Air America goes Green

Crain's New York Business - March 19, 2007

New York family will run network as business, will ratings improve?

- By Matthew Flamm

In the weeks since Air America Radio emerged from bankruptcy, the liberal radio network's new president, Mark Green, has met with reporters, talked with affiliates and, in keeping with his history as political pugilist, taunted Fox News in the blogosphere.But he has also done something that hasn't been done since Air America launched in spring 2004: hired a vice president of programming to work with the talent. ``He's a guy deeply versed in radio,'' Mr. Green says of veteran talk radio programmer David Bernstein, who starts at the network today.The new hire is one component of what Mr. Green describes as Air America 2.0, an iteration that began when the network was purchased by real estate investor Stephen Green, Mr. Green's older brother. Deep pockets, the manhattan-based company, will continue to be a home for left-leaning or ``progressive'' talkers and produce 19 hours a day of programming. But according to Mr. Green, the new Air America will be run as a business.``We can't be influential if we're not profitable,'' says the onetime New York City public advocate and frequent Air America guest host, who has lost races for U.S. senator, mayor and, most recently, attorney general.

Referring to his elder brother's deep pockets and how much money he is willing to invest, Mr. Green says, ``Steve will not be to Air America what [News Corp Chairman] Rupert Murdoch still is to the New York Post.''The newly constituted Green Family Media can't do much worse than prior owners Progress Media and Piquant, which lost a total of $42 million and were both plagued by fallout from a scandal involving an improper loan from a charity.Stephen Green, chairman of SL Green Realty Corp. and of Air America, bought it out of bankruptcy for a mere $4.25 million from his pocket; minority partners contributed another $3 million.The chairman will oversee the business side of the network. The younger brother will put his background in advocacy and liberal politics to use as its public face. He will also be in charge of content and digital strategies.

Another radio veteran, Scott Elberg, who has been with Air America for two years, was named chief operating officer.Thanks to the bankruptcy, contracts with hosts are being negotiated in line with market rates, in contrast to the $2 million a year that the network's biggest star--and radio novice--Al Franken was paid. He left last month to run for the U.S. Senate from Minnesota. And the workforce of 50 staffers is half the number of a year ago.The Greens are also benefiting from the millions of dollars that were spent building and promoting Air America.

Expensive model``there was a huge startup cost of going into barren terrain and establishing that there was an audience for this,'' says Danny Goldberg, a music industry professional who was the network's chief executive for a year. ``[Air America] may not be moving at 100 miles an hour, but it's moving.''But the company is still founded on an expensive and unwieldy network model: creating a daily lineup of original programming, rather than producing just one or two shows.``It's hard enough to have a successful show in this business, let alone a [full] lineup,'' says Michael Harrison, editor of the trade magazine Talkers. Air America's business troubles have taken a toll. The network is down to 70 affiliates from a peak of almost 90, and many of those listed on its Web site carry no more than one show. Most stations mix in talkers from other networks, like the popular progressive Ed Schultz, or carry their own content.

Additionally, Air America is saddled in some markets with underperforming stations. Flagship WWRL-AM in New York, where the network moved last year after losing its lease at WLIB-AM, posted a paltry 0.8 share in the fall, according to Arbitron.``They've got an uphill battle,'' says Mark Lefkowitz, media director at Furman Roth Advertising, who stopped placing ads on Air America after it left WLIB.Messrs. Green and Elberg counter that they're rebuilding a New York presence on WWRL. They also insist that the network model can work because Air America has established itself as a brand. ``The name gives us leverage,'' Mr. Green says.

Some critics concede that Air America has been making improvements, in particular by moving popular host Thom Hartman into Mr. Franken's former noon-to-3 p.m. slot. What's more, well-run stations, notably in Portland, Ore., and Seattle, have maintained solid ratings.Some radio experts say that getting a network launched at all is an accomplishment that should not be underestimated.``[Air America] is in top markets with top programming and getting an audience,'' says Robert Unmacht of media consulting firm iN3 Partners. ``Now we just have to see if the new folks can run a solid business and keep the product worth listening to.''