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The Millionaire’s Media Megaphone — Part Three (cont.)

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For a while, the new management seemed to put things back in their place. AAR continued to grow, and in spring 2005 its audience had, compared to six months earlier, more than doubled to 3.1 million strong.

But, the therapeutic Bush bashing that carried it into 2005 could not change the fact that Air America failed to accomplish its political objective — to give Democrats a well-funded boost to get them elected. As Bush bounded into his second term, Air America limped through its second year. Philadelphia’s WHAT-AM dropped AAR in September 2005 due to disappointing ratings. WLTQ in Charleston, South Carolina, dropped AAR the same month, citing low ratings and ad sales.

In Providence, Rhode Island, affiliate station WHJJ switched from live and local programming to Air America in October 2004. Bill George, the station’s program director, said the decision marked a pretty substantial change — and resulted in an immediate decline in the ratings. By September 2005, WHJJ had unplugged Air America.

The overwhelmingly Democratic Rhode Island capital seemed an ideal setting for Air America. But, George told the Center, the programming lacked quality, and shows like Jerry Springer’s and Al Franken’s had trouble competing with what was up against them. “It was a worthwhile experiment for us, a good gamble,” he said of the decision to broadcast Air America. “But we learned that talk radio was about more than political ideology.”

Advertising, George pointed out, was another obstacle for Air America. Syndicated programs are tougher to sell, as was Air America’s distinctly liberal message to business owners with more conservative views.

Former Public Advocate for the City of New York Mark Green and his brother Stephen bought Air America in 2007, for $4.25 million. (Credit: Mark Green for Mayor)

The lack of money pouring in — and the lack of money to begin with — would continue to cause major problems. Compared to other successful news networks, AAR simply did not have the financial resources to get it off the ground. A crucial factor in a network’s success is landing stations with powerful signals, noted Maddow. “That’s an expensive proposition,” she said, “and it’s hard to start from zero unless you’re Rupert Murdoch — somebody with an incredibly deep pocket, willing to lose money for awhile, maybe even for a long while, in order to position you so well so that ultimately you can start making money. This is a pioneering thing, and it requires investment.”

At Fox News, which cost about $140 million to launch, it took four years to record a profit and seven years to reach its current distribution, even as hundreds of millions of dollars fueled the startup each year. And today, Fox News is worth an estimated $10 billion. But while Murdoch pumped his millions into Fox News to build it up during its early growing pains and expand his own electoral influence, financial backers were fleeing Air America Radio.

In the fall of 2006, rumblings of bankruptcy were streaming out of the AAR New York office. Sheldon Drobny stepped in and offered $2.5 million for his original brainchild, but then backed away.

On Friday the 13th, AAR filed for Chapter 11 bankruptcy protection. The $20.2 million they claimed in debts towered over the meager $4.3 million in assets. The October 2006 filing noted that the liberal dream had lost $40.9 million since May 2004. Al Franken was owed over $360,000 in unpaid paychecks, and then-CEO Robert Glaser was out the door with $10.3 million in claims. Glaser and two other investors offered up to $2.6 million in interim financing to keep programming on the air, but other liberal money was not coming in to bail them out.

“I think liberal money isn’t that much different from other money in that it wants to back a winner,” NPR’s Gladstone said. “Air America needs its angels, and then we can see whether or not it can hold a commercial audience and create the kinds of fortunes that Rush Limbaugh is able to.”

Six months later, angels in the form of real estate mogul Stephen Green and brother, Mark, a former New York City elected official and political activist, shoveled out $4.25 million for the drowning AAR operation. And this March, nearly four years after the rocky beginnings and just as another presidential election looms, Vermont venture capitalist Charlie Kireker bought into AAR. Mark Green remains as president, and longtime media industry executive Bennett Zier has been brought on as CEO.

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Gladstone noted that in light of all of the reorganization and refinancing, perhaps liberals just aren’t drawn to talk radio. AAR, she said, was never geared to be as fiery as a Rush Limbaugh: “I don’t think that they’re comfortable with that kind of saliva spray.” Rather, Gladstone asserted that the web is a better platform for discussion and debate for the passions among the Left. The AAR new hires — Zier and new senior vice president of programming Bill Hess — are hoping to build that web community.

But Air America’s troubles remain. Its flagship station in New York, WLIB, dropped the network in 2006 to become a gospel music station, and the programming moved to the much smaller WWRL. In April this year, WWRL announced that it would cut the AAR’s morning programming from its schedule to make room for two one-hour health infomercials.

And AAR now has its competition, as other progressive talk radio networks are looking for a slot on the dial. Sarah Boyer, an administrator of the independent AAR fan site, Air America Place, reports that the site is discussing a name change to reflect a widening focus that will include other networks. Boyer told the Center that AAR has been “the trailblazer for progressive talk, but they’re not going to be the one that lasts.”

Boyer sees promise in the new progressive ventures like Jones Radio Networks and Nova M Radio, founded by AAR originators Anita and Sheldon Drobny. CEO John Manzo took over Nova M in June 2007 after leaving his post at AAR, where he had been since the launch. “The Drobnys were squeezed out of Air America in the midst of investor infighting,” he told the Center, “but understood the power of progressive talk and opted to put their own money up to build another outlet.” Billed as the “future of progressive talk,” Nova M syndicates former AAR hosts Randi Rhodes and Mike Malloy. Manzo says most of progressive talk radio nowadays is non-Air America content. He blames poor leadership by top investors — what he calls the “vanity of a handful of wealthy individuals” — for AAR’s failure. “Otherwise,” he said, “Air America could have been a profitable enterprise anchored by a successful NYC flagship station within its first 12 to 18 months of operation.”

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With enough money, political activists on either side can buy a big megaphone to amplify their free speech. But to find a loyal audience and turn that megaphone into a successful business endeavor is harder. Does progressive talk radio have a future? Many would argue yes. Particularly with this year’s election heating up, Maddow believes Air America can benefit from the public’s “increased appetite for political talk.” She has confidence in new owner Charlie Kireker and believes they are set for a successful year.

Kireker, too, is bullish. He sees Bush’s dismally low ratings and the high Democratic turnouts in the primaries this year as a perfect formula for liberal talk radio to flourish. “When one Democratic candidate can attract more voters in South Carolina than all the Republican candidates, that tells you something about the mood of the country,” Krieker said of Democratic nominee Barack Obama. “There’s a thirst for change.”

Indeed, with Obama’s national popularity and widespread dissatisfaction with Republicans in this election season, these should be heady times for Air America. And yet, the network has come nowhere near the level of influence as have conservative media. There may be a thirst for change, but for Air America, that is irrelevant if no one is listening. In the end, the network’s fate may rest less with liberal politics and more with sustainable business models and deep pockets.