NERW 2/16/2015: When Vertical Real Estate’s Not Enough

From the NERW Archives

Yup, we’ve been doing this a long time now, and so we’re digging back into the vaults for a look at what NERW was covering one, five, ten, fifteen and – where available – twenty years ago this week, or thereabouts.

Note that the column appeared on an erratic schedule in its earliest years as “New England Radio Watch,” and didn’t go to a regular weekly schedule until 1997.

One Year Ago: February 17, 2014

*We’re not much in the habit of making prognostications here about what lies ahead in each new year of covering the radio and TV industry. And it’s a good thing we’re not in the prediction business, because if we were, there’s no way we’d have pegged the start of 2014 as a time of record prices for big-market radio stations.

That surprise came to us from NEW YORK City, where Emmis’ $133 million deal to buy WBLS (107.5) and WLIB (1190) from YMF Media closes the circle on one of the oddest – and ultimately most profitable – ownership transfers in pretty much the entire history of American radio.

Before we dig into the backstory of what makes this deal unusual, here are the basics: by adding WBLS, in particular, to its existing WQHT (97.1), Emmis will create a one-two punch of urban FM that will give it a dominant position with that chunk of the New York audience, competing only against Clear Channel’s WWPR (105.1) on the younger end and with essentially no competition for older African-American listeners.

Even if that demographic is becoming a smaller part of New York’s radio landscape – and it is – the size of this deal shows that it’s still a valuable market segment. Consider, by way of comparison, the last two class B FM stations to change hands in the city: CBS paid $75 million in 2012 for what’s now WFAN-FM (101.9), while Cumulus paid $40 million for the somewhat lesser signal of what’s now WNSH (94.7 Newark). Those, of course, were stick-value deals, where the buyer was picking up only the license and transmitter, not an ongoing format or advertiser list. And so we have to go back one sale further to find a comparison, which brings us right back to Emmis and to the reasons this WBLS deal is so, so very interesting:

Let’s rewind to April 2012, shall we, and the Thursday afternoon that set the radio industry abuzz. Emmis New York was then a two-FM cluster, having recently shed 101.9 to Merlin Media, and its remaining FMs were both squarely aimed at the urban audience: WQHT with younger-leaning hip-hop and WRKS (98.7) with an older-skewing R&B format that was rapidly shedding revenue. In a deal then valued at $96 million, Emmis spun off the intellectual property of WRKS to YMF, which brought some airstaff from 98.7 over to WBLS, created a new subsidiary to hold the 98.7 license, and entered a 12-year deal to lease the 98.7 signal to Disney to become the new FM home of ESPN Radio in New York.

That deal, which we explored very deeply in the April 30, 2012 issue of NERW, was – and still is – unique: for all practical purposes, 98.7 became ESPN’s radio station (so much so that most of the coverage of the Emmis/YMF sale didn’t even mention Emmis’ continued ownership of the 98.7 license), and while Emmis still holds the 98.7 license, it’s also reaping nearly as much financial benefit as it would have received from an outright sale.

The YMF piece of that 2012 deal turns out in retrospect to have been even more interesting than it seemed at the time. While widely reported as a “$10 million” sale of WRKS’ intellectual property, the numbers were even bigger: YMF also agreed to make quarterly payments to Emmis of 15% of any increase in revenue it reaped at WBLS (presumed to be the result of the elimination of competition from WRKS).

And then, a few months later, the ties between YMF and Emmis got even deeper when YMF’s own budget problems forced WBLS and WLIB to move out of their expensive Park Avenue aerie. In need of a new home, and quickly, the YMF stations relocated downtown to the space at Emmis’ Hudson Street studios that had become available with the demise of WRKS. The result wasn’t quite a full-fledged LMA – YMF retained control of its stations under a separate general manager and programming staff, and even had its own separate receptionist sharing space with an Emmis employee at the front desk – but behind the scenes, Emmis quietly began providing some services to WLIB and WBLS that included engineering and IT support. (So quietly, in fact, that few trade publications ever picked up on that piece of the agreement…but that’s why you read NERW, right?)

*Before Emmis and YMF reset the expectations game on the radio side with their New York deal, the other big station-sale headlines for the week were happening upstate (and around the country, too), where Granite announced a pair of deals that nearly take it out of the television business.

We expected the first deal – as we told you in last week’s NERW, Granite was just hours away from selling its WKBW (Channel 7) in Buffalo to E.W. Scripps, along with a second station, and we correctly pegged that second station as MyNetwork affiliate WMYD (Channel 20) in Detroit, which pairs up nicely with Scripps’ WXYZ-TV (Channel 7) at that end of Lake Erie. Over at the Buffalo end, the $110 million deal brought some relief to the remaining embattled employees at WKBW, who’ve been forced to try to get by with less and less every year as Granite’s financial woes have led to a spiral of budget-slashing and falling ratings. Is it too late for the better-positioned Scripps to bring WKBW back to the prime position it once occupied atop Buffalo’s TV ratings? They’ll be watching closely up the road at LIN’s WIVB/WNLO and Gannett’s WGRZ, which have both benefited from WKBW’s slide.

While the sale of WKBW was expected, the surprise came the next day, when Granite announced a second deal to unload most of its remaining stations to Quincy Newspapers, the small Illinois-based operator that’s known for its quality operation of TV outlets (and a few newspapers) in the lower rung of the market scale. Quincy’s only NERW-land presence until now has been the New Jersey Herald in Newton, N.J., but its deal with Granite now brings Binghamton’s WBNG (Channel 12) into the Quincy fold (along with stations in Fort Wayne, Duluth and Peoria).

*Returning downstate, it’s a bad Monday morning for WKJY (98.3 Hempstead), albeit one of its own making. Connoisseur’s “K98.3” drew some social media buzz not long ago when its morning team of Steve Harper (who’s also the PD) and Leeana Karlson posted what purported to be a nastily homophobic RSVP to a child’s birthday party on Long Island. But when reporters tried to find the mother who’d allegedly sent the note, they came up dry- and by Friday, Harper and Karlson were forced to admit they’d made the whole thing up, note and all, in an attempt to start a “healthy conversation.”

What resulted instead, of course, was a storm of outrage. It’s not yet clear what WKJY will do about it; the station hasn’t commented yet, and Harper and Karlson say they did what they did without any input from the station or its management – except, of course, that Harper is management there.

*The storm that ripped across the eastern seaboard late last week tested the structural integrity and emergency plans of stations from Maine all the way down into the Carolinas – but the only report so far of major damage came fairly far inland, up in south central PENNSYLVANIA. That’s where a part of the roof collapsed at the studios of WGAL (Channel 8) in Lancaster, forcing the Hearst-owned NBC affiliate to evacuate its staff just as they were preparing for the early newscasts Friday afternoon.

The roof that collapsed turned out to be over an auxiliary studio that’s no longer in regular use, but uncertainty over the structural integrity of the rest of the 1950s-era building kept the staff out of the building until midday Saturday. In the meantime, WGAL was able to get back on the air for NBC Olympics coverage Friday night via a feed from the master control of sister station WBAL-TV (Channel 11) just to the south in Baltimore. (Some cable and satellite subscribers also ended up with feeds of WCAU from Philadelphia and WNBC from New York.)

While waiting to get back inside their building, WGAL staffers were able to originate a live webcast from the station’s parking lot Friday afternoon, then set up a temporary studio at a municipal building across the street for Saturday morning’s broadcasts.

Five Years Ago: February 15, 2010

Two years after its Penobscot Mountain transmitter tower was sheared in half by the ice-laden collapse of a neighboring tower, Scranton, PENNSYLVANIA’s public broadcaster WVIA is once again coping with a transmitter-site disaster.

The culprit this time was not ice but fire – an electrical blaze that broke out Friday afternoon while a WVIA engineer and several electricians were working in the building. One of the electricians reportedly noticed equipment sparking, and the entire building was quickly in flames. It took about three hours for fire crews to put out the blaze, hampered by the icy roads that lead up to the tower farm that provides most of the TV and much of the FM for the Wilkes-Barre/Scranton market. WVIA president Bill Kelly says the transmission equipment for WVIA-DT (channel 44/RF 41) and WVIA-FM (89.9) is a total loss, estimated at well over a million dollars. Fortunately, there was only one minor injury from the fire and the WVIA tower (as well as the rest of the Penobscot tower farm) was undamaged.

It’s always heartening to watch broadcasters cooperate when someone’s off the air, and this was a fine example: less than a day after the fire, WVIA-TV programming was back on the northeast Pennsylvania DTV airwaves with some help from WNEP-DT, its next-door neighbor on Penobscot and the station whose falling tower clipped the WVIA tower in 2008. WNEP-DT moved from its transitional RF channel 49 to its permanent RF channel 50 last year, but its channel 49 transmitter was still available for use on Penobscot, and as of Sunday it was on the air with WVIA’s full lineup of DTV programming. (The temporary RF 49 operation is a great argument for the utility of the sometimes-controversial practice of “channel mapping” – with a simple rescan, the broadcasts from the old WNEP-DT transmitter will appear to viewers as “44.x,” just like the destroyed transmitter on RF 41 did. How’s that for a backup plan?)

It’s a big week in Pittsburgh radio, with two new stations launching in the space of less than 24 hours. Sunday was Catholic radio’s big day, as St. Joseph Mission put the former WAMO stations back on the air. WAOB-FM (106.7 Beaver Falls) and WPGR (1510 Monroeville) were on the air at 11 AM, leading up to an inaugural Mass at noon; WAOB (860 Millvale) was missing in action for the first day, and the announcements during the Mass mentioned only 106.7 and 1510. As it turned out, the launch of the “Catholic Radio Network” was only temporary; the Mass broadcast was followed by a looped announcement alerting listeners that the next few weeks will bring more Sunday Mass broadcasts, with a “limited schedule” of regular broadcasting set to begin March 19.

Today it’s KDKA-FM (93.7)’s turn, with a 6 AM launch for “93.7 the Fan,” the city’s third sports-talk station. CBS pulled the plug on the former “B94” WBZW on Saturday, spending the weekend stunting with a loop of music interspersed with jingles.

Not many medium-sized markets still have a local talk rivalry between two stations, and right up until last week, the political hotbed of Albany, NEW YORK was all but unique in boasting three competitive talkers.

As we told you in an update to last week’s NERW, that competition thinned out dramatically just after 10 o’clock last Monday morning when Albany Broadcasting abruptly pulled the plug on talk at WROW (590 Albany), surrendering the field to locally-owned WGDJ (1300 Rensselaer) and its lineup of former WROW personalities, as well as to Clear Channel’s largely-syndicated lineup on the big signal of WGY (810 Schenectady). What we didn’t know yet last Monday was that the new WROW simulcast of standards/soft AC “Magic” WKLI (100.9 Albany) is more than just temporary – and that “Magic” is in fact moving permanently to the AM 590 signal as Albany Broadcasting prepares to launch an as-yet-undisclosed new format (possibly bearing the moniker “The Bridge”?) on 100.9.

Ten Years Ago: February 14, 2005

TRENTON, N.J. – It’s a week of change in NEW JERSEY – and not just the big flip here in Trenton that’s taking place this afternoon. That, of course, is the Nassau swap that’s moving top 40 WPST (97.5 Trenton) to 94.5 and shifting classic hits “Hawk” WTHK (94.5 Trenton) to 97.5. It’s a preface to a bigger move that’s at least a year down the road, in which the 97.5 signal will move to Burlington, becoming a full-fledged Philadelphia market signal. We’ll be listening and rolling tape, and we’ll have more on this move next week.

But in the meantime, there’s another format change happening out at the Jersey shore, this one the work of Press Communications. On Friday (Feb. 18), top 40 “B 98.5” WBBO (98.5 Ocean Acres) will shed its format and flip to a simulcast of modern rock “G 106.3” WHTG-FM (106.3 Eatontown), giving G full coverage of the Monmouth-Ocean market for the first time.

Across the river in PENNSYLVANIA, one of the region’s oldest religious stations will soon change hands. Susquehanna, which already owns WSBA (910 York), WARM-FM (103.3 York) and WSOX (96.1 Red Lion), will reunite 96.1 with its former sister station when it pays Thomas Moffit Sr. $280,000 for WTHM (1440 Red Lion). WSOX and WTHM used to be known as WGCB AM-FM, and those of you who’ve taken broadcasting history courses might now be recognizing the stations as the instigators of the famous “Red Lion” case, in which the Supreme Court ruled that the target of a personal attack during a WGCB broadcast was entitled to equal time to reply to the accusations. Things have quieted down considerably since then in Red Lion, where Moffit continues to operate WGCB-TV (Channel 49) and WINB shortwave. There’s speculation that the purchase of WTHM is less about the AM signal (which is effectively a daytimer) and more about the tower that it shares with WSOX. We wouldn’t be surprised if 1440 – which has been on and off the air sporadically the last few months – ends up as a simulcast of WSBA, at least for now.

Fifteen Years Ago: February 18, 2000

Suppose Stephen King is scared yet? His MAINE hometown of Bangor will soon be home to two multi-station groups competing with his own WZON (620) and WKIT (100.3 Brewer). Cumulus came first, assembling a four FM, one AM group (WDEA, WEZQ, WWMJ, WQCB, WBZN) in 1997-98. Now a company called Communications Capital Managers is assembling a five FM group in two separate purchases.

CCM, which is headed by a former principal in 62nd Street Broadcasting, is buying talker WVOM (103.9 Howland) and adult AC WBYA (101.7 Searsport) from Jerry Evans’ Moon Song Broadcasting, and combining them with three stations from Mark Osborne and Natalie Knox: hot AC WKSQ (94.5 Ellsworth), country WLKE (99.1 Bar Harbor), and country WBFB (104.7 Belfast). We hear the price on the Osborne/Knox stations was $8.2 million; no word yet on the Evans properties. The usual “no format changes are planned” applies here; we’ll wait and see.

A few more changes are on the way to the radio dial in central NEW HAMPSHIRE: After almost four years in the morning seat at WJYY (105.5 Concord), Kevin Hilley is packing for a move to the much bigger Albany market. Hilley’s last show at WJYY is next Friday (2/25); the following Monday, he’ll start on the morning shift at WCPT (100.9 the Point). Meanwhile, Vox has switched the calls of WRCI (107.7 Hillsboro) to WKXL-FM, completing the move that began when the former WKXL-FM (102.3 Concord) became WOTX, “Outlaw Country,” last month.

Digital TV is coming to VERMONT, eventually. Vermont Public TV applied for a construction permit this week for WVTA-DT (Channel 24) in Windsor. WVTA-DT will join WVTA (Channel 41) atop Mount Ascutney once it’s built. (We hope they’ll have more viewers than Maine’s public DTV attempt; a newspaper article this week claims there are exactly two DTV sets in private homes in Maine, one of which is out of range of the WCBB-DT Augusta signal).

After forty years at 2077 Elmwood Avenue, Buffalo’s WBEN (930) and WMJQ (102.5) are moving out this weekend. They’ll be the first of Sinclair’s Buffalo stations to move into the new group HQ off Maple Road in suburban Amherst. The stations, then WBEN AM/FM, moved into the North Buffalo facility with what was then WBEN-TV (now WIVB, Channel 4) in 1960, taking over the space that had been built by NBC for erstwhile O&O WBUF-TV (Channel 17). WIVB remains at Elmwood Avenue.

Twenty Years Ago: February 18, 1995

When last we left this sorry excuse for 25 kilowatts, WBMA-890 Dedham/Boston was still running leased-time Spanish-language programming….with a promise to flip to Prime Sports “sometime.” Well, sometime is now, or at least Saturday afternoon 2/18. The local Spanish is gone, and in its place is satellite-delivered Prime Sports. You may recall that the management at WBMA had preferred to keep identifying their station by its former calls, WBIV, which were the legal calls when the station was on 1060
in Natick (until October 1994). The legal ID on 890 (when they remembered to run one) was “WBMA Dedham WBIV Natick.”

Early press reports about the switch to Prime Sports claimed the station would “change its call letters from WBIV to WBMA” (sic). Later reports (as in last week) mentioned neither set of calls and referred to the station under its new format as “WBPS.”