September 13, 2006

Air America: Bankruptcy, If It Happens, Won’t Necessarily Mean Disappearance (Update: Think Progress Retracts; AAR Troubles Remain)

Filed under: Business Moves,Corporate Outrage,MSM Biz/Other Bias — Tom @ 5:45 pm

From Think Progress, in a headline on a par with “Chicago Cubs Finish in Last Place Again; Team Optimistic”:

Air America To Declare Bankruptcy, But Progressive Radio Remains Strong

Air America Radio (AAR) will announce a major restructuring on Friday, which is expected to include a bankruptcy filing, three independent sources have told ThinkProgress.

Air America could remain on the air under the deal, but significant personnel changes are already in the works. Sources say five Air America employees were laid off yesterday and were told there would be no severance without capital infusion or bankruptcy. Also, Air America has ended its relationship with host Jerry Springer.

I’m not going to engage in premature e-celebration, partially because I’ll believe it when the filing takes place (remember who my patron saint is; also, this report appears to cast some doubt). Too many angels have swooped in during AAR’s lifetime to rule out another angelic appearance by someone with more money than sense. But more importantly, tempting as it is in this case, I’m not a big fan of celebrating business failure anyway. Recognizing it — important (something Think Progress is not doing). Learning from it — of course. Celebrating it — Nope. Criticizing and ridiculing those who are pretending it’s no big deal — fair game.

Michelle Malkin makes great points about the outstanding work of Brian Maloney at The Radio Equalizer in exposing the ethically challenged conduct of AAR from its very beginning, and the failure of the New York Times’ and others in The 527 Media to cover AAR’s post-launch travails. Proof: Here’s an NYT search just done on “Air America” (it may require free registration); you’ll find plenty of results, but virtually nothing covering AAR’s financial difficulties. Specifically, there’s an August 2005 story about Gloria Wise (no longer accessible unless you have TimeSelect), and a very incomplete correction shortly thereafter that was forced by Malkin.

Brian’s post today reminds us that “the Gloria Wise scandal has still not been resolved.” For late arrivers, a previous entity operating as AAR “borrowed” money from a not-for-profit, the Gloria Wise Foundation, that was operating a Boys & Girls Club and providing senior services. That company was gutted when new owners took over AAR only a few months after its launch, leaving Gloria Wise holding the bag and short of funds to provide its basic services. These services had to be taken over by other agencies. A legal investigation in New York City is ongoing and the money ($875,000) has, per Brian, been “sitting in an escrow account that is controlled by an Air America attorney.”

Also escaping many is the fact that companies can operate in bankruptcy for a loooooooong time before either emerging from it, which would not appear to be likely in AAR’s case, or folding their tent once and for all.

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UPDATE: A probably not unrelated item from yesterday“Greenstone Media, a radio company whose founders include social activist Gloria Steinem and actress Jane Fonda, has launched an all-women, all-talk network across the United States.” Brian at Radio Equalizer, who is speculating that Greenstone might take station slots AAR would abandon, mentioned a while ago (link not available; site has no search function) that investment capital that could have gone to prop up AAR might have gone to Greenstone instead.

UPDATE 2: AAR responded at Think Progress — “If Air America had filed for bankruptcy every time someone rumored it to be doing so, we would have ceased to exist long ago; it may be frustrating to some that this hasn’t happened. No decision has been taken to make any filing of any kind, we are not sure of the source of these rumors and frankly can not respond to every rumor in the marketplace.”

UPDATE 3, Sept. 14: The New York Sun confirmed that Gloria Wise is still owed the $875,000 noted earlier (HT Michelle Malkin).

UPDATE 4, Sept. 15: Good thing I had all the “ifs,” because Think Progress has retracted their report, based on this statement from Al Franken today on his show (reported by Inside Radio; another story is here) –

Franken tells listeners “we’re not in Chapter 11” and pokes at conservative talk hosts and websites for getting it wrong with quips like “who’s gloating now Bill O’Reilly?” We still believe it’s a tough economic situation at the libnet – and several staffers have been laid-off.

This writer learned long ago that not to buy into a bankruptcy rumor until the filing takes place, as I’ve seen too many companies limp along as zombielike shells for years without actually going to court for the formal funeral. As Brian at Radio Equalizer notes, a few too many center-right bloggers were ready with last rites (remember what I said about “premature e-celebration”?). But then again, Think Progress got the ball rolling by screwing up bigtime.

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Previous Posts:

  • Feb. 26 — Is the Air America Radio Bailout a Violation of Campaign-Finance Laws?
  • Jan. 26, 2006 — The Franken-stein Monster That’s Eating Air America Radio
  • Oct. 21, 2005 — Air America: If They Can’t Make It There, Can They Make It Anywhere?
  • Sept. 8 — Air America Radio (AAR) Update: Is the Endgame Near?
  • Aug. 8 — If It’s Monday, There Must Be At Least Three Obvious New York Times Errors, Omissions, or Hilarities to Report
  • July 27 — Did the Liberal Talk Network Really Steal from Kids and Seniors?
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2 Comments

  1. Thanks for all the hyperventilating excitement, Freepers. AAR has always had a brilliant business strategy of not paying for any advertising (apart from what they self promote on the air). They are able to do this by agitating the wingnuts and getting people talking about it all the time. Witness the fact that Bill O’Reilly can not keep from talking about AAR, and I know about this even though I don’t watch O’Reilly. The lack of advertising in other media means that they can spend their money on operating costs.

    By the same token, this strategy has allowed other progressive talker like Miller and Schultz to provide mutual benefits and pull each other along.

    Bottom line is that AAR is getting more free advertising from these rumors or facts; true or not it doesn’t matter as long as Malkin, O’Reilly, Limbaugh, etc talk about it, along with the big guns of the progessive blogosphere such as Atrios and Kos. Since when has this hurt anybody? They don’t care what they say about the station as long as you get the network’s name approximately phonetically correct. Keep it coming.

    Comment by Webster Hubble Telescope — September 13, 2006 @ 10:53 pm

  2. #1, so I guess you have inside info that AAR is not going to file? Or that it will pay back the Gloria Wise *loan*? Or is that also part of the *brilliant business strategy*?

    Oh, I just realized, you are the redesigned Peak Oiler. My friend, you have had a rough past couple of weeks, what with the Saudi 140-year estimate, the hundreds of years in shale oil, the Gulf discovery, and lower gas prices. It must be tough holding onto that gloom and doom when things are going so well.

    Comment by TBlumer — September 13, 2006 @ 11:21 pm

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