Jerry Lee, WBEB-FM President
By Carl Marcucci (From April's RBR/TVBR Solutions Magazine)
Legendary WBEB-FM (B-101) Philadelphia owner Jerry Lee is being honored this month with the 2006 Hugh Malcolm Beville Jr. Award at the Broadcast Education Association (BEA) welcome reception at NAB2006 Las Vegas. The award from NAB and BEA is presented annually to recognize the memory and life's work of Beville, a broadcast research pioneer. Lee, currently a director of NAB, RAB, The Broadcasters' Foundation, The Advertising Research Foundation, and a member of the National Board of Education Sciences, has long been known as one of broadcasting's leading proponents of quality research. He should know-he probably spends more on it than most stations.
Until just recently, B-101 founder and 51% owner was Dave Kurtz. Kurtz brought Lee in as sales manager two weeks before the station went on the air in 1963. But because he couldn't afford to pay Lee his full salary, he gave him 10% interest in the station, which later became 49.99%. After Kurtz passed away in November of last year, Jerry is set to become the sole owner of the AC station via a buyout. B101 will remain the only privately owned FM station in a Top 10 market.
Here we ask Jerry a bit about the industry and some of his secrets to success, including being a very lucky man.
Your Aston-Martin-what movies was it from and how did you come to buy it?
It was used in Goldfinger mainly and a little bit in Thunderball. It's the one with the oil slick, ejection seat, machine guns and bulletproof screen. How I came to buy the car is in 1966 my radio station WDVR (now WBEB) received the award from the Hamburg Philharmonic Orchestra as being the best music station in the world. On my way to Hamburg, Decca Records asked if I would stop by their recording studios in London, so I did. I heard Stanley Black and his hundred piece orchestra doing James Bond themes. In those days they had 20-foot high playback speakers in the recording studios, hard to believe. When they would playback the cuts from the Bond films it actually went into my veins. Then in September of 1969 in the front page of The Philadelphia Enquirer, there was a story about the James Bond car being up for sale and it was owned by a restaurateur in London. I had my assistant making calls all over London trying to track this guy down with no success. Then I had the idea to call Aston Martin, ask to speak to the Managing Director and tell him I was trying to buy the James Bond car. He said, "You don't want to call him. He has a publicity version of the car. The original car is right here at the factory." (They produced two additional cars for publicity after the movie.) I said, "Great, I'll buy it from you." He said it's not for sale. I have incredible luck-he asked where I was calling from. I said Philadelphia. He said are you aware that the factory owned distributorship for the US is at a suburb of Philadelphia called King of Prussia? I said, "What's the guy's name who runs it?" He said Rex Woodgate. At 9:00am I'm out at Aston Martin waiting for him to open up his showroom. I introduced myself and said, "I own a radio station-wouldn't it be great to have the Bond car in America, wouldn't it be great for sales?" He said, "Jolly good idea."
He [later] said since word has gotten out that they were selling the car he had received four offers. The lowest was in excess of three times what they agreed to sell me the car for. As English gentlemen they honored the deal.
There were two cars used in the film. Mine, which was all automated, and another where all the devices were fake-they used pulleys to operate everything.
Each car was used in about 50% of the movie. Then, where my luck comes in again, seven years ago the other car was stolen and it will never be seen again. At that time the insurance company paid out $3.2 million. Now in January one of the two publicity cars was sold at auction in Phoenix for $2.1 million.
Any recommendations for the new RAB President?
I think Gary Fries has done a good job and has been one of the best leaders of the RAB in its history. I think the way to really make the RAB effective and drive the industry is for the new president to throw down the gauntlet and say, "We're going to go from 8% of the pie of advertising to 10% and we're going to do whatever it takes to make it happen."
For example, we have the findings of the Radio Advertising Effectiveness Lab (RAEL) and we need to really sort of up the ante on that. We have so much good research that's come out and in the pipeline, we've got to find a way to effectively take this research and turn it into dollars.
I am very happy with RAEL. We have a researcher from every major advertising conglomerate on our committee and I'm the head of the research committee. We have a team there that is producing great research and every idea that I have is going into the mix. So I'm a happy camper. We'll probably have three to four more projects released next year starting in May and then another early the following year. No other industry is doing this-television, magazines, newspapers-nobody else is doing what we're doing in radio.
Tell us about your radio history.
I came from a rather modest family. I couldn't afford to go to college so I had to join the Korean War in order to get the GI Bill. But when I found out that the GI Bill really wasn't enough to comfortably go through college I had to figure out a way to earn some additional money. It was 1956 when they were just starting the record hops for Rock 'n Roll stations.
I had a roommate from the South by the name of Hank Terrell and I said, "Hank why don't I bill you as a famous Southern Disc Jockey coming to Youngstown, OH?" I put up signs all over Youngstown and instantly this guy became more successful then the number one rock jock in the market. It was purely made up out of nowhere. So I ran one dance, found it was successful; ran another one and then had a whole chain of dances. And one young kid that worked for me, Ted Niarhos, was fired from a station in Youngstown. I hired him to run one dance a week for me at age 15. Later, I sold off my dances at the last year of college and decided I was going to go respectable. I worked at a management consulting firm for a year and a half. After being involved in show biz, I was just bored to death with this job.
Here's where my luck comes in. I have a meeting with a potential client at 1 o'clock in the afternoon. We go in this Greek restaurant and who is standing there but Ted Niarhos. He had just created, I believe, the first turnkey programming service in the history of radio. On the spot he offers me a job of selling it.
I accepted and quit my job the next day. I'm traveling the east coast for nine weeks trying to make sales. I could not make a single sale and he fired me.
But what happened is that five people offered me jobs running their FM stations because they knew they could get the programming service for nothing because they knew it was in my head. So a guy by the name of Sam Booth out of Chambersburg, PA hired me to run WAQE, which is today WLYF-FM in Baltimore. My first day on the job I called my secretary and said, "You're not going to believe this I have never worked a day on the staff of a radio station and I'm now the boss. Here's the routine-every time you see me talking to an employee you're to run up alongside and listen in. I'll tell the employee I'll get right back to you and then you'll tell me what to do." We did that for a year and a half and that's how I learned the radio business.
Then six months later, a year and a half into the job, I see that another person I had tried to sell the programming service to just got his license-Dave Kurtz, an engineer at the Philco Corp. in Philadelphia. I called him and persuaded him to have lunch with me. By 10 o'clock that night we had signed a three year contract on the back of napkin. It stipulated he could fire me after the first 12 months if we weren't the #1 FM in Philadelphia. We became #1 in four and a half months.
How do you interact so well with local advertisers?
Actually I don't, my GM Blaise Howard who runs the station, does. My role is the idea guy. Then I have this incredible staff under Blaise that makes it happen. One of the things that's a religion with us is that we make moving product the #1 goal. To us it's more important that we move product for advertisers than make money because we know if we move product we will make money. For example one of our latest initiatives, which is going to be a killer, is we have developed our own radio testing lab on the Internet. We now offer free commercial testing to all the major advertisers in the marketplace. We have a panel on the web. We'll get a minimum of 800 people testing a single commercial for us. We did some research and found that if people like a pod of commercials they think the commercials go very fast. If they don't like the commercials they go on forever. So this is a twofer here. We have more results for our advertisers and our audience thinks we're a better radio station.
You are regularly #1 in ratings. How do you do it?
I'll just give you a couple little things. One, we do a monthly check-up of 700 people, 25-54 years of age, random in the marketplace. We're checking out or vital signs to make sure that we're still satisfying our core audience. The other thing is I spend more money on research and marketing than anybody in the market, period.
Tell us about the Jerry Lee Center of Criminology.
The Mission is to address the root causes of crime by using research to find the answer. We're just trying to build the whole field of criminology. I'm also working with the Coalition For Evidence-Based Policy in Washington. I'm the founding funder of this organization, to persuade the Federal Government to use rigorous evidence as the basis for spending our tax dollars. Right now we are working very closely with the Office of Management and Budget help the Federal Agencies to make the right decisions on where they spend their money.
Well, that's a Herculean task.
My philosophy is I only take on projects that people say are impossible. That's what turns me on. Tell me it can't be done. It's wonderful that our mascot is the Bumble Bee because according to aerodynamics the bumblebee cannot fly. The bumblebee doesn't know that so it flies anyhow.
Give us five points of business advice to today's operators.
The first, the top of Hit Parade, is if group operators present a three, four or five year plan to Wall Street, they will buy it. There has been a study that shows Wall Street will buy long-term plans because they want to believe their stock is going to go up in the future. When people say they have to cater to the next quarter it's because they don't have a long-term plan. Wall Street will buy a long-term plan. Second, don't price for share. Third, radio in most markets is dramatically under-priced. In Philadelphia I did a calculation two years ago and found we could double the rates here and still be a good advertising buy. Fourth, sell to the heart of your demo and price will take care of itself. It's when you sell beyond your demo to try to get on buys that price becomes the issue-you have to lower the price. The last thing is most groups control a demographic in their market. For example, in Philadelphia CBS Radio controls the Men, Clear Channel controls, along with B101, the Women. Either one of those groups are in a position to dictate, within reason, the pricing in the market, in their demo. You see agencies and advertisers buy a demo and they'll pay a price, whatever it is, to get that demo. You can have one demo being priced 50% higher than another. Right now, because of consolidation, the groups have the ability to do that, but they're not. It's a tremendous, tremendous marketing opportunity.
Good Morning - Gain a personal edge on today's business day. Are you reading this from a forwarded email?
