Air America Stops Live Programming, Heads Towards Bankruptcy

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MediaBistro

Air America Stops Live Programming, Heads Towards Bankruptcy

by
Amanda Ernst

Facing the harsh realities of the media world today, progressive radio network and growing multimedia company Air America Media
stopped producing live programming this afternoon and is taking the
drastic step of filing for Chapter 7 bankruptcy on the way to
liquidating the company.

"With radio industry ad revenues down for 10 consecutive quarters,
and reportedly off 21 percent in 2009, signs of improvement have
consisted of hoping things will be less bad," AAM chairman Charlie Kireker said in a memo to staffers today, which is also posted
on the company's Web site. "And though Internet/new media revenues are
projected to grow, our expanding online efforts face the same
monetization and profitability challenges in the short term confronting
the Web operations of most media companies."

Although live programming will no longer be produced by the network,
Kireker said the company would be working with its affiliates to
provide "encore programming" until January 25. All employees, including
those recently hired to work on the revamped Web site, are being paid through today, and being offered severance packages.

"We are proud that Air America's mission lives on through the words
and actions of so many former radio hosts who are active today in
progressive causes and media nationwide," Kireker said. "In the years
ahead, as we look back, we should all be proud of our passionate
determination to assure that our nation's progressive voice would be
heard loud and clear. Through the hard work and dedication of current
staff, and those who preceded you, a lasting legacy was forged which
will now continue through other voices and venues."

Kireker's full memo:

From: Charlie Kireker
Date: January 21, 2010 4:36:59 PM EST
To: All
Subject: Air America Operations

It is with the greatest regret, on behalf of our Board, that we must
announce that Air America Media is ceasing its live programming
operations as of this afternoon, and that the Company will file soon
under Chapter 7 of the Bankruptcy Code to carry out an orderly
winding-down of the business.

The very difficult economic environment has had a significant impact on
Air America's business. This past year has seen a "perfect storm" in
the media industry generally. National and local advertising revenues
have fallen drastically, causing many media companies nationwide to
fold or seek bankruptcy protection. From large to small,
recent bankruptcies like Citadel Broadcasting and closures like that of
the industry's long-time trade publication Radio and Records have
signaled that these are very difficult and rapidly changing times.

Those companies that remain are facing audience fragmentation as a
result of new media technologies, are often saddled with crushing debt,
and have generally found it difficult to obtain operating or investment
capital from traditional sources of funding. In this climate, our
painstaking search for new investors has come close several times right
up into this week, but ultimately fell short of success.

With radio industry ad revenues down for 10 consecutive quarters, and
reportedly off 21% in 2009, signs of improvement have consisted of
hoping things will be less bad. And though Internet/new media revenues
are projected to grow, our expanding online efforts face the same
monetization and profitability challenges in the short term confronting
the Web operations of most media companies.

When Air America Radio launched in April, 2004 with already-known
personalities like Al Franken and then-unknown future stars like Rachel
Maddow, it was the only full-time progressive voice in the mainstream
broadcast media world. At a critical time in our nation's history --
when dissent on issues such as the Iraq war were
often denounced as "un-American" -- Air America and its talented team
helped millions of Americans remember the importance of compelling
discussion about the most pivotal events and decisions of our
generation.

Through some 100 radio outlets nationwide, Air America helped build a
new sense of purpose and determination among American progressives.
With this revival, the progressive movement made major gains in the
2006 mid-term elections and, more recently, in the election of
President Barack Obama and a strongly Democratic Congress.

Laws have changed for the better thanks to this revival.....but all
the same our company cannot escape the laws of economics. So we intend
a rapid, orderly closure over the next few days. All current employees
will be paid through today, January 21. A severance package will be
offered tomorrow to full-time current employees with more than six
months of tenure.

We will strive to assist affiliates and partners in achieving a smooth
transition. Starting at 6 pm EST today, we will provide our affiliates,
listeners and users a selection of encore programming until 9 pm EST on
Monday, January 25, at which time Air America programming will end.

We are proud that Air America's mission lives on through the words and
actions of so many former radio hosts who are active today in
progressive causes and media nationwide. In the years ahead, as we look
back, we should all be proud of our passionate determination to assure
that our nation's progressive voice would be heard loud and clear.
Through the hard work and dedication of current staff, and those who
preceded you, a lasting legacy was forged which will now continue
through other voices and venues.

Thank you.

Charlie Kireker
Chair, Air America Media

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