Infinity Broadcasting's main L.A. radio man drives his company's stations through coveted car-culture market amid formidable competition.
By CLAUDIA PESCHIUTTA
Pat Duffy's career in radio began in 1970 inside a mailroom.
A family friend got the pre-law student a job at the Columbia Square building in Hollywood as a way of getting his foot in the door at CBS. Law school was quickly forgotten. Duffy worked his way up from sorting mail to serving as an advertising/sales account executive at KCBS-TV.
In 1973, he was offered a job as an account executive at KABC-AM and remained at the station for 18 years, leaving in 1991 as a general sales manager.
He went on to become the vice president and general manager of KRTH-FM (101.1) and helped turn the financially troubled oldies station around. When Infinity Broadcasting Corp. purchased KRTH in 1993, the media company paid a then-record breaking $116 million.
Today, Duffy is vice president and general manager for KRTH-FM and the market captain, or primary contact person, for Infinity's eight L.A. radio stations, including No. 1-rated KROQ-FM (106.7) and news outlets KNX-AM (970) and KFWB-AM (1070). Infinity is owned by Viacom Inc.
Question: Is there something about this radio market that makes it different from others?
Answer: The number of cars and the number of passengers in the cars. A lot of people from outside the region would have no clue that the commute time here is literally all the time. When we would run into a media planner in New York or Chicago who would say, "Morning- and afternoon-drive only," we would fly them to Los Angeles and take them out in a car from 10 to 3.
Q: How competitive is the L.A. radio market?
A: Any time there's a lot of money at stake you're going to have a lot of competition. Radio stations are priced like a commodity. If there's more pressure against the inventory, you get more for your spots. You also have to have a lot of sales people out there who can establish a (station's) value why is my audience, that is delivering the same quantitative number (of listeners), worth more to an advertiser than somebody else's audience?
Q: Ad spending has dramatically dropped this year. How has radio been affected compared to other media?
A: I don't think any more than any other media. (Last year) was an aberration with the dot-com business coming in here and just pouring millions of dollars into the market and spending it in an irrational way. Then, this year has kind of been a compression the other way and hopefully, by next year, it will get back to business as usual.
Q: How have ad revenues at Infinity's L.A. stations been hit?
A: Obviously, 9/11 was a big setback. The travel industry, the airline businesses, the hotels, the amusement parks, all that advertising was drastically set back and canceled and then, it came back pretty good in November. November is always a strong month in Los Angeles because it's a television sweeps month. December is marginal but not as bad as it was the rest of the year. If you average it all out, I think that you'll probably see a flat year against 1999.
Q: Are declining ad revenues forcing Infinity to cut costs at its L.A. stations?
A: No. We're watching our expenses but the margins here have always been huge, so there's nothing really to cut. We're not throwing people off to save money. We're weathering the storm where we can and we're still making a lot of money. Are we growing as much as we'd like to be growing? No. (Viacom President and Chief Operating Officer) Mel Karmazin is totally driven on the stock price of Viacom and his message is loud and clear we have to grow this business. If we grow the business, the stock price gets up. All the employees are stockholders so they get a share in the business.
Q: Has Infinity changed staffing levels at its L.A. stations over the past year?
A: There's been no changes in the Infinity staffing, other than a couple of moves, back-office type moves, consolidating some things, like accounting.
Q: Clear Channel Communications Inc. bought AMFM Inc. last year and became a big player in the L.A. market. How has the local radio scene been changed by that acquisition?
A: Clear Channel is very aggressive in trying to do cluster deals (in which advertising is sold to multiple stations in the group). They've also consolidated some of their positions so they have fewer managers, fewer sales people. Our model has always been that you have individuals at stations driving revenue. In a soft time, like right now, the consolidated (model) they have might be doing well. We feel that when the market swings back, we're going to be better positioned.
Q: Do cluster sales drive down the market?
A: In a soft market, I don't think it does us any good. The problem with a cluster sale is that in order to get a share of dollars, you're going to deflate the value of the market.
Q: How does Infinity compete with Clear Channel, which has eight radio stations, 14,000 outdoor billboard facilities and three live-entertainment venues that can be packaged for advertisers?
A: We have more outdoor faces than they do (with Viacom Outdoor). We have radio networks. We have a television station (KCBS-TV Channel 2). We have Paramount here. We have Blockbuster Video. We're trying to figure out how to do this consolidation. We're all learning how to do this better and better and better. Clear Channel has an excellent concert edge and we can't compete with them, but they can't sell videos.
Q: Critics say large media conglomerates are homogenizing the sound of radio. As manager of one of the two largest station groups in town, what do you think?
A: The Infinity model has always been based on hiring the most compelling talent and programming the radio stations so they stand out from the crowd. We are not going into voice-tracking (prerecording material). We're not doing any cyber-jocking. We have live disc jockeys on overnight on all of our stations in Los Angeles.
Q: But wouldn't Infinity save money by voice-tracking?
A: You could save some money but then you might lose some of the appeal of radio, which is the localness. People want to know their personalities. They don't want to just listen to satellite XM radio. They want the local content and they want the people that they're familiar with.
Q: Earlier this year KROQ became the first English-language to knock a Spanish-language station out of the top spot in the L.A. market in years. To what do you attribute that?
A: The Hispanic market's very competitive and also a cyclical market. They've had several stations come and be dominant and they eventually lose their position. Now, there are some new formats and new stations, so they don't have the dominance that they did. And KROQ is just on a really up cycle. They've got a tremendous morning show with Kevin and Bean and their music started to become popular again.
Q: What do you listen to?
A: I have eclectic taste in music. I listen to a lot of classical music. I listen to K-EARTH, Arrow (KCBS-FM 93.1), you know, the classic-rock type of music. I also am an avid listener of talk. I listen to all the talk stations on the way home.
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