By Paul Farhi Washington Post Staff Writer
Air America Radio, which has tried to create a liberal talk and news network to challenge the dominance of conservatives such as Rush Limbaugh, yesterday filed for Chapter 11 bankruptcy protection but said it would remain on the air.
Air America has battled financial turbulence since its launch in early
2004. Despite the star power of Al Franken -- the comedian and best-selling author who hosts one of its weekday programs -- the privately owned company has lost almost $42 million since its inception, including $13.1 million so far this year, according to its bankruptcy filing. Franken himself is owed some $360,000 on his $2 million annual contract.The New York-based service has also struggled to get and keep affiliate stations with strong signals. It was recently dropped by its flagship station in New York, the nation's largest radio market, which forced Air America to move to a weaker outlet. It isn't heard at all in Dallas, Philadelphia and Houston, three of the nation's 10 largest radio markets.
In all, Air America's programs are heard on 92 stations and on Washington-based XM Satellite Radio. The liberal network says it has about 4 million listeners.
In the Washington area, several Air America programs, including Franken's, are carried on WWRC (1260 AM), which has a limited broadcasting range. During the most recent quarterly ratings period, "Progressive Talk 1260" didn't attract enough listeners to rank among the region's top 35 stations.
Dave Pugh, who oversees WWRC and other local stations owned by Clear Channel Communications, said he expected Air America to continue broadcasting. "We're committed to the format," he said. "Unless we hear something different, the network will continue. It's business as usual."
Air America, as well as independent observers, said the bankruptcy filing -- which enables a company to reorganize its finances while freezing claims from creditors -- doesn't suggest liberal-oriented talk can't compete with Limbaugh or other conservatives such as Sean Hannity.
"This has more to do with how [Air America] structured its business," said Tom Taylor, the editor of Inside Radio, an industry newsletter. "They had to invent the business model because no one else had, and they made some mistakes. ... It's like they say about pioneers -- they're the ones with arrows in their backs."
Indeed, although conservatives have dominated the talk format for decades, liberals have made some inroads in recent years and are popular in many cities around the country. For example, Washington-based Jones Radio Networks has syndicated talk shows featuring liberal hosts Ed Schultz, Stephanie Miller and Bill Press, with more than 180 stations carrying the programs.
"The format is healthy and here to stay," said Amy Bolton, general manager of news and talk programming for Jones.
Air America said it sought bankruptcy court protection after being unable to work out an agreement to settle a debt with a creditor it would not name. People at the company identified the creditor as MultiCultural Radio Broadcasting, a New York company that had been the landlord of Air America's studios in Chicago and Los Angeles. In a dispute over rent payments that erupted soon after Air America began broadcasting, MultiCultural locked out Air America's employees from the two studios, giving the fledgling company a public-relations black eye.
"[We] do not think this says anything about the viability of progressive talk," said Air America spokeswoman Jaime Horn. "We had a cost structure that did not support the revenue. We are confident that this transition will enable the business to grow."
Court papers show Air America had $4.3 million in assets and $20.3 million in liabilities, according to Reuters news service.
The bankruptcy filing came with the disclosure by Air America yesterday of a succession of executive and board defections. Rob Glaser, the founder of RealNetworks Inc. who owns 37 percent of the company and is its chief financial backer, resigned as a director yesterday along with two others. Air America said it has named a new chief executive, Scott Elberg, who has been with the company since mid-2005. Elberg is the third person to hold the CEO's job since April, following the resignation of the former top executive and his replacement by an interim manager.
Furthermore, Air America said two other board members left in August, that its president quit in June and that its executive vice president and chief operating officer departed in July.
In addition to Franken, Air America syndicates shows hosted by Randi Rhodes and Jerry Springer, among others.
Franken, who was traveling yesterday, was unavailable for comment.
Copyright 2006 The Washington Post Company
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