When Mary Beth Garber left as president of the Southern California Broadcasters Association in April, the organization’s board wanted to restructure – a decision that set in motion a battle over the future of the radio trade group.
The board discussed moving the association into offices provided by Katz Media Group, the subsidiary of Clear Channel Communications that hired Garber away from the association.
But Saul Levine, owner of Mt. Wilson Broadcasters and country music station KKGO-FM (105.1), believes that housing the trade group in the offices of a giant media conglomerate would compromise its integrity and independence. He has formed an alliance with about six other local station owners to fight the proposal.
“The SCBA must be restored to its independent status and not be an arm of any station or station group,” he said. “It must have its own offices, apart from any station or group.”
Levine, a longtime critic of giant station groups in the radio industry, noted that SCBA has decided not to renew the lease at its current office in West Los Angeles and has not started to look for a new president – which he saw as evidence that the board plans to shut down or greatly reduce SCBA operations.
The question about the organization’s offices and independence reflect changes in the radio industry. When SCBA was formed in 1937, radio stations were mostly owned by independent entrepreneurs. Today, radio is dominated by large station owners such as Clear Channel, CBS Corp. and Walt Disney Co., and by large advertising brokers such as Katz Media, which sells time on 4,000 stations nationwide, including many of the largest in Los Angeles.
Gregg Murray, president of radio consulting firm iRadioSales in Roanoke, Va., said the historic role of broadcast associations was to help train station managers and sales people. However, today’s large radio conglomerates have their own systems for selling and conduct their own training.
“Stations don’t need the association’s help the way they did 10 years ago,” Murray said.
In addition to training classes, SCBA provides job fairs and research, and it helps stations navigate complicated regulations about political advertising, which has become a major source of revenue for local stations.
During Garber’s tenure, the organization worked to convince advertisers and ad agencies to put money into radio rather than other media. The organization produced case studies and research on ad effectiveness that helped stations sell time.
“SCBA is a valuable and necessary resource for the radio stations in Southern California, and is especially important to the independent stations,” Levine said. “Greater effort should be made to keep SCBA functioning as an independent organization, and it should not be operated as an adjunct to Clear Channel’s Katz Media. My opinion is shared by many local broadcast members of SCBA.”
Garber, now an executive vice president at Katz Media, said the SCBA board discussed shutting down the trade group but rejected that possibility.
While she maintained that a merger or takeover by Katz was never on the agenda, “the executive board did propose to Katz that they provide an office for a person who would be paid by and dedicated to SCBA,” Garber said.
Katz already provides office space for other broadcast associations, including the national Radio Advertising Bureau in New York, so it didn’t seem unusual to ask to do something similar in Los Angeles, she added.
Stephen Carver, chairman of the SCBA board and L.A. market manager for CBS Radio, said the board decided to take a survey of member stations about what services they want the SCBA to provide in the future. Also, the board will form an advisory committee to come up with recommendations and an operational plan.
Carver expects the survey will be returned in the next few weeks and the advisory committee will have specific recommendations by the end of summer.
“When Mary Beth went to Katz, it created a big opening to look at all aspects of the organization, including financial stability,” he said.
Levine said the shutdown plan went away after he issued a press release June 2. Now, he and the other independent station owners are satisfied the board is checking with the membership, and he expects they will receive some opinionated feedback.
“These are wonderful people but they are misguided in their attempts to restructure SCBA,” he said. “It’s an important resource for radio stations in the L.A. market and we don’t want to see it go away.”
Paying members
Garber said one catalyst for talk about shutting down the SCBA came from the organization’s financial condition.
While member stations pay dues to SCBA, most of the group’s budget comes from noncommercial sustaining announcements, or NCSAs, that run on local radio stations. NCSAs are similar to free public service announcements except the non-profit organization or government agency that wants publicity pays for the ads at a greatly reduced rate. The money goes to the local broadcast association, not the stations.
Garber said that business model has run into trouble. Many non-profits and government agencies don’t have budgets to pay for advertising in these recessionary times, even if it only costs a fraction of true market value.
“There has been some inability by stations to run NCSAs and that’s a key part of our funding,” Carver said.
Murray, the independent radio consultant, said NCSAs still work in many radio markets but not the big ones. Los Angeles is the largest in the country with total radio ad billings of $750 million, based on SCBA estimates.
“In Los Angeles, rates are still high and the stations can fill up most parts of the day with paid advertising,” Murray explained. “If SCBA were in Paducah, Ky., they would have no problem getting stations to run free ads because there’s time to fill. But that particular broadcasters association is fighting against filled-up schedules and premium rates.”
Levine at Mt. Wilson said the SCBA still provides necessary services including job fairs, research, advocacy with ad agencies and sales training. If necessary, he and other independent broadcasters would be willing to pay higher dues to support the organization financially.
He doesn’t want to see large corporate broadcasters take over SCBA the way it has much of the radio business.
“I think consolidation has ruined radio and I’m fighting it tooth and nail,” he said. “I’m standing up for all my fellow broadcasters and trying to save our organization.”
For her part, Garber noted she worked as president of the SCBA for 13 years and doesn’t want to see her work come to naught.
“I would very much like the SCBA to continue,” she said.
