Buyouts squelching independent radio; Media consolidation weeds out local voices; Broadcasting


They came from all over Greater Baltimore, an unlikely swarm drawn by an invisible force. They came in Mercedes sedans and old pickups on September's last day, shooting in off the Beltway like stones from a slingshot.

They parked in the grass near the base of WNST's transmitting tower and piled into a small ranch house to join their hero, "Nasty" Nestor Aparicio, as he ended a fledgling attempt to bring independent, sports-and-nothing-but radio to Baltimore.

Snapped up by Catholic Radio Network LLC of San Diego for $1.5 million, a price far higher than Aparicio and his colleagues were willing to pay, 1570-AM now pipes in national talk-show programming that is identical at all of Catholic Radio's 10 stations around the country.

WNST's fate illustrates some of the forces that are reshaping American radio, which has generally been dominated by locally oriented stations whose news and patter were delivered by local broadcast journalists, disc jockeys and talk-show hosts.

Those days are dwindling. Like so many other media industries, radio has become the province of large corporations that find it cheaper and easier to serve up canned, nationally distributed content than to rely on local voices.

"Now, a single individual will make local decisions on playlists for 150 stations in a regional area," said Cheryl A. Leanza, deputy director of the Media Access Project, a nonprofit telecommunications law firm in Washington. "Radio has always been the most local medium, the most intimately connected to the community, and that's disappearing rapidly."

From a strictly financial standpoint, these have been flush times for radio, with stations commanding high prices from broadcasters eager to expand.

According to an industry report by Prudential Securities Inc. in New York, the going rate to buy a radio station in 1993 was about 12 times its projected broadcast cash flow; that multiple is now up to around 16. The report found that the value of radio acquisitions nationwide in 1997 and 1998 totaled $29.4 billion -- more than the tally racked up in the previous 12 years combined.

In the biggest radio acquisition so far, Clear Channel Communications Inc., the nation's largest radio-station owner, announced Oct. 4 that it is buying the industry's No. 2 player, AMFM Inc., for $16.6 billion. Even after shedding some stations to comply with federal laws, the bulked-up Clear Channel will hold 830 stations nationwide.

Locally, Cockeysville-based Sinclair Broadcast Group Inc. agreed in August to sell the bulk of its radio holdings -- 46 stations in nine markets -- for $824.5 million in cash to Entercom Communications Corp. of Bala Cynwyd, Pa.

Radio's new era of corporatization and consolidation has a birth date: Feb. 8, 1996. On that day, President Clinton signed into law the Telecommunications Act of 1996, which cast aside old regulatory barriers in the communications world.

Telecommunications Act

The Telecommunications Act's impact on radio has been enormous. Previously, a broadcaster could own a maximum of 20 AM and 20 FM stations nationwide, two AM and two FM stations in any single market. Thanks to the 1996 act, a broadcaster can own an unlimited number of stations nationwide and up to eight in any given market.

"Deregulation really allowed fundamental change in the industry," said analyst Geoffrey G. Jones of Donaldson Lufkin & Jenrette Inc. in New York. "It's amounted to essentially a land rush."

Consolidation enables a broadcaster to lock up a range of stations catering to different demographic groups, creating attractive packages for advertisers. The rampant buying of radio properties has also stoked station prices.

"As consolidation occurs, those [stations] that remain standing are worth more money," said Bruce Leichtman, an analyst for the Yankee Group, a Boston-based technology and communications research firm.

One consequence of this, Leichtman said, is the homogenization of the radio dial. "Certainly, consolidation has put a large number of stations in the hands of fewer and fewer, and certainly that leads to less diversity of programming."

Leichtman and other industry experts say relief from this blandification of radio may have to come from nontraditional sources, such as satellite, Internet and low-power stations.

In the meantime, the consolidation spiral will not exhaust itself anytime soon. "You will see the big get bigger," Jones said. "It's not over yet."

What is over is WNST's all-sports experiment, which first hit the airwaves Aug. 3, 1998. Aparicio had bought up all the time slots on the station from the owner, Capital Kids Radio Network, and then made money from advertising.

Aparicio, 31, a Dundalk native, is an engaging motormouth who found a way to turn a boyish fascination with sports into a paying job that allowed him to hang out with wide receivers and avoid neckties. He had some success at WNST, garnering a loyal core of listeners and a consistent stable of sponsors. The station even took out help-wanted ads to bring in staffers. Aparicio had an option to purchase the whole operation, and had hoped to exercise it.

"We intended to buy the station," he said. "We were ready to pay $900,000, up to $1 million, because it was doing well." Capital Kids had bought the station in 1993 for just over $700,000.

Inflated price

However, Aparicio learned firsthand just how inflated radio station prices have become. It would have cost him $1.45 million to pick up the option on the station's FCC license and transmitter. He concluded that the price would be too steep for him to pay. At the end of July, he learned that Catholic Radio Networks had agreed to take over the station.

Aparicio and his partners cast about for another small local station where they could continue their sports shows, but came up empty. Steve Hennessey, the staff director of sales and promotions, said that "in Baltimore, there are very few options" for independent, noncorporate broadcasters who seek dial space.

As a result, instead of occupying a generous chunk of drive-time programming on his own tiny station, Aparicio now holds down the 10 p.m. to 1 a.m. weeknight slot on WCBM 680-AM, where he began operations Oct. 4.

Not that Aparicio is shedding any tears about his new address. He's on a bigger station with a clearer signal. WCBM beams out at 10,000 watts in the daytime, 5,000 watts at night. By contrast, WNST could muster only 5,000 watts in the daytime and was required by the FCC to power down to a meager 237 watts at night.

At Aparicio's WNST farewell party, most listeners reacted to the station switch with equanimity. "With the bigger signal, I think he'll actually be able to pick up some listeners," said Debbie Straub, a bank lending associate who goes by the call-in name Deb from Bel Air.

Some see a wake

However, there were some attendees who saw the gathering as a wake for all-hours local radio programming.

"I'm really sad to see what's going on," said Howard Kesner, a podiatrist from Pikesville who had been a loyal fan of WNST's sports hosts. "They're Baltimore people and talked about neighborhoods and restaurants. Baltimore's got a certain charm, and I enjoy the local flavor that they give."

Local flavor is not the name of the game at the new WNST. The Catholic Radio station carries national talk with a conservative bent. Hosts hold forth from wherever they happen to live -- none is based in the Baltimore area -- and the feed is transmitted nationwide through San Diego.

WNST's station manager, Paul Kopelke, spoke enthusiastically about this new model of radio, in which identical feeds are relayed nationwide from the home studio of a radio personality. Geography becomes meaningless. In today's radio world, Kopelke said, "nobody lives anywhere."

But what about radio's local voices? Kopelke's answer is quick: "They're going away."

To Kopelke, the rise of centralized programming is a healthy reassertion of a tradition that stretches from Jack Benny to Rush Limbaugh: the national radio show that reaches into every corner of the nation.

Rather than using up the airwaves talking about some purely local matter of politics or pigskins, Deb from Bel Air can mix it up with George from Minneapolis or even with Paul Harvey himself. Said Kopelke, "The thing that makes the country a community is radio."

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