Insider Commentary on WWDB... past & present (Fall 1998)
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An unsolicited commentary by a former high level DB staffer.
The whole thing is this - WWDB was for many years a family run station, Dolly Banks put talk on it really as a lark. Most cities have a talk station or heritage full service station FIRST, then all news stations came in in the late 60's or so. In Philadelphia KYW was one of the first all news stations, Westinghouse created the model along with WINS, NYC or WBBM, Chicago, etc. This captured a huge part of the "spoken word" audience. Meanwhile, the real talker, WCAU (CBS) blew it because they were not content to have a smaller audience (but more loyal - remember all newsers depend on tonnage during primarily morning drive, not time spent listening). So CBS sez... damn!, we're CBS, we should own the dominant brand in spoken word. Well, along about 1972 they make a run, hire a ton of staffers, reporters, etc (all news has high labor costs)...and get there clocks cleaned!!! Meanwhile Dolly Banks has this FM signal, pays the talent next to nothing, whores out all the product with endless commercials, has sales managers that are indicted for the shaky deals, and she and her brother keep all the dough! LOW OVERHEAD, LOW AD RATES, BUT since it's MOM & POP...everybody's happy!!! Flash forward.....CBS gets some better managers and talent for 'CAU - Rizzo, Bruno, Dom, Alan Burke etc, get's some ratings, but can't cover the NUT of all the infrastructure that they STILL were paying because of the decision in 1972, big AFTRA payroll....SOOOO....the kill the station. ALL that audience ('cau was beating 'DB 1989-90) comes to WWDB. Dom Quinn comes back, AND they put RUSH on the station when he was at his height!!!!!! The station got some attention HOWEVER, the station became increasingly OLD. NOW, The new owner CHUCK SCHWARTZ has partners, banks and lenders, they want a return. Since the stakes were higher (they were paying a premium to get Rush), they needed DOUGH. The local ad business (even though the station was good at beating down doors) could not cover the nut. The Lou Zumuda's, Adam's Warehouses, and Glanzman Suburu's of the world were paying low rates.......AND they got results BUT, no significant dollars were coming the station's way......McDonald's, Budweiser, Mercedes, Mellon Bank, Home Depot, etc....WHICH come from being a top 10 25-54 radio station, or EVEN 35-54. So, Chuck started the INFOMERCIAL deal which preyed upon the success of the local personalties to use their name to endorse and disguise interviews, they basically used this loyal core audience to pay the bills. The infomercials guys loved it, they would pay upwards of 4K for a half hour. Plus, they would run the 20 minutes of the regular direct account commercials... AND because the talent was older (and was happy to have a gig) THEY didn't ask for talent fee's or a cut of the action. The Sales People started getting huge commissions (WWDB pays 25%) they ran the show, no money was spent on equipment, producers or new product. The sales department had complete arrogance and enmity for anything relating to Programming.
Now, come The Beasley's - they were sold a bill of goods by the previous owner (Mercury) who over sold the billing, cash flow, etc (keep in mind that ad money minus operating costs = broadcast cashflow, so the old way was strip it clean...and whore it out) SO, the Beasley's really didn't look the deal over to well. They wanted another station in Phila AND they were kinda like drunken sailors with money (they had a HUGE windfall with the sale of WDAS). They come in and say we're real broadcasters....we are going to show you how to do it!!!!)
They found nothing but an endless pit of spending money. Meanwhile, keep in mind how it works today, stations in today's market are selling for 22+ times yearly cash flow - which means if WWDB was sold Now it would go for about 80 million.... 'cause the station billed about 10 million and kept about 4 (40%). NOW (sorry if I am boring you) The 10 million was the absolute threshold!!!! It was all direct business and infomercials. If they could get SOME ratings, they could easily keep 8 million in profit. Do the math, see now the station is worth about 160 mil. It's all multiplies....AND equity towards additional purchases and borrowing. But, NO ratings, no multiples. Add to that the audience is dying, the "crackpipe" money had to go away (at least weekdays 6a-7p) and they were left with no money, no ratings and a black hole, they panicked (keep in mind Phila is their biggest market, a big contributor towards cash flow) they were desperate to try ANYTHING. Now, they split the signals and programs, WWDB old... and new... at the end of the day they hope to grow the FM into 35-54, really 30-60, and the old folks on AM. The problem is of course they will whore the hell out of the am, PROBABLY NOT GET THE RESULTS because a lot of their older listeners live in outlying areas and can't get the WTEL signal. They hope that the income will be a wash, that between both stations they will make the same cash flow while they try to move up from #15 in 25-54 with the FM. If they can crack the top 10 it would create that multiple worth scenario, probably increasing the station worth by 25%. We'll see, it will take time. My opinion is that it must be driven by the talk show. The mistake would be to try to compete with KYW but this decision should buy a little more time.
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