He Wuz Rob-bed

For Seattle's biggest-spending liberal benefactor, bankrupt Air America was a costly flyer.

Deep-pocketed political donor Rob Glaser undertook his biggest-ever political investment in 2004 when he handed over $10 million to prop up lefty talk-show network Air America Radio, giving him 36.7 percent ownership. But while the founder and CEO of Seattle-based RealNetworks Inc. successfully helped fund the 2006 Democratic revolt in Congress, he has been bloodied attempting a similar revolution in progressive talk radio. The network's challenge to Rush Limbaugh and other conservative talkers for the nation's hearts, minds, and ad revenues has ended up in bankruptcy, and Glaser, chair of the Air America board the past two years, faces millions in personal losses.He had already surrendered his network chairmanship by the time Air America Radio (AAR) and its parent corporation, Piquant LLC—Glazer's investment group—filed for Chapter 11 bankruptcy in October hoping to stay on the air while it reorganized and worked out a deal with its creditors, the biggest of which is Glaser. According to federal court records in New York, the network has $20.2 million in liabilities and $4.3 million in assets. Glaser's investment share is listed at $9.8 million, which he most likely will lose, in addition to $475,000 he loaned the company—albeit small change to Glaser, whose personal worth is estimated by Fortune at close to $1 billion. His company, RealNetworks, is also owed $85,000, and former RealNetworks exec Eileen Quigley of Seattle is owed $29,000 in back wages and compensation, according to the filings. AAR spokesperson Jaime Horn says a new network buyer has signed a letter of intent and a deal will be completed "any day now," likely allowing Air America to exit bankruptcy. The rumored purchaser is Terry Kelly, who helped found the network and served as its board chair until he was replaced by Glaser, though he stayed on as a partner in Piquant. But even new ownership will have a struggle to keep the network together. Aside from the financial hole it has dug—including more than $300,000 in back rent on its New York studios, according to court filings—its talk headliner, comedian and author Al Franken, is expected to resign this year and run for the U.S. Senate from Minnesota. (He's also listed in the 25 pages of network creditors as seeking more than $360,000 in back pay). Michael Hood, Seattle editor of broadcast blogsite BlatherWatch (and a past Seattle Weekly contributor), sees no light at the end of this tunnel. "It looks like it's over to me," he says. Besides the bankruptcy action, the network faces a half-dozen other lawsuits, mostly by ex-employees or affiliates over contractual and employment issues, the bankruptcy filing reveals. Among them is an $11 million defamation suit by CACI International, a government contractor that helped operate Abu Ghraib prison. At issue is whether on-air personality Randi Rhodes was fair and accurate when in 2005 she accused CACI employees of raping and murdering Iraqi civilians at the prison. A U.S. District Court judge had earlier dismissed the case, though CACI is appealing. Now the bankruptcy court has ruled the suit can proceed. To Hood, that "makes it even less likely that timid investors might want to seriously reorganize and stick with it," although AAR's insurance carrier would likely pay any civil settlement.Glaser's 2004 investment bought him not only the chairmanship but the opportunity he coveted to help spread the liberal viewpoint. "I think some people—Glaser may be among them—got into it for political reasons after the 2004 election," says Hood, "but found themselves in a tough business which happened to go into a serious downturn shortly after their launch." Radio growth is sluggish anyway, Hood says, and for AAR, "it was a poor environment for a new company, with a new format, and investors with not much experience in the business."As the network's chief moneybags, Glaser could have a more direct role in progressive politicking compared to the supporter role he'd played as campaign donor. Based on a review of public disclosure reports, Glaser has been the largest single local donor to national political campaigns and causes in recent years—$2.4 million since 2003, almost exclusively to Democrats. That includes $1.9 million to America Coming Together, a Democratic get-out-the-vote drive, and $250,000 to America Votes, a progressive grassroots voter effort. He gave thousands as well to presidential campaigners Ralph Nader, John Kerry, and John Edwards and to a host of Democratic U.S. senators including Patty Murray and former RealNetworks exec Maria Cantwell.Glaser doesn't want to discuss his Air America role. "Rob has not been conducting interviews on this topic," says RealNetworks spokesperson Bill Hankes. But Glaser, 44, is sensitive to the drawbacks of mixing politics and business: When the former Microsoft executive launched RealNetworks in 1993, he initially dubbed it Progressive Networks, planning to deliver some sort of "socially conscious" content, as he called it, over the Internet, then had second thoughts when customers became more interested in the company's technology. In 1995, Glaser and partner David Halperin broadcast the first live event on the Internet: a socially progressive Mariners-Yankees baseball game. (Glaser is a part-owner of the M's.) Real's steady success has been pegged to its RealPlayer media-streaming software, though Glaser has recently introduced gaming and MP3 technology ("celestial jukeboxes" in Glaser's words) to its product line. In November, Real reported record 3rd-quarter revenue of $94 million and profit of $42 million.By comparison, Air America has been a miserable flop. Glaser and his board, along with a succession of CEOs, presidents, and programmers, did grow the network from three stations in 2004 to more than 85 affiliates, including KPTK in Seattle. But in its three years of operation, AAR lost almost $42 million, most of it under Glaser, records show. The company is currently being run by newly named CEO Scott Elberg. Some affiliates are nervous, while others, such as progressive-talk KPTK, are already prepared for changes. "Fortunately, the way we operate at 1090, we're not really dependent on their success or failure," says Dave McDonald, the station's senior vice president. Like some other Air America affiliates, the Seattle AM station airs Franken, Rhodes, and Rachael Maddow of Air America, but has separate contracts with other progressive political talkers such as Stephanie Miller and Ed Schultz of Jones Radio Networks, a competing independent syndicate. Vocally at least, Schultz sounds like Limbaugh, who is heard here on KTTH, and "has tied or beat Limbaugh in the ratings," says McDonald, indicating that conservative hot talk is not invincible.His station also has a special separate deal with Air America personality Thom Hartmann of Portland. "So we're not sitting here on the edge of our seats, wondering what Air America will do," says McDonald.Of course, Air America never came faintly close to the success of conservative talk radio: Limbaugh, alone, is heard by 20 million dittoheads on 600 outlets. And though Air America's March 2004 launch was much ballyhooed as the left-wing alternative, the network floundered from its first signal. Founding chair Evan Cohen turned out not to have the financial backing he claimed, and paychecks began bouncing within weeks. He was quickly replaced by Midwest media mogul Kelly, who, before the first year was out, was replaced by Glaser. Under Glaser's watch, the network became management-heavy and scarred by infighting as it mixed politics with business, some current and former employees have said publicly. AAR also got caught up in the kind of scandal more familiar to Republican capitalists—having quietly floated a "loan" of $875,000 from a nonprofit New York boys and girls club that was funded in part by taxpayers. According to a 2005 New York state investigation, the questionable transaction had been arranged by former chair Cohen, under a preceding corporation. On the air, Franken said new boss Glaser felt the deal was Cohen's corporate burden to bear, but that Glaser would repay the funds—although it took him more than a year to do so.That Franken had to devote part of a show to the network's messy finances is telling, says Hood, the media writer. Tuning in for another good Bush bashing, Air America listeners instead heard that their side was losing again. AAR's ongoing lack of success has also been gleefully chronicled by conservative talkers and bloggers."Talk radio is not about politics," says Hood. "It's an entertainment business," with the emphasis on business. Adds McDonald of KPTK, one of five local stations owned by CBS Radio: "Some markets are more receptive to the progressive message than others. But roughly half the population is conservative and the other half liberal. I think the progressive format can succeed almost anywhere if the local station is effective in finding local advertiser support. That's the real end game."randerson@seattleweekly.com

 
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