It is clear to me that radio is changing, in some ways, it is changing for the better, and in many ways, it is changing for the worse. In spite of many bad business decisions made by overpriced MBAs, large consolidated radio groups seem to be hanging on, if only by their fingernails. It is very likely that the investment banks, who have the most to lose, are not interested in seeing their loans written off in a bankruptcy proceeding. As we all know, the consolidators that paid multiples of 15 to 16 times cash flow for stations, way overextended themselves. There is no hope that values will ever return to those levels, so the banks are now in the radio business.
Sure, the banks are not the owners of record, and the FCC never would consent to transfer all those licenses to so many investment banks. However, they are calling the shots, making “suggestions” on how best to run things. Offering perhaps a 1/4 percent reduction in an interest rate if the expenses can be reduced below a certain level. Unfortunately, for the communities like Ellenville, NY, their local radio station means nothing to the banker living in Manhattan. It is a number, and more than likely, a negative number on a spreadsheet. It means nothing to the group owner in San Antonio, other than some miscellaneous real estate assets. The same can be said for all the radio stations in the Hudson Valley if not the entire country.
Why is this important? I mean, who really cares? The apparent answer is no one seems to care. Local news, or what used to be local news such as town board meetings, high school sports scores, police blotter, and all of the many other small town things do not get the hearing they used to. Town boards; well if no one shows up for the meeting to pass the new zoning laws, so be it. School boards; sure, raise the taxes, most homeowners will just pay the new higher amount and not say anything. It is for the children, after all. Seems that the local constabulary is spending more time at the Dunkin Donuts than out walking around checking doors. That’s the way it goes. With the demise of local newspapers, detailed in a previous post, who is keeping an eye on things? Who lets the community know when something doesn’t pass the smell test?
A small AM radio station can be made profitable, just not at the margins expected by the big boys. There is a niche for perhaps a 1 KW or 5 KW non-directional station with its own real estate that is not in too bad shape and can be turned into a community radio station. Those types of stations are fairly low maintenance, most have some type of PSRA and PSSA to keep them on at least during drive times if they are daytimers. Others have minimal amounts of nighttime power. Almost all of them cover their city of license, even with small nighttime powers.
I have been looking into good quality AM radio receivers and there are a few out there which are not too expensive. Most GM car radios and older Chrysler radios have good AM radios. A group formed to promote AM radio, ensure that automakers install radios that are at least as good as their older versions, and work with manufacturers to make better small tabletop receivers and such would go a long way to improving the unjustly bad reputation that AM broadcasting has received. Further, working with the ARRL (amateur radio) to reduce and keep noise levels from things like BPL and other noise-making technologies that do not comply with current FCC regulations would also help. It is true that our environment has become electrically noisier, one might not be able to listen to the 50 KW clear channel station 500 miles away, but the local station should come in well enough to enjoy, especially if the programming is good.
FM radio is becoming crowed with translators, adjacent channel HD radio interference, LPFMs, and whatever else can be shoehorned into the band. The quality of FM is set to decline precipitously in the next few years. It seems that with the right combination of good local programming, good receivers, and radio station owners/operators that are not looking to get listed on the NASDAQ, small AM stations could survive, if not thrive in the business that the big stations turn away.
There are a number, a small number, of stations already doing this. As long as there is free local news and free quality programming, people will listen, no matter what band it is being broadcast on. Free trumps paid any time, any day.