The Radio Equalizer: Brian Maloney

25 January 2006

Did Al Franken's Outrageous Demands Slow Boys & Girls Club Repayment?


How Al's Bloated Compensation Threatens Air America

By Brian Maloney

(I'll be appearing on FOX News Channel's O'Reilly Factor tonight at 8pm to discuss this piece in greater detail)

What did Al Franken make and when did he make it?

Nearly six months after shady taxpayer funds transfers from a Bronx-based nonprofit to liberal talk radio network Air America were first disclosed to the public, this dirty scandal's final chapter has yet to be written.

Now, from a key point during its still-unfolding timeline, newly obtained documents raise serious questions about host Al Franken and the firm.

Had Franken not been so pushy during his Air America contract negotiations, could the whole matter have easily been resolved?

Much damage has now been done: still under scrutiny by New York City's Department of Investigation is the sleazy $875,000 in "loans" from the Gloria Wise Boys & Girls Club between September, 2003 and March 15, 2004, to help Franken's bosses pay the fledgling outfit's mounting debts.

After substantial negative publicity and DOI demands, Air America finally agreed in September to put the entire amount into an escrow account controlled by company attorney William H. Schaap.

A DOI spokeswoman did not return a call seeking comment on the investigation's status.

Meanwhile, what's left of the community center is hanging by a thread, stripped of its Boys & Girls Club charter, cut off from grants and facing eviction from its Co-Op City location, as the New York Post has reported.

Happily waltzing through the middle of this mess nearly unscathed, however, is Franken himself. Fawning press coverage almost everywhere was the result of his recently-completed book tour.

And why shouldn't Franken be smiling? While repayment was delayed until it was too late to save Gloria Wise and its afterschool programs for disadvantaged youth, Al got everything he wanted and then some.

Did his greed greatly contribute to the problem, by keeping Air America financially-drained and unable to return the money? Quite possibly, according to newly-obtained documents.

The Kitchen Sink

During the same mid-to-late 2004 period when Air America parent Piquant LLC was quietly considering how to resolve the still-undisclosed scandal, Franken was demanding everything, including the kitchen sink.

A June, 2004 Wall Street Journal investigative report on Air America stated Al was making "over $1 million a year". That was accurate, but not for long.

Despite mixed reviews, low ratings and a perpetually shaky cash outlook, Franken was handed a virtual blank check by Piquant. Even as the extent of the Gloria Wise crisis became clear to an ever-changing series of managers, Franken pushed ahead anyway with an eye-popping 2005 compensation package.

Included was a staggering base salary boost to $1,725,000, plus fringe benefits and potential bonuses, after less than a year on the air. Nor was his bloated staff left out. The result: what is quite likely talk radio's largest-ever and most overpaid entourage, mostly from the ranks of Al's Harvard research team.

The kicker: Franken successfully insisted the entire base sum be paid in advance, during the first week of January, 2005! According to his contract, only death, disability or resignation would lead to any repayment.

Worse, Billy Kimball, his senior producer, also enjoyed a $275,000 early payout. More on Billy in a moment.

Why would the firm agree to these unpleasant terms? Why couldn't poor kids in the Bronx have their taxpayer grants back? Apparently, more important was keeping Al happy.

When he claimed on-air to have only first heard of the scandal in early August, 2005, investigative partner Michelle Malkin and I produced a Franken-signed and notarized legal document disclosing the Gloria Wise mess, dated November, 2004.

Franken has long maintained the "loans" culprits were long-departed former managers, including Evan Montvel Cohen. While we've never claimed Franken was directly involved in securing the funds, it is fair to take issue with statements regarding his knowledge of the scandal.

Even if he truly didn't know, a position this signature strongly refutes, the company had to be aware it had no business placing Al and Billy ahead of inner-city schoolchildren.

Fearing Wise and other business issues would soon bring down the company, did Franken press ahead with upfront payment demands?

That's a funny thing, because when it came time to negotiate for 2006, Al was instead willing to take his base pay, now bumped up to a cool $2 million, in $500,000 quarterly chunks. And earlier in 2004, he frequently spoke of receiving paychecks like everyone else, including to the Journal.

Only during the period where the company was sweating out the possibility of having to repay Gloria Wise did Al Franken demand it all at once. Coincidence? Perhaps.

Whether Air America actually wanted to reimburse the nonprofit isn't known, but they delayed it as long as possible. And Gloria Wise representatives wouldn't agree to a multi-year installment plan.

Until the DOI finally put its foot down in September, demanding a lump sum, the company was adamant about making $50,000 quarterly payments, according to three proposed agreement drafts from 2005, exclusively obtained here. In each, Piquant stated that it was unable to make immediate repayment in full.

Franken's Real Worth?

Meanwhile, what was it that made Franken (who, along with the company, has never been willing to speak to Malkin or myself about any of this) so valuable to Air America? It couldn't have been ratings, where his cumulative audience growth for persons 12 and older was zero percent between fall 2004 and spring 2005, according to the company's own Arbitron audience data tabulations. Nationally, he checked in with a whopping 0.1 rating through last October.

Nor could it have been his ability to lure additional stations into the fold, as he was stuck with 68 mostly-tiny stations carrying his show, as of October (by contrast, frequent Franken-target Sean Hannity just celebrated his 500th affiliate sign-up and Rush Limbaugh has more than 600). That's well after he negotiated these huge salary increases and bonuses.

And it wasn't revenue: his show still isn't profitable, despite representing nearly 50% of Air America's entire programming payroll. "Team Franken", representing all of the program's costs, currently sets Air America back over $3 million annually. How could revenues ever be expected to surpass that?

None of that seems to matter. Even more astounding, his own 2008 base pay will increase to $3 million, whether or not the show is a success. That's assuming he and the company stick around that long.

What was that about a 2008 US Senate race in Minnesota?

In addition, his contract has long contained $500,000 ratings bonus stipulations, should certain audience targets be met. The Sundance Channel, which has televised his radio show, pays him an additional annual amount between $100,000 and $125,000. Live ad reads and other on-air endorsements add thousands more to the total.

Consider that Ed Schultz, a non-Air America syndicated liberal host with a similar number of stations and listeners, is said to make about $400,000 annually. In addition, many with national radio shows heard on as many as 100 stations are known to make a fraction of that figure.

To determine what a person heard on between 50 and 100 relatively small stations might make, the Radio Equalizer surveyed syndicated hosts. While such information is usually closely guarded, one national personality told me base compensation of $75,000 to $100,000 would be typical.

Why so little? "Because many national advertisers don't even begin to consider your show until it's heard in many more than just 100 markets," according to the talk host.

Franken's huge group of assistants also amaze the radio industry. With 10 budgeted positions, it's a shocker for hosts used to having one or two staffers assigned to their programs.

Topping the list is Kimball, a former writer with Craig Kilborn's now-defunct late night CBS chat show. In what must be an all-time-record radio producer's salary, he's paid $600,000 a year, a small part of it covered by Franken himself. Lower-level assistants hover in the mid-to-high five digit range, quite high by industry standards.

In the end, evidence points to Alan Franken, Inc. (his own company's name) and Air America placing their own desires ahead of poor children. He never offered to help the kids affected by program shutdowns. And instead of coming clean about his scandal awareness level, Al played games and made implausible denials.

And with a mainstream media unwilling to probe the matter, why should we expect it any other way?

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Graphics: David A Lunde for the Radio Equalizer. Check out David's new site

AAR Scandal: Darleen Click, Milk of Amnesia: Pete at IHillary for the Radio Equalizer


  • So let me get this right:

    1. Frankin is overpaid. OK, it sounds like he is, although he is the network's top personality (in terms of both publicity and ratings -- btw: will you ask o'reilly why frankin is beating him in key ny demos?).

    2. Frankin MAYBE asked to change his salary structure based on the Gloria Wise mess. Do you have any concrete evidence Brian? Any at all? If not, this is wholly unfounded.

    By Blogger Justin, at 25 January, 2006 14:07  

  • One more thing:

    Is it not a conflict of interest for O'Reilly to host a segment devoted to analyzing (or perhaps bashing) his direct radio competition? I don't believe Olbermann should do it of O'Reilly (which he unfortunately does), but the same rules should apply here. And, as liberal outlaw asked, who will be representing AAR?

    By Blogger Justin, at 25 January, 2006 14:12  

  • i'll even simplify the question, because it is easy to say that "no one would come on," which is what you'd probably say. i want to know who was ASKED to come on to refute your claims. anyone? someone? no one? who was asked to come onto "the no spin zone" to try to counter your attacks on AAR?

    By Blogger hardcore conservative genious, at 25 January, 2006 14:39  

  • Ah, I see, this is the "investigative reporting" you were talking about...

    So - you have evidence that an entertainer rightly sought as much money as he was felt he was worth? That's simply unheard of.

    Nevermind the FACT that the gloria-wise issue wasn't created by Franken, nor was he in any way responsible for it.

    You simply have NO STORY. It died a long time ago. You're looking for 15 minutes of fame, but unless that's how long you're booked on O'Reilly and all the other shows that will pay you undeserving attention, I'm betting you'll fall very, very short.

    Why in the world are you so obsessed with trying to destroy Al Franken? What is it that drives you to stretch the truth so far and pin so many unrelated facts together simply to smear him?

    If you were, perhaps, championing issues against more than one figure this vigorously, perhaps you'd have at least a thin shred of credibility.

    Keep this up, Brian, please. It was fun hearing you fail on KVI (especially when you toned-down your rhetoric when you felt the axe heading your way) was more fun hearing you make crap up about why you failed at KIRO.

    And now, you can't even get a job at the rapidly-failing KTTH (oh, wait, you don't report on any failures other than those with whom you have political disagreements with, and then you don't even tell the whole truth, if any of it).

    Please, please don't stop, Brian. This site is a daily laugh for me.

    By Blogger TJ, at 25 January, 2006 14:42  

  • "What was that about a 2008 US Senate race in Minnesota?

    I think you may have stumbled onto why Franken's compensation is so outsized compared to what the market would appear to support. Late last year, I wrote up some short profiles of Air America Radio's Board of Directors, noting the following for Rob Glaser:

    "Interesting tidbit: Should current Air America on-air host Al Franken run for the U.S. Senate in Minnesota, as rumored, and win, it would mark the second time that one of Glaser's employees moved directly from a payroll over which he has oversight and control to the U.S. Senate. That's no small thing - in 2000, Maria Cantwell was able to largely self-finance her senate campaign through her accumulated earnings from Glaser's RealNetworks."

    Looking at the compensation figures you've posted for Franken, the amount of the accumulated earnings would certainly be consistent with the entry-level requirement for funding a serious run for the Senate. It would also seem to account for Franken's outsized staff. Plus, it would appear to have the advantage of successfully being able to do an end-run around the McCain-Feingold campaign financing law, although those with more knowledge in this area would be able to clarify if this would be the case.

    By Blogger Ironman, at 25 January, 2006 14:44  

  • Frankinlies:

    Here's the difference: To me, shows like O'Reilly Factor & Countdown are supposed to be "fair and balanced." The former promotes itself as such, while the latter purports to be even-handed. In both cases, I believe they have an obligation to let both sides of an issue be heard. Moreover, I find it unseemly to devote segments to attacking their rivals.

    AAR programming, however, I think falls into an overtly-partisan sphere that also includes Limbaugh, Hannity, etc. Therefore, I don't believe the same level of balance is needed.

    Two different types of programming. Given this, who will be there to defend AAR tonight? Or at least who was asked to be there.

    By Blogger Justin, at 25 January, 2006 15:07  

  • I bet this pay package is thousands of dollars per listener.... :^)

    By Blogger Bike Bubba, at 25 January, 2006 15:36  

  • Ironman, your theory is very interesting. It would explain a lot.

    Based on their ratings and potential advertising earnings it doesn't seem likely AAR is earning so much money that paying a salary like this is no problem. It seems more likely that Mr. Soros is funding this whole deal.

    It's not illegal for Mr. Soros to pay the expenses of a radio network no matter how bad the return on ROI. So Soros gets to pump a lot of money to Franken who can finance "his own" campaign.
    In the meantime Franken uses the airwaves to prostelyze

    However, it's not absurd for Mr. Franken to simply demand an outsized salary. It's even a prima facie plausibility for him to claim right to such a salary on the arguement that he's to only name on the network that anyone has every heard of. Without him, who would be the 'headliner'? Many executives demand more to stay with a sinking ship than to move to a stronger company.

    Either way it also makes sense for Franken to demand his money up front for a couple of reasons - he gets his before the whole network folds, and/or before he falls out of favor with the sugardaddy funding the whole shebang.

    By Blogger Lokki, at 25 January, 2006 15:44  

  • Didn't Al Franken write a book about Liars? Isn't Al Franken the guy who calls everyone who disagrees with him a Liar?

    He has been so consumed with the "lies" of others that he has started lying himself.

    By Blogger Peter V. Bella, at 25 January, 2006 16:17  

  • " A signed document doesn't prove Al actually knew anything. If an AAR lawyer put a stack of documents in front of Al stating "We need you to sign these to help get us out of legal and financial trouble" he'd likely check with his lawyer, agent, or whoever he pays to make sure he's not getting swindled (again), and then sign it. "

    Ah.... the old Sarbane/Oxley defense - how clever!

    By Blogger Lokki, at 25 January, 2006 17:49  

  • my guess is Brian has finally given up on the radio host angle...

    instead, he wants a job being a partisan hack "investigative reporter"...

    isn't it obvious?

    By Blogger TJ, at 25 January, 2006 18:06  


    Someone's criticizing Al Franken. Time to bring out the "you don't have evidence, so shut up" argument.

    Unfortunately for Brian, if he were to "lie" about Franken, he could be sued for libel and/or slander.

    Has Stuart Smallcrotch filed a lawsuit yet? Didn't think so...

    By Blogger E.W.Reed, at 26 January, 2006 07:39  

  • I'm not sure why this debate still rages. AAR will be defunct before long, and the hosts scattered to the four winds. Al Franken was a mediocre comedian at best, and his departure from the airwaves will cause no great sensation. The country has outgrown him, and liberal rantings are falling by the wayside. This has merely taken on the tone of a deathwatch. The only thing that remains is the issuance of the death certificate. As far as I'm concerned, the patient is in extremis, and Last Rites should be administered before year's end.


    By Blogger Morgan, at 26 January, 2006 10:38  

  • Morgan -

    The 'debate' still rages because it's so much fun to watch the reaction of the multiple personalities to any comment about the health of Air America.

    It's a lot like watching the old Monty Python routine -

    "Take him away, won't you? He's dead."

    A small voice-(or a weak signal?) says

    "Air America is alive!"

    "Here now, 'e says he's not dead YET!"

    "Yes, but he soon will be. Close enough, eh?"

    "But he's not dead yet!"

    Who can resist watching this?

    By Blogger Lokki, at 26 January, 2006 12:32  

  • Billy Kimball makes How much? $600,00 a year? I've produced radio programming on a 50+ station network with more total listeners for less than a tenth of what Kimball makes. Talk about fleecing your investors.

    By Blogger voiceoflg, at 26 January, 2006 13:54  

  • I watch Countdown with Keith Olbermann...

    Oh! You're the one.

    By Blogger eLarson, at 26 January, 2006 19:21  

  • Hey Smedge — thanks for the update on WEUS; I've been trying to find out what's goig on with them for three weeks. If not them, then another station here in central Florida will eventually pick up AAR. Liberal talk is the only growth segment of the talk market right now, at least that's what Talkers magazine claims. In the meantime, there's XM.

    I swear all this nastiness coming out of O'Reilly sounds like the righties are pantspooping scared of a little competition.


    By Blogger Jeany, at 28 January, 2006 00:29  

  • PArdon me for asking a dumb question....

    What is the source for the $2 million that Franken is supposed to be making?

    Interesting article about being "paid up front", etc.....but what is the source?

    Right now you are just another blogger spouting things without any authority to speak on the subject.

    By Blogger A Radio Listener, at 04 February, 2006 04:21  

  • Given that Air America has chosen the decidedly unusual business method of paying for their air time instead of selling their shows, I don't find it unbelieveable that they would award their, um, "talent" gigantic contracts not linked to ratings.

    In other words, if you don't know the business, you won't run it like you do.

    Could it be something more damning? Could be, but it's hard to prove conspiracy when idiocy is spread thickly and fragrantly.

    By Blogger Bike Bubba, at 15 February, 2006 16:47  

  • check this web: allows employees to anonymously share information about their salaries and jobs.
    Find out if your salary is fair.

    By Blogger Nacho, at 01 May, 2007 22:59  

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