May 14, 2013
Maybe it's time to re-define the term, "Power Player," because Michael O'Shea who heads up a small radio group located in Santa Rosa, CA - market #120 - has certainly wielded a powerful influence wherever he has been over the past few decades, in large markets and small. Here, O'Shea explains how what he learned over the years helped him not only keep mom-and-pop radio in business, but see it prosper by emphasizing its local, one-to-one advantage.
So when did you decided to get into radio?
I started in radio in the '70s as a DJ and announcer in various small and medium markets such as Springfield, IL; Lansing MI; and Toledo. In Ohio, I worked for Lew Dickey, Sr. and his son, Lew Dickey, Jr. used to sometimes come into the station to answer the request line. Years later, I would work for Lew Jr. and John Dickey as their Market Manager for Cumulus in Eugene, OR in the early 2000s. I'm pleased that I've always maintained my relationship with the Dickey family.
At the beginning, could you imagine how your career and radio would evolve over the years?
No, at the time all I could imagine was doing 7p-midnight at WCVS/Springfield, IL. Back then, you never knew what would happen next. When I was working for the Dickey family in in Toledo, I got a phone call that offered me the chance to work at KLIF/Dallas, which at the time was owned by Gordon McLendon. It was one of absolute premiere Top 40s in the country; I was fortunate enough to go in there, do an air shift and ultimately become PD of that station.
When did you decide to segue to the management side of radio?
What I used to say to myself early on - it was a barometer of sorts - was that I never wanted to be a 30-year-old DJ or a 35-year-old PD, so I ascended to the PD level when I turned 27 and to the GM chair when I was 35. I just wanted to climb the radio ladder. I had the opportunity to have some really good teachers along the way -- Joe Amaturo (his son, Lawrence Amaturo, and I are developing Sonoma Media here in Santa Rosa), was one of my mentors in the '70s; I was National PD for him in Miami, St. Louis and Houston. I earned a lot of my programming stripes with Ken Dowe and Gordon McLendon in Dallas ... and management experience with Dan Mason and the Marriott stations in the '80s, with my first GM position, as the founder and creator of KUBE/Seattle.
In your view, of all the things that transpired in radio since you started, what has had the most significant impact on the business?
The biggest thing has been consolidation because radio was a cowboy industry in the '70s and '80s -- a lot of mom-and-pops who were very flexible. On top of McLendon and Amaturo, I once worked with Gene Autry, who was the literal cowboy broadcaster. Of course, what happened over time was the smaller radio stations, the little fish, were eaten by bigger fish, which were later eaten by even bigger fish.
Now you have five or six major companies controlling the majority of broadcasting licenses. It has re-jiggered the landscape and made the way we operate dramatically different. I'm not saying it has made it better or worse, because there's some of each. Consolidation has compressed our industry, where there aren't as many jobs and not as many opportunities as there used to be. One GM is running five different stations, like me, while some are overseeing 15-20 stations in multiple markets. Some PDs program three to five stations at once. It's a different paradigm, a different way of doing business.
How much more consolidation do you foresee?
I'm seeing somewhat of a reversal of that trend. I see that Larry Wilson in Portland -- who rode the consolidation rocket ship up, cashed out at a pretty good time and sat on the beach for a while -- is now back in, putting properties together. He's a community-oriented broadcaster ... and that's exactly what's happening in my circumstance. After I spent some time owning my own radio stations and groups, I ended up working for Cumulus in Eugene and Saga in Bellingham, WA; now I'm joining Lawrence Amaturo, a lifelong friend whose father was a mentor ... and we're starting a terrific local community radio company. We may voicetrack some air shifts, but no one is being voicetracked from out of town. Most of the employees we have in Santa Rosa have grown up in the market; we do community events and are actively tied into charities.
I believe we're beginning to see a seismic shift in the way local radio stations are run. It's not that all of the radio giants are going to go away or will spin off a lion's share of their properties. They're operating in a different manner, with different goals and a whole unique model. Stations in the smaller communities that still believe in the value of local radio and can still exist and even thrive.
Look at what happened here: Lawrence Amaturo originally owned these stations and sold them to Maverick for $28.5 million. They operated them for 12-15 years, then when the 2008 recession hit, couldn't generate the cash flow numbers that the banks or equity investors required. So they sold the properties back to Lawrence -- the same stations he owned initially -- for $4.5 million. And it's not that Maverick overpaid at the time. That was the market price and the going multiples back then.
It somewhat mirrors the final scene in the movie Trading Places, where Eddie Murphy and Dan Aykroyd sold high and bought low...
It seems like it, but in our case, the whole world changed in 2008. After lesser recessions, the dotcom boom and bust ... 9/11, the subprime mortgage meltdown in banking ... the entire national economy crashed. That ultimately led us to be able to buy stations for current nickels on the prior dollars.
We see this as an opportunity to be part of this potential tectonic shift in local markets, where we can reemerge as independent, local radio leaders. Clear Channel and Cumulus certainly aren't going away, but mom-and-pops like us can still do quality radio and succeed. And in some way keep a bit of traditional radio operations alive and well.
With the advent of the PPM, many radio programmers have altered their stations - especially when it comes to how the air talent operates - to optimize the new monitoring methodology. Being in a diary market, have you adopted any of those programming tweaks?
We're in market #120, where we get two books a year. We are, however, under the umbrella of the San Francisco metro. As a result, we do show up in San Francisco's PPM book - and all of the stations in this market have Arbitron encoders for PPM -- but we don't really benefit from that.
That said, we don't spend a lot of time retraining radio personalities on PPM tricks. We emphasize the basics; we have certain formatic rules we ask our PDs and air talent to model, in terms of how they put music together and where to put talk segments. But we don't get into PPM-oriented coaching, primarily because we're not convinced it's good for the listener. I think it's merely a reaction to the PPM methodology, where some stations look for ways to create additional quarter-hours or whatever. We don't have to become slaves to methodology.
How does a station in your market adapt to quick, substantive changes when there's six months between "report cards?"
In making that assumption, you have to believe that Arbitron ratings are a true reflection of listeners' habits and behavior. We don't believe that's necessarily 100% true. We know how we're doing through the daily feedback we get from our advertisers and listeners. They're the first to tell us when something is working and when it's not. The fact that Arbitron shows our audience growing or declining every six months is something we have to deal with, but a much more of a vital end-game to us is that our clients get results when they advertise with us.
Our advertisers generally aren't dependent on Arbitron to help them make their buys. Sure, some big agencies in San Francisco and L.A. want to see how we do in the book, and want that data to help verify their decisions to spend money. But by and large, our advertisers join us because we work for them. We go to where they are, and help them count noses of the people who come in. They find out what stations their customers listen to and what spots they hear. That's where our tracking takes place. We're not living and dying on a decimal point in a ratings book; it's not that critical that we do a 3.9 and not a 3.6. It's a benefit to operate without being a slave to six-month ratings bounces. Arbitron still matters, of course, but it's not an end-all.
A market your size is usually the so-called "farm system" for up-and-coming air talent to hone their skills. But with today's downsized business, I would imagine that some bigger-market personalities may be applying for your openings, too. How do handle that?
It's heartbreaking. I've only been here for five days, but when I was in Bellingham, WA - which is not even a ranked market - and I ran an ad for a PD or a morning air personality in All Access, I'd typically get 100-125 responses ... and as I said, it would be heartbreaking. Most of those people were victims of station downsizing and format changes. And when I say larger markets, I'm not just talking about a ranked market like Schenectady. I got responses from former L.A. personalities who were willing to come to Bellingham, WA for a job I had posted.
One applicant in Michigan sent an audio file and a letter to me regarding a job posting I put in All Access, telling me that he'd "been downsized." Even though we didn't hire him - we decided to promote from within -- I wrote him back and said, "On behalf of the entire radio industry, I want to personally apologize to you for being referred to as being 'downsized' and being made to feel personally degraded." He wrote me back and said it was the nicest rejection letter he ever received.
It's a tough situation all around. On one hand, it's a case of supply and demand. We used to joke with each other and say there were 101 people looking for 100 radio jobs. Now it's 101 people looking for 37 jobs. For our part, we could have very talented people from big markets, but we've actually had better luck hiring employees from our local area or region. They have a better handle of what works here because they've lived here.
Bottom line: When it comes to newcomers to our industry, is there a "shallow talent pool" nowadays?
My peers and I were lucky to have been in this business in the '70s, '80s and even '90s, when radio was in a big "show business" era with superstar DJs. Radio has changed so much since consolidation; it has bred a different animal. There are still superstars, but they're more national brands than local icons. Once you get past the Ryan Seacrests and Elvis Durans, when you get into the "real world" in the local markets, you might not have that superstar factor, but what you have instead is local market equity and a real desire to "touch" listeners and do good solid radio.
I just finished doing 55 one-on-one interviews with the entire staff here in Santa Rosa, and I asked them all the same first question: "How did you get here?" And 25% of them said they started here as an intern and developed into whatever their current job was. This is a good example of a station growing its own, finding people here who want to be here and are interested in this business, whether it's stuffing T-shirts into boxes for a contest or doing the midday shift.
Although you're just a week into your new job in Santa Rosa, have you set long-term goals of things you'd like that cluster to achieve, or are your goals more monthly or quarterly?
Perhaps a little of both. Before you set revenue goals, you first look at the market to see what kind of total revenue it brings in, then you see what, historically, your own group's share of that has been. You find out whether the market revenue has been going up or down. Then it's pretty simple: You make an estimate of your stations' growth - and you judge the success or lack of success your stations end up having.
Of course, you do the annual budgeting at the end of the preceding year, but you also make fine-tuning adjustments every quarter. Those adjustments are not like going back to the drawing board and starting over. If you've done this long enough, you get almost a gut feel on how things are trending and how things will turn out.
In every cluster, there are "big dog" stations, the most successful ones generating the most revenue, and the "small dog" stations, the ones not doing as well and could use the most help. When you decide where to allocate your budget resources, do you prioritize the "big dog," to keep the cash cow going, or do you allocate more time and money to the small dogs, to help them succeed?
That's the eternal question. On one hand, you don't want to take the big dog for granted ... just let it sit there and get yellow around the edges. But at the same time, you don't want to forget about the development of the stations not doing that well, because they may present the most growth opportunities. I look at it as if I have a child in college and one in 5th grade. Each one deserves its own kind of attention. In reality, that's kind of a non-answer answer, but there is no universal answer here.
In Santa Rosa, we have two big dog stations, two stations that need development and a legendary AM that's been left out in the cold for too long. Thankfully, our Country and Classic Rock stations are two of the three biggest stations in the market; how they do will either make or break our budget. If either one of them has an off-month, it would really hurt us, but if our smaller stations have an off-month, that's more like a blip on the screen, so we definitely have to give the big stations the attention they need to succeed.
At the same time, the smaller stations, the Top 40 and Hot AC, represent terrific growth opportunities for us. There are a lot of listeners out there in those formats we haven't reached yet. So we have to make sure those stations' nutrient supply is high, and that their needs are taken care of. Thirdly, I truly believe in big AM radio stations and the heritage and history that our KSRO-A must be brought back to the level it deserves, as "THE community station." Hopefully, that will be enough to build a foundation and generate upward momentum. Again, it's like having kids in college and kids in grade school.
Finally, after all you've been through and seen in this business over the years, has your view on success in radio changed?
One of my dearest friends, and former business partner, is Dan Mason, President of CBS Radio. At one time, we were roommates together. He told me, "Michael, at the end of the day, you won't be remembered by your P&L statements, your ratings book, or the great quarter-hour sweeps you did. You will be remembered by the people you helped develop." If you really look at what we do and what makes us happy, it comes down to helping people grow and develop into quality on-air talent, programmers and sales superstars.
As I look back in my career, I've had three great teachers - Gordon McLendon, Joe Amaturo and Dan Mason. I'm glad to say that I've also helped a handful of people to growth and opportunities over the years - and that's what has made me the happiest. I've had great relationships with young people at critical junctures in their careers - and if they're reading this, they all know who they are. Today, I look forward to working with a staff of 50 people, both young up-and-comers and seasoned pros, so I'm certainly not ready to call it quits now.