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Changing the station
Reporter: John Kenyon
johnk@corridorbiznews.com
The call letters have changed, the operation is in a new building and
programming is going out over the airwaves, but Eliot Keller said KZIA
Radio is still in the process of making 1600 AM its own.
KZIA
purchased the station from Gazette Communications in a deal that closed
Oct. 30. With that, KCRG AM 1600 became KGYM and moved from the
Gazette’s downtown Cedar Rapids facility to the KZIA building on the
city's southwest side.
“It’s still very new to us,” said Mr. Keller, KZIA Radio general manager.
The
process to transfer the station began in April when Mr. Keller said he
first became aware that KCRG was looking to sell the station. Since
then, the two parties negotiated a deal, the Federal Communications
Commission (FCC) granted approval and KZIA worked to move operations to
its facility.
Mr. Keller said he is pleased with the transition
process, saying he knew it would take six months after the purchase to
get operations to where they wanted them. The focus thus far has been
on making sure the proper hardware is on hand.
“We want to give
people the best tools available so they can do their best work. We want
to get the physical plant further along before we start looking at
content,” he said. “Based on the dust and tools and wires you’ve seen,
we’re not there yet.”
KZIA Radio purchased the station for $775,000, and has put an additional $250,000 into it in capital improvements.
“It’s
over a million-dollar project, but we think it’s a great opportunity
for us,” he said. “Now it’s up to us to do it. Our goal is to do good
radio, and 1600 gives us a platform to do that. It has taken longer and
cost more than we thought, but that’s no big surprise.”
When
things started in April, Mr. Keller and fellow KZIA owner Rob Norton
discussed the possibility of buying the station and decided to make an
offer. A purchase agreement was put together that Mr. Keller delivered
to KCRG.
“The idea was, ‘Tell us what you don’t like about this besides the price,’” he said. “It gave us a place to start.”
KCRG Station Manager John Phelan said the radio station was sold for two reasons.
“With
the consolidation that you've seen over the last 10 years in the radio
business, it’s tough for a stand-alone AM to compete in this market,”
he said. “Although it was attached to a TV station, that didn’t really
help it. From a business perspective, almost all of the competitors had
multiple stations.”
The other factor, he said, was that there was more than one interested local buyer, meaning the company had options.
“It
really made us feel much more comfortable than selling to a
consolidator who wasn’t perhaps as concerned about local things,” he
said.
There are 14 stations in the FCC Geographic Market
Definition for Cedar Rapids, including three based in Johnson County
and 11 in Linn County. That doesn’t include the public stations at the
University of Iowa. Of the 14, six are owned locally.
According
to the FCC market overview included in the license transfer report,
estimated gross revenues in the Cedar Rapids radio market for 2005 were
$13.3 million. The market serves 198,000 people in 80,000 households.
There
were changes made to the asset purchase agreement all the way up until
the Friday before the Monday it was signed, Mr. Keller said. It was
signed July 10, after which began the FCC license transfer process.
“They’re not used to selling radio stations and we’ve only bought one, because we created the other,” he said.
Mr.
Keller and Mr. Norton created KRNA in 1974, and bought 102.9 FM in
1994, making them the first duopoly in the Cedar Rapids market. They
sold KRNA in 1998, an experience that helped them through the KCRG sale.
“It was tremendously helpful,” he said. “We looked back and said, ‘What worked and what didn’t?’”
When
the duo operated both stations, it did so from two offices. The
headaches of that set-up made it clear that 1600 needed to be run out
of the KZIA offices, he said.
After the FCC approved the sale in
early September — following a required 30 day period during which
members of the public could express concern about the transfer — the
deal was officially closed Oct. 30. From that point, the process of
bringing the station to its new facility began.
Mr. Phelan said the sale went smoothly, following the systematic schedule established by FCC requirements to transfer a license.
“It’s
not that complicated,” he said. “If the government wasn’t involved you
could probably do it in nine days; this took 90 days.”
Much of
the work after the transfer agreement was signed belonged to KZIA,
though KCRG was required to run some on-air announcements and take out
newspaper advertisements to let listeners know about the pending change.
The
station stayed at KCRG’s studios until Nov. 26, because a new AM studio
needed to be built at KZIA’s facility. Mr. Norton was displaced from
his office to make way for the studio, and a nearby janitor’s closet
was turned into an equipment room.
In addition to the license,
KZIA also purchased 34 acres of land where the station's transmitter
and towers are located. The new owners installed a new transmitter on
Dec. 7 which they hope will improve the station’s signal.
Mr.
Phelan said the fact that KZIA Radio was making improvements to the
transmitter site while KCRG still owned the station was part of what
made the company so comfortable selling to Mr. Keller and Mr. Norton.
Before
the sale, Mr. Keller said that the task was to determine what kind of
programming to use to fill 168 hours each week. The goal, he said, was
always to maintain the sports programming focus of the station, and
KZIA has kept the contract KCRG had to broadcast ESPN Radio
programming, in addition to local content.
“We just want to find
ways to do it better,” he said. ”The more I talk to folks who are
sports fans, they say this is great stuff.”
KZIA brought over one KCRG employee, Scott Unash, to run operations. Mr. Unash is the programming director for KGYM.
Some
programming changes have been made. The Bloomberg Financial Report was
dropped, and the KCRG-TV 9 newscasts are no longer simulcast. Mr.
Unash’s regular afternoon show, “The 19th Hole,” is on hiatus while
work on the studio is completed.
Mr. Unash said the prospect of
a sale was “pretty nerve-wracking,” particularly the possibility that
the station could be sold to a conglomerate that might not keep the
format or staff. When it became clear that a local buyer would acquire
the station, it made the process easier, he added.
He said it
has been an educational process so far because the station is
essentially being built from scratch. In addition, nearly everything
must be redone, including station promos and ads. CBJ
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