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SMALL BUSINESS

Classical Station Owner Sticks to Playing Solo

Saul Levine could sell K-Mozart radio for $100 million or more. But he's not about to.

July 19, 2006|David Colker | Times Staff Writer

In 1958, atop Mt. Wilson overlooking Los Angeles, Saul Levine built a radio station almost solely with his own hands.

He used a rented tractor to clear scrub brush from a patch of land so remote that the U.S. Forest Service leased it to him for $350 a year. With the help of a carpenter, he built a shack to house his broadcast equipment -- mostly secondhand -- and a bare-bones studio.

The antenna was placed atop a flagpole.

His station went on the air in February 1959, with selections from Franz Lehar's operetta "The Land of Smiles."

"It was just by chance the first album I grabbed," said Levine, a lawyer who had dreamed of having his own radio station since growing up in rural Michigan. "But it was how we felt."

Today that classical music station, now known as K-Mozart, or KMZT-FM (105.1), is worth at least $100 million and perhaps much more, according to analysts. But only if Levine would give it up. And he's not about to.

Levine, 80, still comes into the office -- a modern three-story building in West L.A. -- every day. It also houses his other station, KKGO-AM (1260), which plays pop standards.

He oversees every aspect of the stations' operations, including advertising sales and on-air personalities.

In an industry that has gone corporate, Levine is one of the last of a breed: the independent radio station owner.

Other independent owners -- particularly in classical music radio, which has a limited, aging audience -- long ago accepted offers from industry giants that snapped up FM stations in lucrative markets.

"The amount of money he could get is insane," said Brenda Barnes, president of USC Radio, which operates the other classical music station in L.A., the not-for-profit KUSC-FM (91.5).

In fact, Los Angeles is the only city in the country that still has more than one full-time broadcast classical music station, according to research done for an upcoming National Endowment for the Arts report.

Analysts say the broadcast license for the station -- which Levine originally had acquired for about $25 -- is particularly valuable because of the station's range.

KMZT would be restricted under current Federal Communications Commission rules to a power output of 680 watts. But because it was founded before those rules went into effect in 1962, the station can operate at almost 18,000 watts.

"He has the rights to one of the most powerful signals in Southern California," said Mary Beth Garber, president of the Southern California Broadcasters Assn. "It's one of the few stations that can be heard all the way in Palm Springs."

But Levine refuses to bow to the economic pressures that have shut down commercial classical music operations to the point that there are only about a dozen left nationwide -- fewer than half of what there were 20 years ago.

"Whenever I get an offer," Levine said, "I call my wife and she tells me to tell them to go away. She doesn't want me hanging around the house, and I would go nuts."

Total advertising sales of stations in the Los Angeles radio market -- in general defined as Los Angeles and Orange counties -- last year amounted to nearly $1.1 billion, according to media advisory firm BIA Financial Network.

KMZT's part of that was estimated by BIA to be $7.3 million. By contrast, the station with the highest revenue, alternative rocker KROQ-FM (106.7), took in $67.6 million.

Station licenses, particularly for those on the FM dial, are so valuable in Southern California that beginning in the 1980s, many were purchased through leveraged buyouts, arts consultant Bob Goldfarb said.

"A station, after it was bought, had to not only earn a profit but also service the debt that eventually got into the nine-figures range," said Goldfarb, who conducted the survey of classical music radio stations for the National Endowment for the Arts report. "You can't service a debt like that on the income of a classical music station."

One by one, commercial classical music stations were sold and instantly changed format. The time came in 1989 for Los Angeles' KFAC-FM, which had been playing classical music for 58 years. It sold for $55 million and became KKBT-FM (now at 100.3), with the motto "Rock With a Beat."

At that point, Levine's station was playing an all-jazz format, which he had switched to in the early 1960s because of competition from KFAC. The demise of that station cleared the way for Levine to return to classical music. His station finally began showing a steady profit, and the money made from the sale of a San Francisco AM station got him out of debt.

The newfound prosperity reinforced Levine's resolve not only to hold on to his original station but also to program it the way he wanted to.

In 2000 Levine changed the call letters from KKGO-FM to KMZT-FM, after Mozart. "I thought about naming it for Beethoven," he said, "but I couldn't figure out how to get that into call letters."

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