CBS Radio is preparing to put local talker KFWB-AM (980) on the sales block under orders by the Federal Communications Commission.
The move comes eight years after the FCC first told the network to get rid of one of its L.A. properties to comply with limits on the number of stations one owner can hold in each market.
CBS Radio will put KFWB into a trust run by Bill Clark, a longtime radio industry veteran who lives in the Bay Area. Once the trust has ownership of the station, it will seek a buyer. Due to the down market, however, it’s unclear if a buyer will come forward.
A sale would likely mean the end of KFWB’s history as a local news station. Industry watchers said likely buyers for KFWB are foreign-language broadcasters – such as Spanish, Korean or even Persian – that would convert the station to music or talk radio.
The sale also comes at a time when both all-news stations in Los Angeles, KFWB and CBS Radio-owned KNX-AM (1070), have seen double-digit declines in revenue.
While all-news stations in other markets, such as New York and Washington, D.C., have seen revenue hold relatively steady or increase, both KFWB and KNX have struggled. Radio habits differ from market to market, and industry observers cite L.A.’s diversity as a possible factor.
“All-news in Los Angeles is not working as well as it is in New York, Chicago, D.C.,” said Michael Harrison, the publisher of Talkers Magazine, an industry trade publication based in Springfield, Mass. “One station is being sold, and the other one, while doing relatively well, has done nothing but decline.”
Industry watchers said CBS Radio likely chose to sell KFWB because the station has the lowest ratings and the weakest signal strength of all its local properties.
A spokeswoman for CBS Radio declined to comment except to say the sale of KFWB “is purely a business decision based on a thorough evaluation of all our properties in the market.”
Long legacy
KFWB has been broadcasting in an all-news format since 1968, when it promoted itself with the radio slogan, “You give us 22 minutes, we’ll give you the world,” referring to its programming blocks.
The station’s ad sales have fallen further than its sister station, KNX. KFWB had $36 million in revenue in 2005, but brought in just under $14 million in 2009, according to BIA/Kelsey, a Chantilly, Va., media analysis firm. KNX, which had revenue of $40.4 million in 2005, tallied $25.4 million last year.
Early last year, CBS Radio combined the KFWB and KNX newsrooms as a cost-cutting measure. Then, in a move to slash more overhead and differentiate the stations, CBS Radio flipped KFWB to news-talk, stocking it with syndicated conservative hosts such as Laura Ingraham.
But since then, KFWB’s ratings have slid. Before the flip, it was ranked 27th in the local market. In January, KFWB was in a four-way tie for 38th place.
That gave KFWB the lowest ratings of all CBS Radio stations. Also a factor: KFWB has the weakest signal of local CBS Radio stations. Its 5,000 watt transmitter sometimes makes the station difficult to pick up in the farther areas of the L.A. region.
KNX, in contrast, has a 50,000 watt transmitter that can be picked up by radios in Asia and South America when atmospheric conditions are right.
Nevertheless, CBS Radio hasn’t been in a rush to unload KFWB. The network is putting the station up for sale after a complaint by local broadcaster Saul Levine.
Levine, the owner and general manager of music stations KGIL-AM (1260) and KKGO-FM (105.1), filed a complaint with the FCC late last year pointing out that CBS Radio still owned two local television and seven radio stations, even though FCC regulations limit a company to eight stations in a market the size of Los Angeles.
The FCC instructed CBS Radio to sell one station in 2002, after the media company’s purchase of KCAL-TV (Channel 9) put it over the allotted limit. CBS Radio agreed to put KFWB in a trust and then sell it.
But because the FCC was considering relaxing the rules, CBS Radio didn’t follow through and continued to operate KFWB.
Then last fall, CBS Radio made one of its out-of-market country music stations, KFRG-FM (95.1) in San Bernardino, available to L.A. listeners. The move irked Levine because his company, Westwood-based Mount Wilson FM Broadcasters Inc., owns KKGO, the only other station that played country music in Los Angeles. Levine filed a complaint with the FCC and pointed out that CBS Radio had yet to sell KFWB.
‘Boxing match’
“We were just saying to CBS, ‘Hey, my God, what are you going to do, have 100 radio stations in town competing with us small mom-and-pop operations?’” Levine said. “If we’re in a boxing match and I weigh 159 pounds and they threw me into a ring with a 200 pound boxer, I’d be in bad shape. Now they want to tie one hand behind my back. That’s what they’re doing to me.”
The FCC approved CBS Radio’s application to place KFWB in a trust shortly after Levine filed his complaint.
Pat Duffy, a former CBS Radio executive, said anticipated relaxation of ownership rules may not have been the only factor in the delay of the sale. A deal was likely put off because the economic downturn took its toll on revenue across the industry, and CBS Radio executives probably worried they could not get a good price for KFWB.
“The market is way, way down, and they weren’t going to get a major player to come in and buy it,” said Duffy, now retired.
CBS Radio plans to continue to operate KFWB while it’s in the trust. Clark, the trustee, said no format changes are planned for the station while it’s under his direction. That means the 15 to 20 CBS Radio people who currently work at the station should retain their jobs at least until a buyer is found.
Another complaint
But Levine has filed another complaint, which challenges CBS Radio’s right to operate the station while it’s being held by a trust. Once the FCC resolves that complaint, CBS Radio will have 90 days to transfer ownership.
At the moment, it appears that the most likely buyer will be a foreign-language broadcaster, as foreign-language radio has been making more inroads on the local dial. In June, for instance, KMVN-FM (93.9) dropped famed DJ Rick Dees and abandoned its music format when it leased the frequency to Cadena Radio Centro, a Spanish-language programmer that owns 11 stations in Mexico City.
Mary Beth Garber, president of the Southern California Broadcasters Association, said a Korean-language programmer might be interested in KFWB as well.
“There are a number of foreign-language programmers who are quite interested in expanding their holdings in this market, or coming into this market, and AM radio stations are quite good for that,” Garber said.
