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New Emmis exec Charlie Morgan faces big challenges as he re-enters radio

October 3, 2009
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When local radio industry veteran Charlie Morgan stepped down as president of Indianapolis Motor Speedway Productions last month, it could’ve appeared he was trying to escape the daunting problems of open-wheel racing. Unless you considered where he was going.

Morgan, 48, left IMS to become market manager for Emmis Communications Corp.’s local radio stations.

Morgan

Some would say jumping from racing to radio is like going from the frying pan into the fire. But that’s not the way Morgan, who has spent 28 of the last 30 years in radio, sees it. 

“When many people are having difficulty finding a job, I had two really awesome jobs to choose from,” he said.

Morgan was hired to replace Tom Severino, who died of lung cancer in July, at a time when radio is facing a multitude of hurdles and an uncertain future.

Emmis Chairman Jeff Smulyan thinks Morgan, who spent 22 years at Susquehanna Radio Corp.’s (now Cumulus Radio) local cluster before joining IMS Productions less than two years ago, is the perfect person to lead Emmis’ local properties through this challenging era.

“Charlie Morgan was the leading candidate from the beginning,” Smulyan said. “We went right after him. Charlie is a great people person with a great history of leadership.”

Morgan was terminated in September 2007—shortly after Georgia-based Cumulus bought Susquehanna—and replaced by former Clear Channel Market Manager Chris Wheat.

“I don’t think anyone in the industry thinks that termination had anything to do with Charlie’s level of competence,” said Bill Perkins, a longtime Indianapolis media buyer and owner of Perkins Nichols Media. “Charlie Morgan knows all aspects of this business up and down, and has a national reputation as a very solid manager. I think it’s a brilliant hire.”

Evaluating format changes

At Emmis, Morgan’s most immediate challenges include evaluating two stations—WFNI-AM 1070 and WIBC-FM 93.1—where major format changes happened over the last two years.

Morgan also will be faced with bolstering the ratings of Emmis’ country station, WLHK-FM 97.1, if it is to mount a serious challenge against country behemoth WFMS-FM 95.5.

WFMS is a monster that Morgan helped build when he was at Susquehanna. Overtaking it in the ratings will be a significant challenge. The station is routinely rated among the top three Indianapolis stations in listener audience and advertising billing. While WLHK has edged up, it trails WFMS in every significant demographic category in every time slot.

Country radio experts think Morgan is the man for the challenge.

“Charlie was on the leading edge of building country music into the stalwart franchise it is today,” said Ed Salamon, executive director of Country Radio Broadcasters, a Nashville, Tenn.-based industry group. “He should be able to quickly identify country market niches and go about building a strong audience for [WLHK].”

But building WLHK’s audience may not be Morgan’s biggest challenge.

In late 2007, Emmis began a major shift, moving its longtime news talk station, WIBC, from 1070 AM to 93.1 FM, where it scrapped its pop format. Meanwhile, it installed a sports/talk format at 1070 AM, now known as WFNI, or The Fan.

Emmis has poured a healthy six-figure sum into promoting the changes, industry insiders said, and the results have been mixed. Listener numbers provided by New York-based Arbitron Inc. show WIBC’s audience size in the critical 25-to-54 age group has increased about 20 percent in the last year. The picture for its sports/talk station is much less clear.

“There was an expectation that The Fan, with all the marketing investment they put into it, would get a tremendous uplift, and the ratings show they’re still neck and neck with WNDE,” Perkins said. “I know Emmis has had success with The Fan format in other markets, but I’m not convinced it’s working here.”

Arbitron’s most recent ratings period, which ended June 23, shows Clear Channel’s WNDE-AM 1260—the market’s other major sports/talk station—clearly ahead of WFNI in the critical afternoon drive slot. WFNI, fueled by its ESPN fare, is the ratings winner during the morning drive. WFNI, which features “The Dan Dakich Show” from 10 a.m. to 1 p.m., edged WNDE during midday.

Asking lots of questions

Morgan said he won’t rush to judgment.

“What I’m doing the first 30 days is asking a lot of questions about everything,” Morgan said. “I’m starting that conversation on the sales side, then I’ll be having that conversation on the product side.”

That dialogue, Morgan said, will help shape his plan for the Emmis stations.

“Nobody thinks anything is necessarily broken, but to be successful, you have to continually ask questions and look at things with a critical eye,” Morgan said.

Smulyan said he has given Morgan no directives and will let him determine the best course for Emmis’ four Indianapolis stations.

“There’s no mandate for an overhaul, but we’re looking at everything,” Morgan said.

While he has a close eye on the ratings war between WFNI and WNDE, he’s not panicking just yet.

“I’m a fan of The Fan,” he said. “A music format will take off quickly if it’s going to succeed. People quickly identify with it. But that kind of [sports/talk] product takes a little longer to develop. You have to give those personalities time to connect with the audience.”

Morgan said he was particularly pleased with the way Dakich has connected with his audience in a short time. He thinks his afternoon duo of Indianapolis Star sports columnist Bob Kravitz and Eddie White also shows promise.

Sales staff worries

On-air personalities may not be Morgan’s only concern. Industry insiders said Morgan will have to take a close look at his sales staff if he is to bolster Emmis’ local revenue.

“Two or three years ago, they lost five or six heavy hitters in the ad representative department,” Perkins said. “Now they have a young sales staff, and they’ve had difficulty keeping up.”

Emmis even has seen ad revenue stagnate recently for WIBC, which—along with WFBQ-FM 94.7 and WFMS—has long been at the top of the money heap.

But Emmis isn’t alone in its pain. The combined revenue of this market’s top 15 stations has declined from $95 million in 2004 to $77 million in 2008, according to BIA Financial Network, a Virginia-based financial and strategic consultancy for the radio and TV industries.

All this comes at a time when New York-based Arbitron Inc. is changing its ratings-data collection system and the industry continues to struggle with emerging technology such as the iPod, Internet and satellite radio.

And if all that isn’t daunting enough, Morgan has the added pressure of Emmis’ stockholders’ concerns. Last month, NASDAQ warned Emmis—which has 22 stations in seven U.S. markets and five stations in three overseas markets—that it could have its stock delisted if the price doesn’t rise to at least $1 by March 15. Shares of the Indianapolis-based radio operator and publisher have been below $1 since October 2008. Emmis stock is up this year, but closed at only 84 cents Sept. 30.

Morgan, a Warren Central High School and Butler University graduate, said radio’s pull was too strong for him to pass up the Emmis opportunity. And then there was a pep talk of sorts from Smulyan.

“I understand the radio business, like the racing business, is undergoing a tumultuous period,” Morgan said. “But after talking to Jeff, his commitment to the radio industry set aside any fears I had about the business being viable.”•

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