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Turning Off the Lights at Air America

These are excerpts from an article in today’s N.Y. Times underscoring the challenges facing Air America:

“At Air America, business and politics always mixed, and that was the problem, critics contend. Begun with an onslaught of publicity in spring 2004 as an alternative to right-wing talk radio, the network is given some of the credit by its supporters for having helped achieve the Democrats’ Congressional election victory in November.

Detractors label the liberal network’s programming as combative, one-note and emotional. At least its business dealings seem to fit that last description. Even before Air America and its corporate parent, Piquant L.L.C., sought bankruptcy protection on Oct. 13, its management was engulfed in a series of financial crises. The search for new investors and managers has been marred by infighting among those who want the network to succeed, according to people in the organization.

In recent weeks, Air America, which has its headquarters in New York and reaches about 2.4 million listeners weekly, has suffered the defection of a handful of its more than 80 affiliated stations and soon faces the likely departure of its most visible host, Al Franken, even as it cobbles together a plan to emerge from Chapter 11.

A possible solution surfaced on Friday. Douglas Kreeger, an initial investor and former chief executive who stabilized the network in its early months, said in a telephone interview that there is “a signed letter of intent” for a new group to take over the network and that he is “likely” to be a part. The lead equity position would be taken by Terence F. Kelly, of Madison, Wis., also an Air America investor from the beginning and a former board chairman.

Mr. Kelly said in a separate interview that the investor group included a new strategic media partner he declined to name, and both men would not predict when a deal might come to fruition.

“Any number of things can happen,” Mr. Kreeger said.

This is only the latest twist in the short but contentious history of Air America. At the root of its problems, some critics and competitors say, has been an inability to negotiate a middle path between its political mission and its business.

“It’s my feeling that they really put this together without broadcasters,” said Stuart Krane, a former ABC Radio executive who is the president of Product First, which owns the program of a liberal talk-show host, Ed Schultz. “If you have a healthy business, then your agenda will be put forth.”

Air America ran into financial trouble within days of its appearance on March 31, 2004, when it turned out that its original chairman, Evan Cohen, did not have the backing he said he did. Weeks later, Mr. Kelly, a former owner of Midwest radio and television stations, stepped in to take charge of the board. At the end of 2004, he ceded the chairmanship to a new investor, Rob Glaser, chief executive of RealNetworks.

Some people at Air America assert that, under Mr. Glaser and the team he put in place, the network was top-heavy with management, inept at selling ads, unwilling to make program compromises that veered from the liberal message and overstaffed with more than 100 employees when two dozen would have sufficed.

“What they did for $45 million they could have done for $10 million,” said Sheldon Drobny, an investor with a contentious relationship with the network. Mr. Drobny and his wife, Anita, longtime Democratic activists, are credited with the idea for Air America.

The network has run through a stream of operational executives. Danny Goldberg, a music executive who served as chief for about a year before leaving in April 2006, said the problem was “a big gap between the ambitions of the company and the funding available to accomplish those ambitions.”

“There was no way to manage around that gap,” he said. “Either lower your expectations or raise more money. No one wanted to change the ambitions.”

Faced with constant money woes, the board considered a takeover by the Democracy Alliance, a loose group of moneyed progressives, including George Soros, who had pooled resources to support projects they considered worthy. But the group ultimately rejected the appeal, because “Air America needed to do certain things to make it a more attractive business,” Mr. Kreeger said.

Late in August, the network lost its lease with WLIB in New York and switched to a weaker station, WWRL 1600. Some liberals blamed Product First, which was negotiating its own WLIB deal. It later fell through.

“We just saw WLIB as something we might own and do very well with,” Mr. Krane said. “There was never any nefarious plot here.”

Late in September, the Drobnys tried to buy Air America for $2.5 million, but the deal fell apart because, Mr. Drobny says, the terms were changed. He said he would have had to put the money into Piquant’s operating account, where it could have been tapped by creditors, instead of into a shielded holding company.

As for the bankruptcy filing, which came after a creditor, MultiCultural Radio Broadcasting, sought to freeze company accounts, Mr. Klestadt said the board decided a Chapter 11 proceeding “would be the best way to maximize the value of the assets.”

Some affiliates have grown weary. In recent weeks, an affiliate in the Quad Cities market of western Illinois and eastern Iowa switched its programming to Christmas music, and stations owned by Clear Channel in Boston, Cincinnati and Madison announced plans to bail out.

Moreover, Jerry Springer just ended his Air America-syndicated radio show, which never gained a wide audience. Mr. Franken has been telling associates that he is likely to run for the Senate from Minnesota.

Mr. Franken, who is on a U.S.O. tour of Iraq and Afghanistan and says he is owed $360,750 by the network, declined requests for comment. Through Air America’s spokeswoman, he said, that “although I do not know the specific details about A.A.R.’s progress through the Chapter 11 restructuring process, I was pleased to hear that they had received a letter of intent from a prospective buyer.” He added his hope “that the network’s ownership situation and financing difficulties will be resolved while I am away.”

When he returns, he faces competition from an unexpected source: Product First’s Ed Schultz, who went on the air in January 2004, three months before Air America. Last week, Mr. Schultz’s program moved to a live broadcast against Mr. Franken’s.

Mr. Franken “gave visibility to the format, but at the end of the day, you’d better be selling a commercial,” Mr. Schultz said. “You have to run it like a business.”

Mr. Franken said he was “pleased to welcome Ed Shultz as a direct competitor.”

“Ed’s success,” he added, “is proof of the vitality of the progressive talk format. I consider Ed a friend — unless he starts beating me in the ratings, at which point I plan to downgrade him to acquaintance.”

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  1. JerryDinAZ
    December 18, 2006 at 2:49 pm

    THE REASON AIR AMERICA FAILED IN THE FREE MARKET IS BECAUSE “BUSH SUCKS” AND “BUSH LIED” GETS OLD PRETTY QUICK. PLUS LIBERAL IDEAS USUALLY LOSE WHEN ACTUALLY REASONED OUT. GAY MARRIAGE, ABORTION ON DEMAND, TERRORIST CODDLING, GUN CONTROL, HIGHER TAXES, GENERAL AMERICA HATING, ETC. IS REPULSIVE TO MOST AMERICANS AND THEY DON’T WANT TO HEAR IT ON THE RADIO.

    NOW TO NPR. TAKE AWAY TAX PAYERS MONEY AND THAT DULL & BORING LEFTY LIBERAL PROGRAMMING WILL FALL FLAT ON IT’S ASS TOO!

    BOTTOM LINE…IF YOU ESPOUSE THAT LIBERAL LEFTY AGENDA DRIBBLE YOU WILL FAIL. DEAL WITH IT.

    THE REASON THAT RUSH, SEAN, AND ORIELLY ARE SO POPULAR AND SUCCESSFUL IS THAT AT LEAST THEY ARE HONEST ABOUT WHAT THEY ARE DOING…AND IT’S WORKING WAY BEYOND THE UNDERSTANDING OF LEFTY LIBERALS WHO NEVER QUITE LEARNED HOW TO BE HONEST.

    “I SMOKED IT ONCE BUT DID NOT INHALE”

    “I DID NOT HAVE SEXUAL RELATIONS WITH THAT WOMAN…MS. LEWINSKI”

    “IT DEPENDS ON WHAT THE MEANING OF THE WORD IS IS”

    “I WILL APOLOGIZE TO NO ONE!”
    AND ON…AND ON…AND ON.

    CONSERVATIVE SELLS BECAUSE IT’S RIGHT AND HONEST, EVEN IF YOU DON’T AGREE WITH IT.
    WE’LL DEAL WITH HILLARY LATER AND YOU WILL SEE MY POINT MORE CLEARLY.

  2. mike of morro
    December 18, 2006 at 7:30 pm

    I like watching Al Franken and reading his books, but his radio show never did much for me and I could never stand Randi Rhodes. What a frigging witch!

    Looks like Schultz is positioning himself to take over as the liberal alternative should Franken step down and run for the senate.

  3. Bob from San Luis
    December 19, 2006 at 4:37 am

    Why was I not surprised to JerryD’s infamous CAPS ONLY screaming about how bad and evil Air America is because they don’t spout the Republican talking points like Rush, Sean and O’Rielly. Yes Jerry, the liberal wing of the Democratic Party do embrace the idea of equal rights regardless of sexual orientation, legal abortion, treating even our enemies with a certain humane respect, not allowing access to every single type of weapon without some legislation to restrict access to convicts and mentally unstable persons who might like to obtain fully automatic weapons, the idea that taxes should be paid in a progressive manner, not shifting the burden to those who actually work for their money, and taking responsibility for what has been done in the name of our country.
    I have said this before, but Air America did not startup a program or two, but launched an entire network; several different programs, some with established radio personalities and some who had never broadcast before. Mistakes were obviously made, but the very model of liberal talk is not inherently flawed as Jerry would have everyone believe.
    As to RushSeanBill being successful because they are honest about what they are doing; have you been smoking something funny Jerry? How honest can someone have been when they say: ” I no longer am going to have to carry the water for people who I don’t think deserve having their water carried.” Of course that was Rush on November 12th after the midterm elections; he really sounds like he has been honest.
    All of your quotes were from Bill Clinton; President Clinton does not represent what the left in America is all about. If Bill Clinton had been a liberal while he was President, he would not have pushed NAFTA, the deregulation of the media, and the “reform” of welfare; what was done in each of those instances was not in anyway a liberal approach.
    The right is very seldom left, but the left is most often right.

  4. The New Tone of San Luis Obispo
    December 19, 2006 at 5:43 am

    Bob, you deserve to be called a moron. The right never has been for convicts having weapons. We have been against them having weapons and instant background checks. Waiting periods and arbitrary local officials deciding who is worthy of a weapon is not fair or progressive there son. What is a poor battered wife need a gun to protect her from the man that was released due to progressive judges and gentle police who have their hands tied. Is she to call 911 and wait while her throat is slit? That is not progressive.

    On top of all that, the republican congress is the one that pushed through welfare reform, not Clinton. He did sign it and should take some credit, but with help from Newt. And it has made a huge positive difference. Have you ever been to public housing? All of the not willing to work, crack dealers, lording over the people that really do need assistance. If you don’t want to work, and are not willing to, you need to be on the street. I am sorry. All the welfare moms with 5 kids, no skills, no ambition need to be on the street. Too bad. I have been to public housing and dealt with welfare people, and 90% of them are there by the choices that they have made. Bob, there are consequences to the choices that we make.

  5. Rich from Paso
    December 19, 2006 at 6:24 pm

    Bob, what is your obsession with the font by which Jerry posts his messages? SO WHAT THAT HE FEELS IT NECESSARY TO TYPE EVERYTHIGN IN ALL CAPS. YOU KNOW, HE PROBABLY ONLY DOES IT FOR TWO REASONS: ONE, IT IS EASIER THAN HITTING THE SHIFT KEY, AND TWO (AND PROBABLY THE MAIN REASON) IT PISSES YOU OFF!!! DID YOU EVER THINK THAT YOU ARE THE RESON WHY HE TYPES IN CAPS BECAUSE YOU GUYS KEEP BITCHING ABOUT IT? JERRY WILL NEVER STOP WITH THE CAPS LOCK THING BECAUSE OF ALL OF THE ATTENTION YOU GUYS PAY TO HIM. IF YOU REALLY WANT HIM TO STOP IT, TEHN STOP COMPLAINING ABOUT IT. AS A MATTER FACT, IF YOU REALLY, REALLY WANT HIM TO STOP: JOIN HIM. YES, START TYPING IN ALL CAPS SO HE WON’T FEEL SO SPECIAL AND HE WOULD GO BACK TO USING LOWER CASE TYPE JUST TO DISTINGUISH HIMSELF FROM YOU. THINK ABOUT IT.

    Liberals are not right as a matter of course. How many trillions have we spent on the War on Poverty and for the numbers of poor in this country are exactly the same? The answer is that liberals have spent a number almost exactly the same as the current national debt trying to combat poverty over these past 42 YEARS. The War on Terrorism will not last as long nor will it waste as much money or lives as the so-called “war on poverty”. Heres’s why I disagree with Dave and Pastor Doug that Christ would b e a liberal if he lived today: the old saying, “give a man a fish and he will eat for a day; teach a man to fish and he will eat for a lifetime.” Liberals are content to give poor people their daily fish in the form of food stamps and welfare and free healthcare, etc. and feel good about themselves that they, the liberals, are so kind and compassionate. Your compassion robs those people of their ambition and their self-respect and, by extention, their respect for others and societY. You teach them that they are “entitled” to the daily fish that you have given them, which only makes it harder for them to go fish for themselves. Those people in New Orleans that didn’t leave before Katrina hit, stayed because they were waiting on their ration of fish for the month. Then when the floodwaters were so high that they couldn’t leave if they wanted to, there they were again waiting for the governement to give them their fish. When they got their fish, they start complaining because the fish was cold when they should have just been happy they were alive. Ray Nagin was boo-hooing on television demanding to know where his city’s fish were. The truth was that Nagin let his fish (the buses) go underwater and get spoiled. Now I don’t think people should starve, but there has to be a time limit of some sort on the amount of fish you cna get from the governement. That was what was so good about the welfare reform that Clinton put his pen on and sign his name (that’s all the credit he gets from me). Conservatives want to broaden the ability of people to fish for themselves. School vouchers are one of those ways, but liberals are against the state spending money on learning how to fish from a religious school. Who cares? Those tax payers get no say in where their dollars go? At least the kids are learning something, right? Nope, not for you liberals. that is what is also wrong with liberalism: you all think you are so superior and so much smarter than anyone who doesn’t think like you. Well, you know what? Your beliefs FAIL when put into practice or they SUCCEED in creating more problems after you do something than before you started trying to solve it. Let’s go back to the war on poverty: welfare destroyed the black nuclear family, it created a demand for abortion as a means of keeping poverty down, when they don’t apt for abortion, it created single-parent homes where the mother is the parent of five children, each with a different father. Crime rose as the “War on Poverty” got started. Welfare created the inner-city ghettos by causing the above crime which caused capital flight from the area. All have the roots in liberalism. Liberalism succeeds only in the minds of the liberals that think of it. It fails when placed in the real world. The problem then is that once it is in the real world, that failure is kept going, generation after generation, by other liberals to stupid or hard-headed to realize that their plans were failures.

  6. Jose in Santa Maria
    December 19, 2006 at 6:57 pm

    Air America is still on the radio. Still going strong.WHAT THE HELL IS WRONG WITH YOU PEOPLE!!!!!!

  7. Rich from Paso
    December 19, 2006 at 8:52 pm

    Yeah, maybe so, but for how much longer as affiliates and investors alike flee the sinking ship that is Airhead America?

  8. JerryDinAZ
    December 19, 2006 at 10:24 pm

    Rich,
    Shhhhhhhhhhhhhh!

  9. Jose in Santa Maria
    December 22, 2006 at 7:18 pm

    Tell me something true instead of lies. Air America is resilant and proud, and still broadcasting. Viva Air America!

  10. JerryDinAZ
    December 24, 2006 at 3:18 pm

    AIR AMERICA DIES…NEW TIMES TURNS TO CHRIST!
    WHAT A COUNTRY EH?

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