Sunday, December 17, 2006

Newsweek Article Rips Air America Radio

An article in the current edition of Newsweek paints a blistering portrait of Air America Radio. Citing sources ranging from the bankruptcy report to the disparaging statements of former AAR executives and staffers, the article’s only positive statement is contained in opening paragraph when the writer, Matthew Phillips, acknowleges that are “reports of potential buyers ranging from a group of investors led by two Showtime executives, to a small obscure media company.”

"AAR had confirmed “that a letter of intent has been signed by an undisclosed potential buyer, and that negotiations have now turned to drafting a purchase agreement to divvy up the $20 million of debt the broadcaster owes to a roster of more than 100 creditors.”

From that point on the article recites a littany of complaints about AAR. Many of them well reported on this blog and in other sources over the past month. The article includes the some of messy highlights from the bankruptcy statement

A look at Air America’s bankruptcy filings offers insight into an impatient network that seemed bent on catching up to such industry mainstays as Rush Limbaugh practically overnight. Air America certainly spent like the big boys. Included among its $4 million of assets is a combined $1.2 million in broadcast and recording equipment, computers and office furniture. It still owes $327,000 in back rent on the sprawling 2,200-square-foot studio in New York's Chelsea area it built in 2005, as well as $1.4 million in wage and severance claims to on-air talent and high-priced executives. Franken alone is owed more than $360,000.

The article also criticizes some of AAR’s other well known problems such as the large salaries paid to "stars" like Al Franken and Janeane Garofalo, that there never was a realistic business plan, that pay checks were bouncing, and that morale at the network was eroded when executives decided to cancel popular shows like "Morning Sedition" and the "Mike Malloy Show."

However quoting a named source, former AAR producer Martin Lynch and a unnamed former AAR executive, the Newsweek expose also reveals some lesser known observations about the beleaguered liberal talk radio network. Lynch claims that programming shakeup at AAR was a key factor in the networks demise.

"That was the straw that broke the camel’s back," says Lynch. "They cut the legs out from under us and upset a lot of listeners. The next quarter’s ratings were nonexistent, and we were getting a lot of angry letters from listeners saying we’d canceled their favorite shows. From then on we knew we were done for."

Lynch also cited the morale problem among low-paid staffers.

"We were getting paid peanuts, sometimes not even that, while these executives were making six figures and up."

Probably the most damaging statement in the article is attributed to a unnamed former AAR CEO. Your guess is a good as mine about who that might be. I just have hunch his initials are DG. The source states:

"There was never a realistic business plan that appreciated the difficulty of building a 24/7 radio network from the ground up," He said that in the beginning, the network was plagued by infighting between those who saw it as a political cause that would take years of dedicated subsidizing, and those who saw it as a viable business venture capable of turning a profit off the bat. "The latter group of people were deluding themselves," he said, noting that the programming costs never came close to matching up with revenue opportunities, particularly as companies such as Microsoft, Wal-Mart, Visa and Exxon began pulling advertising from Air America affiliates…It was doomed by their lack of realism."

Ironically, it was Michael Harrison, usually a gadfly about liberal talk radio who struck the most optimistic note.

"This has nothing to do with the viability of liberal talk radio," Harrsion said. "It has to do with them not running an effective business model and with people like Al Franken not living up to the hype. If they’d hired broadcasters instead of a bunch of comedians, they would have had a chance of succeeding."

1 comment:

Longtime said...

The anti-Air America article was NOT in the "current edition" or any edition of Newsweek. It was on the Newsweek web site, which has much lower standards.