Jeffrey Warshaw

Jeffrey Warshaw came from a radio family; his parents and uncle once owned Universal Broadcasting. So it was somewhat inevitable that he would follow suit, starting and building Connoisseur Communications in the '90s. When he sold the company to Cumulus in 2000, it was equally inevitable that he would find his way back into the business - which he did in 2004, using an FCC Auction to launch what is now called Connoisseur Media. With around two dozen stations in relatively small markets, Warshaw quickly generated considerable success, in spite of the economy, relying on what he believes are the principles of good broadcasting. Here he explains just what that is.

This is your second go-round, of sorts, after you sold your first Connoisseur group of stations to Cumulus in 2000. Do you have any second thoughts about selling out now that you're back in the game?

I loved the company, but it was clearly a great time to sell. We couldn't grow the company through acquisition anymore because the prices were so insane. We built the company to a position where we had tremendous market share and healthy margins. But we didn't see more opportunities to grow, so when someone came along and offered us something that was more than satisfactory, we took it.

The business environment had certainly changed in the four years between selling Connoisseur and starting over in 2004. Did you have to operate your stations differently this time around because of the changing economic conditions?

We started by buying up stations in the Auction of 2004. We thought there would be an opportunity to come in and create a valuable business. There had been a vacuum created because many radio companies were overleveraged and could not devote resources to a lot of things we felt were important to make successful radio stations. In markets where we were competing, there was very little research and promotion being done. The street presence of various radios stations had been diminished. Although I didn't see an opportunity to build huge market positions, there was an opportunity to take radio stations and build them into successful enterprises. Fortunately we've been able to do that.

Our stations have grown in market share every year. In certain markets, we have built very strong positions. All of our markets are profitable; in the Spring book we were up in every one of our markets. We've been able to attract great people because we have a reputation for treating people fairly and with dignity. We try to build up the value of -- and loyalty to -- our stations over the long term. Because we're not leveraged, we've been able to continue to do the things we think the radio industry needs.

What kind of research are you talking about?

We do research and promotion in our markets. We do perceptual research and we also continue to use the best consultants in the business.

Being in diary-sized markets, you may have a choice between Arbitron's diaries and those by Nielsen, not to mention the phone service done by Eastlan. While some have argued that Arbitron is placing too much emphasis on PPM and not enough on the diary, have you shopped around for a ratings service?

All of our markets have Arbitron and we haven't considered any other service. We plan to continue to use Arbitron; we think the data we receive is the best out there and our advertisers are interested in it. The problems this industry face aren't because of Arbitron not focusing on smaller markets because of PPM. Many of our maladies have been self-inflicted.

Could you describe those "self-inflicted maladies?"

One of the biggest problems in our industry is decreased local service. Too many stations are sitting there, saying, "Woe is me," yet just in the area where I live, there have been some natural disasters over the past year that have been largely ignored by local radio. There's much less training going on. Because so many companies in our industry are so overleveraged, they do everything they can to grab business - things that don't reflect the great value radio can bring to advertisers. Running 20 commercials an hour is not in our -- or our advertisers'-- best interests. Some stations in our markets are running so many commercials that our advertisers have a very real fear of being lost in the overcrowded environment. As we are now also competing with new media, it's even more important that we aren't so cluttered.

Has a "less spots" approach paid off in the ratings?

It definitely helped us get good ratings in our markets. For virtually all of our stations, we run 10 units or less, which definitely helped us get market share and put us on the map. When we came into the markets, they were very crowded and all the stations were owned by big radio consolidators. When we came into Billings, MT, we started two of our stations from scratch. Now we have four out of top-5 stations.

Especially in an economy like this, how do you deal with rivals who cut spot price to get the client's business?

Obviously if our competition is charging lower rates, it's increasingly difficult to have integrity when you come into these markets. If we didn't have a long-standing heritage radio station, we weren't in a position to have any leadership. But in the markets where we do have leadership, we exhibit spot-price integrity. In Erie, we had two stations with great ratings and we changed formats on the other two FMs. We re-launched the second Country station, now it's the #1 Country station. We changed our Oldies format to Bob ... and that has worked out well.

You've have mentioned in past interviews your belief in developing new formats. What kind of new formats are you talking about?

We have no plans to roll out any more new formats right now, but we have experimented with formats over past five years. Some have done better than others; we've definitely proved that we will try new things as long as our research and instincts tell us there's a shot to succeed.

We came into markets where there was virtually two of everything, so we had to do things that were unique. A format like Bob is very often music-intensive and one where we don't play many commercials.

So what of Connoisseur's future growth? Is the time ripe for more station acquisitions?

There's a big gulf between what sellers are willing to sell for and what we think are reasonable prices. No deals are being done. We are an overleveraged industry, so there's not a lot of deal flow. Overvaluation and too much debt have plagued this industry for years.

We are constantly looking at new ways to develop our revenue; we have undertaken a variety of Internet initiatives and concentrated sales efforts. We weren't active in the most recent FCC Auction; we feel better served by growing our business in the markets we already are in, by continuing to invest in them. It's very rewarding to do all that we can for our listeners, our advertisers and our employees. If we can continue to serve those coalitions, we'll get taken care of as well.

Our radio stations don't exist to make us rich, but as long as we take care of our advertisers, listeners and employees, we'll do well enough.

We tend to focus on stuff we can control -- and what we can control is putting on great radio stations, providing great environments for advertisers and great place for people to work. We can control becoming a vital part of our communities. We can control the amount of debt we take on - and we make sure we don't get into too much debt. We can control treating our people with dignity; we can control the number of commercials we air. If we control those things, we'll do well no matter how bad the recession is or what our competitors are doing.