SCV NEWSMAKER OF THE WEEK:
Carl Goldman, Owner, KHTS AM-1220
Interview by Leon Worden
Signal City Editor
Sunday, November 30, 2003
(Television interview conducted Nov. 13, 2003)
"Newsmaker of the Week" is presented by the SCV Press Club and Comcast, and hosted by Signal City Editor Leon Worden. The half-hour program premieres every Wednesday at 9:30 p.m. on SCVTV Channel 20, repeating Sundays at 8:30 a.m.
This week's newsmaker is Carl Goldman, co-owner, with his wife Jeri, of KHTS Radio AM-1220. The Goldmans co-owned the radio station from 1990 to 1998 and repurchased it from Clear Channel Communications Inc. this year.
The following interview was conducted Nov. 13. Questions are paraphrased and some answers are abbreviated for length.
Signal: What were those new call letters again?
Goldman: I have trouble remembering them, too, because I'm so used to the old call letters, but KHTS, for "Home Town Station."
Signal: Not "Hits"?
Goldman: Not "hits," no. Home Town Station. We actually wanted the old KBET call letters, but those had gone by the wayside to a station that's out in Utah.
Signal: Did KBET stand for anything?
Goldman: No. We inherited KBET. After all the years that it was on the air, and the eight years that we owned it, KBET stood for a lot in this community.
Signal: It had brand identity.
Goldman: Right. Heritage call letters. So really wanted those back. Clear Channel thought they still owned the call letters, and then, as we carved out the deal with them, we discovered that they had let the call letters go. So we came up with the second-best alternative, which is HTS for Home Town Station.
Signal: Where do people find it on the radio dial?
Goldman: It's AM-1220 still, right where it was when it was KBET, and over the course of time, with KIIS-AM as well.
Because of the proximity to Los Angeles, there is no way to get another signal in Santa Clarita under the current FCC laws. So we're stuck with one station for this entire community. To put that in perspective, the Antelope Valley, which probably has another 80,000 or 90,000 more people than we have, now has 13 radio stations, commercial stations.
Signal: When did you originally start the station?
Goldman: My wife (Jeri) and I, back in 1990 ... we always wanted to own a radio station, and KBET became available. We came up here with some other partners, who are not broadcasters, but they had some money, and they, along with us, purchased the station. We turned it around over the course of the eight years...
My wife Jeri and I moved up here, raised our kids, became part of the community, and really fell in love with Santa Clarita and became, I think, an integral part of this community.
(In 1996), consolidation took place. The landscape for all of radio changed. Where in 1996 there probably were 12,000 radio stations and maybe some 5,000 (to) 7,000 different owners, suddenly that shifted completely. You suddenly had companies like Clear Channel (Communications Inc.) and Infinity Broadcasting, owned by Viacom, gobbling up hundreds of stations.
Right now Clear Channel is sitting there with 1,200 radio stations all across the country, and in many areas, here in Los Angeles, they probably have a few dozen. So as the landscape changed and consolidation took place, the big media companies swooped in and decided they wanted to basically control the media in the whole market area.
There were some real efficiencies that could take place in most of these markets, so whether it was a major market like Los Angeles or a smaller community like the Antelope Valley or up in Santa Barbara, a company like Clear Channel could come in and buy five, six, seven in Santa Barbara, eight stations and put them all under one roof, have one general manager, one receptionist, one accountant, one sales team, and really get some interesting efficiencies out of it, and also, then, become a major, dominant media player in the market...
We saw this community in 1990 you basically had Mervyn's and Target here, and that was it, of the big places to shop. And then as this community grew, and more and more of your big boxes came in, the Wal-Marts, the Home Depots, the Circuit Citys, the Best Buys, they started taking away from the mom-and-pops. So where there might have been five, six, seven hardware stores that were mom-and-pops, now you basically have Newhall Hardware, and that's about it. Most of the other hardware stores are chains. Tons of furniture stores back then, now there's a handful. Appliance stores, same thing. Even in the grocery business, where we used to have so much grocery business money, that dried up.
I can remember ... Will Fleet, who was the former Signal publisher, I can recall, and this must have been around å96 or å97, we were both on the board of the Santa Clarita (Valley) Chamber of Commerce, and I was lamenting because Hughes market had just gotten sold. And Hughes, for us, was the last of the grocery advertisers on our radio station back when it was KBET. And I remember walking out of the chamber meeting and saying, "Will, guess what? We just lost Hughes." And he said, "Don't feel bad, it's been three years since we've had a grocery store," in his paper.
Signal: The mom-and-pops really were the bread and butter when you were running the radio station the first time around.
Goldman: Absolutely. And they still will be this time around, because the reality is, we are part of the Los Angeles metro (region). Even though you know and I know that this is a very different community and a totally different mindset up here, and now that you have a lot more than Mervyn's and Target, people are spending a lot more time up here. They're doing their shopping up here, and their entertainment up here as well. There are very few times, and very few needs, to leave the valley. Unless you're going down to see the Dodgers, or a play possibly down at the Pantages, there's no reason to leave Santa Clarita.
So what has happened, I think, is that as the arena changed, and as they killed off a lot of he mom-and-pops, we then began to see the ability to pick up different kinds of advertisers.
Signal: There are more advertisers than there were 10 years ago, but there are more for-profit media enterprises, too. Is the problem solved?
Goldman: The problem isn't solved. Ask me that in about six months and I'll let you know. Hopefully it will be.
Signal: It's a trial venture you've got going...
Goldman: It's a real trial venture. But going back to 1998, and part of the motivation to let Clear Channel (initially Jaycor) come in and purchase the radio station, was the fact that we didn't, back then, envision this new landscape.
We saw the Circuit Citys and the Wal-Marts and the big boxes coming in, killing off the mom-and-pops and not being replaced, and because of the proximity to Los Angeles, we weren't seeing any of those advertising dollars, just as the newspaper wasn't. It's too easy for a Home Depot let's use them as an example to advertise on L.A. television, on the major L.A. radio stations, and capture 60, 70 of their Home Depot stores through that one ad, as opposed to worrying about back then, when there was one Home Depot up here one store. So to us, the landscape looked like it was shrinking, and in reality it was shrinking back then.
The difference now, and I think what really pushed my wife and I into taking a real hard look at taking the station back again, is that even though (the landscape) has changed here, what we discovered is, I think, that more and more smaller businesses and ancillary businesses and service businesses have popped up. So for every hardware store that has disappeared, there are now 50 more financial advisors, 20 more accountants, 30 more plumbers, 30 more electricians, etc., and we felt that there was a ripe opportunity to come up here and, rather than necessarily getting as many big sponsors as we used to have, we could probably make this successful by having more, smaller sponsors advertising, and doing more of a targeted specialty-niche kind of programming than we did in the past.
Signal: You bought the station in 1990 for how much?
Goldman: In 1990 we bought it out of bankruptcy ... probably about $600,000 (or) $700,000.
Signal: In 1998, when you realized the advertising future was bleak, did you sell it knowing Santa Clarita would no longer have a local radio station?
Goldman: No, not at all. In fact, it was the exact opposite. Clear Channel gave us assurances they were going to keep it local, and in reality, Clear Channel's strategy was to keep it local.
They had an interesting strategy. You can look at what Clear Channel did throughout the country during that time ... in probably the top 30 (or) 40 markets in the country. Their strategy, which started out as Jaycor's strategy, was to buy as many major-market stations as they can in a Los Angeles, or a Denver, or a Cincinnati, and then surround the market by also purchasing the suburban stations, and then even going a little bit farther out, by buying stations in the markets that were still part of what you would call the ADI in television the buying of Santa Barbara, for instance, here.
And not just buying one station in Santa Barbara, but clustering and buying eight, or up in the Antelope Valley, buying five radio stations there. So their strategy, which made a lot of sense, was, yes, the local dollars were dwindling in certain markets, even in Santa Clarita and they recognized that, too; they're bright broadcasters but they saw their strategy of being able to have the best of three worlds.
One is, by being this broad company throughout the entire nation and having all the major markets, they could get the national dollars on board.
(Two, they) envisioned being able to get regional dollars. ... They could now approach Home Depot or Farmer John, with the Dodgers, or a variety of the regional groups, the grocery stores that we talked about losing they could go back to a Vons or a Ralphs or an Albertson's and say, "Hey, you know what? Along with buying (advertising on) a Los Angeles station, which you know you're going to buy, now we can also offer you this great additional suburban reach on all our stations for that same commercial. But instead of charging, let's just say, $1,000 for the commercial on the L.A. station, now we'll charge $1,500 and you'll be on this regional network around Southern California."
Signal: Including on the local station, which they would never advertise on independently.
Goldman: Exactly. So it was a brilliant strategy.
Signal: And third?
Goldman: And then the third was, still get the local dollars even though the local dollars weren't as essential, still get those local dollars.
The reality, even in our heyday, back before all the big boxes came in, probably 80-85 percent of our revenue came from local businesses, not from any of the regional advertising. And now it will probably be, even when we get KHTS ramped up again, it will probably be less than that.
Signal: But Jaycor's Clear Channel's formula didn't work, right? They bought a valuable property from you for $3 million, and five years later you bought it back for $900,000.
Goldman: Sure. Put me on the spot.
Signal: But the value dried up over those five years. Their formula didn't work.
Goldman: Right. And let me backtrack, since you did put me on the spot. Even though we bought it for $900,000, when we sold it, the station was a viable, thriving entity, making a lot of money, with facilities and an infrastructure and a brand.
Signal: And the problem was?
Goldman: When we bought it (in 2003) there was no brand. There weren't even studios. We didn't' even have Scotch tape.
Signal: Or the call letters.
Goldman: Or the call letters. We're still out scrambling to pick up those paper clips that don't exist. We're really starting it totally from scratch again.
But Clear Channel's model has worked in a lot of markets, and it's a brilliant strategy. Just using Los Angeles as an example, it's working very well in Santa Barbara, it's working very well in the Antelope Valley, it's working very well in San Bernardino, and you can look city after city, and it's working extremely well.
It's working well there because two things happened. One, they were able to get efficiencies up there (in the Antelope Valley) and when I say efficiencies, I mean they could put five (or) six radio stations under one roof, have one receptionist, one general manager, and suddenly have a way to operate the stations much more efficiently than down here in Santa Clarita where you can't have more than one station.
So along the line, as they struggled with trying to figure out what to do with 1220 here, I think they made a conscious decision in San Antonio, where their corporate headquarters were, to look at ways to save money. And the most logical way for them to save money was to move the (Santa Clarita) station's facilities up into their Lancaster facility, because they looked on a map and saw Lancaster was 30 miles away "The dots are right next to each other; let's move it up there" not realizing they might as well have moved it to East Jesus, Ark.
It's a different world up there. You know that, anyone who lives here knows that. They're two very, very different communities that have different needs and different wants and desires, and it's a totally different market. So as soon as they moved (the station), it was the kiss of death, no pun intended.
Signal: The "KIIS" of death. Clear Channel ran a straight simulcast of KIIS-FM, with Rick Dees, on the renamed KIIS AM-1220. One of the hurdles for them, as it had been for you, was the weak broadcasting signal. Is it the same signal now, and will it improve?
Goldman: We have upgraded the signal from where Clear Channel had it, so it's back up to the full strength it was back in the KBET days. However, there is no question there are challenges with the signal, as there are with any signal up here because of the terrain, and because of the fact that you have AM radio, regardless AM radio inside a building with fluorescent lights, and the new buildings that have sealed windows, and have metal on the outside it's a very tough way to get a signal in.
So we realize that our strength is in cars. Probably 60-70 percent of the listening that will take place with KHTS other than during emergencies or for specific information or tuning in if you like the Dodgers or the Kings or high school football other than that, for our regular programming we realize that probably two-thirds of our listening, if not more, will be when people are in their vehicles.
But you know, as well as I do, going back to the days when there was only Target here, I could get from my house in Sand Canyon across town to Target in eight, nine, 10, 12 minutes back then. My wife could do it in one or two minutes back then that's a different story but now, it's 25, 30 minutes to get across town to Target.
Now, the reality is, a typical person here in Santa Clarita, let's just use the afternoon as an example: It's 2:30, the mom's going out to pick up her kids at school, she gets in line at school, in her car, hopefully while listening to our station, waits he 10-15 minutes while she works her way to pick up the kids. Now she's driving 10-15 minutes away to leave one of them off at soccer practice, take another one off to art lessons or ballet or to another sporting event. Then maybe she'll have a few minutes to stop at the dry cleaners and pick up dry-cleaning, then she's got to pick the kids up again and go and drive home, maybe they'll stop at a fast-food place to get a quick snack on the way. So now she has been in her car for three (or) four hours. Granted, it's in bits and spurts, but there are three, four hours of listening.
The other partner in the marriage half of them are probably coming up from Los Angeles when they come over the hill now, it's another 15-20 minutes for them to tune into the station and hear what's going on. Or the other half of our working public, whether it's male or female, are out in the industrial center or around town, and again it's 20, 25, 30 minutes.
Signal: You've got a more captive audience than you did 10 years ago.
Goldman: A much more captive audience.
Signal: What's your background in radio?
Goldman: My wife and I are both second-generation radio. Both our dads were in radio, both our dads did their best to talk us out of going into radio, and here we are.
Jeri and I have both worked at L.A. radio stations. We worked for what's now the largest radio network in the country, Westwood One, which happens to be based up here in Valencia because Jeri moved them up here when she was working for them, up from Hollywood, and yes, we've owned radio stations.
KBET, back in 1990, was the first that we owned, with partners that was the first station we purchased and then in the mid-'90s we brought in some other investors and started purchasing stations out in the Ventura area and up in the Antelope Valley...
Signal: You owned 11 at one time, right?
Goldman: Eleven and 12, actually. When we had this station still, there were 12, and we were competing with Clear Channel in those markets, and that was fun. But we've stepped out of that. We still have some ownership in it, minority ownership, but we got out of the day-to-day operation.
Signal: KHTS is it, then.
Goldman: This is it. This is our baby.
Signal: You started it back up when?
Goldman: We took over ownership Oct. 24, this time without any partners. This time we're doing it ourselves.
Signal: How has the response been so far?
Goldman: It has been exciting. We scrambled to get on the air because of the fires. We were intending to have a week to dry-run everything, and as I said earlier, we had to build it from scratch again. It wasn't like we were walking into an existing entity. There wasn't anything there. So we had to build studios all over again, get equipment all over again, build the staff up from scratch, computer systems, everything had to be built from scratch. So our intent was to give it a week to two weeks before we went on the air and actually go on the air right about now, was the vision.
And then the fires hit. We had a couple conversations with the city, and the first couple days it didn't look that bad, but we said, "You know what? If it gets bad, we'll figure out a way to get up and running." And we did. We stopped everything, hooked up our signal, and then, with about an hour's notice, we were able to get on the air on Tuesday, the big fire day.
And then once we were on, we stayed on. So the challenge then was to let listeners know we were on, because we had not yet planned our advertising blitz or anything else. But in this day and age, it's interesting: E-mail, and the Internet, have become such a powerful tool, and this is such a small community, that the minute we went on the air, our phones were already ringing, because a couple people heard it and they started spreading the word, and suddenly e-mail blasts were going out ... and you ran some stories in The Signal, and the city had it on their Internet site, and suddenly word spread. It wasn't like it was a big secret; for the past six months we had been anticipating going on the air. We got slowed down, actually...
Signal: Why was that?
Goldman: Nationally, right now, one of the big issues is cross-ownership between newspapers, television and radio and cable. And cross-ownership became a political hot potato. It got worse and worse as the season progressed last year, as more and more people jumped into the fray.
One of the things that happened, which was ironic, was that everyone was arguing, using Clear Channel as the model of what was going bad with consolidation, when in reality, consolidation has done a lot of good things. Clear Channel has brought a lot of great things to the table. Santa Clarita wasn't necessarily one of their best models for that, but for every Santa Clarita there's a dozen really good stories that have happened with consolidation. But it got caught up, and the irony was, we were doing the exact opposite. Here Clear Channel was spinning back off to a mom-and-pop. We weren't personally running into problems with the FCC, but the government just slowed everything down.
Signal: What programming do you offer on the station now?
Goldman: With each day it changes. We keep adding more and more local elements.
We already have local news, traffic, weather in the mornings and the afternoons. We are adding in all the fun elements we used to have putting "Deputy Patrol" back on, the "Book Report" is back on, our "Pet Adoption" is back on. We're sprinkling in one-hour weekly talk shows, everything from a pop psychologist to financial shows to some of the public service shows that we were really fond of doing back in the past.
Our soon-to-be mayor, Bob Kellar, will be hosting a show, and that will be one of many. So we see mid-days from 10 a.m. to 3 p.m. being one-hour blocks of local programming. Right now it's sprinkled in with a lot of music, adult contemporary music, Elton John, Mariah Carey, that kind of sound.
We've already done high school sports: We've done three high school football games, and we'll be doing a game Friday again; we are doing, now, our second COC football game; we anticipate doing basketball; we're bringing the Los Angeles Kings back, and they're being broadcast; Dodgers will be coming back with us in the springtime; we have a pet show on the air right now; we have a great feature, that I really love, with The Signal, that I think is going to be a big hit that is "Tomorrow's Headlines Today," and you are doing that along with (Managing Editor) Tim Whyte, and calling in and doing a live report on the station. I see a lot more of that.
Signal: So when can people hear local talk?
Goldman: (At) 5:30 a.m. we start with local talk. The goal is from 5:30 until about 11 (or) 12 at night, we'll be wall-to-wall talk, I'd say within the next five (or) six months. Already, now, probably about 50 percent of that programming is local. And it's coming along really nicely.
I think what will happen this time around, which is different from last time, is, people knew what the station used to be like. Not just during emergencies; it really was an appendage to the community, just as the local paper has been.
Signal: The station had been a supporter of nonprofit causes...
Goldman: Absolutely. And I think when it left the valley, people realized they had taken it for granted. So what we're seeing now, more than anything, is, people are so thrilled to have us back.
See this interview in its entirety today at 8:30 a.m., and watch for another "Newsmaker of the Week" on Wednesday at 9:30 p.m. on SCVTV Channel 20, available to Comcast and Time Warner Cable subscribers throughout the Santa Clarita Valley.