Global Policy Forum

by Daniel Zoll

THE NEWS HIT employees, fans, and supporters of Oakland's KDIA-AM like an electric shock: last December, after serving the city's African American community for more than half a century, the legendary R&B station was sold to Disney for some $6 million.

Good-bye B.B. King, hello The Lion King.

Friends of KDIA gathered outside the station's Embarcadero West studios for a midnight vigil to protest the sale. But under federal deregulation of the radio industry, community input is meaningless. Harrison Chastang, news anchor at San Francisco's KPOO-FM, explained the damage. "KDIA was once a place where people could get their records played and get their messages out," he recalled. "A lot of the issues and concerns of the Oakland community were aired on KDIA, especially on Sundays."

KDIA's new owner switched the station's programming to the satellite-fed Radio Disney, which pitches a mix of tightly formatted Top 40 songs and Disney self-promotion to kids. Gone is KDIA's highly regarded local public affairs programming, replaced by health tips like this one, from Nov. 18: "Contrary to popular belief, chocolate or fried foods do not cause acne." That must be a relief to Radio Disney's sponsors, which have included Reese's peanut butter cups and McDonald's.

Welcome to the world of radio consolidation. In the past two years a handful of mostly conservative, out-of-town media conglomerates have snapped up the majority of Bay Area radio stations -- and you can hear the results anytime you tune in. Here's a glimpse at the state of local radio:

* Just two companies -- Texas-based Chancellor Media Corp. and New York-based CBS Radio -- own 11 of San Francisco's 20 top commercial radio stations.

* Ten years ago the 30 or so commercial radio stations licensed in San Francisco and Oakland were owned by 23 different companies. Today the number of owners is down to 10.

* The variety of music played on the radio has dropped dramatically, as computer-programmed stations overplay proven hits and minimize risk taking.

* Radio news and public affairs programming have been virtually eliminated. Only two commercial stations, KCBS-AM and KGO-AM, produce any in-house news programming at all. Many stations contract out their news to outfits like Shadow Traffic and Metro Networks, which do little if any original reporting.

* With conglomerates scrambling to pay back Wall Street, commercials on some Bay Area stations have almost doubled in the past few years.

* And despite the damage done to radio by consolidation, the Federal Communications Commission is considering relaxing ownership limits even further.

"Consolidation is killing the business," said Quincy McCoy, senior editor at San Francisco-based industry magazine Gavin. "You're getting less music, less choice, and more research. Radio was safe enough as it was, so imagine it more homogenized. I think it's really hurting radio's creativity, spontaneity -- everything that makes it exciting."

The problems in the radio industry today can be traced to two waves of deregulation -- both pushed by the powerful broadcasting lobby. The first began under the Reagan administration and gutted the public-interest obligations broadcasters were required to uphold in exchange for the right to use the public airwaves.

The second is the Telecommunications Act of 1996, which lifted restrictions on media ownership. Among other things, the act made it possible for companies to own an unlimited number of stations in the United States -- and up to eight in large markets like San Francisco. The media and telecom giants who backed the law claimed it would start a wave of competition and create millions of jobs.

According to a report in Common Cause Magazine at the time, major media companies gave political candidates and lawmakers more than $4 million in the years leading up to the law's passage -- making it, in the words of Sen. Larry Pressler (R-S.D.), "the most lobbied bill in history." Ralph Nader argued that it would result in "less diversity, more prepackaged programming, and fewer checks on political power."

Many observers predicted the act would unleash an unprecedented torrent of mergers and acquisitions -- but even they might be surprised at the speed and scale of consolidation. Since 1996, four multibillion-dollar conglomerates have gained control of about a third of the country's radio stations. San Francisco's radio market has become dominated by five companies: Chancellor and CBS, which each own seven stations, Susquehanna Radio Corp. and Bonneville International Corp. with four each, and Disney with three.

In September 1996, shortly after the Telecom Act became law, Evergreen Media Corp. of Irving, Texas, bought KKSF-FM and KDFC-AM/FM for a total of $115 million -- the highest price ever paid for Bay Area radio stations. Evergreen merged with Chancellor last year.

"Consolidation puts too many stations in the hands of too few people, and the public doesn't benefit one bit," said Bill Mann, who has covered Bay Area radio and television for 15 years, for newspapers including the Oakland Tribune and the San Francisco Examiner. "It doesn't benefit anybody to have four or five big companies owning half the stations in this market."

Thanks to Wall Street's eagerness to cash in on radio consolidation, stations are being sold in San Francisco for as much as 45 times cash flow, according to Chester Coleman, a Bay Area-based consultant to station owners. As a result, stations are under pressure to increase profits and service their debts. One way the group owners aim to cut costs is by recycling programming. According to the American Federation of Television and Radio Employees, Chancellor has announced its intention to reuse and recycle local radio station programming on its other stations around the country. "By doing so, Chancellor will replace locally generated radio programming with fare from its other owned and operated stations," AFTRA stated in a May 27 letter to the FCC. Chancellor failed to return repeated phone calls requesting comment.

Another result has been to increase the thing listeners hate the most: commercials.

A San Francisco program director who asked to remain anonymous provided us with commercial data from a recent report by Indianapolis-based Media Monitors. KCBS, for example, now plays about 22 commercial spots an hour; KGO runs about 20. According to our source, stations averaged 12 to 14 spots an hour a few years ago.

"It's hurt the product," Coleman said. "The idea is, we've got to pay this debt service and we can do it by increasing the number of commercials."

One reason the group owners can get away with increasing commercials is that, in many cases they also own the only competition within a particular format. CBS controls alternative rock outlets Live 105 and Alice 97.3; Susquehanna owns sports talk stations Ticket 1050 and KNBR-AM; Chancellor owns "urban adult contemporary" stations KMEL-FM and Wild 94.9; and Disney owns talk outlets KGO and KSFO-AM.

"As recently as five years ago, every station in San Francisco competed against every other station," longtime Bay Area radio personality Peter B. Collins said. "Today you have groups competing against other groups, but in many cases that competition between individual stations is completely gone."

Collins is a longtime critic of broadcasting deregulation -- a fact that was duly noted by at least one of his former employers. When KNBR execs told him they were letting him go, Collins recalls, his manager pulled out a file containing all the letters Collins had written to the FCC protesting deregulation.

Bay Area commercial radio was not exactly a bastion of musical diversity before consolidation. But for listeners and artists, things have gone from bad to worse.

Lynda Tice is a Los Angeles-based music promoter who represents some Bay Area bands, including Dawn Jackals. She says program directors often tell her they would love to add a song -- but the corporate boss has to approve it first. The radio conglomerates, she says, are more cautious than independent owners when it comes to music programming. "They go for the safe songs -- that's why you get less of a variety," Tice said. "It's a bad time for music. Let the music play -- get rid of the accountants and the attorneys deciding what's going to be a hit and what isn't."

And radio stations are playing fewer and fewer songs, over and over again. Corporate program directors have found that tightening their playlists helps attract casual listeners, who are more likely to stop at a station playing a song they've already heard a dozen times. Narrower playlists "means having less of a window for newer artists. It's a simple math equation," said Dave Margulies, a former A&R executive with Sony subsidiary Work Records who now runs Berkeley-based independent label High Sierra. "I don't see many stations in our community reaching out to develop new artists. If you want anything that's exposing new talent, it's to the left of the dial."

The narrowing of radio's scope could be changing the shape of the music industry. Record companies, Margulies says, are putting less energy into developing career artists and more into one-hit wonders. "People are looking more for novelty songs and instant overnight successes," he told us.

And one of the first things to get lost under corporate consolidation is regional diversity -- including the unique character that made the Bay Area a musical mecca during the heydays of psychedelia and punk. "The stations are programmed from Philadelphia or somewhere," said Chuck Plotkin, a former Columbia executive who has produced records for Bruce Springsteen and Bob Dylan, among others. "How do you do that -- especially in the Bay Area? The Bay Area charts have never matched the national charts. Records that were breaking across the country, you couldn't get them on the radio in the Bay Area. Can you have your regular old programmer from Philadelphia program in the Bay Area? I don't know."

When Mark Provost started working in the radio news industry in San Francisco about 30 years ago, he says, 15 or 20 stations had at least one news person; many had full departments. Now, only KGO and KCBS have their own news-gathering operations.

Provost was news director at KNBR when the station's owners eliminated his department in December 1995. The owner, Pennsylvania-based conglomerate Susquehanna, dumped the station's news operation and adopted Disney's all-sports ESPN radio format. The one non-sports show spared the axe was Rush Limbaugh, who still shares his unique blend of bald-faced lies and unchallenged demagoguery from 9 to 12 every weekday.

Provost now works as a news director at Seattle all-news station KXL-AM. Many of his colleagues in the industry weren't so lucky. "A lot of people are out of jobs," he said. "A lot of them had to go into P.R., which is the last place you want to go if you care about this business."

After the layoffs, KNBR farmed out its news to a Texas-based outfit called Metro Networks. More and more owners are cutting costs by hiring Metro or its chief competitor, Shadow Broadcast Services. At least 18 San Francisco stations contract with Metro for traffic, weather, sports, and/or local news. Heavily indebted group owners like these networks because they don't cost a cent: Metro and Shadow sell a 10-second spot at the end of their broadcasts, then provide the content free of charge.

Former NBC News president Lawrence Grossman wrote about the outsourcing trend in a story called "The Death of Radio Reporting" in the September/October Columbia Journalism Review. "These syndicated services employ few if any reporters and do not bother to subscribe to the A.P. or other wire services. Instead, they merely cannibalize local newspapers and cable news channels," Grossman wrote.

Listeners may not know that the voices they're hearing also appear elsewhere on their dial. Reporters for these services frequently use different names to make the public think there are different staff at different stations. Joe McConnell, news bureau chief for Metro in San Francisco, for example, says he has used as many as three different names on different stations. He wouldn't tell us the pseudonyms he uses, citing contractual arrangements with those stations.

McConnell objects to the assertion that Metro is replacing in-house news operations; most San Francisco stations dumped their news-gathering operations long ago, he says. McConnell said he has seen Metro's San Francisco bureau grow from a traffic service to a full-fledged news outlet in just a few years. The San Francisco operation includes a staff of 30 people and four aircraft. "We're putting news back on the radio," he said. "Stations have been dropping radio news since deregulation, and we provide a way for stations who may not have the resources or don't want to spend the money on news to have it."

The AFTRA, the union that represents news talent, hates the trend toward outsourcing, which it sees as a direct result of consolidation. "Replacing original, distinct, and diverse local news and information in radio stations with 'outsourced' news and information is harmful to the local community," wrote AFTRA's Kim Roberts and Dominique Bravo in a May 27 letter to the FCC.

Cecil Hale, professor of broadcast communications at San Francisco State University and a former vice-president of Capitol Records, blames radio's decline on deregulation. In 1987 the Reagan-appointed FCC eliminated the Fairness Doctrine, which required broadcast stations to give airtime to issues of public importance and to present opposing views. At the time, broadcasters promised the repeal would increase serious public-affairs programming. "Once upon a time, in order to have a station, you had to prove yourself worthy, you had to provide programming to serve the local community," Hale said. "When the rules changed, that went out the window. Nobody did the news anymore, nobody did public affairs anymore. Since that's gone, it means there are very few opportunities for disenfranchised communities to come forward and make their case."

The increasing whiteness of station ownership doesn't help. An August 1998 report by the National Telecommunications and Information Administration found that deregulation and consolidation were eroding the gains minorities had made in media ownership. "The 1998 minority ownership numbers offer discouraging news for minority broadcasters," the report reads. "Minority ownership has not kept pace with the developments within the industry as a whole, and black ownership is losing ground." The report notes that many of the remaining minority-owned stations are being squeezed out by the big conglomerates.

"Consolidation has killed the small entrepreneurial guy in radio," Gavin's Quincy McCoy said. "You can't come in anymore and buy one station, because banks aren't looking at one-guy, one-station anymore. Minorities and small-market guys can forget about it."

Disney/ABC owns three radio stations in the Bay Area -- less than half the holdings of CBS and Chancellor. But for industry observers, the company has come to symbolize the worst elements of deregulation and consolidation. The corporation, which also owns the ABC network and San Francisco's KGO-TV, lends its family-values image to KDIA's Radio Disney, promoting features like its "town hall meeting on racism" with Hillary Clinton. But across the bay, at the Disney-owned "Hot Talk" KSFO station, the format is all hate, all the time.

KSFO's hot-talk format was in place before Disney acquired ABC in 1996. But the parent company has made little effort to bring any balance to the station. In just the past few weeks, KSFO star Michael Savage has insulted "the lesbians and feminists from Berkeley," described the incoming Sacramento administration as "Gov. Red Davis and his Marxist Totalitarian Gang," and somehow managed to spin the recent spate of pies tossed at local politicians as a conspiracy by gay rights groups. "Send 'em to Santa Rita for five years with a tube of K-Y jelly," he urged authorities. After the election, Savage treated listeners to this little gem of insight: "The Bay Area is hopeless, especially San Francisco, and will not be turned around except perhaps by plague."

One thing you can't accuse KSFO of is inconsistency. In just one day we heard host Geoff Metcalf refer to "goo-goo liberals," host Ken Hamblin talk about "liberal egg-sucking cockamamy pinko Democratic dogs," and Savage urge, "If you're a liberal suffering delusional realities, stay tuned."

Now that there's no Fairness Doctrine, Disney can provide a soapbox for the KSFO goon squad without allowing time for other points of view. After buying up Bay Area stations, the company has given progressive and liberal commentators the boot. It dumped populist host Jim Hightower from KGO soon after it bought ABC Radio -- and after he trashed Disney on air for its labor practices (see The Naked Eye, 10/18/95).

ABC also dropped Peter B. Collins's intelligent, left-leaning talk show soon after it acquired KSFO in 1994. "I was not qualified to continue because I've never been indicted and I'm not a right-wing name-calling crackpot," Collins told us. Last year KGO even threatened to cancel popular talk show host Bernie Ward, one of the last voices of moderation remaining on the Disney dial. Julie Hoover, New York-based spokesperson for ABC Radio, wouldn't comment on KSFO's all-hate format, saying that she is unfamiliar with the station's programming, but did add that it is "a fantasy" to think that parent company Disney has anything to do with the running of its radio division.

Hoover defended the company's purchase of KDIA and its installation of a syndicated Radio Disney format. She said it provides a service for children, who are underserved by radio. "Certainly there is no other station on the air that has tried to program specifically for children under the age of 12," she said.

While most intelligent listeners respond by tuning out, there have been occasional murmurs of protest. In May 1996, in response to calls from ethnic and gay groups who were fed up with being attacked and ridiculed on local radio, the San Francisco Human Rights Commission held a hearing on the issue. "The persistent inhumanization of immigrants, women, people of color, gays, lesbians, and others that is encouraged and even promoted on some talk shows in the Bay Area has a real impact on the quality of life in this city," the HRC wrote in its findings. "It creates, fear, hatred, resentment, perpetrates stereotypes and widens divisions."

When CBS bought San Francisco's KITS-FM (Live 105), the company fired local morning-drive host Alex Bennett. The station later brought in Howard Stern's syndicated show, broadcast out of New York. "Love him or hate him, Alex was local and you could hear him talk about how it's raining in San Francisco," Chastang said. "That's what you lose when more and more stations are going with syndicated programming. You lose a local perspective."

In an interview, Bennett says it's too soon to tell if consolidation is a positive development for the industry. So far, he says, it has been bad for talent and bad for the audience. "What these places really become are gas stations; they're not run with the personal touch that local owners brought to it," he told us. "The public is the loser in this great equation."

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