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Premiere Radio Tuning In to New Ventures : Broadcasting: Sherman Oaks-based syndicator hopes to boost revenues by purchasing a station and presenting live shows.

March 23, 1993|PATRICE APODACA | TIMES STAFF WRITER

Since it started five years ago, Premiere Radio Networks Inc. has become a profitable little venture by syndicating comedy and music countdown radio programs to stations around the country.

The Sherman Oaks company earned $1.16 million in 1992, up 33% from the year before, while its revenues rose 5% to $10.1 million. It is widely believed within the industry that Premiere is now the nation's fifth-largest syndicator of radio programming behind ABC Radio Network, Westwood One, Unistar Radio Network and CBS Radio Networks.

But the market for the type of prerecorded programming that Premiere produces generates an industry total of only about $85 million in revenues a year, and the company's chief executive, Steve Lehman, wants Premiere to reach $50 million in annual sales in five years.

So to grow, Premiere went public last April and used the cash to buy its first radio station. Now the company plans to launch a morning show by popular Nashville disc jockey Gerry House that it hopes to broadcast live, via satellite, on country music stations nationwide--sort of a country version of controversial radio personality Howard Stern, who proved that live radio need not be produced locally.

But as Premiere grows, Lehman might do well to remember Westwood One Inc., its much bigger rival.

Westwood One was also a success early on, but it had a few highly publicized fiascoes and is now a debt-heavy company that lost $24 million in 1992. The Culver City concern bought radio stations and networks for what critics say were inflated prices, and its failure with the Los Angeles radio station it calls Pirate Radio left it with egg on its face.

Will Premiere avoid the pitfalls that beset Westwood One?

Premiere's Lehman, a former KIIS-FM disc jockey, says don't touch that dial.

Lehman, 40, acknowledged that comparisons with Westwood One are inevitable. But he asserted: "We've been very calculated about growing this company. We're creating things that are seen as cutting edge and not buying any big dinosaurs."

Lehman founded Premiere in 1987 with a handful of other radio veterans, and the company quickly made its mark producing generic music "countdowns" that local stations edit into their own custom versions. The company is also known for its comedy programs that are tailored to country, rock, oldies and popular music formats.

Premiere produces 12 weekly shows that run on more than 1,100 stations around the country, as well as radio jingles and promotions. Instead of selling its programming for cash, Premiere is given advertising time, and then makes its money by selling the ad space. This barter system is common in the syndication market for prerecorded programming.

Renee Thomas, a spokeswoman for KZLA-FM, a local country music station, says Premiere's programming is considered among the funniest in the business. After the last big Southern California earthquake, she recalled, Premiere's "Earthquake Boogie" parody song turned into a big hit for the station. "We've dumped other comedy services in favor of Premiere."

A couple other parody songs from Premiere: "Shopping at 7-Eleven" to the tune of "Stairway to Heaven," and "Jeopardy" to the tune of "Yesterday." Its comedy shows feature impressions of politicians and movie stars, gag "Celebrity Answering Machines" and commercial spoofs--like one for a fictional car called "Uranus."

But to get bigger, Lehman said Premiere had to acquire stations. So earlier this month Premiere acquired a sleepy country music station in Denver for $3.55 million, and it is tinkering with the station's format to appeal to a younger audience with fast-talking disc jockeys and music by hot young stars like Garth Brooks and Randy Travis. That way he hopes to win away listeners of Denver's top-rated station, which has an older, more conservative country format.

Next, Premiere plans to use the Denver station to launch the Gerry House show into its first market outside Nashville. If successful, Premiere will have enough ammunition to market the show to stations that might otherwise balk at an unproven concept. Lehman said the costs of Premiere's expansion will probably depress its earnings this year. But in the U.S. radio market there are nearly twice as many country music stations as any other type of format, so Premiere stands to score big in the long run if House is a hit.

Simon T, president of Beasley Broadcast Group in Naples, Fla., and a former Westwood One executive, said Premiere "is young, aggressive and on the cutting edge of what's happening in radio. They found the guy in Nashville and grabbed him."

But T also warned that radio is a volatile business, and "I'd caution them to look at other networks and the mistakes they've made as they grew."

Case in point: Westwood One. Lehman says he knows that lesson and it's that Westwood One's flamboyant chairman Norman Pattiz became so mesmerized by the thought of becoming big that bad decisions were made.

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