on WODS-HD3.

The Christian contemporary “Mercy Rock” format that had been there has reportedly shifted over to WBMX (104.1)’s HD3, displacing the psychic talk that was heard there. (Did they see it coming?)

In Fall River, Steve Kass is coming home to WSAR (1480) beginning next week to do the 3-6 PM show. After starting his career at WSAR, Kass went on to a long career doing talk in RHODE ISLAND at WHJJ and WPRO before leaving radio a few years back to work for the Rhode Island Emergency Management Agency and Big Brothers of Rhode Island.

*Joseph Rosenmiller was Peter Bordes’ partner way back in 1956 when the two young broadcasters bought WESO in Southbridge, and the little company they founded back then grew into something much bigger. That, of course, was Greater Media, and Rosenmiller retained partial ownership of the company until 1994. He died in New York last Sunday (Oct. 14) at age 87.

*And back to Canada we go: Evanov (through its subsidiary Dufferin Communications Inc.) has been granted a second signal in the Montreal area. As we noted earlier in the column, Evanov will soon put “Radio Fierte” on the air on 990, serving the city’s gay and lesbian community in French – and now the CRTC has also granted its earlier application for a new 500 watt/94 m signal on 106.7 in Hudson/St. Lazare, out to the west of Montreal. The new station will broadcast in English, using the same “Jewel” soft AC format heard on Evanov’s CJWL (98.5 Ottawa) and CKHK (107.7 Hawkesbury).

Speaking of Ottawa, CFRA (580) has hired former Ottawa Sun publisher Rick Gibbons to host a new block of programming from noon until 3 on weekdays. The new CFRA schedule drops “Ottawa Noon,” Rick Corbett at 1 PM and the first hour of Rob Snow’s afternoon show to make room for Gibbons.

And in Windsor, the CRTC has given the CBC the go-ahead to move CBEF, its Radio-Canada premiere chaine affiliate, from 540 to 1550. CBEF will use the facilities vacated last year by the old CBE (1550, now CBEW 97.5); those towers were in better shape than the aging 540 transmitter site. CBEF will also add a new FM transmitter in Sarnia, at 98.3.

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*Good news, everybody! The 2013 Tower Site Calendar is finally back from the printer this week, and on its way out to YOU!

This is the 12th edition of our annual calendar, which features photos of broadcast towers taken by Scott Fybush on his travels.

The 12-month wall calendar boasts a full-color photo each month of a well-known broadcast transmitter site.

This year’s edition includes sites in Florida, Wisconsin, Kentucky, California, Iowa, Idaho, Las Vegas, Colorado, Boston, Cleveland, Albuquerque, upstate New York and western Massachusetts. We’ve also redesigned the calendar to make it more colorful (don’t worry; the pictures are still pristine) and make the spiral binding our standard binding — your calendar will hang even better on your wall now! And of course, we still have the convenient hole for hanging.

Order 20 or more for a 10% discount! And while you’re at the Fybush.com store, check out the new National Radio Club AM Log and the final stash of FM Atlas editions.

For more information and to order yours, click here!