RBR-TVBR 2014 Fall Special Report

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Sean Hannity: Life after the move from Cumulus stations

The longtime Premiere Networks and Fox News talks about the transition and what’s hot on the show today

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Larry Patrick, Managing Partner, Patrick Communications: “The Deal Market Is Open” Dave Ramsey: Helping listeners and helping radio

The self-syndicated powerhouse has spent his life helping dedicated listeners over financial hurdles and providing strong ratings for affiliates nationwide.

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Mary Quass on running radio

The NRG Media President & CEO talks about her entry into the business, challenges she faced then and now, and what’s next

Steve Shaw, Westwood One CEO: “Moving Westwood One and Our Industry Forward” Glenn Serafin: “2014 Brings Radio Back to the Table” Bill Freund, Clip Interactive EVP: “The Importance of Mobile for the Future of Broadcast Radio” Jamie Bartholomew: Former VP/Director, Local Broadcast, Initiative: “Radio Must Change or Die”

Jeff Smulyan: Emmis CEO, NextRadio hero

By Carl Marcucci RBR-TVBR sat down with Jeff to talk about the hurdles and opportunities radio is facing today, his acquisition of WLIB and WBLS in NYC, his passion for NextRadio, and what we as an industry can expect down the road.

In your fiscal Q1, Emmis was 1.6 percent against the markets, which were down 5.5 percent. Outperforming the market seems to be the case lately for you, quarter after quarter. What is your formula?

The formula is the same one that has gotten this company through 30 years: We have great people. We understand we’re not going to be able to compete with the big-scale guys on a lot of the national business. A lot of it we don’t see; before it comes out, it’s been gobbled up by one or two companies. We understand that. We have to be really good at local direct selling, relationship-building, and I think we’re world-class at that.

That seems to be the case. We’re seeing some Q2 reports coming out, and for radio it’s been kind of tough. Why do you think this has been the case in Q2, and what should radio do to get numbers up?

I’m the ultimate one-trick pony. I’ve said this for years: We have not fragmented as much as television. If you look at radio listening fragmentation over the last 20 years, as opposed to TV, it’s almost shocking. The difference is radio is considered a secondary or tertiary medium, to TV’s primary. So people will pay more and more cost per point for less and less audience in television, and when radio has any fragmentation, they say, “Oh, my god, it’s going away.”

We have a perception problem. We must make radio cool again. I’ve said that because we have no cachet. That’s the challenge. I’m a one-trick pony. I keep saying, “We’ve got to make radio cool again.” I keep coming back to NextRadio. You saw the research.

I don’t have any other idea of how to make us cool again. If we just compete with

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streaming guys, there’s more of them, there’s unlimited entry, there’s going to be 10,000 of them.

But we have some tremendous advantages in the over-the-air distribution system. We just have to capitalize on them and let technology come in our favor. Data caps and battery drain all move right in our favor, but we’ve got to capitalize on them.

I’ve studied this industry for 40 years. I’ve never seen a time where the perception of radio is just blah.

I always say Wall Street and Madison Avenue talk to each other every day, and I think that’s the big issue.

How can radio stations change the way they program their formats (and schedule spots, such as perhaps only one between songs) to keep more listeners from moving to Pandora, iTunes Radio, etc., for music discovery?

What you find, when you tear it apart, is they end up liking to hear the hits. I’m not saying we can’t do a better job of programming. All of us can do it. But the fact is, there are 275 million people on a 6+ basis who listen to us every week. They listen a little less, but we’re doing something they like. Could we do more things they like? Yes. Could we play more commercials? Yes. My challenge is if we can get more capital allocated to this industry, we could get our commercials for more, we could attract more capital to do other things, but we’ve got to change the perception.

Nielsen did a study that showed 88 percent of our listeners stayed through a five-minute stopset. We have that debate all the time, and we experiment. I couldn’t begin to tell you what the radio answer is. Intellectually, I would agree with you on changing the spots to only one between songs. It only makes sense. I’m not sure that’s how consumers behave. Listen, we’ve been experimenting in this business since I got into it, and people accuse me of getting into it right after President Lincoln died. It isn’t quite that long, but we’ll always experiment with those things.

Tell us about your decision to invest in Digonex.

We made a couple of decisions to invest in areas where we really like the future. Because of what we see in radio, we’re convinced dynamic pricing is absolutely going to be a way of the future. We found some people we like a lot and think are very good, and we think we can build a

July 2014

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dynamic-pricing business. We’ll see.

Obviously you’re a big hero in this business when it comes to NextRadio. Tell us how you became involved —why is it such a passion for you?

I’m the person you’d least like to invite to a cocktail party anymore. It used to be I could talk about sports or politics or the economy or anything else, and now if I’m at a cocktail party, I’m sure I’ll talk about NextRadio. I got drafted into this when somebody said, “In most of the world, FM radios are installed in smartphones. Will you look into it?”

What I realized, Carl, was that when I looked into it, for many different reasons, I began to realize it was the one thing that could change this business.

Remember, my net worth is tied up in the American radio business. I own a lot of radio stations, magazines, and a few other things. This is now my future, my career. This is what I’ve chosen to do with my life. The more I got into it, the more it became crystal-clear: This is the one thing that changes it for us. It’s the only thing. I’ve been streaming for 18 years. We’re a proud member of iHeart and TuneIn. TuneIn told us Hot 97 is the number one streamed radio station in the United States.

And we joke that the more people listen to Hot 97 and Power 106 and all of our stations online, the more money we lose.

I found there were several things. Number one: Sony sold 40 million Walkmans a year 20 years ago.

Today they sell none. Coleman research indicated that people coming up don’t even understand radio can be portable. They look at it as something they get in their car. When they leave their car, they go to Pandora. We found we have some tremendous advantages if we can be in mobile devices.

And more important than anything else is changing the perception. The best news — and it’s why I asked the question in the Coleman research — was the response to “Do you find the NextRadio system cool?” And 92 percent of the people said yes.

The one thing we were told — and I gave Kevin Gage [NAB EVP/CTO] credit and I gave Paul Brenner [Emmis SVP/CTO] credit — is that it’s not enough to get those chips turned on. This is a labor of love. Maybe we’ll build a business with some of the NextRadio stuff. It’s been gratifying. We’ve been contacted from all over the world. We didn’t do it

1,171 YEARS OF EXPERIENCE Air Time Media American Communications Partners Barger Broadcast Services Broadcast Media Associates CEA Capital Advisors Clifton Gardiner & Company CMS Station Brokerage The Exline Company Explorer Communications Frank Boyle & Co.

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because we said, “This is a business.”

The real hero is Paul Brenner. I’m just the cheerleader. Paul went out and built all this stuff, and it’s truly remarkable. I tell you one thing, MediaVest talked to us yesterday, and they said this is the best game-changer the industry’s ever had.

I spoke with Gary Shapiro [Consumer Electronics Association CEO], who has been the biggest person attacking the American radio industry. I showed him NextRadio and he said, “Jeff, this is your answer.” Honest to God, when he spoke in Canada — we were together — he said, “I’ve changed my mind. Radio has been reinvented by this system.” I was laughing with Gordon Smith [NAB CEO]. When Gary Shapiro says something nice about the American radio industry, we know we have the answer. I think our peers know it. We just have to carry through, and not quit. I think if one of the big carriers jumps, and I think we’re getting closer, they’ll all say, “Sign us up.” I’m not quitting until we’re on 315 million cell phones. I’m still going.

You’ve got to build a compelling ecosystem that people love. You have it in your hands. This is the important point: The nature, the history of radio in the last 100 years, is interactivity. You can build that interactivity in a smartphone that people look at 120 times a day. We’re just in the early stages of this. Right now almost every major company is doing interactivity. I envision a time five years from now where every time a disc jockey opens his mouth and says, “We’re going to take a poll this morning,” it flashes on the screen, a listener-poll vote. It’ll also translate to tablets and automobiles. Now, in automobiles, we have some driver-distraction issues. But the fact is I envision a time we can capitalize and build an entire interactive ecosystem in the American radio station, and no one can compete with that.

You can’t do that with Pandora.

Absolutely not, and you can’t do that with anything else. What we did was we built an interactive ecosystem. It’s just in the beginning of the very first inning. But number one, that changes how people view radio. That’s why we asked the question.

Forty-eight percent said this is “very cool” and 44 percent said “cool.” If 20 percent of the public said this is really cool, that’s a game-changer for radio.

The National Association of Media Brokers WWW.NAMBONLINE.COM

Minority Media & Telecommunications New England Media Patrick Communications RadioStationsForSale.net RadioTVDeals.com Richard A. Foreman Associates Satterfield & Perry Schutz & Co. Serafin Bros., Inc.

“ B R I N G I N G B U Y E R S A N D S E L L E R S T O G E T H E R F R O M C O A S T-T O - C O A S T.”

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At 92 percent, it’s off the charts.

If you want to have cachet, instead of going to a group of college kids and saying, “Radio,” and they say, “Gee, I’m sorry,” say, “Boy, I just played with my new interactive radio.” That’s cool. That changes Wall Street and Madison Avenue, which we desperately need. Number two, every time we add a cell phone and people are listening to local radio, that adds to our listening. I don’t know if this’ll add 10, 15, 20 percent listening. But it’s listening we have in the terrestrial system that we actually have a chance to make a profit at. I’ve said I don’t know what the numbers are, but if we’re at 315 million smartphones, we’re going to have a lot of people listening to radio that never did, or listening a lot more than they did.

And it’ll really become important when the cell phones go down in an emergency as well.

That’s exactly right, and we know in every emergency, people rely on us. That’s been our message to Congress: “If the carriers had turned these chips on, you would have saved a lot of lives.”

Unfortunately, our portability has diminished.

People don’t go into Best Buy and buy radios anymore, but every American has one smartphone. It’s the perception, number one. Number two is that it’s totally intensive listening.

When people say, “How will this matter?” I don’t know. All I know is if we’re on 300 million devices that everybody looks at 120 times a day and we’re free and don’t drain their battery, and we’re interactive, I have a strong feeling we’re going to get a lot more listening.

The third thing is, we’re building an interactive advertising ecosystem, which has a chance to be gigantic. We’re beta testing it now. But for the first time ever — and this is why Sprint did a deal with us — you run an ad for McDonald’s, and you have a chance to sell them an interactive component, so when the ad comes on the air a McDonald’s logo comes up, or a coupon or directions. The customer can hit it, and they immediately interact with McDonald’s. They can drive to McDonald’s and get the discount in 30 seconds. We’ve never had that ability before. Now we have it in our own system.

It’s not controlled by anyone else.

I’m passionate about it. I’ve always said, “I’ve spent hundreds of thousands of hours on this in the last seven years.” By the way, long before we invented NextRadio, people said, “Well, it’s a Smulyan project.” I fell in love with this because I knew it was a game-changer. When the NAB said somebody’s got to build an interactive system, nobody built it but us. I never regretted it. We’ve learned a lot. I did this because I think this is our future. If somebody could get me another future and let them carry the ball, I’m glad to go back to the beach.

There’s a lot of discussion about the industry measuring streaming listening and crediting it to a station’s OTA listening. If you’re in L.A. and you’re listening to WOR, they don’t get credit. But if there can be a way to get proper credit for all streaming and add that credit into one rating....

It would help. It’s still a small percentage, but you’re right. Whatever we can do with streaming, if we can measure it, sure. But the reality is, we know that 9 billion hours of local radio are streamed in the data networks. That’s 9 billion hours we know can transfer to NextRadio and over-the-air radio that we can make a profit on. The stations aren’t paying a data charge, and neither are listeners.

Can NextRadio measure over-the-air listening via the smart app?

Absolutely.

“If we’re in 315 million smartphones, we’re going to have a lot of people listening to radio that never did, or listening a lot more than they did.”

And you can geotarget as well?

Absolutely.

Measuring and geotargeting. What kind of potential do we have for ad dollars?

We have to build up the ecosystem first, but we think it’s spectacular. We can build an ecosystem where our listeners can interact with our advertisers on a real-time basis in our local markets. If an advertiser says, “Come to the store,” and their ad pops up, you can hit a button and immediately get directions through your phone to the store and receive a coupon or a discount. Or you can link to their website for more information.

Everything that can be done, we can do in our ecosystem through this. That’s why I’m so fanatical about it. People talk about spotloads. Remember, the cost per thousand for interactive ads is about triple what it is for over-the-air rates, or more. If I can sell some of these every hour, I can cut my spotload down.

Do you know the time frame for getting that out?

We’re doing beta tests in advertising. We’ve got to have at least a couple of million phones in operation. I think by the time this comes out, we’ll be at about 800,000, picking up about 5,000 people a day.

If you build it, they will come.

Absolutely, and we know this. One of the people that advised us said, “Look, you’ve got the same case as WiFi.” When WiFi entered this country, the big carriers said pound sand. We did it with small carriers, the public loved it, and the big carriers said, “OK, where do we sign?” It’s the same case. I know this now. We see the take rates, we see the consumer research. We haven’t done any mass marketing yet. This has all been word-of-mouth. Now we’re going to ask the industry and all the leaders, “Let’s do it. We’re going to do it over the air.” We’re also going to ask our brethren in TV to support this.

Westwood One recently partnered with the radio initiative to fund the Sprint payments for NextRadio. What are your thoughts on that partnership and how’s it going to help your position?

We made a deal with Sprint and said the industry’s got to chip in. Everyone’s been great. We’ve got a lot of people who have said, “I can’t afford to write you a check, but I’ll give you inventory.” This answers those people. The largest 10 or 15 companies are just writing checks. What we need is the inventory from the other people, and this is what we’re getting from Westwood One.

Can you give us a snapshot of the latest efforts to get other phone carriers and smartphone manufacturers to activate those chips and support NextRadio?

The manufacturers love it. We’ve had one break, and we don’t know if it’s because the carriers are changing their minds, or whether there’s a technological question. Every HTC phone that’s been made has NextRadio. You can buy an HTC phone at AT&T or T-Mobile or Verizon and download NextRadio and have it. We know that that’s true of Samsung and LG and Nokia, but the phones from those other carriers have been deactivated. We believe we’re getting closer. You keep throwing pebbles at a rock and at some point the avalanche starts. Let me just say we’re in discussions and we’re hopeful.

Are there any other hurdles you can think of that we need to overcome to get the numbers back up, both for ad dollars and listenership?

I believe we can improve listenership if we’re in all these devices — that will help us dramatically. I think we’re going to get a great break. I had a consultant years ago who said, “When data metering comes about, that’s when you’ll be in all devices, because it’s going to be a big issue.” I didn’t know what he was talking about. We see it day by day.

Every time somebody gets a data meter — Verizon is under attack because even with their unlimited customers, they’re throttling it. All of that goes to our benefit. That’s the challenge that Pandora has, that Spotify has, and our friends at TuneIn. The fact is that it goes to our benefit. When people start going, “Jeeze, let me see if I’ve got this right. I could listen to the same thing for free?” So I think that helps us.

But as I said, our biggest challenge is perception.

When you look at radio consumption, even with fragmentation, our consumption’s spectacular. Ten years ago we had 15 analysts covering this industry.

Today we have none. Marci Ryvicker covers a couple of companies; it’s about 5 percent of her total work. The reality is we’re not in the game. Why? Not because of consumption. We’re not like the newspaper business. Our consumption’s held. But our perception has just — I’ve always said: Make it cool and change perception. And someone give me a better idea to change perception, and I’ll do it.

With Emmis’ purchase of WBLS and WLIB in NYC, Emmis is further solidifying itself in the Urban radio marketplace. Tell us how this opportunity came about and why you decided to take it.

It was a perfect fit. When the world collapsed and we had too much debt, we reluctantly made a deal with ESPN and they took over KISS. We knew WBLS and we sold BLS as our intellectual property.

We knew a couple of things at the time we made the deal. Number one, we needed to fix our balance sheet, which we did. Number two, there was going to be one surviving Urban station in New York, and it was going to be BLS that was going to do well. Number three, we knew the people who had bought BLS were not long-term radio players.

The station was housed in our building. We knew them, liked them.

We were the logical buyer. We bought them. We have no regrets, and I think our formula, Carl, has been the same since the day we started this company in 1981: Get great managers and great people and let them serve their communities, and find the best niche and serve it. Whether it’s BLS or Hot 97 or Power 106 or KROX in Austin or KSHE in St. Louis or The Fan in Indianapolis, we don’t have any formulas. We find the best format in the market, and we give our people the power and we use our personality and our involvement with the community, and that’s why we do pretty well. ·

For a confidenti call 415.391.48

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We’re closing deals left and right.

(And even down the center)

Recent transactions

What can we do for you? )))) (((( BROADCASTING

has agreed to swap

5 Radio Clusters

has agreed to convey the assets of

The Salt Lake City assets of

has conveyed the assets of

4 Radio Clusters

are being conveyed

$57,000,000

$16,000,000

for

with

Serving Long Island, NY to

for

to

to

in exchange for

Broadway Media, LLC

has conveyed the assets of

2 Radio Clusters

in Monroe & Alexandria, LA to

has conveyed the assets of

has agreed to convey the assets of

KDAY(FM)&KDEY(FM)

WGXA (DT)

Los Angeles, CA for

$15,000,000

Macon, GA for

$33,000,000 to

to

Summit City Radio Group, LLC has conveyed the assets of its

Ft. Wayne, IN Radio Cluster to

Adams Radio Group, LLC

MVP will be at the Fall Radio Show. Come see us at the Westin.

Media

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Telecom

For a confidential discussion or more information, call 415.391.4877 or visit www.mediaventurepartners.com

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IT Services • Renewables

San Francisco | Boulder | Kansas City | Boston

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Sean Hannity: Life after the move from Cumulus stations

By Carl Marcucci

The longtime Premiere Networks and Fox News host is doing just fine after contracts were not renewed on numerous Cumulus 50-kW stations at the end of last year. We asked Sean about the transition, how his show has evolved since, and a bit about the important issues he’s been covering in today’s rocky political, economic, and international environment.

Tell us about the transition from Cumulus stations since your contract on some of its stations ended at the end of last year.

It really couldn’t have worked out any better for us. One of the things that we did is added a whole bunch of live markets that we never had: Tampa, Miami, Denver, Sacramento, and Birmingham on an FM. We knew there would be a slight rebuild, but to be perfectly honest, we haven’t lost any audience at all. The two measures of success that we have are audience and revenue, and we’re one of the few shows that, in a tough economic environment, has gone up 20 percent a year for the last six years. The show is really doing well. We’re very advertiser-friendly.

The biggest challenge all of radio is facing, especially talk — and I try to preach this any time I’m talking to radio people — is the measurement that we’re now using is beyond flawed, based on the many new platforms that people have to listen on.

This is a huge problem, and it’s going to become a bigger problem for music, even more so than talk. When you have people that are listening on WSBRadio.com or WJR.com or whatever affiliate they listen to, in most cases — there are a few exceptions — none of those listeners are ever even potentially counted, because there’s no encoding.

If you listen to a host website, like Hannity.com, or a host application, or if you listen to iHeart, or, in the case of music, if you’re listening to Pandora, whatever it happens to be, none of this is rated.

The world of consumption of radio has dramatically changed in the last 10 years. It has similarly, dramatically changed from the five years prior. We’re not keeping up our measurement with technology.

It’s outdated, it’s outmoded. Literally, radio com-

panies are paying for their own demise by allowing this system to remain so flawed.

The smartphone is the new transistor radio.

Your product is being listened to on that radio, so that should be counted as part of the overall listening. Nielsen is working on it.

Let’s say there’s a big issue breaking in Los Angeles. I pull out my iPad or my iPhone and I go to the iHeartRadio app, and I’m listening to KFI, which is a great radio station — that’s our sister station. And I’m listening for the news out there.

Why shouldn’t they get credit for my listening even though I’m in New York?

Let’s say you lived in New York City and there’s breaking news in New York. A lot of people have difficulty getting AM in big office buildings, yet so many people are listening online. Why is it, on a big breaking news day when people would turn to WOR, my affiliate, and I’d have a huge spike in listenership that day, none of it is going to be counted because it’s all online listening?

Companies do measure online listening, but they should pair it up with the overall rating of the radio station it’s coming from.

They certainly should. I’m not sure they can do it all accurately. The one thing about online listening is you can get exact measurement. There’s no guessing. You can see who’s listening — not exactly who — how many are listening, and how long they’re listening. The reason there’s not been any erosion in the format is we work very closely with our advertisers. It’s expensive to advertise on radio. How is it we’re growing 20 percent a year, that many of our long-term advertisers now sign two- and three-year contracts with the show? They wouldn’t do that if they weren’t getting results, and the results are there because the audience is there, and the audience isn’t getting measured.

It’s very frustrating for everybody on the air.

I’ve got to imagine it’s frustrating for all the big companies paying enormous amounts of money to Arbitron, and now Nielsen.

There’s no urgency to fix this problem, which is hurting the industry. It’s hurting every single solitary radio station. It’s hurting every station owner.

It’s hurting every station group, and it’s hurting every on-air personality. So I’m not sure why there’s no sense of urgency and a demand they start getting this thing right immediately.

How has your show evolved over the years, especially with the political divisiveness in our country of late? How do you keep up with that?

It’s in many ways similar and many ways different. I’m 52 years old, I’m a father, I have teenage kids — it adds a texture and perspective to your life I didn’t have when I was young and single running a talk show. I’d like to say I’m more mature.

But I think the single thing I have moved toward, including my opinions on the show, is the newsof-the-day information from behind-the-scenes insiders — one of the things I’ve been able to develop over the years is a lot of contacts. I use them as efficiently as I can, and I’m trying to give out information, news, what’s happening, and then, of course, the opinion and the newsmakers along with it. I go in to work, one of the top three stories every day that’s going on in the world, and I try to focus, move the show as fast as I can, give as much information and context and texture and all that with it.

What are some of the top issues you’re covering and the things you’re most concerned about from a geopolitical, or domestic, perspective?

What bothers me more than anything else is America’s abdicating its leadership position in the world, in foreign policy. And I think we should be the world’s economic leader, and we’re not. When I throw out these numbers, I try to remind my audience: There are 50 million Americans on food stamps, 50 million Americans in poverty, the lowest labor participation rate since 1978. Fifty million people. That is a lot of people in a nation of 300+ million people. That’s a lot of people in our country that are suffering, I would argue, needlessly.

I’m kind of proud of a couple of things that I’m able to do with the platform that I have. I keep looking at these numbers. I have no faith in government that they’re going to fix the economy any time soon, especially not under the current White House. So I started a “Get America Back to Work” campaign, and it started one day on the air when I said, “If I was out of work today, with the current economic conditions, I would move to North Dakota.” I kept reading about North Dakota, the oil fields, and the jobs that are being created, and Walmart trainees being paid $20 an hour, and truck drivers making $75,000 or $100,000 a year, and they don’t have enough people to fill the slots available.

Interestingly, three or four months later, all these calls started coming in, one a week, one every two weeks: “Hey, Sean, I’m calling from North Dakota. I took your advice.” They heard me say I’d move to North Dakota if I was out of work, they were out of work, they moved to North Dakota, and they were very proudly telling me their success stories. Maybe somebody that was making $25,000 to $30,000 a year is making $80,000 or $100,000.

And he’d tell the story, he moved to North Dakota and started doing X, Y, or Z. And I thought, maybe I could institutionalize this.

I ended up partnering with all these companies in North Dakota, and some in Texas because midland Texas is going through an oil boom. We got over 2,000 people jobs in just the short time we’ve done this, and we have thousands more in the pipeline to get more jobs. The interesting thing about North Dakota is that’s only the tip of the iceberg.

If you’re asking me if I think these are troubled times, I think these are very troubled times. We see a war going on in Israel as we talk today. I think this president has been the worst president, in terms of our relationship with Israel, in our history. I can’t believe they don’t seem to understand that thousands of rockets have been fired into Israel and three kids were kidnapped and killed, and a terror group, Hamas’, charter calls for the destruction of Israel, and Israel is only doing what we would expect our government would do if thousands of rockets were fired into American cities.

And on the job front, just think how easy it’d be to build a bunch of desalination plants in California along the coast. How many jobs would that create, and would that solve part of their water problem?

I lived out in Santa Barbara in the late ’80s.

They had a major drought when I was there and they were very close to building one of those plants. Certainly the technology is there and available, and the creativity and the mindset have to be there with it, and that’s why you need forwardthinking leaders that understand things.

We’ve got a crisis at our border, we’ve got an economic crisis with 50 million people in poverty, 50 million on food stamps. We have the lowest labor participation rate we’ve ever had. Add to that a $17 trillion debt, $100 trillion in unfunded liabilities. It is a prescription for an economic disaster.

One of the things I’m trying to do to keep it positive, because there’s a lot of negative news out there. So

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I started this whole Conservative Solutions thing.

How can we fix things? Rather than bitching about the problem all the time, what are some of the solutions?

For me, energy is a big part of the solution.

There is the “Penny Plan” — if you cut one penny out of every dollar government spends for six years, you can actually get to a balanced budget — but that means you have to squeeze a penny out of every dollar. You’d think that’d be an easy thing to do. But it’s not easy when Congress increases spending 8 percent a year on every program whether we can afford it or not.

Another solution would be to control the border.

The cost of illegal immigration is huge. It impacts our educational system, our health care system, our criminal justice system. The president doesn’t seem to care about controlling the border. Texas Governor Rick Perry is having to act unilaterally because the president won’t partner with him and do their job of controlling the border.

School choice would be another part of our solution, and health care savings accounts would be a great alternative to ObamaCare.

What is your formula for juggling Hannity on Fox News with your radio show? That’s a long day.

It’s a long day, but first of all, it’s in my DNA. I love it. I actually think I love it more now than I ever have, and I appreciate it now more than I ever have.

I have great partners, I have a great staff, I have a great team both on radio and television. I have amazing people around me that help me, support me, and make me look good every day.

I won’t say the schedule’s easy, because it’s not.

But it’s really a matter of discipline and desire. I love to get on the microphone every single day and talk. I love to go on TV and do that show every day and say, “Hey, take a look at this. Did you see this is happening?” I love to interview top newsmakers every day, the people who are making news. I love to be in the middle of presidential debates. I go on the road with presidential candidates. I like being on the road at the RNC convention, the DNC convention. I just like the whole package.

Some say radio listening is going south, especially among the younger demos and on music stations. They’re going to online destinations. What do you think can be done to keep radio relevant?

I think in the end, music is going to be harder.

You have satellite radio, and you have iHeart, and you have Pandora, and you have an iPad or an iPhone you can plug into your Bose radio speakers in your car and choose your own music that you downloaded that you want to hear again and again. I think their challenge is far greater than for spoken word.

You are one of the few major national radio hosts that hasn’t put his foot in his mouth and scared away affiliates and advertisers.

How do you keep from doing it?

I do it consciously. No one has ever asked me this question, ever. I feel I can say everything I need and want to say and not compromise a thing without saying it in a way that is going to hurt the show. Here’s how I look at it: There are a lot of people that depend on me. There are a lot of people that work for me. They have homes, they have apartments, they have cars, they have mortgages, they have kids.

I could walk away from all this tomorrow. I have been blessed financially. But it would be selfish if I didn’t think of the impact that the words I say might have on their careers. There are people

that sell for the shows. At some point in radio you have to find who you are. I remember trying to be Bob Grant when I first started. I remember I was down in Atlanta, hanging up on people, and it really wasn’t me. It’s not who I am. I remember they used to tape every show, and if the program director wasn’t listening and I thought I might get in trouble, I’d go steal the tape, and then go home and worry I might get fired the next day. I didn’t want to live my life on the edge like that. I kind of know what the issues are, that are that incendiary.

I understand political correctness. I think there’s a double standard for conservatives, but I don’t feel like I have to compromise a single thing that I want or need to say or throw my career away.

I also think, on the other side of the coin here, I’ll defend Bill Maher. I’ll defend any liberal that says anything way over the top, even if they say it about me — and they have. I hate the environment we’re working in. I hate the idea you can’t revise and extend remarks like Congress can, that you can’t apologize for something you sasid out of emotion or anger or whatever. I hate the idea there are groups of people monitoring my four hours on the air every day. We know who they are, we know where they live, we know who’s paying them, we know why they’re doing it: because they don’t like what I’m saying, and they’re looking for that one word, that one phrase, that one sentence that would end my career, and I’m not going to give it to them. That’s a decision I made.

I would rather have Bill Maher use any word he wants about anybody, any place, any time, or Jon Stewart. Well, “They can get away with it because they’re liberal and they’re comedians.” Well, I hate to tell you, but Rush is very funny. Rush is often doing insane things, tongue-in-cheek. But the same standard doesn’t apply. I don’t see liberals ever coming to his defense.

We work in an environment, Carl — and this is not paranoia, this is just a fact — where there are groups hoping and praying and waiting and monitoring every single hour of every single day of every single conservative in the hopes of getting that person fired, in the hopes of silencing that voice. I’ve actually addressed the people that have to do that job and monitor me.

I’ll say, “You, in your underwear, in your basement, getting paid to listen to me. Right now you are a loser. Go get a life.” But it is what it is. I can do two things. I can fight the system, and if I wanted to go out on any given day, if I wanted to go out there and get in trouble, I’d know how to do that. But I choose not to. But I also choose that I will not compromise what I have to say. I just say it, because I think having conservative voices in the end is more important than whatever satisfaction I’d have with, “I told it the way it needed to be told!” Well, OK, now I’m on the beach.

How do you keep your show entertaining and relevant, and have you changed over the years the ways you produce or prep for your show?

I think we did a dramatic reset toward the middle of 2012. There are cycles to the news and cycles to radio, and always in election years you do really well, and in post-election years there’s a letdown. I moved toward news information behind the scenes. Everybody has an opinion on Obama. I still talk about him, but we were right about him in 2007.

It’s 2014. If I’m doing the same show I was doing seven years ago, I’m making a mistake.

People want to hear new things, new takes. I think the best thing I can do every day is deliver the news of the day, the top stories of the day, my opinion on those top stories, and the people that are involved in those top stories. One of the things we’ve been doing is putting on persecuted

The deal market is open

By Larry Patrick, Managing Partner, Patrick Communications

The radio deal market appears to be picking up steadily each quarter. That market closely mirrors the overall economy as we climb out of the recession hole into which we fell six years ago. The upcoming Radio Show in Indianapolis will be a good test to see if the business in the suites will return to the lofty levels of prior years.

Lenders are back, although at much lower leverage levels than before. It is still possible to borrow as much as 4-times trailing BCF to finance acquisitions. Many sellers have also accepted the new reality of the marketplace in terms of pricing for their stations. That is, unlocking some inventory and making deals happen. The recent uptick in pricing for the South Central stations and the Kansas City Wilks cluster is encouraging. Better pricing will bring more sellers back to the market. We have seen smaller and unrated markets stabilize at 5.5- to 6-times trailing broadcast cash flow.

The bankers and many investors still value the substantial cash produced by radio stations in rated and larger unrated markets. It is encouraging to see current owners, like Midwest Family, Connoisseur, Mapleton, and Duke Wright, exhibit their faith in radio by expanding their holdings.

The better news is that institutional investors are backing some of these firms as well as returning players like Larry Wilson, Dean Goodman, and Carl Parmer. The investors believe in these new companies and are willing to back them to replicate groups that they owned or managed in the past. Seeing 30 percent-plus returns as a dividend will convince some fund managers to get back in the water. The revenue growth may be heavily dependent on digital initiatives, but radio’s free cash flow is music to the ears of those with risk capital to invest.

The recent initial public offering by Townsquare Media started off a little soft but has rebounded. The process shows some interest in new public radio companies by Wall Street. This is music to the ears of several owners who have managed public companies previously and seek to tap that marketplace to expand their war chests for more acquisitions.

Many other topics will continue to resonate in the radio industry up to and past the Radio Show. NextRadio, with FM chips in cell phones, the continued drumbeat from the record industry to have radio pay for its broken business model, the influx of hoped-for political revenues, and budget planning for the coming year will all demand our attention.

For many station owners, summer will fade into fall. Back-to-school promotions will take center stage along with plans for football broadcasts. And thinking about how Main Street is churning along to make its and our cash registers ring will be the daily focus for most owners.

For those in the deal business as sellers, buyers, or advisers, the market is showing signs of life. The Radio Show will be a good time to measure how much the market has rebounded.

Already we are seeing steady increases in the number of buyers and sellers in the market and that, as a broker, is always a good thing.

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Christians that were given the ultimatum, “Convert to Islam or die in Mosul,” and we put two of those people on the air. We’re always looking to take people a step inside the story.

During the Boston Marathon bombing, we had people on Boylston Street, on the ground, giving us information. Very news-intensive, very information-intensive. We call it “news information overload” hour in the final hour, and that’s when I bring in my staff and we start fighting about stupid stuff and throw out the other stories of the day. We try to keep it balanced between having fun news information and entertainment.

What other talkers do you listen to?

Probably I only get to hear three. In all honesty, they’re friends of mine, and I really don’t get to hear them a lot. Occasionally on the weekend I hear Howard Stern in a replay. If I’m in the car, believe it or not, I like to prep in quiet.

I need quiet time to prep. I turn my phone off, and I just sit and I study and I read and I write and I take notes and I’m doing all that stuff.

I like to hear Glenn Beck, I like to hear Rush a little, I like to hear Mark Levin a little. But I also don’t want to listen to that much because I want to keep my own identity. I want to do my own thing. I want to be as pure to the person I am as possible. I find that I’m better able to do that when I just go inside myself.

How far will you go for affiliates?

As long as it’s vetted, I’ll do any ad they want. I do as many appearances as my schedule allows. It’s hard with teenage kids, but I try to do a number a year. I went through a series over the years of the Freedom Concerts, where I was traveling everywhere and doing that for the military and such. Maybe in three years, when my son graduates high school, I’ll be able to get back on the road again. And if people want me, I’d love to go.

How are you helping Republicans win in November, and what will it take to get the sea change a lot of people are saying we need to see in Congress?

First of all, I am not a registered Republican. I am a registered Conservative in New York. I look at conservative governors like Rick Perry, Rick Scott, Bobby Jindal, Scott Walker, Nikki Haley, and Susana Martinez. They are all Republicans, but they have governed conservatively, Rick Perry perhaps the best among them. They all took record deficits and turned them to surpluses.

Under Rick Scott in Florida, unemployment has gone from 11 percent to 5 percent, since he’s been governor, in one term. They’ve done amazing jobs.

I have referred to Republicans in Congress as timid, weak, and lacking vision. I think there are good people there. They have done good things there. But I also think they have been afraid of their own shadows when it comes to combating the president and doing it with a united voice.

Which is why I’m encouraging all of them to get their act together, stop being timid, and create a five-point vision that will inspire the country.

That’s the Penny Plan, and that’s energy and that’s controlling the borders and that’s education and that’s health care savings accounts. You can’t just be anti-Obama. You need to convince people you’re going to get them out of poverty, off of food stamps, give them a ladder, and if they’re going to work hard and play by the rules, that they’re going to have a chance to succeed and buy a home and a car and live in a nice safe neighborhood. I don’t think they’ve done a good enough job doing that. ·

Dave Ramsey: Helping listeners and helping radio

By Carl Marcucci

The self-syndicated powerhouse has spent his life helping dedicated listeners overcome financial hurdles and providing strong ratings for affiliates nationwide. Here, we ask Ramsey how important the radio medium has been to his career, how radio can evolve in the Internet age, why his affiliates are so happy, and more.

radio has held its own quite well in the radio medium. You are no small part of why that is the case. Can you tell us why talk radio is still so important to listeners?

For our show it’s about providing the information people need, being genuine with them, and providing a quality product.

Tell us about your career. How did you get where you are today?

In 1992, I was a guest on a radio show talking about real estate, and the phone started ringing with people wanting to ask questions. The station was in bankruptcy and couldn’t pay the host, so the guy quit. A friend of mine and I called the GM and met with him about doing a show. They had no money, so we did the show for free — just for fun.

Not too much later, my friend quit and we changed the name of the show to The Dave Ramsey Show. That’s when we started syndicating the show. We’ve grown the program one radio station at a time. I have a great team of people who work with radio stations to make sure we superserve our affiliates and our listeners. We just never quit looking for ways to grow and serve.

How have you expanded the Dave Ramsey brand online? How successful have you been with it?

We now have the Dave Ramsey Online Video Channel, where you can watch the show via iOS app, mobile, or desktop. The Video Channel provides a lot of the behind-the-scenes video and family profiles that our listeners have been requesting.

We can’t include that on the radio show, but we can online.

Listeners can also stream the audio of the show on the Dave Ramsey Channel on iHeartRadio, at our website, or by using our app. We want to make the show available in multiple formats so listeners can choose how and when they access the show. We are really happy with the initial success and have exceeded all our original goals.

When did you first realize you had struck a chord?

After my wife, Sharon, and I hit financial rock bottom, people started asking how we had survived and how we were recovering. It was obvious that a lot of people were struggling with money and needed help developing a game plan. When the phones started ringing at the radio show, we knew we had struck a chord.

You have carved out an enormously successful career in virtually all media platforms and public speaking, as well as authored some best-selling books. Radio has been fortunate to have you share your talent on the air for about 22 years. What has kept you involved in the medium?

I love radio because it is theater of the mind; it is a very intimate medium. You can feel the pain, humor, and drama in every call.

What are the greatest challenges today to building a financially successful business?

Business owners face a lot of challenges these days, but at the top of the list is hiring the right people and keeping them. You have to take your time in hiring so you don’t make a mistake. Hiring the wrong person will cost a business more than waiting for the right one. And once you get that person in place, you need to treat them the way you would want to be treated if you were in their shoes.

If you treat your people well, it will create a good company culture and bring more of the right people to the business.

If you were setting fiscal policy in the country, what would be your first order of business?

You don’t want me involved in fiscal policy. I’m just here to help Joe and Suzy take care of their finances. I’ll leave the policy to the goobers in Washington.

While music radio has been in decline from competitors like Pandora, talk/spoken word

Tell us about your Financial Peace University — what should our readers know about personal debt?

Financial Peace University walks people through creating a plan for their money — getting out of debt, saving for emergencies, having insurance, investing, and giving. When all your money is going toward debt payments, then you don’t have anything to invest or give. You’re just a rat in a wheel. If you get rid of the payments, then you have control of your greatest wealth-building tool, your income.

Do you have any immediate financial advice for our readers? We’re trying to figure out how the stock market has been so strong for most of the summer with so many macroeconomic threats out there.

The stock market is fickle and hard to predict. Think long-term when you are investing, and you’ll be fine.

What immediate and short-term threats do our readers face economically that they should be concerned about and act on?

Personal finance requires long-term thinking. Get a game plan for meeting your long-term goals — get out of debt, save for emergencies, invest for the future, and give. That plan works in any economy.

How do you create such a strong bond with your affiliates?

I have a great team of people who work to superserve our affiliates and make sure they have everything they need to promote and sell the show in their market.

Tell us about your live events. How do they help in evangelizing your radio show? Do you see more of them on the horizon?

We have a variety of personal finance and business events that we do throughout the year, mostly in markets with radio affiliates. Our affiliates have the opportunity to get involved in the events, and make it a big deal for the state and their markets. ·

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Mary Quass on running radio

By Carl Marcucci

Mary Quass, NRG Media president and CEO, got her ownership start when she purchased stations from Stoner Broadcasting in 1988. We asked about her entry into the business — the challenges she faced then and faces now in running radio; how the acquisition environment has changed, especially for women; and what made her decide to make the leap into ownership.

Mary, tell us about your entry into the business with the formation of QBC and the challenges you faced back then.

Oh, gee, it’s been so long ago. Actually, I kind of got into radio by chance, I guess. I graduated from college with a degree in Home Economics and minor in Marketing. I aspired to have a position within the fashion industry, which is about as far away from radio as you can get. But at the time, my husband and I had recently been married, he was back from Vietnam going to school, and the desire to eat and pay the rent were the goals, along with getting him through college.

I began to research my ideal career moves, and in doing so noted that the people who were in the positions I desired were a) almost exclusively men, and b) were in direct sales. Though not a fan of direct sales, I listened to a friend who suggested that I try selling radio. The rationale behind the move centered on the possibility of finding the dream job, because I would be able to interact with many different types of businesses and could see what area held the most opportunity. So I took the position of rookie salesperson with no list, no territory (other than the Yellow Pages), and no training.

I take that back: My training was a visit to the shopping mall armed with a rate card and instructions to “Go talk to the business, and see if they want to buy any radio spots.” My indoctrination by fire, if you will, put me in a position to figure out that I really liked this radio thing! I was fortunate enough to be able to go on to work in regional sales, then sales management, and then eventually got the coveted job of general manager at the stations that gave me my start in radio.

What was the station you started at?

KHAK-AM & FM, simulcast country stations in Cedar Rapids, IA. The stations were owned by Stoner Broadcasting. Tom Stoner ran a great group of stations and really created an environment that was the basis for what eventually became the underlying theme of NRG Media: great local radio!

The stations were embedded in the community and were really a part of the lives of the community and the listeners. While I learned a lot, I also began to believe there were things that I would do differently if I owned the stations.

So on one of the occasions I had dinner with Mr. Stoner, I asked for the opportunity to buy the stations if he ever contemplated selling. We had another glass of wine and moved on. A couple of years later, he took me up on the offer and offered me the opportunity to purchase the stations.

He called and said, “Do you still want to buy the stations?” And I said, “You bet!” Panic then set in when I got off the phone and said, “What do I do now?”

Through some starts and stops and a huge learning curve, I was able to put a package

together and purchase the stations. I remember talking to my husband as we were close to closing and saying, “So, I’m about ready to do this. If it works, it’s going to be great, and if it doesn’t, our house and perhaps a car might be about what we have left. Are you OK with that?”

God love him, he said you bet! We closed on the stations on September 25, 1988. To this day, annually I reach out to Mr. Stoner on the anniversary to thank him for the opportunity to make a career doing what I love every day! We had a great time growing the stations; it was an awesome time to have country stations. It was a blast.

I was fortunate to work with a great group of people. The rules changed in ’96, and radio changed forever, and we embarked on the beginnings of the great “land grab” as everyone wanted to acquire more radio stations. I was in that group and in the quest to acquire, met Steve Hicks, who was doing the same, and from that meeting I began my association with Capstar Broadcasting, adding my stations to the company, which grew to almost 500 stations by the time it merged to become AM/ FM. We did that in under 18 months. It was pretty wild. I got sort of used to being an owner and didn’t want to leave the business after I sold the stations to Steve and asked for the opportunity to run the Midwest region, called Central Star.

Do you think women have to work harder to prove themselves in the radio broadcast biz?

How was it in the past compared to now?

I really don’t know if I had to work harder just to be taken seriously, but you know what? I never looked at that as a deterrent. I think I learned more because, whether it was internally or externally imposed, I had to work harder, I needed to be better prepared.

I think it was a good foundation for me to be able to understand that. If you really want something, you figure it out. I’m very goal-oriented. You work harder, but in the end, if the prize is worth it, then the effort’s worth it to get you there. I do think over the years some of the hurdles we had to face have become less intense as more women prove themselves. Look at the ranks of women salespeople. Some of our best and brightest salespeople in the organization are women.

Women enter into radio sales with the goal of being successful on their own.

When I got into the business, it was a way for me to be paid the same as a man in the same position.

That wasn’t the case when I graduated college and a huge disillusionment. I thought a college degree gave you the opportunity to be on an equal footing, and that just wasn’t the case. Sales was an opportunity. If you perform, you get paid the same.

Commissions are commissions.

Results are what matters, which is great for women to be able to get in and prove themselves.

I do think women have a different perspective on management than men do. Neither is right or wrong, it’s just different. Generally, probably one of the things I’m most surprised about today in the broadcast business is that we don’t have more women owners. I’m not sure why. Perhaps it was the era of consolidation that made private ownership less popular for a time, or the access to capital.

I believe the landscape is changing, and the opportunity for private ownership is once again becoming a viable option. But for me it was an opportunity that was just a given, because it was what I wanted to do. I do think the environment is ripe for the kind of leadership that women bring to the business environment.

We’ve got some fabulous managers within NRG Media. We are blessed with some awesome women in management roles who by their contribution provide leadership to the benefit of the entire company. I know that we are a better company because of the leaders we have, regardless of gender. I would applaud each one of them who wanted to go into ownership, and the industry would be better for it. This is a risky business, always was, and likely will always be.

But I think the access to capital and the access to financing is generally not more difficult today for a man or a woman. Startup capital is always a challenge. It is much easier to attract equity when you are fortunate enough to have a good track record, especially when the equity is new to the sector.

How did you feel when they handed you the keys to your first station?

Back in the day, when I bought my first radio station, we all went to a “signing.” We all came together in a room with lawyers and stacks of documents. After we were done signing all the documents and delivered the money and shook hands, I said, “Is it ours now?”

I got on the phone and called the staff in Cedar Rapids to tell them it was ours and we were on our way. It was fabulous, probably one of the coolest days of my life, because it was now ours. We had an opportunity to be able to do what we wanted.

It was tremendously exhilarating. That feeling has never left me as I am continually amazed that every day our team chooses to come together to make magic, when they could do whatever. They could do a thousand other things. But they come to work in this company that I get to be a part of. To me, there’s nothing better in business than that.

What do you love most about radio?

I get to work with really cool people. Awesome, creative, and caring people — which I personally love. Radio is the people. To me it’s not spreadsheets, it’s not profit, it’s not only ROI. It is providing an environment in which we can allow people to reach their goals, and as a bonus I get to work with really cool people who use their imagination and who care about what they do.

What are radio’s biggest threats right now, and how can we address them?

I think this is a renaissance time for radio.

I used to think we were on the edge of a large chasm looking to the other side — where there’s a whole bunch of radio people standing on a cliff and there’s this chasm between where we are and the other side, and we’re all standing there looking at each other. We can’t go back. Can we jump the chasm? Or do we just stand there and hope somebody else builds a bridge so we can get across?

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The rule book is changing, and the way we used to do things just doesn’t cut it anymore. Today, with the opportunity we have digitally, with the ability to have one-on-one communication in ways we’ve never had with our audience — through texting, e-mail, Twitter, social media, geotargeting, etc. — our shackles are off. We have no limitations.

We’re able to go back to what brought us all to the business: creativity and fun. We’d think and we’d figure out a way and we’d go do it. One of the things I love about the business is it’s never the same. We can do things we have never had the opportunity to do before. So now the chasm, which we thought was so great, is becoming more narrow, and instead of us standing looking over the edge, what we’re doing is backing up a little bit so we can take a run and make the leap across that chasm.

I’ve never been more excited about the business than I am today.

So you’re embracing digital, and you see that as the next frontier for expansion. What have you specifically done at NRG for digital, and is it becoming a revenue source in itself?

Yes. Let me tell you, I think there are so many opportunities now, the problem is how we pick. We have a brand. Every one of our radio stations means something to the audience. Digital, in whatever form, is just another distribution opportunity for the brand. When you were a kid, did you have a favorite radio station?

Heck, yeah.

Me, too. What did it mean to you? It wasn’t just the music they played. It was what the announcer said, it was your association with it, it was your connection to it, it was what it meant, it was what the call letters meant, it was what the logo looked like, you wanted to see the announcers, all that kind of stuff. You wanted to be a part of it. That’s the brand. That was the connection we had. Now we have an opportunity to do that in ways we never had.

We are embracing, certainly, our Web presence. We’re doing streaming, we’re doing search, we’re looking at the interaction with texting and e-mails and social media and all those kinds of things. It’s just another way for us to connect in ways our audience uses, how they spend their lives today.

Do you see any next wave in programming or selling radio?

In programming, it goes back to our roots. I think from a programming standpoint, we have to understand and focus on how people live their lives today. Become a student of your audience. Understand how they live their lives, what’s important to them; a significant part of what you do and what you provide over the radio with your brand is being able to match the audience you serve.

From the sales perspective, and also programming, we have to address the proliferation of commercials on our radio stations. While the foundation of radio revenue has always been an ad-based model, the opportunities for share of time with our audience have proliferated and matching spot breaks with other radio stations is no longer the preferred plan — there are now tons of ways to lose audience to other sources.

Just pay attention to what you do for choices the next time you are in your car. How do you maintain that relationship with your audience and stay able to have an ad-based model so you can provide the programming without alienating the people you desperately want? I think that’s a huge challenge for our industry.

I think we should do it like Pandora: one spot after each song, and that’s it. You can pair that with a promo or the DJs speaking. You still get the same number of spots in an hour, and maybe some songs go back-to-back, but it lets the listener think, “Gee, I can get that Pandora experience on my radio.” And it’s better for the advertiser. They’re alone between two songs — it’s a good pitch — the listener is not going to another station because he knows on your stations there’s not going to be multiple commercials in a row.

That’s a very interesting idea. Has it ever been tried? I’ve got to think about that.

You are also heavily involved in sales with your group. What is the formula you pass on to your staff to maximize revenue while superserving the clients?

Some things never change, right? People want to know what’s in it for them. As much as we say the guys on the air need to be students of the human condition, we need to be, from a sales perspective, problem solvers. Same as it was before. However, now we have an arsenal of more tools to better tailor a program that combines the product with the right message, delivered at the right time over the right delivery system. ·

Moving Westwood One & our industry forward

By Westwood One President/CEO Steve Shaw

It’s an exciting time to be in the radio business. People listen to more audio than ever before, across multiple platforms. Our medium’s unique ability to reach people on the go is one of our core strengths. Whether it’s an NFL game on Sunday, a playlist on Rdio with all your favorite songs, or the latest scoop from Nashville, we’re seeing an increase in demand for quality, multi-platform programming.

We’re meeting this demand by developing more products to reach listeners whenever, wherever they are. Westwood One offers exclusive access to quality brands people love. We also provide our partners with the tools they need to build revenue. Now more than ever before, radio stations and advertisers are seeking a unique mix of content and services specific for their brands and targeted to their audiences.

We are committed to advancing our industry. Earlier this year, Westwood One and Cumulus Media Networks combined assets to build a large and exciting consumer product with great diversity of programming and multiple opportunities to engage listeners. Last month we introduced Westwood One as the national-facing arm of Cumulus Media. We now represent more than just a network — we are a multi-platform provider of sports, music, news, spoken word, and digital content.

I’ve led many companies through transformation, and I’m thrilled to take Westwood One to the next level. It’s really about understanding and anticipating what our partners need. We know we are the most aligned audio company for the future and a one-stop shop for affiliates and advertisers of any kind.

Whatever you’re looking for, we’ve got it — and if we don’t, we’ll build it. For instance, we recently announced a white-label news product that will allow local affiliates to brand flexible news updates available in any length, format, and flavor of news. This type of innovation is a direct response to hearing what our partners need and want.

Our NASH brand continues to build buzz across America — it’s not just radio, it’s a movement that gives 85 million country fans access to the best country lifestyle content across any device at any time. On the sports and entertainment side, we are expanding with more fan-oriented NFL content, primetime play-by-play, and the best in sports personalities from NBC Sports Radio and CBS Sports Radio. We are also seeing a lot of demand for access to our highly coveted Red Carpet Radio platform featuring the Grammys, American Music Awards, Billboard Music Awards, Academy of Country Music Awards, and our brand new live-televised American Country Countdown Awards, airing this December on Fox. Perhaps the initiative I’m most excited about is our partnership with Rdio.

It’s the first of its kind in which a major broadcast company combines forces with a red-hot digital music brand to offer the first fully loaded traditional radio and digital audio platform. This data-rich offering is just part of the digital programming and advertising strategy we’re excited to roll out for you next year.

We’re also innovating to provide better services and technology. I’m excited to announce we are the only company with exclusive off-air verification technology that proves when a commercial runs. This breakthrough tool helps our affiliates decrease operational costs and ensure more advertising accountability.

We’ve built these products for you, with you.

We’re proud to introduce a new, re-energized Westwood One in the marketplace. Our mission is connecting people to cultural moments and to their passions in life. We are building the brand platforms of the future, championing the power of audio, and looking for strategic partners to collaborate along the way.

If you believe in human connection, great brands, innovative platforms, and creative culture, then you belong with us. ·

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Glenn Serafin: 2014 brings radio back to the table

By Carl Marcucci

There has been a real uptick in radio deals so far this year. We’ve asked the director of Serafin Bros. brokerage and finance firm what factors are driving the deals; the current lending and VC climate; advice for radio station owners looking to sell; his role as president of the National Association of Media Brokers; and what we as an industry can do together to help increase our value in the marketplace.

We’ve had a real uptick in deals so far this year vs. 2013. What do you think is driving it?

The “new normal” has settled in, and that has a lot to do with it. Revenues have stabilized.

Pricing has moderated to a level that makes investing in terrestrial broadcasting more attractive.

Just stand back for a moment and look at our business. Broadcasting, especially radio, can adapt to change very quickly. Technology is a tremendous assist to operations. The business is not capital-intensive. The tax treatment is quite good. Profit margins can be terrific compared to most other businesses. We have a large pool of available talent, both in programming and sales, who love what they do.

Look, I know this violates the rule of leverage, but, if you buy a station for 7-times cash flow and pay cash, then, excluding deal costs and capital expenses, the annual rate of return is 14 percent, assuming you maintain revenues and cash flow. Here’s another way to look at it: You get your money back over seven years, after which the value of the station is your profit. Using an appropriate amount of debt only increases the yield! But you have to have talent and determination to make it work.

Today’s market is being driven by existing broadcasters who are expanding, former broadcasters who waited out the downturn, secondgeneration broadcasters, and first-time buyers who always wanted to own stations but until now could not afford them.

The deals making headlines these days are by current or former licensees who know and love the business. Larry Wilson at Alpha. Jeff Warshaw at Connoisseur. Dean Goodman at Digity. John Caracciolo and Paul Homer at JVC. Lew Dickey at Cumulus. Jeff Smulyan at Emmis.

Ginny Morris at Hubbard. Duke Wright at Midwest Communications, and the Frischling family in Pittsburgh. Summit Media did a management buyout of some Cox stations. Starboard Media has expanded its ownership in Chicago and New York City. Educational Media Foundation is always a dependable buyer. Salem Communications has a great operating track record. Townsquare is planning an IPO (CEO Steve Price is a second-generation broadcaster). Saga has the best balance sheet in the business!

On a unit sale basis, however, these headline deals are just the tip of the iceberg. So many

more, smaller deals are being done, deals of less than $1 million. The buyers are individuals or institutions, many ethnic or religious, which can now afford to be in our business. Many of these transactions are being financed with personal capital or crowdfunding or by sellers.

This is today’s deal market, very different on opposite ends of the spectrum.

What advice can you give radio station owners looking to sell right now?

Get some professional advice. And be forthcoming. You have to lift your skirt a little to get attention. Even if you think you have a deal in your pocket, it would be good to know if you are buying too high or selling too low. Brokers watch station transactions intently. There is always more than one buyer for a transaction.

Sometimes, to maximize proceeds, it may be better to split assets to multiple buyers. Media brokers do this for a living. And they are good at it. Brokers only want to deal with reputable and qualified buyers. Otherwise, what’s the point?

What advice can you give radio station buyers right now?

Don’t overreach, and don’t misrepresent your capabilities. Look to buy only competitive signals in healthy markets. Consider “buying down,” and by that I mean buying in a smaller market for less money where you can be a bigger factor. You’ll be surprised how fast your company can grow in two or three years. Go to state or national conventions. Buy and operate where you will be happy.

Tell us about your role as president of the National Association of Media Brokers.

I am enjoying it. The NAMB has become very proactive. It used to be a place for a hot breakfast and an FCC update twice a year, but now we are doing more sharing, sharing information that affects our business activity at the FCC and elsewhere. We host terrific speakers. We file comments at the FCC. We still are a proprietary bunch, and by that I mean we each have our special relationships.

But we also know the “go to” broker for a specific client or prospect. These are treasured relationships earned over many years. You see, most often the shortest distance to a deal is through a broker. More and more, our members see the value of cooperating with each other, which only facilitates transactions. To a man and woman, our members love what they do and are committed to the success of their clients. Also, NAMB is a founding and continuing benefactor of the Broadcasters Foundation of America. We are very proud of that.

Do you anticipate some big deals coming out of the NAB/RAB Radio Show?

Absolutely. They always do. I personally had a $33 million deal that was hatched in an elevator at a Radio Show some years back. I am working on another large one now that started at this year’s NAB in Las Vegas. Brokers and others find the spring and fall shows good times and places to discuss the possibilities and, when the circumstances are right, to get buyers and sellers together. It might take months thereafter to finish, but a sit-down during a convention can help.

Really, sometimes it’s just a comment in a hallway that starts a process. But the comment would be lost on someone who doesn’t know the transaction landscape.

What can we as an industry do to help increase our value in the marketplace?

NextRadio is certainly one thing that has been brought forth.

Well, you’re talking to someone who packed a transistor radio to grade school every day.

Along with iHeartRadio and other applications, anything that puts a radio station’s signal in your pocket is a good thing. I am a radio junkie and listen to radio stations many hours every day. I have an Internet radio receiver on my nightstand so I can listen to local, distant, and even offshore stations at my leisure. My behavior goes to content.

Pandora is not radio. Neither is iTunes. They are music libraries. Sure, they have their place and draw, but real radio is much more. Real radio is engaging, informative, and entertaining, and its listening goes beyond local measurement. The trick is how to effectively measure and monetize that reach. We increase our value when we air good radio.

What about the lending and venture capital climate? What do we have now and what can we expect for financing?

Frankly, access to capital could be much better. There still are too few lenders, and many of them have minimums that are far greater than the average deal. It is better on the debt side than it is for venture capital. One metric that hasn’t changed much in decades is secured debt to value, which is 60 percent for cash-flowing assets. Pricing for debt varies depending on the size and source.

Venture capital needs significantly higher yields, which are hard to get in a slow-growth environment. The largest companies access capital via Wall Street, so that is less difficult, relatively speaking. The problem is in middle to smaller markets, which is where cash on hand, personal capital, and crowdfunding come into play. For the foreseeable future, I do not expect this to change. It would be different if our industry’s revenue growth rates were 5, 6, or 7 percent. If you figure that out, let me know. ·

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Mobile strategies will define the future of broadcast radio

By Bill Freund, EVP and Chief Revenue Officer at Clip Interactive

The way media outlets are communicating with the masses has changed dramatically in the last few years, and the rapid shift continues. While digital communication has driven the change for some time, today it is essential for all industries to leverage mobile technology as a part of their marketing efforts. Regardless of the product or service — whether it is your favorite retailer, sports team, financial institution, or entertainment — the way that people receive and interact with information is now primarily through mobile devices. Any industry that wants to connect with today’s consumers and remain relevant has to have a sound mobile strategy — including broadcast radio.

Today, radio has 243 million listeners in the U.S., 90 percent of the population, and reaches all demographics. So why has the medium been slower to empower the mobile experience? Why has the media channel with the greatest reach not taken a leadership position in mobile? It is time for executives in the terrestrial radio industry to embrace mobile technology beyond a basic streaming app to deliver a rich, engaging user experience, and clear metrics and ROI for advertisers, music labels, and artists.

STREAMING IS NOT ENOUGH Radio stations are taking their incredibly powerful one-way communication tool and making it into a one-way mobile communication tool with simple streaming apps. Unlike other digital and social channels, these apps lack engagement capabilities for listeners. Radio listeners are consumers and social beings who want to interact with on-air personalities and engage radio content, including the station’s Twitter, Instagram, and Facebook profiles. Yet the mobile solution most stations offer falls far short of delivering a robust interactive experience. New technology is bringing radio up to speed with the rest of the digital world by moving the one-way stream to an immersive, two-way experience. Technology is ready to provide a better user experience, interactive content, and solid metrics to stations and advertisers. Radio stations should be embracing new technology and not just checking the mobile strategy box with a one-way mobile streaming app.

If a radio station’s mobile app doesn’t include this functionality, then it doesn’t have a mobile strategy: • Make all contests and promotions instantly accessible with a single tap in your mobile station app.

• Provide relevant location-based offers to listeners as they move about the market.

• Allow your listeners to browse radio and engage with offers, promotions, and ads at any time.

• Combine all of the station’s social and digital channels into one app.

By providing mobile users with an easy and fun way to interact with over-the-air radio content, stations can engage listeners more deeply. The increased engagement can not only build station loyalty, it can also lead to more robust and measurable interactions, like opt-in e-mail submissions and sales leads for advertisers.

Radio has the largest reach of any local broadcast medium. It is still the method by which a majority of people receive their local news, learn about local events, and connect with personalities. It is time for terrestrial radio to better engage the audience through more robust mobile strategies. Mobile is the future of radio, and by embracing it industry leaders will be able to deliver metrics and results the industry has never seen before. · Bill Freund is the executive vice president and chief revenue officer at Clip Interactive, a company with the mission to give interactive radio to the masses in order to bring more listeners to stations and provide new services to listeners, advertisers, labels, and station owners through both standalone apps for individual stations as well as the Clip Radio app, which aggregates all Clip Interactive stations.

Radio must change or die

By Jamie Bartholomew, former VP/Director, Local Broadcast, Initiative

Radio has changed. Hopefully, that’s not a surprise to anyone reading this article. Today’s listeners have so many options that they often don’t know where they heard a client’s ad. Listeners don’t differentiate between audio on a local station, a satellite station, or an online station — it makes no difference to them how or where they heard their news, entertainment, or music. To a listener, audio is audio.

The industry needs to change and embrace new technology, just as TV had to do with the advent of cable. Instead of fighting the change, embrace the new frontier, and move ahead with a plan that focuses on station strengths.

This change needs to allow clients, planners, buyers, and stations to develop audio plans and buys that reach listeners everywhere they listen to audio.

To move the audio business forward means including online audio as part of a terrestrial audio buy, making it just one simple buy. There is no need to create a separate online buy; just add the online audio TRPs (guaranteed impressions/population) to the terrestrial audio TRPs and use the combination to achieve a client’s overall TRP goal.

If listeners don’t care where or how they hear a client’s ad, the industry needs to meet them where they are. Additionally, buyers need to embrace the idea and stop making excuses for why they can’t include online audio on a radio buy. It simply takes some imagination and guts to step outside the box and do what’s right for a client.

Unfortunately, terrestrial radio as an industry has lost its luster with clients and planners. The Internet is the bright, shiny object in the room, and radio isn’t competing very well. In fact, people in terrestrial radio spend way too much time talking about why online audio doesn’t represent itself accurately.

Stations need to treat services like Pandora, iHeart, Spotify, Rdio, etc., as just another competitor. They need to stop complaining about the shares online audio is taking from terrestrial stations and find a better way to compete for their piece of the pie.

For a buyer, negative selling is unappealing. The reality is that online audio is keeping listeners engaged with audio in new ways. Online listening is only enhancing listeners’ audio experience by giving them exactly what they want to hear, when they want to hear it. There is a place for everyone on an audio buy, and radio needs to present the reasons a particular station should be purchased instead of telling buyers why they shouldn’t make an online audio service part of their buy.

Most terrestrial stations actually offer online audio experiences themselves.

Some ownership groups have gone to reporting single line ratings for their stations, adding up all the ratings for a station no matter where someone listens.

In Los Angeles, the Mount Wilson Broadcast group does it for their stations, including KKGO-FM. Emmis’ KPWR-FM is doing it in that market as well. In fact, Emmis has rolled it out to all of their stations other than one New York simulcast.

Audio is everywhere, and these owners are acknowledging that they need the ratings for those listeners who choose online for their listening experience. This is definitely a step in the right direction, both from a ratings standpoint and for listeners. Listeners hear the same spot over the air and online, and the station has a single focus. These owners have put the listener first and have stopped trying to capitalize on online audio by selling it separately. In fact, single radio stations have a hard time selling their online experience separately because the scale simply isn’t there.

The advantages of local radio are vast, and we seem to have lost the presentation skills to really sell those benefits. The need for immediacy is growing stronger all the time, and radio has the ability to deliver what a listener wants when they want it. The advantage radio used to have over TV was that clients could get on air quickly — sometimes within a day. Add to that the fact that developing a spot is much more cost-efficient and radio can frequently win out over TV, if we make the advantages clear. Focus on what makes local audio appealing and put plans together that capture those benefits for clients.

The Internet came with the promise of proving a return on investment for clients radio hasn’t been focusing on, and since then radio money has moved to fund various forms of Internet campaigns. Meanwhile, radio stations appear to have yet to figure out how to successfully and consistently demonstrate radio’s ROI for clients. Whether it’s using an outside source to prove ROI or simply presenting strong case studies of successful audio campaigns, radio is a medium that can deliver on ROI. We just need to do a better job of selling that fact. · S E P T E M B E R 2 0 1 4 · R B R . C O M · 15

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