He He Ha Ha!...ADIOS!
Air America Radio Network Seeks Bankruptcy Protection
By Don Jeffrey
Oct. 13 (Bloomberg) -- Air America Radio, the liberal talk and news radio network, sought bankruptcy court protection after losing $40.9 million since May 2004.
Air America, featuring comedian Al Franken, will keep broadcasting after receiving court permission to use $900,000 in financing from Democracy Allies LLC today, Tracy Klestadt, a bankruptcy lawyer for the company, said in an interview.
``I think they're not going to make it in this current form,'' said Paul Levinson, media studies chairman at Fordham University in New York. ``It's a sad day because we need as much political diversity in our media as possible.''
The decision to seek legal protection from creditors came after a creditor froze the bank accounts of Piquant LLC, which operates as Air America, the court filing shows. Piquant said Multicultural Radio Broadcasting Inc. ``restrained all of the Debtor's bank accounts,'' leaving Air America with no funds. Piquant said the bankruptcy filing will free the frozen funds.
A spokeswoman for Multicultural was not immediately available to comment. Court papers show Piquant owes Multicultural $550,245.
Not Entertaining Enough
``Some of the shows were not in the least entertaining,'' Levinson said in an interview, adding that Franken's show is too ideological and not funny enough. ``Radio is still an entertainment medium, even when it's delivering strident political commentary.''
Air America's biggest broadcast affiliate, Clear Channel Communications Inc., said it will stick with the network.
``We will continue to air the best available programming from within the genre, regardless of origin, including Air America,'' said Gabe Hobbs, a vice president of programming at Clear Channel Radio, in an e-mailed statement. ``This process should be completely transparent to the radio listener.''
Air America's programs are on 24 Clear Channel stations, a company spokeswoman said. Piquant said it has 92 U.S. affiliates, in an e-mailed statement.
Started in March 2004 by Mark Walsh to counter the influence of conservative talk-radio hosts such as Rush Limbaugh, Air America initially said it would take four years to make money. Piquant said it bought the network for $705,000 in May 2004. It said Democracy Allies has agreed to provide as much as $3 million in financing.
Franken Owed $360,750
Court records show that the company owes creditors $20.3 million, including $360,750 to Franken, of Minneapolis. RealNetworks Inc. Chairman Robert Glaser is owed $9.82 million and was listed as chairman of Piquant in the court filing.
Glaser resigned today from the chairman's position, said Klestadt, Piquant's lawyer. The company listed Eugene Keilin as acting chairman.
Some investors told the company in September they would not keep subsidizing Air America, prompting Piquant to start looking for a buyer and to explore liquidating the business, the filing said.
Another hearing for Piquant will be held on Oct. 31 on the use of the rest of the funds, Klestadt said. He said Glaser and other investors started Democracy Allies.
Scott Elberg said in the court filing that he was named Piquant chief executive officer on Oct. 9. Piquant's former general manager, Elberg replaced Jim Wiggett, who was acting CEO after Danny Goldberg, a record industry executive, quit the job in April.
Air America has said it broadcasts from radio stations in the top U.S. markets. In New York it is aired on WWRL AM. Besides Franken, on-air personalities include Randi Rhodes and Robert Kennedy Jr.
The case is In re Piquant LLC, No. 06-12423, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
