Liberal Radio Goes Dark

Posted by unknown - April 27, 2004 (entry 171)

originally published in the L.A. Weekly, April 16-22, 2004

Liberal Radio Goes Dark
A dispute over money silences 2-week-old Air America in L.A. and Chicago
by Howard Blume

Air America, the liberals’ answer to Rush Limbaugh, is on the air.

Er, make that off the air.

The fledging network, 2 weeks old, was yanked Wednesday in Los Angeles and Chicago, the nation’s second and third largest media markets. The owner of these stations, WNTD 950 AM in Chicago and KBLA 1580 AM in L.A., said Air America bounced a check and owes his company more than $1 million. Air America executives denied breaching financial obligations, said the network’s absence is temporary and pledged to pursue relief in court if necessary. General counsel David Goodfriend characterized what happened as a contract dispute over the station in Los Angeles.

In the meantime, devotees in L.A. and Chicago can listen to broadcasts online at http://airamericaradio.com or on Channel 167 of XM Satellite Radio. The online feed is calibrated to New York time, so the shows will play three hours earlier than listeners are used to. But you’ll still get that increasingly familiar, unrelenting mix of hosts learning to do radio, ads for New York museums and public-service plugs for the United Negro College Fund.

The unplugging came at the hands of New York City–based MultiCultural Radio Broadcasting, the nation’s 18th largest broadcaster, with 43 stations, two of which had leased airtime to Air America. MultiCultural’s specialty is ethnic radio, which explains why a New York staffer told the Weekly its Web site was in Chinese and couldn’t provide reporters with so much as a press release in English. But MultiCultural counts as something of a player within its niche, having just acquired Miami-based Radio Unica, a Spanish-language network with 15 stations, for an estimated $150 million. The acquisitions included KBLA, which had been an all-sports station in Spanish.

MultiCultural produces some original programming, primarily targeting the Chinese community in Los Angeles and New York City. But for the most part, it sells blocks of time to ethnic programmers. Its on-air tongues include Mandarin, Cantonese, Korean, Russian, Spanish and Vietnamese.

Until 7 a.m. Wednesday, its newest language was liberal. Air America fit in because it was, like MultiCultural’s other customers, seeking to purchase airtime.

The bonds with Air America were strictly financial.

Air America contends that it intentionally withheld payments to KBLA, because KBLA was illegally reselling airtime already paid for by Air America. The disputed airtime rolled by in February and March, before Air America began broadcasting. To fill the time, MultiCultural slotted in Spanish talk and apparently earned revenues by doing so. These revenues should have gone to Air America, said Air America general counsel David Goodfriend, because his network owned that time, even if it wasn’t yet using the time for its own programming.

"We sent a letter to them Monday," said Goodfriend. "We said, you’ve violated our agreement in Los Angeles, and you owe us money. We will negotiate some settlement with you, but we’re not happy." Goodfriend said these negotiations were under way the next day, Tuesday, in New York City. "We were engaged in what appeared to be settlement negotiations, and then we find that we’re taken off the air in Chicago and Los Angeles. We were all paid up in Chicago, under a separate contract, and they take us off the air anyway."

So, for those L.A. listeners who tuned in this morning, the sudden format change — to Spanish — was not, in fact, a calculated attempt to get Latinos to vote Democratic.

MultiCultural’s representative declined to go into as much detail, but said it was a case of no pay, no play. What happened "is not unusual in our type of radio," said Dave Sweeney, executive vice president of MultiCultural’s West Coast operations. "We sell block time to many different people. If they can’t or don’t pay their bill, or bounce checks, we take them off. It’s just a matter of paying your bills. We’re in the business to sell airtime, not in the business of taking it away from people." He added, "As a general rule, there’s plenty of time given to people who fall into default."

MultiCultural owner Arthur Liu said he was simply taking care of business. "It’s a default," said Liu in an interview with the Chicago Tribune, which got out one of the first stories. "They have paid only a very small portion of what they owe us . . . They’ve been saying, ‘We’re going to get you the money’ for the past two months . . . They’re not honoring our agreement."

MultiCultural plainly caught Air America by surprise. "MultiCultural Radio Broadcasting’s conduct in this matter has been disgraceful," said Air America chair Evan Cohen. "To shut off a broadcast that listeners rely on without warning and in the middle of discussions is the height of irresponsibility and a slap in the face of the media industry. In addition, it is a clear violation of their contractual obligations, and we are seeking legal remedies against them in court."

Goodfriend said that a court hearing over the Chicago station was scheduled for Thursday.

Wednesday’s bad news came one day after an upbeat press release announcing the network’s expansion into six new markets, which, at the time, gave the network 16 stations. Air America had started on March 31 with four stations. Yesterday’s new additions included stations in Sacramento (1240 AM), West Palm Beach and Portland, Maine.

The network’s business plan contemplated losing money for as much as four years, so presumably, investors were prepared for the financial pain of keeping the doors open in L.A. and Chicago. Which is one reason why Wednesday’s events were so puzzling.

So can this be seen as a strike by the vast right-wing conspiracy? Or perhaps an unfortunate misunderstanding? Or hardball business tactics that spiraled to a confrontation?

Stay tuned, Los Angeles.

If you can figure out how to do that.

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