Air America deflated
By Joyce Howard Price
THE WASHINGTON TIMES
September 1, 2005
When Air America Radio (AAR) went on the air in March 2004, newspapers, magazines and network TV celebrated the liberal radio network in cover stories, on the front page, and in glowing features.
The network's star -- former "Saturday Night Live" funnyman Al Franken -- was feted by the New York Times as Air America's "big gun in the noon-to-3-p.m. slot going up against his old nemesis, Rush Limbaugh."
Now, nearly 18 months later, the network's ratings remain low. AAR's former boss has been accused of swindling hundreds of thousands of dollars from a social service agency for poor children. And a lawsuit seeking more than a quarter-million dollars charges that AAR perpetrated a "sham" to defraud the network's creditors.
The woes of the liberal network have been pursued avidly by conservative bloggers and columnists, who note that those who once trumpeted AAR's debut as front-page news have given little coverage to its subsequent problems.
Among the network's recent bad news:
New York authorities are investigating $875,000 in loans AAR received last year from Bronx-based Gloria Wise Boys & Girls Club (GWBGC). Network officials blame the network's former chairman and say they are making arrangements for repayment of the loans.
One of the nation's largest minority-owned broadcasting companies is suing the parent company of AAR. Multicultural Radio says it is owed $255,000 and that AAR's change of ownership last year was a "sham" meant to cheat creditors.
After a year and a half, AAR's audience is still tiny compared to the millions who tune into conservative talk shows (Mr. Limbaugh alone reaches nearly 15 million), and industry analysts question whether the liberal network will ever draw enough listeners to turn a profit.
Yet AAR officials insist the network is doing well. Ratings are improving, they say, and investors are willing to keep AAR afloat.
"We're definitely financially stable at this time," an AAR spokeswoman, who requested anonymity, said in a recent interview. She cited a "new round of investments" received in November 2004 and May of this year, but did not provide a dollar amount.
AAR has grown from 25 affiliates to 67 stations nationwide since last year, and network officials say new data from the Arbitron rating service found that AAR's cumulative audience has climbed from 1.3 million listeners to 3.1 million.
Gary Krantz, who became president of AAR in April, said the network has "seen double-digit growth from a huge percentage of our markets," led by Los Angeles and Denver. "It proves there is a stable and growing audience for Air America," he said.
Yet the ratings remain relatively low. Ratings for AAR's flagship station, WLIB in New York, fell from a 1.3 percent share of the audience last summer to 1.0 percent this spring, National Review recently noted. Pointing out that Mr. Franken "is paid at least $1 million per year," the magazine said, "Air America almost certainly needs better ratings than it currently attracts if it is to survive."
In the Washington market, AAR has barely registered in the ratings since it debuted on WWRC-1260 AM in January. During the spring, it drew just 0.4 percent of listeners 12 and older, according to the most recent Arbitron data.
AAR got off to a bumpy start, with stations dumping the network and payroll checks bouncing. Piquant LLC, the current owner of AAR, insists that both the suspect loans from the New York charity and the network's early cash problems occurred on the watch of former Chairman Evan M. Cohen, 39, and the firm he ran, Progress Media.
Others at AAR have said they were unaware that Mr. Cohen was working as a $74,000-a-year development director at the Gloria Wise Girls & Boys Club at the time the loans were made.
On AAR last month, Mr. Franken said Mr. Cohen "let us believe we had enough funding to go three years before making a profit. Turned out it was three weeks." He also said he thought Mr. Cohen "was robbing Peter to pay Paul."
GWBGC, which has 20,000 clients and receives millions in taxpayer funding, normally funds projects such as senior centers and after-school activities for disadvantaged youth. The club's executive director, Charles Rosen, abruptly resigned earlier this month, and GWBGC is now being probed by both the New York State Attorney General's Office and the New York City Department of Investigation.
The Bronx charity's future is threatened by the scandal. The city suspended millions of dollars in government grants and contracts to GWBGC in June, saying the suspension was a result of accusations of "inappropriate transactions."
And no one seems to be able to find Mr. Cohen now. "He hasn't surfaced ... no one knows where he is. We haven't talked to him," the AAR spokeswoman said.
Last week, the New York Sun said it was told by a lawyer who's been trying to serve Mr. Cohen with legal papers that the former AAR chairman is missing, while others have said that he has been seen in Hawaii.
Piquant LLC says it made an initial deposit of $50,000 early last month toward repaying GWBGC.
Meanwhile, Multicultural Radio's lawsuit filed in May contends that last year's transfer of Air America's ownership from Progress Media to Piquant LLC was a "sham" designed to maintain the network's assets while abandoning its creditors.
Multicultural says in its lawsuit that it dropped AAR from stations in two cities in April 2004 because the network had not paid its bills. Last November, a New York court ordered AAR to pay Multicultural more than $255,000. But lawyers for Piquant LLC say the new owners are not responsible for Progress Media's debts.
One attorney for Multicultural, Randy Mastro, told the New York Sun that some of those running Piquant LLC also were involved in AAR operations when Progress Media was in control. He said the suit filed in May is part of a larger attempt by his client to collect more than $1.5 million it says it is owed.
Meanwhile, AAR continues to ballyhoo its improved ratings and new personalities, including Jerry Springer.
"He'll bring some audience that we didn't have," Jon Sinton, AAR's programming chief, told Billboard Radio Monitor, "and we are excited about that."
Researcher John Sopko contributed to this report.
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