A Radio Merger in New York Reflects a Shifting Industry

Story by New York Times
Written by Ben Sisario

On its surface, the merger last week of WRKS and WBLS, longtime rivals in the R&B radio format in New York, was business as usual for the broadcast industry. Two struggling competitors combined operations, and a deep-pocketed third party — Disney — came along to lease the leftover frequency.  

But radio executives and analysts said the deal also reflected a broader trend in the business that has taken a toll on black and other minority stations. Since the introduction five years ago of a new technology for tracking audiences, many such broadcasters have experienced shrinking numbers, forcing radio companies to consolidate stations or switch to general-audience formats.   

Arbitron, the standard radio ratings service, has long had sample audiences record their listening in a diary. In 2007, it began using the Portable People Meter, or P.P.M., a small electronic device that tracks radio signals, offering broadcasters far more precise listening data. 

The technology, now used in 48 markets, has already had significant effects — for instance, increasing ratings for news and oldies stations. But many black stations have suffered under the new scheme, including WRKS, known as Kiss-FM, (98.7 FM) and WBLS (107.5 FM). While both were once ranked near the top of their desired demographic — adults ages 25 to 54 — since P.P.M.’s arrival they have slipped to between sixth and 11th place, said Jeff Smulyan, chief executive of WRKS’s parent, Emmis Communications.

“The recent economic downturn has affected the profitability of everyone in radio,” Mr. Smulyan wrote in an e-mail, “but the decline has been much more pronounced in adult African-American targeted stations, largely because of the impact of P.P.M.” 

The deal to merge Kiss-FM and WBLS involves several broadcasters. Emmis sold Kiss’s intellectual property for $10 million to YMF Media, an investment group that is taking over WBLS. Disney, eager to expand its ESPN franchise, will lease Kiss’s old frequency for 12 years, paying a fee that starts at $8.4 million and increases 3.5 percent each year. The changes were scheduled to take effect at midnight on Monday. 

Political figures, broadcasters and other industry observers have expressed concern over how the loss of stations will affect minority communities. 

“I am saddened that an important black voice is going silent in New York City, especially during this important election year,” Tom Joyner, the syndicated talk-show host, said in a statement on Friday. 

“Although social media currently gets a lot of credit and rightfully so, nothing can replace the role black radio plays in empowering, informing and entertaining black people.” Mr. Joyner’s show was on Kiss-FM in New York but will not be on WBLS. 

Last year, Radio One, which owns 53 stations, mostly in so-called urban formats — hip-hop, R&B, gospel and other genres popular with black audiences — changed stations in Houston, Cincinnati and Columbus, Ohio, from black to more general-interest formats, largely because of P.P.M. results, said Alfred C. Liggins III, the chief executive.

In response to complaints that P.P.M. undercounted minority listeners, Arbitron has settled lawsuits in New York and California, and pledged to improve its methods to find diverse sample audiences. But the company also stood by the accuracy of its ratings. 

“Arbitron’s point of view is that P.P.M. is a more reliable and granular look at the marketplace,” Thomas Mocarsky, a spokesman, said on Friday. “Unlike the diary, which depended on recall, P.P.M. records what people are actually exposed to.” 

Whether Arbitron’s new system will result in more changes for black stations is unclear. Emmis still owns WQHT-FM, (97.1) known as Hot 97, a top hip-hop station in New York, and Mr. Smulyan, the chief executive, said it had no plans to sell. Paul Heine, a senior editor at the trade publication Inside Radio, noted that some urban stations had been thriving under the system. 

“There are a number of cities where we have two well-performing urban stations,” Mr. Heine said. “I don’t know if there’s going to be a domino effect.” 

The companies behind WRKS and WBLS have also had troubles beyond simple ratings. Inner City Broadcasting, the previous owner of WBLS, went bankrupt last year. (YMF, the company buying it, is a new investment group including Ron Burkle and Magic Johnson.) WRKS’s revenue fell 32 percent in the last three years, according to a recent regulatory filing by Emmis Communications, and Mr. Smulyan said the station’s profit had fallen 90 percent. 

Emmis, which has sold off a number of stations as it struggles with a heavy debt load, said its deal in New York to sell Kiss-FM and lease 98.7 to Disney was worth at least $96 million, and that it would help stabilize its balance sheet.

Some broadcasters rued the loss of black stations and the reduction of services to black communities that would result, but said the change had simply become an inevitable part of business. 

“The economics of this business have changed so drastically,” said Mr. Liggins, of Radio One. “It is a shame. But something’s got to give.”