Credit Crunch Hits Radio

A change in the air: One Maine radio station may soon have new owners, and several others may have new, tighter-fisted management as a result of financing problems at Princeton, N.J.-based Nassau Broadcasting. Nassau’s credit line came due last September, according to a report on the Radio Info Web site, [1] and to meet its obligations, the company, which owns or operates 56 radio stations in 7 northeastern states, agreed to give the investment firm Goldman Sachs 85 percent of its equity in return for forgiving two-thirds of its debt. Goldman also gets a seat on Nassau’s board and could exert considerable influence over how its stations are operated.

But that’s in the long term. In the short term, one half of “The Bone” duo of stations will have new management.

Because the Federal Communications Commission regards this transaction as a change of ownership, Nassau will no longer be grandfathered from requirements limiting how many stations a company can own in one market. As a result, Nassau will have to sell off WHXR in North Windham (106.7 FM), one of two stations it owns that carry the classic rock format known as “The Bone” (the other is WHXQ-FM, 106.3 in Kennebunkport). Nassau will also have to sell off two New Hampshire stations.

WHXR will be placed in a divestiture trust, which will run it until a new owner is found. That might be a while.

North East Radio Watch [2] is reporting that it’s almost impossible for potential buyers to get credit to purchase radio stations.

Radio advertising revenue has tanked, and, as a result, station values have nose-dived. What does this difficult market and the new ownership alignment mean for Nassau’s other 10 stations in Maine? Company management is saying no further changes are planned, but NERW points out that at other broadcast facilities that have fallen victim to the credit crunch, the new (number-crunching) owners have tended to squeeze the budgets for all they were worth.

Right down to … the bone.

A change on the mid-coast: The Bangor Daily News announced late last week that it’s starting a new weekly newspaper covering Knox and Waldo counties and Waldoboro in Lincoln County. [3]

The Midcoast Beacon will be distributed free by mail to all homes and businesses in its circulation area, with the first issue set to arrive on May 21. According to BDN executive editor Mark Woodward, the Beacon will have a press run of about 43,000 copies.

While the Beacon will use some stories written by the daily paper’s reporters at its Rockland bureau, it will be primarily produced in Bangor by the same staff that publishes the Bangor-area weekly, cleverly titled The Weekly. Roxanne Moore Saucier, editor of that paper, will also edit the new publication. Much of the content will consist of calendar listings, court listings, business press releases and light features.

The Beacon will compete with several existing weeklies, including the Village Soup-owned Herald Gazette in Rockland and Republican Journal in Belfast (disclosure: My weekly political column runs in those papers) and the Lincoln County News in Damariscotta. Woodward said he isn’t worried about the tight advertising market in the area, which has squeezed those papers during the current recession.

“We’ll have a much broader reach in terms of circulation than all the others combined,” he said. “Given the atmosphere down there, this is probably as good a time as any to start a new paper.”

Just for a change: I’ve been pretty tough on Lewiston Sun Journal reporter Rebekah Metzler lately, so it’s only fair to give her props for getting the angle everybody else seems to have missed. In none of the other stories on the Maine House of Representatives deciding to reduce its size by 20 members did I see any mention of the curious vote by House Minority Leader Joshua Tardy of Newport. As Metzler noted in her May 7 article, Tardy was one of only nine Republicans to oppose the measure, even though he had taken part in a press conference a month or so before in which he endorsed reducing the size of the Legislature. [4]

Tardy was unavailable for comment after his vote, and to the best of my knowledge, neither Metzler nor any other member of the State House press corps has seen fit to follow up by asking him a pointed question or two.

What are you waiting for?

Al Diamon can be e-mailed at aldiamon@herniahill.net. [5]