New Radio Association to Focus on Buying and Selling, Not Lobbying

The newly formed Independent Broadcasters Association (see 2007100040) is intended to let independent radio stations cooperate to get some of the financial advantages the largest station groups enjoy, not as a lobbying group or alternative to NAB or RAB, said the group’s members in interviews last week. The IBA will be a buying group and one-stop shop for national advertisers, not a lobbying organization, said founder Ron Stone, CEO of Adams Radio Group. NAB and RAB “do an outstanding job,” said IBA member and Renda Broadcasting CEO Tony Renda. “Why reinvent the cow?”

At the outset, the IBA will represent about 500 owners and close to 3,000 stations, said Stone. He would like to have all 7,000 independent radio stations in the U.S. in the group. The goal is for the stations to band together to purchase at scale equipment, supplies and even content. The stations could even share talent, he said. “Negotiations, deals, equipment -- you name it.” The IBA stations will also be “an unwired network,” allowing advertisers to buy commercials with a national reach that run on all the member stations, Stone said. He also envisions the stations combining their digital efforts, including putting all their digital content together in the same place, similar to iHeartRadio’s music app.

An independent station group working on its own “cannot be as attractive to a buyer who thinks nationally or regionally,” said Renda. “Maybe we have an opportunity to sell ourselves as a group.” Renda compared the concept to Ace Hardware, which is a cooperative that provides similar benefits to local hardware stores.

“We are a small, family-owned business, we have 19 stations. The leader in our area has 800 and some,” said Dick Broadcasting Chief Operating Officer Dick Harlow. Dick Broadcasting supports Stone's effort. Harlow said the IBA’s timing is “really good.” During the COVID-19 ad downturn, it's going to be hard for many radio groups to expand their businesses by increasing their revenue, Harlow said. The decreased expenses the IBA could bring would provide another way to grow.

Stone said the idea has been on his mind since fall 2018, when he attended a radio event and realized little of the information presented was relevant to his business. “I as an independent radio owner was not getting out if it what I needed to grow my business,” he said. Stone said the IBA isn’t a reaction to COVID-19 and the difficulties it has caused for radio stations, but the downturn highlighted why something like it should exist.

“Anything that can bring together radio stations to offer a more complete product for a national advertiser,” could help the radio industry, said BIA Advisory Services Chief Economist Mark Fratrik. How effective the plan is depends on the markets and reach of the stations involved, he said. A commercial might need to run on many independent, smaller market stations to reach the same number of people it would reach running on the larger market stations of industry leader iHeart or Cumulus. It's incorrect to assume independent stations are universally small market stations, said Stone. The IBA has a mix of stations and markets, including both larger market stations and some that aren’t rated by Nielsen, he said.

“Like Mr. Stone, we do not see IBA and NAB as competing groups,” emailed an NAB spokesperson. Stone said he never envisioned IBA as a competitor to NAB. Other broadcast industry officials told us there could be interest in an organization that focuses on the lobbying needs of smaller broadcasters when those interests don’t align with those of larger companies.

Other groups have tried to fill that role with mixed results, said Dawn Sciarrino, radio attorney with Sciarrino and Associates. She said some of her clients asked her about IBA, but none expressed interest in joining. Renda said NAB does a good job of advocating for smaller radio groups. “You’re not going to be Entercom, but they’ll listen to you,” he said of another large owner of stations. Renda said he has never found NAB to be unresponsive. “NAB is uniquely positioned in how we serve radio stations and groups -- large and small -- as evidenced by our effective advocacy in Washington on behalf of the radio industry,” its spokesperson said.

The IBA won’t be a lobbying group, but Stone said it could help organize independent radio operators to weigh in individually at the FCC if they thought their voice wasn’t being heard on an issue. There was an industry split along those lines on the issue of local ownership subcaps. Stone's "opinion is that consolidation hasn’t been good for this industry."