Re: this week in review....

[Mark Laurence <mlaurence@mindspring.com>]

On Sunday, August 26, 2001, at 10:51 AM, Brian Vita wrote:

> 3.  A large player, Greater Media has a very successful station (WMJX) 
> and
> it wants to keep it successful so it buys up as many of the other 
> stations
> in the market and deliberately puts less successful programming on them 
> (Hot
> Talk, AOR, Oldies [already in the market]).  By limiting the 
> competition the
> value of the primary station is protected and can charge the big $$$ 
> for ad
> revenue while being satisfied with the secondary ones paying their rent 
> on
> time.  As long as the group doesn't exceed the cap, this works.

Brian,

I don't think I've ever heard a nuttier analysis of the radio business 
or any other business.  To think that Greater Media or some other owner 
would invest in oh, maybe $200 million worth of radio properties just to 
protect WMJX, that's just crazy.  There's a finite number of commercials 
that can be sold on even a number one station, and there are plenty of 
non-GM stations with similar numbers who can compete to keep the ad 
rates below the "confiscatory rates" you suggest are in order for #1.  
In your scenario, why even bother with programming expenses on the other 
stations?  GM could put on wall-to-wall infomercials or Spanish 
religion, anything that pays the bills.  Instead you see some big 
paychecks, large syndication contracts, and heavy promotional expenses 
being invested in these other properties at Morrissey Blvd.

I realize you say somewhere in your note that this situation is 
hypothetical and not based on a current local situation, but I maintain 
that it's not based in reality.

Mark Laurence
Magic 106.7 (but not speaking in any official capacity)
mlaurence@mindspring.com