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Liberal Talk Show Shuts LA, Chicago Sales Offices
Wed May 12, 2004 09:21 PM ET
By Sue Zeidler
LOS ANGELES (Reuters) - Air America has shut its sales offices in Los Angeles and Chicago and is recasting its business plan, the network's president said on Wednesday as troubles beset the liberal talk show network.
With Air America not broadcasting in those two cities after a financial dispute in April, network president Jon Sinton said, "There's not much sense in having sales offices in cities where you don't control a station."
About 15 to 20 people were laid off in the closing of the sales offices, the latest sign of problems for Air America, launched on March 31 as a liberal alternative to the country's predominantly conservative talk show culture led by right-wing icons like Rush Limbaugh.
Since it started, Chairman Evan Cohen, Vice Chairman Rex Sorensen and Head of Programing David Logan have left while co-founder Mark Walsh has stepped down as chief executive to take a smaller role in the organization.
Sinton said Air America was in "high-level affiliate discussions in Chicago and Los Angeles" and other cities.
Sinton said the company had moved away from its original business model, which was to lease and totally control the radio stations in which its programing ran.
Rather, Sinton said Air America has found success with traditional affiliate relationships, under which it provides about 20 hours of programing per day in many cases in exchange for the ability to sell a certain number of minutes per hour of advertising.
"The business model has changed with our on-air success. The fact that we are moving the needle so quickly with affiliates has surprised us and negated the need for us to control our own stations," Sinton said.
After its launch, a dispute with business partner Multicultural Radio Broadcasting led to its programing being yanked from the air in Chicago and Los Angeles.
Air America, which is said to have more than $30 million in financing, is operating in about nine markets, and on satellite radio and the Internet. Its Web site said that 15 more stations will be coming in May.
"We're always looking for new financing, but the investors we have are committed and we would we like to raise more money," said Sinton, who said that certain people on the board with long-term radio experience have recently taken over key decision-making roles in a departure from the past.
Serious errors in business judgment account for Air America's problems, rather than its slate of programing, say various radio industry insiders.
"It makes you wonder why everybody is leaving the company," said Michael Harrison, editor for Talkers, a magazine about Talk Shows.
"I think the concept of liberal radio is great, but they went about it wrong. They first insisted that stations take an entire line-up. The odds of getting enough stations to take a whole line-up are so impossible."
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