Dialed In And Excelling (09/04/06) — with Spencer Brown, David Landau, Ken Williams
Dial Global and Excelsior Radio Networks: Tuned In To Network Radio
By Joe Howard, Editor-In-Chief
Since the purchase of Winstar Radio Networks in 2001, Excelsior Radio Networks has been busily acquiring top network radio and online properties. The company followed the Winstar deal a year later with the acquisition of Dial Communications, which merged with its existing Global Media division to form Dial Global, the nation's largest full-service independent radio network.
Through its in-house programming operation, Dial Global produces shows like Rick Dees Weekly Top 40, Bob & Sheri, The Matt & Ramona Show, and Backtrax USA with Kid Kelly, and full-time formats that include AC, Oldies, Adult Standards, and Country. It also provides a variety of prep services, and sales representation to a variety of clients, including the John Tesh Radio Show.
Excelsior in 2003 acquired MJI Interactive, the largest independent supplier of syndicated web tools and web content to radio stations. In 2005, Excelsior itself was acquired, by private equity firm Lincolnshire Management.
Earlier this year, Excelsior acquired Westwood One's eight full-time music formats, and created a new division - Dial Global Programming - that merged its X Radio programming operations with the Westwood One properties, and accommodated yet another new group of new assets under the Excelsior umbrella.
Oversight of the vast business operations requires a solid management team. To get a complete picture of the many facets of Excelsior and Dial Global, Radio Ink reached out to Excelsior CEO Spencer Brown and Dial Global co-presidents and co-CEOs David Landau and Ken Williams to understand better how these divergent businesses fit together, their plans for the future, and what acquisitions they're eyeing to grow their already powerful group.
Radio Ink: Tell me about Excelsior and its various businesses. What does each division do? How do they all fit together?
Spencer Brown: Excelsior is a company I formed in 2001 to purchase the Winstar Radio Networks. At the time, I was working at Franklin Capital Corporation, and we had previously owned radio stations. We thought that mid-2001 was a good point to reenter the radio business, albeit on the network side. While we were in the midst of completing the Winstar acquisition, we were introduced to David Landau and Ken Williams. It was always our intent to use Excelsior as an acquisition vehicle. We instantly recognized the importance of acquiring Dial Communications and David and Ken's management expertise. It took about two weeks to reach an agreement, which the lawyers then took six months to memorialize.
RI: There are many branches to Dial Global. Tell me what the company does, and what services you offer.
Ken Williams: With the restructuring of the company, a good portion of our programming and services now lies under the Dial Global umbrella. The other division of the company is MJI Interactive, a very forward-thinking and exciting division of the company. With podcasting, text-messaging, and station services, MJI has helped keep Dial Global technologically on the forefront of the industry.
The company has three components: First, we have a full-service sales and marketing business that focuses on providing top-level advertising sales representation and marketing services for best-of-breed independent radio producers such as Talk Radio Network, Fox News Network, John Tesh Media Group, Fox Broadcasting, Multinet Marketing, The Complete Sheet, Sixty Second Productions, and the WOR Radio Network to name a few, in addition to our own programs and services.
The second component is Dial Global Programming, which includes our digital 24/7 format business, which provides eight 100-percent live, 24/7 music formats to hundreds of radio stations across the country. The live nature of our production allows stations to provide their listeners with up-to-the minute coverage of breaking news and information, unlike many others, which contain a great deal of voice-tracking. A good example of the importance of being live is the recently foiled terror plot that caused millions of people to react to a new set of travel restrictions in a very short period of time. Our listeners were fully informed from the beginning. We also provide many big-name, long-form programs for a variety of formats, which include Rick Dees Weekly Top 40 and Backtrax USA with Kid Kelly for CHR and Hot AC, Whitney Allen's America's Hot List and Big Time Saturday Night for Country and Big Boy's Hip Hop Spot for Urban. We also provide a plethora of prep services for almost every format imaginable as part of our X Prep brand.
The third component is MJI Interactive, which is the leading provider of interactive services and content for thousands of radio stations across America. MJI Interactive's service products provide e-mail, e-contesting, listener survey, podcasting and instant messaging solutions, as well as web hosting and proprietary content delivered daily. MJI Interactive is constantly developing new products and services within the backdrop of the ever-changing world of technology, and keeps us at the forefront of technological services we can offer radio stations and other media outlets.
RI: Tell me about the recent deal to acquire Westwood One's 24/7 formats. How did it come about? Who initiated the deal? How will those former formats be integrated into your existing businesses?
David Landau: Westwood One CEO Peter Kosann and I initiated the deal. Peter, Ken, and I have been friends for a long time and there was a great deal of trust and friendship that went into the development of this business deal.
KW: The 24-hour format business is a great fit with our other assets. Now, stations can get a full, end-to-end solution for their local market. They can start with the foundation of one of our digital 24/7 formats. They can do their own morning show, and subscribe to one of our prep services to help make that a winner, or affiliate with one of our syndicated morning shows. They can add a special weekend show that we syndicate or represent. And they can do this with one company, and one infrastructure.
The barter inventory from the digital 24/7 format business will be offered to advertisers in a separate RADAR-rated entity called the Dial Global Digital 24/7 Network, which will be daypart and day-specific. This gives us a very valuable resource for advertisers.
RI: Why did you decide to create a new division to accommodate those assets?
KW: With the addition of the digital 24/7 formats, we decided it was the right time to organize all our owned properties onto the single platform of Dial Global. We've always focused name-wise on our show and service brands, and less on our corporate entities, so it made sense to set them up this way.
RI: Will your existing formats undergo any changes as a result of the creation of the new division?
KW: We spent a lot of time talking with the programmers and affiliate people, as well as customers, and we believe we've found the most important service elements that are necessary to win with this business. These formats have always had first-rate personalities, but every station, regardless of location, wants them live and interacting with their listeners. So we will make sure we are live, all day, seven days a week. We heard that these operators need the tools it takes to win in their local markets, like sales presentations, ad creative, consultation, and the like, and we will provide them with that. Because stations want the best possible sound in their market, we're working on new jingles and imaging, and an improved way to provide them with music libraries, for when they are originating locally. Once we get these basic needs met, we'll move onto some other smart ideas, like time-zone shifting morning shows, taking increased advantage of the proximity of our studios to the center of the entertainment industry, and other initiatives we think speak to the future opportunity for this business.
RI: What criteria do you use for selecting, developing, and evaluating acquisition opportunities?
SB: Does the business complement our overall strategy? Are we getting talented people who will fit into our corporate culture? We want to be involved with good people and good companies. We have and will continue to pass on lucrative opportunities if we are not comfortable with the people on the other side of the transactions.
RI: Are you looking for more acquisition opportunities?
DL: Absolutely. That was the cornerstone in our deal with Lincolnshire, to give us the financial assets to expand our business.
RI: What are the challenges of managing such a diverse stable of companies and assets? How do you ensure that each gets the attention it needs to thrive?
DL: We're fortunate to have a very talented staff that understands the needs of our clients and the expectations from management. We don't have to kick people's asses. Our people are very professional, love the medium, and are very dedicated.
RI: How has consolidation changed the network and syndication landscape?
SB: Consolidation is an established part of our industry, and we don't spend a lot of time bemoaning or even thinking about it. Obviously, there are fewer station operators; as an independent network that does not own stations, we have to be selective about the programs we produce and syndicate. That said, quality programming and services still do well. We have no complaints. In fact, consolidation has created opportunities for an independent like Excelsior, particularly in the area of acquisitions.
DL: There are two consolidations. The consolidation to which I think you are referring is the group ownership consolidation, which we believe has benefited our company. At the end of the day, the radio groups want to produce the best product for their listeners. This gives us the opportunity to speak directly with the decision-makers at the various groups. The second consolidation is that of the agencies and clients, and we're very bullish on that aspect of our business.
RI: What concerns do you have about the future of the radio industry?
SB: I have no concerns about radio's future. There is a lot of innovation in media that forces radio as an industry to be creative, nimble, and smart. Perhaps we got off to a slow start, but now the industry is not only reacting but innovating. I think we are going to flourish.
DL: There are two classes of equity investors who invest in our business. The first one is obvious - the banks, pension funds, and retail shareholders who own stock in the radio public companies. The other class of investors, which I'm afraid has been ignored, is the CEOs and CIOs of the major media entities. I recently asked one president/CEO of a top-five media group how many top radio executives have been in to talk to him about radio. He saw one radio CEO in three years. Because of the events following Y2K and Sarbanes Oxley, the management of the radio companies and the RAB had a full-time job managing “the street.” Because of that focus we have practiced benign neglect when it comes to getting our story across to the major agencies. In effect, we have lost our sales mojo.
RI: What are the biggest challenges you're facing?
DL: People are in this business by choice, because they love radio. We are losing our footprint as a vital national medium and business. Martin Sorrell was quoted as saying that Internet advertising will double in five years. No one can convince me that the Internet, satcasters, and Internet radio have the same call to action that terrestrial radio can deliver. The country is at war, we have a traffic epidemic, people are in need of information. Where else are they going to get this from, other than radio? We are a technological, innovative medium, and we must reposition ourselves as such.
RI: What do you see as your company's next growth opportunity?
DL: The digital 24/7 networks will be an important part of our growth, as will our expansion of RADAR network offerings. It's also important to work closely with our producer/partners and help them bring product to the market that they think can be successful.
SB: We will continue to grow the company through acquisitions, joint ventures, and organic growth. We are very excited about MJI Interactive and the opportunities it presents providing Internet content and services to radio stations. We also plan to aggressively build our newly acquired 24/7 division.
RI: Are you worried about the future of syndicated media, as consumers are moving toward devices that allow a more personalized experience, like iPods, laptops, mobile phones, etc.?
DL: No, radio has always adapted and risen to the occasion. Clearly, we are at an important crossroads, and we must communicate to our clients the direction we are taking. I believe Less Is More was a great step in that direction. Now we have to improve upon our content, and re-establish the vitality of our medium.
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