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Fifth Column
Inside Air America’s Troubles:Optimism and Shaky Finances (Heh)
2004-06-21
On March 30, the night before Air America went on the air, the liberal radio network threw itself a $70,000 party at Manhattan’s hip Maritime Hotel. More than 1,000 guests, including Yoko Ono and Tim Robbins, drank red, white and blue vodka cocktails as they toasted the network’s bid to challenge the dominance of conservative talk radio. But behind the scenes, Air America was running out of money. Today several employees say they still haven’t been reimbursed for the costs of attending the New York launch. "It was a fun party, until I knew I was paying for it," says Bob Visotcky, Air America’s former Los Angeles market manager, who hasn’t been reimbursed for his hotel room and flight.

Mr. Visotcky wasn’t the only insider in the dark about the company’s problems. Many of Air America’s investors and executives say they thought the network had raised more than $30 million, based on assurances from its owners, Guam-based entrepreneurs Evan M. Cohen and Rex Sorensen. In fact, Air America had raised only $6 million, Mr. Cohen concedes. Within six weeks of the launch, those funds had been spent and the company owed creditors more than $2 million. When the problems came to light, "we realized that we had all been duped," says David Goodfriend, the company’s acting chief operating officer. Messrs. Cohen and Sorensen say they didn’t mislead anyone about the company’s finances. They say they planned to invest more over time but didn’t because of cultural differences with other managers. Both resigned in early May...

Air America’s left-leaning orientation gave the fledging network a public profile and helped lure donors, including RealNetworks Inc.’s Chief Executive Rob Glaser and New York’s Durst family of real-estate developers. It also helped attract big-name talent, including comedian Al Franken. Amid the hype, however, investors and executives overlooked Air America’s haphazard organization, opaque finances and flawed business strategy. Trying to make a big political splash, Air America embarked on an ambitious and costly plan to get radio-station owners to carry the network’s entire 24-hour lineup. Typically, networks allow stations to pick the shows they want, and both sides share the advertising revenue. Air America got its way in smaller markets. In big cities, Air America agreed to pay for airtime, which ultimately cost more than it could afford. "When you believe you’re doing work for the greater good, you don’t question as much," says Javier Saade, a former Air America executive vice president. "People never questioned the curves and obstacles on the road. People just said, ’We’re on the road.’ "
As they say: read the whole thing.
(schadenfreude is nothing to be ashamed of)
Posted by:Evert V. in NL

#3  "It was a fun party,until I knew I was paying for it"

Lament of every Democratic voter 6 months after his candidate won.
Posted by: Stephen   2004-06-21 3:00:10 PM  

#2  Via Instapundit, Prof. Bainbridge discusses the ramifications of their takeover & creditors. The word FRAUD appears more than once.
Posted by: Raj   2004-06-21 2:48:46 PM  

#1   ...They say they planned to invest more over time but didn?t because of cultural differences with other managers. Both resigned in early May...

TRANSLATION: People expected us to pay our bills. Damned capitalists, they should have given us this stuff for free so we could liberate them from BusHitler...

Mike
Posted by: Mike Kozlowski   2004-06-21 2:27:08 PM  

00:00