Radio Free Amarillo?
May 30, 2007 2:01 PM   Subscribe

How do these radio stations pay the bills?

There are two AM radio stations here in Amarillo, Texas that I listen to regularly. One is a sports talk station, an ESPN affiliate. The other plays talk radio like Alan Colmes and Michael Savage.

On both of these stations, I never, ever hear a paid advertisement. All they ever play is Ad Council PSA's like for the "Energy Hog," giving blood, and so on.

Conversely, another local AM station is full of local commercials.

How do these stations stay in business? Do they receive any money for playing PSA's? Even if they are part of a corporation, like Clear Channel, it would seem impossible to have a radio station broadcasting 24 hours a day without revenue.

Also, even if their listenership isn't that large, it seems like they could sell cheap ads - which would be better than all PSA's, all the time.
posted by Bud Dickman to Media & Arts (13 answers total) 1 user marked this as a favorite
Doesn't Michael Savage advertise things during his show?
posted by dcjd at 2:16 PM on May 30, 2007

Yes, but doesn't Michael Savage (or Rush, or Dr. Laura, or whomever) keep any ad revenue that he or she generates? That money doesn't go back to the radio affiliates, does it?

Or maybe it does. That's what I'm trying to determine.
posted by Bud Dickman at 2:20 PM on May 30, 2007

This may not be the case with your specific stations, but we've got a couple of AM stations here that let anybody have their own show for a fee. It's a strong draw to all the folks who think they'd make great talk radio hosts - political pundit wanna-bes, amateur sports analysts/commentators, etc.

A buddy of mine bought a flight of 13 weekly, one-hour shows a few years ago - I think it set him back about a thousand dollars - and he used it to talk about local politics.
posted by jbickers at 2:28 PM on May 30, 2007

They can rent out tower space to cell phone companies, maybe.
posted by unknowncommand at 2:29 PM on May 30, 2007

Both of these stations have mainly nationally-syndicated content. The sports station is all Jim Rome and ESPN-based radio shows. Sometimes they broadcast local high school sports.

The other station is all national talk shows. Don't stations have to pay to broadcast, say, the Jim Rome show? How do they do this with no ads? (I'm repeating myself...sorry!)
posted by Bud Dickman at 2:39 PM on May 30, 2007

The stations are leasing their broadcasting capabilities to others. Michael Savage is paying this station to broadcast his show, which he will attempt to monetize by selling advertisements. He monetizes those ads by selling the fact that he reaches X number of listeners in Y number of markets. Moreover, in many cases, his ads are high-profit style ads where he reads the ad copy himself, which gets the message out with an implied endorsement.

even if their listenership isn't that large, it seems like they could sell cheap ads

Yes, but it'd be cheaper still to turn over the ad sales and management burden to someone else entirely, which is likely exactly what they're doing.

This station isn't likely reaping a tremendous profit. But it has only a teeny, tiny overhead, so it's worth it.
posted by frogan at 2:43 PM on May 30, 2007

Don't stations have to pay to broadcast, say, the Jim Rome show?

The answer is "not necessarily." If you want to license Rome's show and run your own ads, you can. Or Rome can license your broadcasting bandwidth and sell his own.
posted by frogan at 2:44 PM on May 30, 2007

Do they have a strangely out-of-place fundamentalist Christian show, perhaps weekly? When I worked for campus radio, we were offered unbelievable (well, unbelievable for college students) sums of money to air fundie shows. It would have easily paid for one of our staff members' annual salaries.
posted by joannemerriam at 3:02 PM on May 30, 2007

I think the above answers have it. These folks do ads in their own voice as part of their show, and the PSAs are where local ads would normally go. If it's not worthwhile to get local ads (paying a sales commission, etc) then they just make revenue from the show itself paying them to broadcast. I don't know much about the radio biz (ok, nothing) but I don't think they make much. But, it's passive income, and they probably piggyback on equipment they use for other stations.
posted by The Deej at 3:17 PM on May 30, 2007

Some AM stations in my city have extra frequencies lower on the dial where they relegate their less commercially-viable programming, such as Michael Weiner, Dr. Laura (and worse).

So, yes - the radio stations are being paid to run the programming by the hosts, and the hosts are making money by shilling Ruth's Cris and the Sleep Number Bed, and the radio stations are happy to keep all their equipment busy. So basically, what everyone else said.
posted by M.C. Lo-Carb! at 3:32 PM on May 30, 2007

Okay, let's see here.

Syndicated shows work in different ways - take Rush, for example. Not only does Rush charge fees for his show, he also takes part of the station's clock. During a 3-minute break in his show, it'll be divided up into (just like TV) network and local breaks, say 2:00 network, and 1:00 local. So he's getting fees from the station, and national ad rates.

I have a hard time believing that any show that's actually syndicated would pay a station - I mean, I understand the motivation behind it, but I just don't think that's how it works. I no longer work in AM radio, but having done so, there's an expectation that content gets paid for.

So basically, what you're describing is exceedingly strange - at the very least, I'd think that the Savage show has a similar network/local setup. Even if they were just sending the satellite feed straight to air, you'd at least hear the network break, followed by some fill music, or some other crap.

I'm guessing you're talking about KPUR, as the ESPN Sports Radio affiliate? Also very strange that they wouldn't have ads.

The only thing I can come up with is that the owner of these stations are contractually obliged to air certain shows on more than one of their broadcasting outlets, so they're using these teeny stations in a really small market as simple repeaters - running totally automated, without any human in the signal chain. I do think that's unlikely, though - what's going on is probably much more pedestrian.
posted by god hates math at 4:05 PM on May 30, 2007

After reading GHM's comment, I wonder if the station is still gearing up, and running those programs while they get their stuff together. To keep the license, don't they have to broadcast a certain amount per day? And if they do pay Rush, maybe the owners have the pockets to do it until they ramp up. Good question; I like intrigue, no matter how pedestrian it really ends up.
posted by The Deej at 7:24 PM on May 30, 2007

Do they receive any money for playing PSA's?

In Minnesota, no. Here, the local stations are required to air X amount of PSA's (I found out when I inquired with the stations about radio advertising for a school fundraiser)
posted by jmd82 at 7:54 PM on May 30, 2007

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