AMFM groups radio ad sales in three markets

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Even before it merges with Clear Channel Communication into an 800-radio-station gorilla, AMFM is throwing its weight around.

In a move some expect to raise ad rates, the company has realigned its sales forces in New York so that all its stations, including three of the city's top five-WLTW-FM, WHTZ-FM and WKTU-FM-report to one manager. Instead of undercutting each other in a grab for advertising-competition that tends to keep rates lower-the five FM stations are working together to grow the pie for all.

This model is being duplicated at AMFM's cluster stations in Boston and San Francisco.

Ad agency media buyers worry about the impact on rates.

"It has the potential to keep rates higher by minimizing head-to-head competition between sister stations," said Mark Lefkowitz, media director for Furman Roth, New York.


The change comes as radio in New York, and across the country, is booming. Ad sales in the New York market through September are 16% ahead of last year, which means 1999's take could reach $675 million or more. The good times have been fueled by Internet companies, which are earmarking 40› of every marketing dollar for the medium.

After a series of consolidations during the past three years, most radio stations in the country are in the hands of a few corporations.

AMFM, formerly Chancellor Media, is expected to merge with Clear Channel next year, creating an 800-station behemoth. Infinity Broadcasting Corp., the nearest competitor, has 163 stations. These goliaths are now in a position to reap the benefits of their merging.

AMFM said the move is not intended to push rates up.

"From our side of the table, the New York City advertising community negotiates each station on its own merits," said Kathy Stinehour, the former general manager of AMFM's WTJM-FM who recently became exec VP of the Chicago market for the company.

"It's not about an attempt to all gang up and drive rates up. The buyers have choices," she said.

But the choices are slimmer than ever. AMFM's New York stations have cornered the market on women.

"AMFM has a wall of women, from 12 to 50," said Sean Ross, editor of Airplay Monitor, a sister publication to Billboard.

AMFM has been particularly aggressive in trying to change the culture of its sales teams. The company is layering management to foster a new camaraderie instead of the cutthroat competition that has been a radio trademark.


John Fullam, promoted to regional manager last year, has added exec VP of the New York market to his title. Andy Rosen, promoted to senior sales VP for New York, will report to Mr. Fullam. General sales managers of the stations will report to Mr. Rosen instead of the general manager of the stations, who used to have total responsibility for the bottom line.

"We used to compete," said Scott Elberg, general manager of station WKTU. "Now we cooperate."

Instead of discounting their rates to take business from each other, the stations will try to convince advertisers to spend more money on all the AMFM stations-and less on rivals such as Walt Disney Corp.'s female-targeted WPLJ-FM-by offering special promotions and sponsorships.

Amanda Beeler contributed to this story. Ms. Block is a reporter at Crain's New York Business.

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