Rescuing Radio

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Luckily, Wilson still had some of that Forstmann Little cash lying around. He called an old Citadel hand, the fortunately named Bob Proffitt, and found a local private-equity firm, Endeavour Capital, that was willing to back Wilson's new venture, Alpha Broadcasting. It paid $11 million for Paul Allen's Portland stations--Allen bought them for about $50 million. Experts say the price premium for radio stations has fallen from 20 times earnings to eight times.

Radio has many would-be saviors. There are those, like the recently merged Sirius and XM, that have put all their chips on the pay-radio table. Others, including iBiquity Corp., believe the future is in HD radio. And there are others, like Mike Agovino, COO of Triton Digital Media, who believe that all radio stations need to create a digital infrastructure: ESPN Radio apps, Internet video of musicians or a morning-show host, online audio streamed through your computer at work. "We talk about the infinite dial," says Agovino. "The ability to access 20-, 30-, 40,000 radio stations in your car."

But so far, like much radio content, it's mostly talk. Satellite radio has been stunted by the recession and a lack of must-have content beyond Howard Stern. Consumers have taken slowly to HD radio receivers--there's an industry joke that HD stands for Huge Disaster. And there's no money to invest in digital. "The biggest challenge we've got right now in the industry," says Agovino, "is that companies are struggling to stay out of the way of their bankers."

Wilson's strategy is to take radio back to its local roots while at the same time keeping his company private and well capitalized. "When you cut the costs out of this business, you cut the product. Then you don't have anything to distinguish you from iPods or anything," he says.

It's also a repudiation of the consolidation strategy, which tried to increase profits by centralizing sales and programming. "People say, 'We'll program five markets from X city and we'll have one team doing it, and we'll save all this money,'" he says. "Doesn't work. Listeners want to talk about the mayor, the new light rail that's going in, the local sports teams." Wilson acquired the rights to air the games of three local sports teams for his FM sports channel. According to Arbitron, it has already started to poach listeners from the local AM sports channel.

Wilson isn't finished buying. His Alpha Broadcasting hopes to buy another station in Portland, and when revenues hit $10 million, he'll go after another city in the West. It all sounds like the actions of a confident man, but perhaps Alpha's logo is telling. It's a picture of his rescue dog Bear. "It looks like he's cocky and winking at you," says Wilson. "But really he just has one eye."