For several years 92.7 was a contested piece of real estate on the FM dial. It launched as a dance station in 2002, briefly switched to a hip-hop format in 2004, and finally ended up in the hands of former Infinity Radio sales director Joe Bayliss, who did the unthinkable: He flipped the station back to dance and ran it more like you'd run a station fifteen years ago. While the rest of radio got increasingly homogenous, Bayliss emphasized lesser-known artists, sponsored neighborhood events, and catered specifically to a local market. A self-described "straight guy with a wife, two kids, and two dogs," he became an improbable benefactor for the LGBT community. It would be his legacy and his downfall.
Bayliss' newly christened Energy 92.7 had a lot of extra-special things going for it. It created a fanbase for local artists like Kaskade; it also helped break such current hit-makers as Lady Gaga and French producer David Guetta. And, unlike the vast majority of commercial FM radio stations, it was independently owned. Most importantly, it was quintessential San Francisco: pure dance with a gay slant.
That was astute marketing on Bayliss' part. Shortly before buying the station from Three Point Media in 2004, Bayliss had done a series of focus groups through his own company, Flying Bear Media. They tested about ten different formats — including hip-hop, old school, jazz, and alternative rock — but ultimately went with dance because it not only scored high, but also had "really high passion scores." "We looked under the hood to see who is passionate about this format," said Bayliss. "It was two distinct audiences: gay men and urbanites — it was that 25- to 34-year-old club-going city-dweller." By running a pure dance station, Bayliss could ensure a sizeable gay following, along with a lot of women in the 25 to 45 age range. "That's a pretty attractive advertising consumer," he said. So attractive, in fact, that Bayliss put himself on the line and secured a $33.7 million bank loan to purchase the station.
Bayliss knew that he couldn't use a general market format in a tiny station broadcasting from the top of Russian Hill — 92.7 didn't even remotely cover the footprint of its competitors. Instead, he embraced the niche format and made Energy the honorary station for San Francisco's LGBT community. It had gay morning show hosts, a gay promotions director, and a penchant for sponsoring gay-themed events. It ran ads for gay porn site Naked Sword, and the Folsom Street Fair. One year, the tiny three-kilowatt station even managed to out-fund-raise all of its fifty-kilowatt counterparts for San Francisco's AIDS Walk, according to former on-air personality Joey V. And for a while, it made a profit, according to former music director Trevor Simpson (who worked at three different iterations of the station, including the ill-fated hip-hop version, "Beat of the Bay"). Bayliss concurred. "It was a very passionate audience," he said. "We had success for our advertisers beyond belief."
Unfortunately, Bayliss had entered radio at the worst possible time. In the last few years it's been tough to judge the value of traditional radio stations, especially as listeners shift to iPods and satellite radio. "The easiest way to put it is that the industry has been repriced," said Bayliss. "Anybody who bought anything in the last five years ago is gonna look like they overpaid." In that sense, the financial metrics of radio somewhat resemble those of the housing market. As soon as the banks saw a slight recovery from the recession, they wanted to free up their balance sheets of large, risky loans — especially those in blighted markets, like radio. Bayliss' bank decided to put Energy up for sale. Enter radio mogul Ed Stolz — whose company Royce International Broadcast Company owns several stations throughout the country — with $6.5 million. The bank bit.
Stolz changed the call letters to KREV ("the Revolution") and immediately flipped Energy to a Top-40 format. The sale took a couple months to close, during which time Bayliss warned his staff about it — most of them hung around to see if the new station would hire them. (Simpson said that Stolz hasn't reached out to any former employees whatsoever, and everyone was laid off with the regime change.) It's probably the first of many such sales that will happen on FM radio in the coming years. Ever since the FCC's big deregulation ruling in 1996, companies like Clear Channel and CBS can own up to seven stations in a market as big as San Francisco. They've cut corners by downsizing their staffs — after all, why have an individual program director for each station when you can hire one or two people to run all of them by using a paint-by-numbers Top-40 format? As a result, the new KREV (which launched last week) sounds virtually indistinguishable from Movin' 99.7 and Wild 94.9, but also overlaps strongly with Alice, K101, and KMEL.
Energy was different. It had an old-school way of doing business: find a niche audience, develop a playlist based on what's hitting in the clubs and what's charting nationally, and do market research by sending out weekly e-mail blasts. As Simpson — who describes himself as another "token straight guy" — put it: "Yes, you could put the stamp on it that it was 'this was the little gay radio station that could.' But I really think that it matched what was going on in San Francisco — gay culture is part of San Francisco, whether you like it or not."
In fact, the symbiotic relationship between Energy and its LGBT listener base was so important that, according to the Chron's City Insider blog, last week San Francisco Supervisor Bevan Dufty drafted a resolution to advise 92.7's new owner Ed Stolz to "continue with the Community/Lesbian Gay Bisexual Transgender/Dance radio format that has made Energy 92.7 one of the most unique and popular radio stations in San Francisco and the Bay Area." Dufty's resolution smacks of misguided boosterism, even to Joe Bayliss, who found himself in the awkward position of having to defend the new owner. ("If he bought a restaurant and wanted to change the menu, that's totally his prerogative," said Bayliss.) But it does go to show exactly how much the San Francisco-themed station endeared itself to the city at large.
At this point, Bayliss' own future in radio remains uncertain. After more than two decades of working in radio, he shelled out millions for an underperforming station, made it run a lot better, and ultimately got screwed. With the current climate skewing way Top 40, he's not sure whether he plans to stay in the medium. "It's questionable," he said. Granted, Bayliss had to admit that now is a great time to buy.