Despite its name and alternative approach to broadcasting, Indie 103.1 was hardly going it alone.
The L.A.-area radio station is not only owned by Spanish-language media giant Entravision Communcations Corp. but its advertising has been sold by Clear Channel Communications Inc., the nation’s largest radio broadcaster.
Beginning April 1, however, it’s been forced to stand on its own two feet.
The station, which goes by the call letters KDLD-FM and KDLE-FM and broadcasts from Santa Monica and Newport Beach, severed its relationship with Clear Channel because of federal media ownership rules.
Now, it must sell its own advertising, a requirement that forces it to hire a new sales staff and station manager. More significantly, it faces a struggle to stay alive in the shadow of higher-rated competitors and as an English-language anomaly among Entravision’s portfolio of 54 primarily Spanish-language stations.
The dilemma reflects how intertwined broadcast properties have become in creating packages of advertising buys for more than one station. Such dependence creates challenges when that stream of business is shut off.
Entravision entered the agreement with Clear Channel when the station was founded in 2003 because its other stations in the Los Angels market are Spanish-language and there was little chance of selling ad packages that included the indie station.
“If they weren’t unique, they wouldn’t stand a chance, but they are unique,” said Mary Beth Garber, president of the Southern California Broadcasters Association, who believes that the market has enough advertisers catering to the station’s young and primarily male listeners to sustain itself.
For now, Entravision executives say the only changes will be the new staff, while the format which last year earned it Rolling Stone’ magazine’s blessing as “America’s Coolest Station” will remain the same.
“Indie will be there,” said Jeffery A. Liberman, president of Entravision’s radio division. “We’re just going to build off the buzz we have on the street. We have a nice niche in the marketplace because we don’t rely on the record companies as much as the other stations.”
Clear Channel ended its sales relationship with Entravision because of a January determination by the Federal Communications Commission that joint sales agreements violate federal ownership limits.
Clear Channel owns eight stations in the Los Angeles market; under the FCC’s interpretation of ownership rules, the sales agreement for Indie 103.1 would push Clear Channel above the eight-station market limit. FCC spokeswoman Rebecca Fisher could not say how many other sales agreements were dissolved due to the federal agency’s rules.
The station is the lowest-rated of Entravision’s three Los Angeles-area outlets and the only one that broadcasts in English. It had a 0.8 share in Arbitron Inc. ratings for the quarter ended March 28, well behind its main competitor, alternative rock powerhouse KROQ-FM (106.7), which is owned by Viacom Inc.’s Infinity Broadcasting division. KROQ had a 4.5 rating.
Entravision, which is publicly traded, does not break out revenue information by station. Radio stations account for about 36 percent of Entravision earnings, according to company filings.
Analysts have faulted Entravision for its high debt load while at the same time highlighting the potential of the Hispanic radio and television markets.
Entravision said in its 2004 annual report that it has nearly $500 million in debt that could hinder its ability to borrow for future purchases or to compete effectively in existing markets.
The company sold five radio stations last year three in Chicago and one each in Fresno and Dallas and reformatted five stations to the “Super Estrella” format targeting young Hispanics with contemporary music. Its KSSE-FM (107.1) station in Los Angeles already broadcasts in the “Super Estrella” format.
Radio consultant Jeff Pollack said there have been rumblings about a possible format change at the station, particularly one aimed at an ethnic niche. But Pollack said he expects Entravision to keep the eclectic mix of music, at least long enough to see whether it can generate profits.
“With the current configuration, they have a following here,” said Pollack, chairman of Pacific Palisades-based Pollack Media Group. “Although it’s not enough to have a significant impact in the ratings, they’ve got a nice format. I don’t think it’s an expensive operation.”
Liberman said Entravision recently invested in upgrades to its Santa Monica and Newport Beach facilities so that its signal now reaches listeners in the San Gabriel and San Fernando valleys. He declined to say how much the upgrades cost.
Ratings are projected to grow with the station’s stronger signal, which now reaches the core Los Angeles market. Liberman said he doesn’t plan to change the marketing strategy.
Meanwhile, Entravision is assembling a sales staff of two or three persons at the station to be led by Dawn Girocco, who was a sales manager for Clear Channel stations KIIS and KHHT in Los Angeles.
