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The Big Radio Play

Christopher Gardner "This law is truly revolutionary legislation that will bring the future to our doorstep." President Clinton By Dan Pulcrano The future of radio showed up at San Jose's doorstep last week when venerable rock station KOME ended its quarter-century life, cut most of its talent loose and moved its management team to San Francisco. This community's loss of a media innovator, though, is a mere footnote in a massive radio industry consolidation unleashed by Congress's passage of the 1996 Telecommunications Act. Despite the considerable attention paid to its Internet "decency" provisions and telephone industry competition issues, few noticed that the bill gutted longstanding restrictions on broadcast ownership concentration by removing the limits on how many U.S. radio stations a single company could own. Unshackled media companies wasted no time in taking advantage of the deregulation. Before 1996 was over, old industrial giant Westinghouse (which had bought CBS the year before) acquired Infinity Broadcasting, transforming itself into the largest radio broadcasting company in the world. Observers were stunned by the deal, which gave Westinghouse/CBS 79 radio stations in 17 markets, including 64 stations in the top 10 markets. The next year Westinghouse acquired the industry's fifth-ranked player, American Radio Systems, adding 98 stations and bringing its portfolio up to 175 properties. It then announced that it was changing its name to CBS and selling off its non-media properties, getting out of the business of exporting nuclear reactors to China and India and divesting itself of other rust-bucket relics mired in stream pollution and asbestos problems. Through the series of transactions, three of the Bay Area's leading rock stations--KOME, Live 105 (KITS) and Alice (KLLC)--had all fallen under the new CBS's control. Even with the relaxed provisions of the Telecommunications Act, which now allowed as many as eight commonly owned stations per market, CBS was at its limit, since it also had KFRC-AM/FM, KBAY, KCBS, KEZR and KYCY-AM/FM. Something had to go. And so the plug was pulled on KOME, a direct competitor to CBS's other Bay Area alternative rock station, Live 105. Though KOME sat at the top of the San Jose book and Live 105 lagged in the San Francisco market, the San Francisco station billed $9.3 million a year in advertising, compared with KOME's $7.2 million, according to estimates by the Virginia-based BIA Consulting. "Everything is market size [in radio]," says Live 105 general manager Jim Hardy, who ran KOME for more than a decade. "San Jose is around 28th [among radio markets]. San Francisco is fourth." Less than two weeks remain until the letters fade away. In the age of media consolidation, DJs and programs are disposable. The KOME timeline. A longtime listener bids farewell. Online information about the Telecommunications Act. Losing out to San Francisco was an ironic twist, considering KOME management's decades-long effort to establish metropolitan San Jose as an independent media market. Those efforts began when Infinity paid $400,000 for the struggling free-format station in 1973, becoming the first of the 79 stations it would eventually own. "There were almost no ads" at the time of its purchase, recalls Dan Tapson, who operated the station for the next 12 years. Under Tapson, who had grown up on the Peninsula and attended San Jose State, the station's programming, which ranged from soul and folk to English keyboard groups, found focus and commercial success. Tapson worked with graphic designer Mike English to create the famous yellow and black logo that adorned pickup truck windows and stop signs throughout the 1970s and 1980s. "You probably wouldn't believe me if I told you how many we bought and put on cars," Tapson says. "It was in the millions." The yellow traffic sign logo embodied the South Bay's freewheeling suburban car culture, riding the prosperity of the nascent Silicon Valley. "KOME became a leader in establishing the South Bay marketplace as an important metro radio area," Tapson says. "We struggled at the beginning; we were overshadowed by San Francisco. By the late '70s we started getting media buys for soft drinks, beers, stereo equipment ... the big guys: the Sonys, the Buds, the Coca Colas." The station achieved notoriety both for its outrageous promotion, which in addition to stickering the South Bay included scheduling spitting contests and referring to itself as "The KOME spot on your dial." The station took programming risks as well, most notably hiring college radio jock Dennis Erectus in 1977. A master of radio as theater, Erectus pushed the limits of free speech and engaged in shocking sex talk long before it became a staple of popular radio. "I had people down there having sex on the floor and I did a play-by-play," Erectus says, the type of shtick common these days on the Howard Stern show. "I think Stern was still in high school when I started doing that sort of thing." Radio was much different in the pre-corporate days, Erectus recalls. "People were allowed to drink or use drugs on their shows. ... Not everyone did, and at times it made for some sloppy radio. You would open the front door and smell marijuana. Their friends would be in there partying." "Everyone working at the station hung out with one another. It wasn't like working for a big company. Now people do their jobs and they leave." Erectus remembers that the jocks would show up and pick out the music they wanted to play from an extensive library of albums. "Now you get a computer readout." Erectus was fired in 1983 during a format change. The following year, Tapson asked Infinity to buy out his interest. "The company started getting very big," he says, and KOME was pulling down an annual profit of around $1 million. It had purchased LA's edgy KROQ in the early 1980s, and other acquisitions followed. With KOME as its flagship, "We became the largest radio-only business in the U.S." Hardy, from a station in Denver, took over as the station's general manager. Though the yellow stickers remained, the station's name grew from a single syllable to its four individually enunciated call letters, K-O-M-E. In 1987, Erectus returned for a second six-year stint and the morning team of Jeff Blazy and Bob Lilley came on board, entertaining the morning audiences with an endless succession of cornball stunts and live broadcasts from other cities and continents. Ironically, Erectus was given the ax for the second time when another Infinity talent, Howard Stern, was given a slot on KOME. Today Erectus is behind the mike at KSJO. Blazy and Bob lost their morning slot to Stern and were given walking papers when the station switched to an alternative rock format in 1994. By the time the curtain came down on KOME, Erectus says, it had "a short playlist that was programmed out of KROQ in LA with two syndicated shows. [The area] didn't lose anything of great artistic merit." Though it had left its homegrown free-expression behind and its promotion was slick and less groundbreaking, KOME under Hardy remained a good corporate citizen. The station championed local bands, boosted local clubs and gave a break to many a college student trying to break into the business. The station's Acoustic AID compact disc and Acoustic Christmas concert, which featured acts like Courtney Love and Green Day, raised tens of thousands of dollars for AIDS groups in San Francisco and the South Bay. "Our public service commitment was above and beyond most stations," Hardy says, calculating that the station ran hundreds of thousands of dollars in public service announcements. Will the management team that for well over a decade championed the South Bay now shift its loyalties to San Francisco? Though it is clear from his remarks that the South Bay community outreach will be diluted by the broader regional focus, Hardy says the former KOME team will not completely abandon the area that supported them. "Santa Clara County is part of the San Francisco metropolitan market. The largest county in the nine-county metro is important to us. Yes, we're going to be interested working with South Bay clubs and bands as we always have." Now the dominant player in Bay Area radio, CBS's eight stations today command nearly a quarter of the revenues in the $300 million-plus San Francisco and San Jose markets, and 27 percent of the San Jose market, according to estimates provided by BIA Consulting. Another large player in the San Jose market is Jacor Communications Inc. of Covington, Ky., the nation's second-largest radio company measured by total stations. Jacor now owns, operates or represents 203 radio stations in 55 broadcast areas, including KSJO and the classic rock station KUFX. Other significant players include the community-oriented Empire Broadcasting (KLIV, KARA and KRTY), run by spry septuagenarian Bob Kieve, the last of the local owners, and EXCL Communications, owner of the Spanish-language KLOK. Clearly, the Telecommunications Act of 1996, billed as a pro-competition piece of legislation, has reduced competition in the region and accelerated the consolidation of once-local media by huge corporations. "It will create many, many high-wage jobs. It will provide for more information and more entertainment to virtually every American home," Clinton said when he signed the bill amidst much fanfare. If they emerge, however, the jobs will likely be in other media, as radio transforms into a centralized, automated and tightly formatted entertainment medium. The wave of mergers and consolidation has attracted the attention of watchdog groups from Consumer's Union to Common Cause. At the time of the Telecommunications Act's consideration by Congress, Ralph Nader wrote, "We believe that Congress is moving the law in the wrong direction, toward greater concentration and fewer choices for consumers, all under the guise of 'greater competition.' Laws and rules that limit cross-ownership and concentration not only enhance competition, a putative goal of the new legislation, but they also serve important non-economic goals, by promoting a greater diversity of programming and enhancing opportunities for local ownership. ... The predictable result will be less diversity, more pre-packaged programming and fewer checks on political power." "That these provisions are being included in legislation that is being sold as pro-competition is particularly galling," Nader added. Common Cause noted that the top 10 broadcast interests and their trade association, the National Association of Broadcasters, made $9.5 million in political contributions in the decade preceding the act's passage. This included $6 million in direct contributions to candidates, $3.1 million in soft-money donations to political parties and almost $400,000 in hard-money contributions from top execs. Singled out for special favor were the 70 members of the committees that oversaw the telecommunications issue; they received $1.26 million from the top 10 broadcasting interests over a decade--nearly three times as much as legislators not on the committees. While it was enough to put them in the top 5 percent of PAC givers, the investment was a small expense by broadcast industry standards. CBS's two top executives made more than $3 million each in salaries and bonuses last year. Since the Telecommunications Act's passage, more than 4,000 of the 10,000-plus commercial radio stations in the U.S. have changed hands, to the surprise of both regulators and legislators. Critics and consumer advocates fear the consolidation will both drive up advertising rates and provide opportunities for centralized control of information. CBS CEO Michael H. Jordan, a former nuclear engineer and soft drink executive who now heads the nation's fourth largest media firm, does not believe the ownership concentration will lead to anticompetitive pricing. "We deal in an advertising market that includes electronic and print. We expect the definition of the market will be much broader than just radio," he said around the time of the act's passage. Community activists, meanwhile, fear that the variety of opinions heard in a community could suffer as media control is consolidated in the hands of a few. Even FCC Chairman William Kennard has expressed concern that the new deregulation has narrowed "the diversity of voices." CBS Radio President Mel Karmazin, Jordan's heir apparent, rejected a $22,000 ad buy when he killed spots on three New York stations purchased by Crain's New York Business Weekly to promote an upcoming profile of the publicity-shy Karmazin. The issue of centralized media control was raised by media critic Ben Bagdikian in his 1982 book, The Media Monopoly. In it, he documented how 50 corporations controlled half or more of the media business. By 1992, the number was down to 23. In the 1997 edition, he calculates that 10 companies control most of what we see, read or hear. With the gradual demise of KOME's free spirit, followed by the station's sudden, unceremonious disappearance last week, the consolidation touched many of us in a personal way. The concentration of media power may even be one of the most important stories of our time. So how come you haven't heard much about it? [ San Jose | Metroactive Central | Archives ]