Insider Commentary on
WWDB... past & present (Fall 1998)
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An unsolicited commentary by a former high
level DB staffer.
The whole thing is this - WWDB
was for many years a family run station, Dolly Banks put talk
on it really as a lark. Most cities have a talk station or
heritage full service station FIRST, then all news stations
came in in the late 60's or so. In Philadelphia KYW was one
of the first all news stations, Westinghouse created the
model along with WINS, NYC or WBBM, Chicago, etc. This
captured a huge part of the "spoken word" audience.
Meanwhile, the real talker, WCAU (CBS) blew it because they
were not content to have a smaller audience (but more loyal -
remember all newsers depend on tonnage during primarily
morning drive, not time spent listening). So CBS sez...
damn!, we're CBS, we should own the dominant brand in spoken
word. Well, along about 1972 they make a run, hire a ton of
staffers, reporters, etc (all news has high labor
costs)...and get there clocks cleaned!!! Meanwhile Dolly
Banks has this FM signal, pays the talent next to nothing,
whores out all the product with endless commercials, has
sales managers that are indicted for the shaky deals, and she
and her brother keep all the dough! LOW OVERHEAD, LOW AD
RATES, BUT since it's MOM & POP...everybody's happy!!!
Flash forward.....CBS gets some better managers and
talent for 'CAU - Rizzo, Bruno, Dom, Alan Burke etc, get's
some ratings, but can't cover the NUT of all the
infrastructure that they STILL were paying because of the
decision in 1972, big AFTRA payroll....SOOOO....the kill the
station. ALL that audience ('cau was beating 'DB
1989-90) comes to WWDB. Dom Quinn comes back, AND they put
RUSH on the station when he was at his height!!!!!! The
station got some attention HOWEVER, the station became
increasingly OLD. NOW, The new owner CHUCK SCHWARTZ has
partners, banks and lenders, they want a return. Since the
stakes were higher (they were paying a premium to get Rush),
they needed DOUGH. The local ad business (even though the
station was good at beating down doors) could not cover the
nut. The Lou Zumuda's, Adam's Warehouses, and Glanzman
Suburu's of the world were paying low rates.......AND they
got results BUT, no significant dollars were coming the
station's way......McDonald's, Budweiser, Mercedes, Mellon
Bank, Home Depot, etc....WHICH come from being a top 10 25-54
radio station, or EVEN 35-54. So, Chuck started the
INFOMERCIAL deal which preyed upon the success of the local
personalties to use their name to endorse and disguise
interviews, they basically used this loyal core audience to
pay the bills. The infomercials guys loved it, they would pay
upwards of 4K for a half hour. Plus, they would run the 20
minutes of the regular direct account commercials... AND
because the talent was older (and was happy to have a gig)
THEY didn't ask for talent fee's or a cut of the action. The
Sales People started getting huge commissions (WWDB pays 25%)
they ran the show, no money was spent on equipment, producers
or new product. The sales department had complete arrogance
and enmity for anything relating to Programming.
Now, come The Beasley's - they
were sold a bill of goods by the previous owner (Mercury) who
over sold the billing, cash flow, etc (keep in mind that ad
money minus operating costs = broadcast cashflow, so the old
way was strip it clean...and whore it out) SO, the Beasley's
really didn't look the deal over to well. They wanted another
station in Phila AND they were kinda like drunken sailors
with money (they had a HUGE windfall with the sale of WDAS).
They come in and say we're real broadcasters....we are going
to show you how to do it!!!!)
They found nothing but an
endless pit of spending money. Meanwhile, keep in mind how it
works today, stations in today's market are selling for 22+
times yearly cash flow - which means if WWDB was sold Now it
would go for about 80 million.... 'cause the station billed
about 10 million and kept about 4 (40%). NOW (sorry if I am
boring you) The 10 million was the absolute threshold!!!! It
was all direct business and infomercials. If they could get
SOME ratings, they could easily keep 8 million in profit. Do
the math, see now the station is worth about 160 mil.
It's all multiplies....AND equity towards additional
purchases and borrowing. But, NO ratings, no multiples. Add
to that the audience is dying, the "crackpipe"
money had to go away (at least weekdays 6a-7p) and they were
left with no money, no ratings and a black hole, they
panicked (keep in mind Phila is their biggest market, a big
contributor towards cash flow) they were desperate to try
ANYTHING. Now, they split the signals and programs, WWDB
old... and new... at the end of the day they hope to grow the
FM into 35-54, really 30-60, and the old folks on AM. The
problem is of course they will whore the hell out of the am,
PROBABLY NOT GET THE RESULTS because a lot of their older
listeners live in outlying areas and can't get the WTEL
signal. They hope that the income will be a wash, that
between both stations they will make the same cash flow while
they try to move up from #15 in 25-54 with the FM. If they
can crack the top 10 it would create that multiple worth
scenario, probably increasing the station worth by 25%. We'll
see, it will take time. My opinion is that it must be driven
by the talk show. The mistake would be to try to compete with
KYW but this decision should buy a little more time.
