American Radio Systems, owner of three stations in that upstate New York market, is buying four more stations from Lincoln Group. American Radio also runs the sales operation of yet another station in the market.
ROCHESTER MARKET CONTROL
If the purchase is approved, American will control 66% of the market's $29 million radio ad revenues, and an overwhelming 75.6% of the key 18-to-34-year-old listening audience, according to Arbitron ratings from last fall.
"Justice has been all over this," said Bob Cloutier, president and general manager of three competing radio stations owned by Heritage Media Corp. "They've had five attorneys here for three weeks talking to every advertiser in town, and they've subpoenaed our documents."
American Radio President Steve Dodge did not return phone calls.
"In that kind of situation, you really become hostage to the stations in question," said the media director of a major New York City ad agency who has been interviewed by the Justice Department about radio mergers. "Can you have a fair negotiation in that situation? I don't think so."
"Our biggest concern in this radio merger-mania of late is that it will spread to TV," said the media director, who requested anonymity. "So we need to get on the record now to nip this."
Similar concerns have had Justice asking questions about recent radio mergers in Philadelphia and Cincinnati.
A number of local Rochester agency executives also have been interviewed by Justice, including Tracy Till, media director at Hutchins/ Young & Rubicam.
"We are very concerned about the pending deal," she said.
WORRY OVER AD RATES
Her worries are that American Radio will raise ad rates or try to force advertisers to buy stations they don't want in order to get on ones they do.
"And," said Heritage Media's Mr. Cloutier, "if American raises its rates, I'll guarantee you I'll raise mine as well."
"Personally, I don't think Justice will let the merger go through without getting some concessions," the rival exec added. "I think ownership that exceeds 50% of a market is a bad thing."