WLIB, Air America, New York City, ICBC, Randy Michaels
Air America Appears To Lose Flagship Station
Exclusive To The Radio Equalizer
By Brian Maloney
While Air America Radio's loss of two affiliates in Phoenix and Missoula, Montana is generating news this week, the company itself probably hasn't been able to give either city a second thought.
Why? In a development sure to rip the heart right out of the liberal radio network's already ailing body, it appears extremely likely their leased New York City flagship station WLIB-AM will soon abandon Air America programming.
Even worse, litigation looks probable over the station's lease.
While the network's last day on WLIB isn't known for certain, an internal source providing backing documentation points to the end of March. At this time, Air America parent Piquant LLC has no firm back-up plan for where in the nation's largest radio market its programming will now air.
Some inside the firm are already referring to WLIB in the past tense.
Without WLIB, Air America faces an immediate, crushing blow. Worth perhaps 100 small markets combined, an on-air presence in New York City is absolutely vital to the company's survival. If an immediate and suitable replacement isn't found, the consequences would be dire.
What percentage of Air America's audience would disappear overnight, the Radio Equalizer can't say for sure. Could it be 40%? Fifty percent?
Taking control of Inner City Broadcasting Corporation (ICBC)- owned WLIB is said to be a consortium of industry heavyweights, including former Clear Channel executive Randy Michaels and Boston-based broadcast investment firm Alta Communications, in partnership with ICBC.
Since leaving Clear Channel, Michaels has been determined to build his own broadcasting empire, purchasing stations, bidding on station licenses and syndicating programs (including liberal talkers Jerry Springer and Ed Schultz). With a portfolio of investments in smaller television and radio operators, Alta would seem a perfect fit for his plans.
In addition, Alta has previously invested in ICBC, even listing the company on its website. Michaels, Alta and ICBC did not respond to questions about the deal. In addition, Air America has never been willing to communicate with us regarding our reporting.
So what happened? Because AAR had a long-term WLIB lease arrangement with ICBC, absolutely nobody in the radio industry could have seen this coming. While it's not entirely clear what brought the relationship to an end, a number of clues do provide a very likely theory:
Under AAR's deal with Inner City (ICBC), it was to pay the latter a fixed fee of $2.5 million, divided into upfront quarterly payments. In addition, Piquant/AAR was to give up 49% of WLIB's local advertising revenue after keeping the first $2.5 million collected annually.
Each year, Air America and ICBC's payment percentages would be calculated, with the latter receiving its share by February 15.
According to an internal source, on February 17, ICBC exercised a clause to terminate Air America's WLIB lease. Was there a dispute over the share? A missed payment? At this time, we don't know.
In addition, was the Michaels/Alta/ICBC deal already waiting in the wings? Was Michaels, with his vulture-like and highly eccentric reputation, quite in the loop regarding AAR's financial woes?
While the odds of salvaging Air America's programming in New York City aren't good, it does have some very unappealing options:
1) Kiss Randy's rear and hope he will allow Air America programming to remain for the time being. Since Michaels is determined to build his own empire, saving Air America is probably his lowest priority, or even something he wants entirely off the air.
2) Find another station. Here, there aren't any decent options. Currently airing the floundering Sporting News Radio format, one possibility is Microsoft billionaire Paul Allen's tiny WSNR-AM 620.
While Allen recently told the media he was ready to part with it, WSNR has a terrible signal that reaches only a small portion of the market outside of Manhattan.
3) Beg another company to place Air America on one of its stations. But which one and why? If Air America had to pay ICBC millions of dollars to air in New York City, why would ABC, CBS and the other major players carry it for free? In terms of programming, their outlets are already spoken for.
If there's another decent option, let the Radio Equalizer know, we can't think of any others.
Even if Air America somehow finds a last-ditch way to remain on the air in the nation's most important market, it will be at a tremendous disadvantage, compared to what it has had up until now.
Unlike our previous reporting, which the company could either deny or ignore, this will be impossible to spin. It's either losing WLIB or it isn't.
If Randy Michaels Radio is airing on April 1, trust us, it won't be an April Fool's Day joke.
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