RBR+TVBR INFOCUS
With a trio of high-powered FM signals from Baja California, Mexico, an entity dedicated to the local community competes against two of the nation’s biggest radio operators in what is colloquially known as “America’s Finest City.”
In an age where publicly traded nationally known companies typically dominate revenue and ratings in a top 20 market, this operation — formed roughly 7 years ago — has in many ways beat the odds. Its brands are synonymous with the market, and reflect its listeners in various ways. Station-branded events attract thousands of people.
Nine years ago, these stations’ operator was in bankruptcy. Thirteen years ago, the stations were operated by one of its direct competitors. Today, this radio broadcaster believes its armed and ready to continue a battle it is largely winning in the Nielsen Audio ratings.
In a candid conversation with RBR+TVBR, the VP/GM of this company — Local Media San Diego — shares his thoughts on how these three stations can outperform and deliver results for its clients and owners.
NEW BEGINNINGS
In 2010, newfound stability arrived at three heritage mega-watt facilities licensed to Tijuana.
For the previous 12 months, some wondered what the future would bring for heritage Alternative XETRA-FM 91.1, known as “91X“; Top 40 XHITZ-FM 90.3 “Z90“; and Rhythmic AC XHRM-FM “Magic 92.5“.
Finest City Broadcasting, the stations’ operator, was in bankruptcy just four years after acquiring the rights to run 91X, Z90 and Magic 92.5 from iHeartMedia predecessor Clear Channel Communications.
How Finest City came to run the stations is directly thanks to the FCC — not a Mexican regulator. In 2003, the Commission ordered Clear Channel to give up its rights to operate the three stations in order to remain within U.S. ownership caps. While Clear Channel did not own the stations, they were programmed and operated for the San Diego market and not the Baja California audience, giving them what was determined to be an unlawful market advantage.
In September 2005, Finest City took over. By June 2006, the San Diego Union-Tribune was writing about “a revitalized 91X,” and a brand regaining the skateboarder and surf crowd. At the same time, Magic 92.5 and Z90 were resurgent.
Yet, Finest City was far from healthy, and in 2009 defaulted on assets resulting in its bankruptcy filing. Could an independent operator no longer operate in San Diego?
No. That’s where Local Media San Diego’s story begins.
In late 2009, what was then “Local Media of America” — an affiliate of private equity firm Thoma Bravo LLC, purchased the debt of Finest City and acquired the company and its assets through a foreclosure sale. The transaction was completed in partnership with Broadcast Company of the Americas, an entity headed by a former 91X VP/GM — John Lynch, who stepped up to the plate to assist in the management of his old station, Magic and Z90.
Today, BCA continues with the operation of Sports XEPRS-AM “The Mighty 1090,” Adult Hits XHPRS-FM 105.7 “Max FM” and ESPN Radio affiliate XEPE-AM 1700.
Local Media operates as a separate company; Lynch has not been involved since 2010, when he stepped aside from BCA.
LONGEVITY AND LOCALISM
It’s an interesting fact for a company that has “local” and “San Diego” in its name: The stations are leased and aren’t even based in the U.S. But, that’s a minor technicality. All three stations under the Local Media San Diego umbrella are well-established as San Diego stations across the marketplace. The digital and social media platforms for the three FMs reach 2.5 million people each month. Some 1.6 million people consume 91X, Z90 and Magic 92.5.
Still, Local Media San Diego must compete against Entercom and iHeartMedia for dollars and listeners.
What’s the recipe for success for Gregg Wolfson, the VP/GM for Local Media San Diego?
“91x is 35 years old,” he says. “Magic has 20 years in the market. Same dial position for both stations. Same format for both stations. It’s been 27 years for Z90.”
Simply stated, each station has stood the test of time. “We’ve been a model of consistency,” Wolfson says, adding that Entercom’s takeover of CBS Radio stations in the market resulted in a facilities swap for its Country KSON-FM and CHR/Pop KEGY-FM, following by a branding change at 91X’s direct competitor, KBZT-FM 94.9, to “Alt.”
Asked how Local Media San Diego differentiates 91X from what is now Alt 94.9, and what makes Z90 different from KEGY “Energy 97.3” or iHeart’s KHTS-FM “Channel 93.3,” Wolfson doesn’t hesitate to answer.
“It’s in the name of our company,” he says. “We are the leader in live and local content, and local contesting with actual, local listeners. We do local events, instead of pushing a major event like some of our corporate competitors.”
Wolfson also prides his three stations for being integrated into the communities across San Diego County. “When you look at our three stations, regarding what they do, they are really involved in giving back,” he says.
On a recent February morning, Wolfson presented the chief of a local fire station with a $15,000 donation — all from money raised at 91X’s Wreck The Halls concert held two months ago.
“This was right in alignment with the fires we had back back in December,” Wolfson says. “We lost a firemen and a lot of horses, and we wanted to give back.”
COMMUNITY COMMITMENT WITH COST CONTROL
While any radio operator would love to thrive with live and local content, balancing costs with needs could cripple the finances — or lead an operator down a path that Finest City was faced with some nine years ago. How does Local Media San Diego do it?
“It is definitely a challenge,” Wolfson says. “But, we see the benefit of it. With the increase in ratings and the endorsements that come along with it, we think it is a difference maker.”
Is attracting talent a disadvantage for a company that only has stations in San Diego? No, Wolfson believes.
“I think we’ve done relatively well, and a lot of our talent have been here a long time,” he says, noting that syndicated “Ol Skool” air talent Xavier the X-Man is a fixture at Magic 92.5, currently in middays. He follows Jagger & Kristi, who have been in morning drive since 2005 following a run in mornings for Jagger at KMYI-FM “My 94.1” and a six-year stint in afternoons at KFMB-FM under its “Star 100.7” branding, from 1996-2002.
Meanwhile, 91X and Z90 have used their heritage to keep the air staff fresh, and in sync with their target audience’s lifestyles and social preferences.
“People come in to our building and … they really dig the vibe. When the prospective media buyer sees the concert posters and the gold record albums, they feel the vibe.” — Gregg Wolfson
“Whether it is talent or sales people, or traffic and continuity, really is what we do is radio as it was back in the 1980s … without the drugs,” Wolfson says, with a straight face. “People come in to our building and go, “holy shit” … they really dig the vibe. When the prospective media buyer sees the concert posters and the gold record albums, they feel the vibe.
Still, sales aren’t a slam dunk for 91X, Magic and Z90. Wolfson acknowledges that iHeart and Entercom have leverage on the national front. “But, I think people want local,” Wolfson says.
In San Diego, 2017 saw radio revenue dip 6% overall, with political in 2016 factoring. Local Media San Diego outpaced the marketplace by being flat, Wolfson notes.
And, one station doesn’t dominate the cluster, leaving crumbs for one of its lesser-desired siblings as is the case with other station groups seen across the nation.
“The good news is that, with three stations, usually one is up when one is down and one is in the middle of the road,” Wolfson says.
There’s also the benefit of having a station lead in nontraditional revenue and in digital. For Local Media San Diego, that station is 91X. “[The station] does quite a bit of business, non-spot. On that side, 91X is No. 1 in the market,” Wolfson notes. “One of the things we focus on as a non-spot revenue stream. We’ve had to, in order to compete.”
With market rumors continuing regarding the competitors, Wolfson remains focused on his trio of station’s abilities to connect with the community, and drive sales at local business.
After all, Local is embedded in the company name. Anything else would fall short of what this operator is all about.
RBR+TVBR
