Shakeup in Cincinnati Public Radio Happening!

Robin Gehl, WGUC Program Director

Bucking the recent trend in U.S. public radio circles of changing from classical music formats to all-talk, the Cincinnati Symphony's broadcast partner, Cincinnati Classical Public Radio, Inc., also known locally as WGUC announced Friday, March 11, that it has acquired its rival, WVXU and its affiliated X-Star Radio Network for $15 million pending FCC approval. The X-Star Radio Network, encompassing stations in Chillicothe and West Union, Ohio; Rogers City, Harrison and Manistee, Michigan, and Richmond, Indiana. I must idly wonder whether this move may bode well in the future for the Cincinnati Symphony broadcasts in terms of potentially increasing audience penetration in the tri-state area, particularly at a time when major cities such as New York, Philadephia, Miami, and Detroit no longer have classical music stations.

As the Cincinnati Post's Rick Bird reports in A new era for public radio; WGUC buys WVXU stations for $15 million:

"...Changes will be slow, at least at first.

"The deal allows WGUC to shift its news and public affairs programming to WVXU, essentially becoming a classical music juke box.

"Such WGUC Saturday shows as Car Talk and Brain Brew would move to WVXU.

"It means the popular All Things Considered from National Public Radio would air only on WVXU, ending duplication of the show on the two stations.

"WVXU would essentially turn into a news, talk and public radio information powerhouse. WVXU will move from the Xavier University campus to the WGUC studios on Central Parkway.

"Whether the changes are ultimately a good or bad development might depend on whether you're asking management pursuing profits, employees concerned for their job safety, or loyal listeners.

" 'We certainly think one license holder operating both stations will provide a great deal of synergy and cross promotion activities between the two,' said Richard Eiswerth, WGUC general manger and president. 'This will be healthy and strengthen both services dramatically.'

"The purchase price is the second largest amount ever paid in the country for an established public radio license. It is the largest public radio consolidation deal in terms of the number of stations involved. WGUC officials said the debt for the purchase would be funded by municipal bonds amortizing over 20 years.

"...The consolidation is expected to make major national news in the radio world since such buyouts are rare in the public radio sphere. They have become the norm in commercial radio since ownership restrictions were lifted in 1996, leading to such radio giants as Clear Channel, which owns 1,200 stations, eight in Cincinnati.

"...The deal puts under one owner two nationally celebrated heritage public stations.

"WGUC, coming on in 1960, was the first licensed public station in the United States and is one of the few remaining that is dedicated exclusively to classical music. WVXU was founded in 1976 by Dr. James King, who nurtured it as an alternative mix of specialty music programming and news with an almost religious devotion to preserving Cincinnati's radio heritage.

"Like commercial radio consolidation, the purchase allows for plenty of efficiencies in operation by combining marketing, strategically targeting programming and cross-promotion opportunities between the stations. Eiswerth suggested the new WGUC/WVXU configuration will be closely watched nationally from such interested parties as National Public Radio and the Corporation for Public Broadcasting as public radio struggles to find a niche in the increasingly splintered radio universe wracked by Internet competition.

"...The agreement calls for an ex officio member to be appointed by Xavier's president to the 20-member board of Cincinnati Classical Public Radio, Inc., the body which owns WGUC. Eiswerth said the deal states that, if WGUC dramatically alters the WVXU format, it must give up the call letters.

"Eiswerth said there is no intention of radically changing WVXU programming, but he said the station will undergo a massive revaluation of its programming. "We will spend several months interviewing the local hosts and get their feel for what listeners like and don t like. Everything's up in the air right now. Everything's on the table."

"WGUC average some 150,000 listeners a week; WVXU averages about 110,000, according to Arbitron ratings...."

The Cincinnati Business Courier in its article Crosstown sellout (3/11/05) reports:

"...The deal will be financed with tax-exempt bonds, backed by revenue from both stations, according to Marc Hand, managing director of Public Radio Capital in Denver. The nonprofit financial adviser has helped assemble financing for several public radio acquisitions in recent years. In Denver, a public broadcasting station acquired two AM stations in a model similar to what's planned by WGUC in Cincinnati. By shifting news and talk to its sister stations, the Denver classical station boosted membership by 25 percent and realized $2 million in additional revenue, Hand said."

And as Janelle Gelfand reports in WGUC to 'super serve listeners in the Cincinnati Enquirer (3/11/05):

"Across the nation, classical stations, faced with declining listenership and funding, are dropping Bach, Beethoven and Mozart altogether. The most prominent demise of a classical station was WETA-FM in Washington, D.C., which announced in February that it would drop classical music programming in favor of an all-news and public affairs format.

The same month, Pittsburgh's WQED-FM fell short of its fund-raising goal, threatening its existence. Philadelphia, Miami and Detroit no longer have classical music stations.

"There has been a constant erosion over the past years," says Robin Gehl, WGUC's vice president for programming.

"Only a couple of dozen National Public Radio stations are fully classical, says Richard Eiswerth, WGUC president and general manager. In the last decade, the number of stations devoted to classical music has been cut in half, while the number of talk radio stations has tripled.

"The audience for news and information has been growing dramatically, so there's much more demand for that," says Marc Hand of Public Radio Capital, a Colorado-based nonprofit organization that advised WGUC during negotiations.

"The more public radio stations you have, the more listeners you have. Ultimately, that translates into more revenue.

"I think it's very exciting for Cincinnati to put the combination together and preserve the service on both sides."

"WGUC has a strong local presence, including broadcasts of the Cincinnati Symphony Orchestra, May Festival and Cincinnati Opera.

"Last winter, WGUC's market share - percentage of people in this market who listen to the station - was 18th nationally among public radio stations in a Radio Research Consortium study.

"In the last six years, WGUC has seen an 18 to 20 percent audience growth to more than 163,000 weekly listeners, as well as a nearly 40 percent bump in memberships, grants and corporate gifts - totaling $1.4 million last year.

"While other stations are 'dumbing down' their play lists, the move will make WGUC a stronger player in the classical market.

" 'It will allow them to super-serve their classical listeners,' says John Birge, former morning host at WGUC, now at Minnesota Public Radio.

The acquisition could imitate Minnesota Public Radio, in which KNOW-FM broadcasts syndicated news shows like NPR's Morning Edition and locally produced talk shows, and KSJN-FM airs classical music."