January 7, 2014
The last time All Access interviewed Larry Wilson, he had just launched another radio group, L&L Broadcasting, to complement his re-entry into the radio business, Alpha Broadcasting. Over the course of 2013, L&L was busy building up its roster, adding 19 stations in three markets -- Columbia, SC; Jackson, MS; and San Antonio -- and Wilson believes they're not done yet. Here's his view of overseeing two groups and how he sees radio evolving in 2014.
Why did you start L&L Broadcasting when you already had Alpha Broadcasting up and running?
L&L was just a financing mechanism to raise money to buy stations. We have partners in Alpha, but they were already fully invested, so we didn't have an option to raise capital for a new venture. I got a bunch of friends together to invest in L&L, with myself and my family.
L&L seems to be a wholly different entity. Whereas Alpha is essentially a cluster of stations in Portland, L&L is mainly comprised of a bevy of stations in small to medium markets.
I wouldn't say they're all small-market stations. We have great properties in the following cities: Peoria, IL; Jackson, MS; San Antonio, TX; and Columbia, SC. Those are very nice-sized markets. We didn't set out to acquire stations in small markets. We looked at medium and large markets, wherever we saw opportunities to grow. We acquired what we liked. The Triad deal presented stations with good upside. The same went for the stations bought from Yucaipa in Columbia and Jackson. These are heritage stations that offer great opportunities to grow.
Where do you see the growth opportunities in those stations - the fact that they're primarily "live and local?"
Absolutely. Being live and local and getting involved in the community is essential to our station's current success and future growth. We are very focused on additional opportunities to leverage our brands through interactive -- particularly mobile and events.
Are you satisfied with the current size of L&L Broadcasting, or could you see adding more properties?
The stations we currently own in L&L, including the ones we contracted to close by year-end, give us 43 properties. I still feel we have a lot of room to grow. We're still actively looking at stations for sale, and if we find the right deals and opportunities, we'll go for them.
The one big difference between Alpha and L&L is that the Alpha cluster is monitored by the PPM, while almost all of L&L's properties are monitored by the diary. Does that mean you have to program L&L stations differently than the Alpha stations?
In many ways, it does. These are totally different methodologies that present dramatically different results. Everybody around the country knows that when PPM came in, it made a joke out of the diary because the numbers changed so much. Back then, when you talked to Arbitron - which is now Nielsen - and asked which methodology is accurate, Arbitron said both were. But that's impossible; they couldn't both be right. KINK in Portland didn't go from being a perennial top-5 station for the 43-year history in its format -- and suddenly when PPM came out, wound up at #13. That's unexplainable.
With PPM, you have to play their game. It's a different methodology, so you use different techniques. Our programming guys are very good at that. But the key for us is the same at Alpha and at L&L -- do we get results for our advertisers? We really do - and that's why we've been successful.
When it comes to potential future acquisitions, would be they all be going into L&L, or do you see PPM-monitored acquisitions being folded into Alpha?
Any future acquisitions - regardless of the stations being in PPM or diary markets -- will eventually be rolled into one operating company.
How important is the health of the overall economy to the success of your stations and radio in general?
I think radio is coming back. Car dealers are starting to advertise a lot more. That's a big category for us. The overall economy is not robust by any means; we're hampered by our government ... having a Congress that cannot talk across the aisle to each other. I've never seen anything like this in my lifetime -- politicians can't talk to each other and work out compromises that are good for our country. We're in a stalemate now. Add that to the looming uncertainties of Obamacare ... as a businessman, I constantly talk to other radio operators about how we can grow as a result of all this. Even with all this uncertainty, however, our business is still hardy, but it can be a lot better if we get a good economy in 2014.
There is talk that many insurance companies are on the sidelines, about to advertise should Obamacare really take off. Are your stations actively looking for those ad dollars, or is your main concern more the cost of your employees' health coverage?
Both. We are seeing some additional revenue coming from insurance companies and researching opportunities to put radio to work for them.
Like every business, our insurance costs are going up. It's unfortunate the government has totally lost all credibility in how they have handled this initiative.
How important is digital revenue to your companies' overall success?
Digital investment in our stations is going to be very important for our stations. Right now, digital generates about 8% of our revenue in Portland. As time passes and we integrate digital into our L&L stations, we hope to be generating the same percentage of revenue in them, too
But while it is important to grow digital revenue, we still have to pay attention to our terrestrial efforts, which provides the bulk of our revenue. Ideally, we want digital to be a really nice add-on component.
Are you all aboard on Emmis' push for the FM chip in smartphones?
We're very much in favor of what Jeff Smulyan did on the FM chip with Sprint. He did a heck of a job; he worked very hard to make that happen - and that's something we strongly support.
Back to the concept of "Live and Local" - does that man L&L is forgoing significant syndicated programming and voicetracking on its stations?
There's nothing wrong with using syndicated programming. If it's a really, really compelling program, we would use it. But mostly we like to have real local personalities in morning shows, middays and afternoons. We do a bit of voicetracking, but not a lot.
Another definition of "live and local" means being involved in our communities, such as going arm in arm with local charities in helping people in need. These are the things radio did traditionally to engage its audience that it has somewhat gotten away from. We are fully dedicated to localism.
Does having almost four dozen stations offer L&L "economies of scale?"
We are always looking to utilize technology and mental capital (we have significant confidence in our people within all of the areas of our business) to run a more efficient and effective program.
Big picture: Do you agree with the notion that radio is evolving into two parallel universes - one for the major markets, where groups such as Clear Channel, CBS and Cumulus work under the PPM ... and the other for the non-major markets, where groups such as L&L, Townsquare, Pamal and Empire work under the diary. If so, can one of these radio universes succeed without the other, or do both have to succeed for anyone to succeed?
No. Radio is radio. Any successful team needs to have the basic business concepts, and blocking and tackling to succeed. Whether it is Portland or Bluefield for us, or NYC or Muncie for Cumulus, and regardless of PPM or diary, you'd better be focused on client results or you will fail.
Last question: Are you as happy and confident overseeing two groups in the current radio climate today as you were back in the days when you ran Citadel in that environment?
I'm pretty happy with what we're doing today because it's all about the people. When you have great people, you can make good things happen. That has always been the key for me, even when I got in the business 30 years ago. The key to the whole thing is always the people. You can always have the best signals and be playing great music, but if you don't have the right people in programming, sales and traffic, where everyone is pulling together as a team, it won't work well. Our people know how to operate as a great team.
Overall, I'm pretty happy with where the business is and judging by the results we're getting for advertisers, radio is still a very viable medium.