The Millionaire’s Media Megaphone — Part Three
Liberal talk radio struggles for stability — and influence
BY Caitlin Ginley AND Taylor Rausch | September 04, 2008
It was just days after Air America’s March 2004 launch and already things looked grim. The highly anticipated liberal talk radio network, launched only eight months before Democrat John Kerry was to face President Bush at the polls, had been on Chicago’s affiliate station WNTD-950 AM for only two weeks when station owner Arthur Liu complained about a bounced check. Air America, he claimed, owed him more than $1 million, and he dropped its programming.
That lasted less than 48 hours. Air America won a temporary court order against the Chicago affiliate and was back on the air. Chairman Evan Cohen rejoiced, “Arthur Liu received a clear message: Temper tantrums are not the way to conduct business.”
But about a week later, with its financial difficulties continuing, Air America settled its dispute with Liu out of court and was off the air in Chicago again. This time it stayed off through the rest of the election cycle. (In 2005, the network made something of a Windy City comeback, airing on WCPT-AM 820, albeit a station with a significantly less powerful signal, where some of its programs can be heard today.)
In a way, Air America’s story in Chicago characterizes its very existence — from its wobbly beginning, to its comeback, to its struggle to survive in its mission to offset conservative talk radio’s powerful impact on American politics. As the 2008 presidential election bears down on us, at least some of Air America’s programming can be heard broadcast in fewer than 70 markets, and it’s up against the blanket coverage (on over 600 stations nationwide) of the No. 1 talk radio host, Rush Limbaugh, not to mention the array of other conservative commentators all over the radio dial — and not to mention television, especially a Fox News Channel awash in conservative hosts and commentators.
Air America’s owners differ from conservative counterparts like Rupert Murdoch of Fox in that they acknowledge their political motive and say openly that they want to steer America’s politics toward candidates and ideologies they support. Their aim is to fight back against what their allies among liberal bloggers like to call the domestic propaganda war. The wealthy on both sides pour millions into their ventures. At the extreme sits the perpetual money hemorrhage called The Washington Times, published by the Reverend Sun Myung Moon as an alternative to the dominant Washington newspaper that conservatives love to hate, The Post. Moon is thought to have spent more than $2 billion over the past 25 years subsidizing the Times.
An ever-rising flood of political money flows to campaign coffers in the quadrennial bazaar that’s come to be known as “the buying of the president” — and this cycle is projected to set a record this year with total spending easily exceeding $1 billion. But people who invest millions in media ventures in the hope of influencing elections stand apart from those who merely make campaign contributions; if their ventures are sustainable, either profitable or not ruinously expensive, they can continuously influence the political culture, not just an election.
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The first liberal players in this modern drama were the Chicago venture capitalists Sheldon and Anita Drobny. Weary of the platform given to George W. Bush by popular conservative commentators including Rush Limbaugh and Sean Hannity, in February 2003 the Drobnys announced their vision for a liberal-leaning radio network. They set out to establish for liberals what conservatives have provided so effectively for their own candidates and issues, and to do it in time to have an impact on the 2004 election, when President Bush would be seeking reelection. The Drobnys had reportedly already raised $10 million and continued to solicit investments from friends and other progressive pockets. One such schmooze event was hosted by commentator and website entrepreneur Arianna Huffington and by television producer Norman Lear.
In the fall, the Drobnys recruited the Guam-based venture capitalists Evan Cohen and Rex Sorenson. The duo agreed to buy out the Drobnys, and the venture soon became Progress Media LLC, with Mark Walsh, a former America Online executive and chief technology adviser to the Democratic National Committee, as its new CEO. Cohen and Sorenson told investors that they were putting in $12 million of their own money and had raised $18 million more from other individuals, according to investors and company officers who heard their presentations and later spoke to The Wall Street Journal.
Progress Media’s Air America venture moved forward with a plan to rent air time from low-performing stations and air their shows. The new venture seemed to be “an interesting experiment,” Brooke Gladstone of National Public Radio’s On the Media told the Center.
Less than three months after signing Al Franken as Air America’s headliner host for $1 million per year, the team celebrated their March 31, 2004, launch with a $70,000-plus New York gala. Cohen forgot the check to pay the bill and paid with a charge card. Two weeks later, the Chicago and Los Angeles affiliates had endured enough of the company’s misguided management and money problems, and were ready to bail out. The experiment was on shaky ground.
But for many fans of talk radio, Air America was welcome voice. A 2004 study by Democracy Radio found that nearly 90 percent of all talk radio programming was conservative, but that 61 percent of talk radio listeners did not label themselves as politically conservative.
Now a Democratic candidate for U.S. Senate in Minnesota, Al Franken kicked off Air America Radio in 2004 with his The O’Franken Factor program. (Credit: Al Franken for Senate)Host Rachel Maddow, who has been with AAR since the beginning and who in September starts hosting her own show on MSNBC, told the Center that the initial response to the network was overwhelming and fan response was huge. Thanks to a sweeping PR campaign and media frenzy, anticipation for Air America skyrocketed before the network even hit the airwaves.
By Election Day 2004, AAR could be heard on twice as many stations as only 3 months earlier.
Initial ratings also looked promising: In San Diego, ratings were up 75 percent compared to previous programming; in Denver, they jumped 300 percent; in Portland, Oregon, ratings soared 800 percent.
Much of Air America’s initial appeal to liberal listeners was its anti-George W. Bush rhetoric. In the months leading up to the election, Air America hosts geared up for what they hoped would be a Democratic victory. Al Franken said his show would be “a total failure” if Bush won a second term. “We are going to stick it to Bush,” he said before AAR launched. “Bush is going down in November, and then we’re putting it to the rest of the right-wing media.”
“I’m doing this because I want to use my energies to get Bush unelected,” Franken told The New York Times Magazine in March 2004. “I’d be happy if the election of a Democrat ended the show.” Today Franken is a Democratic candidate for the U.S. Senate in Minnesota.
Throughout the 2004 race, Franken and the network’s other program hosts talked up John Kerry, lampooned the Bush administration, and encouraged listeners to get involved in the campaign. But it seemed the political dream of AAR had squelched the business model. Its owners were banking on a Democrat in the White House, but didn’t have anything to bank.
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“They barely had a chance to get off the ground before they ran into financial problems,” NPR’s Brooke Gladstone said.
CEO Walsh quit on April 12, 2004, complaining that he was kept in the dark about the company’s finances. The reported $30 million in original investments turned out to be $7 million. Terry Kelly, one of Air America’s original investors, stepped in as CEO and after combing through finances, it became clear that AAR was facing a $2.5 million bill to creditors. In May 2004, investor Mark Glaser became the third CEO and the fumbling enterprise was transferred from Progress Media to the newly formed Piquant LLC. Piquant would go on to raise $19.2 million in private equity to save the network.
“It certainly affected morale,” Maddow said of the initial financial problems. “I mean, we went through rounds of layoffs, lots of turnover. There was a lot of uncertainty as to the future of the network.”
Also affecting morale was John Kerry’s loss in November.
On Election Day 2004, the Air America newsroom was already planning Kerry’s inaugural parade. Reporting from Palm Beach, Randi Rhodes touted, “Do you realize that when Kerry wins tonight — and he will — that starting January 20, we get to change the world? Do you understand that’s the power we will then have?”
Later, host Janeane Garafolo reported the Bush camp’s rising electoral votes: “I know John Kerry will win, but having to sit through this is like having to sit through — I don’t know — a metaphor for something that is hard to sit through.” As an emotional Randi Rhodes put it: “I refuse to believe that this country reelected that man. It’s not possible.”
A few days after Election Day, Air America began referring to the aftermath as a “pro-Kerry political hangover” and an “electoral disaster.” A section on its website entitled, “You Are Not Alone. . .” listed other reactions in the media ranging from Slate’s disappointment in Kerry’s concession (“There are still votes to be counted!”) to Harpers’ guide to becoming an expatriate.
“We would have preferred it come out the other way,” Jon Sinton, Air America’s president, said one month after the election. “But from a business perspective, this outcome is probably better for us. It certainly gives us a lot of talk about the next four years.”