Local Focus, Sports Keeps Radio Profitable in Arkansas

by Kate Knable  on Monday, Feb. 18, 2013 12:00 am  

Local radio still lives.

On Dec. 8, KEWI-AM, 690, of Benton aired the Class 3A State Championship football game pitting Glen Rose High School against Harding Academy.

Due to heavy traffic to its website, KEWI’s “online stream shut down about the time we hit about 1,500” online listeners, said Grant Merrill, KEWI’s owner and manager.

Merrill bought KEWI, the only radio station operating from Saline County, in 2011, joining an industry that has managed to remain profitable in Arkansas despite competition from satellite radio, limitless iPod playlists and build-your-own online stations such as Pandora.

Merrill rents KEWI’s space at 115 S. Main St. in Benton, where the station has been for 15 years. His modest office features ragged chairs around his desk in the building’s foyer and a small radio studio.

His station isn’t rated by radio data aggregator Arbitron, so Merrill has no way to know how many listeners are tuning in to his terrestrial radio signal at any time. But he does know from Web streaming data and listener and advertiser feedback that if fans can’t attend a big game or Saline County residents are wondering about severe weather, then a good many of them are coming to his station. Merrill also knows that his website gets around 15,000 unique visitors per month.

Area sports, such as those of Malvern (Hot Spring County) school Glen Rose, and, really, all things local, are KEWI’s bread and butter.

Merrill’s station aggressively covers Saline County high school sporting events, sending a broadcaster to report on away games no matter where they are in the state. In addition, KEWI provides live play-by-play coverage of the sporting events of schools nearby, such as Glen Rose.

On Saturdays, KEWI still airs a show it has run since the 1950s: “Tradio,” an on-air Craigslist that allows listeners to call in to buy, sell or trade possessions.

KEWI also reports on area weather, city council meetings and other local news.

“We provide local programming that they’re not going to get on a Little Rock station,” he said.

Advertisers recognize the value, he said, and the business model works.

Merrill said he makes a comfortable living and employs two other full-time staffers.

“We are pretty profitable,” he said. “All of our bills are covered and we’ve had some left over.”

About 95 percent of KEWI’s advertisers are from Saline County. An “emotional connection” is a major reason they pay to sponsor a program on the station, Merrill said. “More than getting their name out, they want to tie their name with what’s happening in the local community,” he said.

Showing his confidence in the radio business, Merrill this month is buying, per Federal Communications Commission approval, five other radio stations in two other small Arkansas markets. He declined to name the stations.

An AM/FM station sells for between $200,000 and $800,000 in markets of fewer than 100,000 people, said Peter Bowman, who has been appraising radio stations across the U.S. since 1987. Bowman owns Bowman Valuation Services in Alexandria, Va. Variables that could drastically affect the value of a station include the land and buildings it owns, he said.

‘Local Is Key’

Merrill’s KEWI isn’t alone in its success.

Signal Media, a three-station chain owned by Philip Jonsson of Little Rock, is a profitable company, according to General Manager Steve Jonsson, the owner’s son.

Signal’s radio stations are all in the Little Rock market. They are sports talk station KABZ-FM, 103.7 (The Buzz), classic rock station KKPT-FM, 94.1 (The Point), and R&B and oldies station KHLR-FM, 106.7 (Heartbeat). KABZ does the best financially of the three, and it has the most local content, Steve Jonsson said.

Jay Bunyard of De Queen operates 19 radio stations in six Arkansas markets. His stations and their websites cover city council, school board and quorum court meetings, as well as high school sports, police reports and obituaries. Even the music formats air local news and sports.

Bunyard said his stations don’t have much competition, and he indicated that the business is quite profitable.

“There’s only one place you can go to get current local news. That’s radio, and the radio station’s website,” Bunyard said of his stations’ markets. “Being local is the key to success.”

Owners of local radio stations tend to manage their stations with a strong understanding of what their listeners like and what their market is, said Bowman, the station appraiser.

“In some ways, they’re working at an advantage because they can be hyper-local and they know their markets intimately,” he said. Big corporate station owners such as Cumulus or Clear Channel “are handicapped because of all their high debt loads. They’re not in a position to lead adroitly. “

What Works

Being a viable local radio station means community involvement, according to Bob Connell, who has owned KFFB-FM in Fairfield Bay since 1998.

His company generates annual revenue of roughly $500,000, he said. KFFB has an oldies music format.

“You’re never not working,” Connell said. Connell has specialized in “remotes,” or doing broadcasts from locations such as other local businesses and festivals. Remotes from events, such as Conway’s Toad Suck Daze, are what have maintained KFFB’s listener base, he said.

When business got tough after 9/11, Connell “hired two salesmen and we went to every festival,” he said.

“That’s how you stay popular. You have to be on the air when you want to be at home. When there’s a tornado on Easter, you’re here,” Connell said.

Crain Media of Sherwood owns seven FM stations and two AM stations in Arkansas. Owner Larry Crain Sr. declined to talk about the profitability of his stations, but he said that he, too, sees an emphasis on local content and local on-air personalities as important to the success of locally owned radio stations.

Crain Media over the past several months has partnered with New Lion Media of Fayetteville to build KKSP-FM, 93.3 (Sports 93.3 The Source), into a competitive local sports talk station with Arkansas on-air talent such as Bo Mattingly and Pat Bradley.

“To me, radio’s only viable product is local programming, local teams, local personalities, local chambers, local clubs,” said Ben Williams, general manager of KFLI-FM, 104.7 (Cool 104.7), in Searcy. “That’s what’s important to our listeners: Their local roots.”

KFLI — owned by TRM Classic Hits of Searcy, which, in turn, is owned by Terry Murphy of Searcy — is profitable and has a full-time staff of nine, Williams said.

The necessity of maintaining a profitable business is what has driven the station to increase its community presence, he said.

“We knew if we were going to be viable and profitable … we were going to have a presence in everything we thought people valued,” Williams said.

“I don’t know of any stations that are doing well that aren’t doing things that are really tied to the community.”

 

 

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