Jay Sachetti joined Jeff O’Brien, partner at Husch Blackwell and Dyanne Ross-Hanson, president of Exit Planning Strategies talked about the market for mergers and acquisitions, exit planning opportunities for companies that don’t end up for sale and how companies can maximize their eventual sale price during an early October panel at the first Upsize on Tap event at Summit Brewing Co. in St. Paul.
When the state Legislature passed a law requiring employers to provide paid leave and safe time for employees, Justin Bieganek started hearing differing details from friends, colleagues and peers.
by Liz Wolf Sometimes life throws you some curves, and you’re forced to figure out the next step in your career. That’s what happened to radio broadcaster Ruth Koscielak in the late 1990s.
After 17 years at WCCO Radio, where she was the first woman in the station’s seven-decade history to host her own daily talk show, Koscielak was fired.
“It was a huge, huge shock. I didn’t see it coming,” she says. “I certainly saw people by the wayside get fired or have things end horribly, and that was always kind of there that that could happen. But I don’t think you’re ever really prepared when it happens.”
Although Koscielak never considered starting a business before, she weighed her options and took the plunge. In 1999, she and business partner Nancy Walker, formerly her producer at WCCO, launched St. Paul-based RBN Productions Inc., a company that distributes The Ruth Koscielak Show, a three-hour radio show to Twin Cities area stations.
The pair took out an SBA loan, invested themselves and convinced friends and family members to invest. “We scrounged and did whatever we had to do,” says Koscielak, the company’s CEO.
It wouldn’t take Koscielak, 49, long to find out how big of a plunge a startup would be and whether she was prepared for the ride.
Koscielak, a self-proclaimed ham, grew up on St. Paul’s East Side and broke into broadcasting at age five by appearing on The Romper Room Schoolhouse. After earning a communications degree from the College of St. Catherine, she landed a job in Ripon, Wisconsin, where she worked for WCWC Radio in sales. “They sat me down and taught me a couple of things. I had no idea what I was doing,” she says.
However, broadcasting came naturally to Koscielak. She worked in sales during the day and hosted the station’s gospel hour at night. After earning just $6,000 her first year, she realized she’d starve doing radio in Ripon and looked for her next opportunity.
She landed at KCLD Radio in St. Cloud, and it didn’t take her long to catch the attention of WCCO, which was looking for a female broadcaster. WCCO hired her in 1981. She was just 25.
“It was terrifying,” Koscielak says. “The fact that I went from 1,000 listeners to hundreds of thousands of listeners made me nauseous. The fact that it was the radio station that my parents listened to made me nervous. Also, I was so young compared to everyone else.”
She enjoyed a rewarding career at WCCO until she was fired in 1998. “I was obviously panicked about what to do next,” she says. She could try to find a job at another station after her six-month non-compete expired. “But do I want to be back in another political atmosphere where you never know if you’re going to be fired, where if you succeed that hurts me, where huge egos are involved?” she asked herself.
She was struck with the idea of producing a radio show that she’d own and syndicate to smaller radio stations regionally.
“I thought the whole idea of media was you have local ownership that cared about the communities and news and people in that area,” she adds. “If we have corporations that own everything and they’re in New York and Los Angeles or wherever they are, they don’t give a darn.”
Koscielak’s original concept was to be a regional network airing her show on stations throughout Minnesota, Wisconsin and the Dakotas. However, there were too many obstacles.
“I didn’t do that much planning, which was really stupid on my part,” she says. “The watchword of my life is I go with the flow, and I’m not sure that’s the wisest thing.”
Koscielak’s business plan was to approach radio stations and tell them they could have her show and they wouldn’t have to pay for it. “My idea was to give them the radio show on barter. You take my show. I’ll take part of the commercials, and you take part of the commercials. So how I make my money is I sell the ads that are on during my show.
“I went in with certain assumptions. One was that they would just go, ‘Ruth Koscielak, we love you. We’ll take your show. Absolutely.’ However, I didn’t really know their situations. One was if they’re locally owned, they want local people.”
Another factor, she says, is the majority of station owners are men. “They’re predominantly older guys, who even though they know their advertisers want women listeners, that’s not really want they want. They don’t really get me. I’m a little too urban. I’m a little too weird,” Koscielak says.
Another issue, she says, is owners had been burned before by people setting up networks who strongarmed them. “They were wary and I didn’t expect that,” she says.
“My final assumption that was a huge mistake was I assumed that advertisers would like to be all over the state. Oh no, my friend. They’d say, ‘Why would I want to be in Duluth? I don’t have a place in Duluth.’ The majority of advertisers just wanted metro area.”
She says RBN was spending a lot of time and energy keeping stations happy in various cities, and the company wasn’t big enough to do that. At its peak, RBN had nine stations. The company was struggling and nearly closed.
Time to rethink
It was time to rethink RBN’s strategy and take the company local. RBN now has relationships with three metro-area stations. Koscielak’s show, which features authors, celebrities and newsmakers, can be heard weekdays from 1 to 4 p.m. at 1220 AM (WMGT ), 1360 AM (KRWC) and 1460 AM (KDWA). She has barter arrangements with each station. RBN also produces other shows for WMGT, including a morning show with Bob Yates and The Happy Hour with Jim Cunningham.
“People might say, ‘They aren’t doing as well as they once were,’ but that’s not true,” Koscielak says. “The reality is we had to change the concept to make it work. The three stations are all local and family-owned. They get it and get me. They want female listeners. They know that’s what advertisers want and that’s what I bring them.” Koscielak’s audience is primarily women ages 35 and over.
Although not disclosing revenues, Koscielak says 2004 was an “up year.” RBN has nine employees and lists about 25 advertisers on its Web site.
“I’m never going to compete if you have the cash and want to be on a big station… But what I offer clients is I basically will do whatever it takes to help them get results. That might mean doing a live broadcast at their place for a grand opening or special occasion. A big station isn’t going to do that.
“I’m a small-business owner like many of my advertisers. I like the fact that we’re all in this together.”
Walker, RBN’s vice president, says there’s a niche for everyone in the business — you just have to find it. “We don’t necessarily compete against the media giants. Our signal strength, stations and listenership fall into a really different realm. Our clients are more loyal and they don’t care about statistics. They just want results.”
Marty Foote, marketing representative at WMGT in Stillwater, says advertisers are seeing results. WMGT and 12 local businesses work with Koscielak to market themselves.
“Ruth has been doing a series of remote broadcasts from these different businesses,” Foote says. “She’s absolutely amazing. She gets to know the individual business owners. She has passion and energy when marketing these advertisers. She’s so good on the business side and on the air. That’s a rare combination of talents.”
Sylvia Strobel, a member of the national board of American Women in Radio and Television, doesn’t know Koscielak personally but is impressed with her determination. Strobel is senior partner and founder of St. Paul-based law firm Lehmann Strobel.
Strobel says the biggest challenge in going up against big media companies is financing. “They have money, and they can out-market you and out-hire you. Just finding financing in the beginning is difficult because you have no cash flow. You may have credentials, but you don’t have a track record.
“I give Koscielak credit for surviving, especially the last few years with the economy the way it has been. For anyone to make it in this business is a testament to their tenacity and love of the business.”
[contact] Marty Foote, WMGT Radio: 651.439.5006; Ma***@********20.com; www.mighty1220.com. Ruth Koscielak, RBN Productions Inc.: 651.647.6101; ru**@************ns.com; www.rbnproductions.com. Sylvia Strobel, Lehmann Strobel LLC: 651.221.0424: sy****@************el.com; www.lehmannstrobel.com. Nancy Walker, RBN Productions Inc.: 651.647.6101; na***@************ns.com; www.rbnproductions.com
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