Bankrupt Liberals

By Paul Farhi
The Washington Post

WASHINGTON — Air America Radio said filing for Chapter 11 bankruptcy protection Friday doesn't suggest liberal-oriented talk can't compete with such conservatives commentators as Rush Limbaugh or Sean Hannity.

Despite the star power of Al Franken — the comedian and best-selling author who hosts one of its weekday programs — the privately owned company has lost almost $42 million since its inception, including $13.1 million so far this year, according to its bankruptcy filing. Franken himself is owed some $360,000 on his $2 million annual contract.

AirAmerica said it would remain on the air. The filing enables it to reorganize its finances while freezing claims from creditors.

The New York-based service set up to challenge the dominance of conservatives has also struggled to get and keep affiliate stations with strong signals.

It was recently dropped by its flagship station in New York, the nation's largest radio market, which forced Air America to move to a weaker outlet. It isn't heard at all in Dallas, Philadelphia and Houston, three of the nation's 10 largest radio markets.

In all, Air America's programs are heard on 92 stations, including Seattle's KPTK-AM (1090), and on Washington, D.C.-based XM Satellite Radio. The liberal network says it has about 4 million listeners.

Although conservatives have dominated the talk format for decades, liberals have made inroads in recent years and are popular in many cities around the country. For example, Washington-based Jones Radio Networks has syndicated talk shows featuring liberal hosts Ed Schultz, Stephanie Miller and Bill Press, with more than 180 stations carrying the programs.

"The format is healthy and here to stay," said Amy Bolton, general manager of news and talk programming for Jones.

"This has more to do with how [Air America] structured its business," said Tom Taylor, the editor of Inside Radio, an industry newsletter. "They had to invent the business model because no one else had, and they made some mistakes. ... . It's like they say about pioneers — they're the ones with arrows in their backs."

Air America said it sought bankruptcy-court protection after being unable to work out an agreement to settle a debt with a creditor it would not name. People at the company identified the creditor as MultiCultural Radio Broadcasting, a New York company that had been the landlord of Air America's studios in Chicago and Los Angeles.

In a dispute over rent payments that erupted soon after Air America began broadcasting, MultiCultural locked out Air America's employees from the two studios, giving the fledgling company a public-relations black eye.

"[We] do not think this says anything about the viability of progressive talk," said Air America spokeswoman Jaime Horn. "We had a cost structure that did not support the revenue. We are confident that this transition will enable the business to grow."

The bankruptcy filing came with the disclosure by Air America on Friday of a succession of executive and board defections. Rob Glaser, the founder of RealNetworks who owns 37 percent of the company and is its chief financial backer, resigned as a director Friday along with two others.

Air America said it has named a new chief executive, Scott Elberg, who has been with the company since mid-2005. Elberg is the third person to hold the CEO's job since April, following the resignation of the former top executive and his replacement by an interim manager.

Furthermore, Air America said two other board members left in August, that its president quit in June and that its executive vice president and chief operating officer departed in July.

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