Air America bankrupt

Posted at 12:53 PM on October 13, 2006 by Bob Collins (2 Comments)

Air America filed Chapter 11 bankruptcy.

Politics aside, given their business model, it was only a matter of time. The method of buying blocks of time from a radio station and then putting your show there and then -- hopefully -- selling enough advertising to make it work has been tried before.

Generally the stations that end up selling you the time are cruddy little radio stations with very little audience and and almost no signal, who are desperate for the cash themselves (it's called "brokered radio").

Technically, they can safely tell the advertisers that they're on the air in major markets, but most of the time the stations are only peripherally in those markets.

Pretty hard to develop an audience that way, and very difficult to make any money that way.

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Comments (2)

Let's make one thing perfectly clear: Air America MINNESOTA, 950 AM, the station WE listen to locally, is NOT bankrupt. They carry some of the shows produced by the national Air America, such as Al Franken, but that is the extent of their affiliation. They also produce their own shows, such as the excellent Minnesota issues show called "Minnesota Matters" every weekday 5-6, and carry shows from other syndicators like "Big Ed" during the afternoon. Anyway, just wanted to assure fans of our beloved local Air America that they're going strong!

The other thing to keep in mind is that going into Chapter 11 bankruptcy does not mean you're going out of business. It just gives you protection from your creditors while you restructure your debt. Many corporations do it and come out of Ch. 11. I worked for a large Twin Cities corporation that went through it (NOT northwest airlines).

Posted by sitsu | October 14, 2006 4:15 PM

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Nobody said the local station was going bankrupt. And all the filing means is that Air America is not making enough money to cover debt.

But, as I said, their business model is a poor one.

Posted by Bob Collins | October 14, 2006 4:42 PM

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