Making Waves In Radio
In the fast-paced radio industry that craves big personalities and instant ratings, Ginny Morris has calmly spent nearly $600 million since 2011 to acquire stations around the United States, and she’s leading for the long haul. Her latest transaction, unveiled in November, involves purchasing another 16 stations, this time in northern Minnesota’s lakes region.
Chair and CEO of Hubbard Radio, Morris doesn’t garner broad public attention like her high-profile father, Stanley S. Hubbard, a veteran of the broadcasting business and an active and outspoken conservative. But she is a well-known figure on the national radio scene, in the Minnesota business community and in her family’s broadcast headquarters in St. Paul. Morris has amassed what is today the ninth-largest radio company in the United States.
Despite new listening options such as Sirius and Pandora, Morris stresses that “95 percent of people in the country continue to listen to local radio every week.” But she quickly adds that local radio also has to resonate with listeners, given the variety of choices consumers have for news, information, entertainment and cultural programming.
To effectively compete, Morris wants engaging on-air hosts in each of her markets to deliver live and local programs that are unique to the regions where listeners live. That approach is a clear form of “product differentiation,” according to Ken Doctor, a media analyst who is president of Newsonomics, a consulting firm that helps develop new business models. “They have to stand apart from so many others—both national and local.” Unless a broadcaster has a distinctive offering, “a combination of content and personality, you can’t even play in the game.”
Career Path of Ginny Morris
1982 – FM
Begins working in the KSTP-TV promotion department.
1990 – AM
Starts managing KSTP-AM.
1995 – FM
Becomes president and general manager of Hubbard’s radio stations in the Twin Cities, including KS95 FM.
1999 – AM
Forms Hubbard Radio Network to syndicate Twin Cities radio shows in the Upper Midwest.
2000 – FM
Becomes president of Hubbard Radio.
2002 – AM
Uses WIXK-FM (purchased in 2000) to launch a new station aimed at women, now called MyTalk 107.1 FM.
2011 – FM
Acquires 17 radio stations in Washington, D.C., Chicago, St. Louis and Cincinnati.
2013 – AM
Purchases 10 radio stations in Seattle and Phoenix.
2014 – FM
Adds CEO to her responsibilities as chair of Hubbard Radio.
2014 – AM
Announces deal to acquire 16 radio stations in Alexandria, Bemidji, Brainerd and Wadena, Minn.
Source: Hubbard Radio
Entering the Big Leagues
Minnesota listeners are familiar with three Hubbard Radio stations in the Twin Cities—MyTalk FM 107.1, targeted to women; 1500 ESPN, an AM sports talk station; and KS95 FM, which has an adult-contemporary format and popular morning and afternoon drive-time hosts.
But the company also has catapulted into the top echelon of U.S. radio broadcasters in the past four years as it has added radio stations in six major metro markets through two large acquisitions.
It spent $505 million in 2011 to buy 17 radio stations in Washington, D.C., Chicago, St. Louis and Cincinnati. The stations were properties of Bonneville International Corp., a company owned by the Church of Jesus Christ of Latter-Day Saints. In July 2013, Hubbard Radio announced a deal for $85.5 million to purchase 10 radio stations from Sandusky Radio in Seattle and Phoenix.
Closer to home, Hubbard Radio is expanding its station ownership in Minnesota, paying $8 million to buy 16 radio stations from Omni Broadcasting in Alexandria, Bemidji, Brainerd and Wadena.
While some may wonder why Hubbard Radio made a dramatic expansion into legacy media, the company is expected to generate between $215 million and $240 million in annual revenue, based on financial data from BIA/Kelsey, a Virginia-based media consulting company, and Moody’s Investors Service. Hubbard Radio operates 30 radio stations in seven top markets in the United States.
“We feel it is a stable industry and it is a very good industry that throws off a lot of cash flow,” says Carl Salas, a Moody’s Investors Service vice president based in New York. “Hubbard has done a very good job of operating the stations and acquiring new stations, while keeping their leverage at reasonable levels.”
Hubbard Radio “has maintained lead rankings in six of seven markets, which supports good EBITDA [earnings before income, taxes, depreciation and amortization] margins of 36 percent or more,” according to a 2014 Moody’s report.
The company also is adapting itself to compete with satellite radio, websites and search engines, podcasts and online music services. “What we try to do is make sure that we excel at the things that Sirius XM and Pandora really cannot provide a listener,” Morris says. “And that is creating a window into the local community and issues that are important to the people in St. Louis, in Cincinnati, in Washington, in Chicago, in Phoenix and Seattle.”
Because of differences in the cities where Hubbard Radio owns stations, Morris says she’s committed to operating the stations in a decentralized fashion. “The market managers run their businesses,” she says. “We live by a certain number of tenets and expectations that we will be local, that we will provide exemplary and responsive service to our community, that we will be live and that we will operate our businesses with great integrity.”
The stations have “big personalities,” but Morris says she lets her market managers pick them. She only has two direct reports—the president and the chief financial officer of Hubbard Radio.
Morris continues to innovate: In November, Hubbard Radio announced that it is creating a new division called 2060 Digital that will serve its seven major metro markets. The focus of the in-house digital company will be delivering digital solutions to clients, including website and mobile site buildouts, social media management, and content and video offerings.
“Hubbard has been successful in its digital strategies and has a higher composition of digital revenue, 8.2 percent, compared to the 5 percent average estimated for the radio industry for 2013,” Moody’s says in a recent report.
Content is king
“I loved the days when the only way you could listen to the radio was over an antenna,” says Dan Seeman, Hubbard Radio’s market manager for the Twin Cities. Yet with the advent of iPads, iPods and other devices, he notes, “delivery is really being dictated by the consumer.” Morris “understood before most did that we have to be in the content business, and not the delivery business,” he says.
Seeman, who is responsible for the content and profitability of Minnesota stations, has been employed by Hubbard Radio for eight years, but has worked for numerous radio executives during his 30-year tenure in the state. Morris “is the best listener I’ve ever worked for,” Seeman says, from his ground-level office on University Avenue in St. Paul. “She has great radio instincts,” he adds, and wants to foster intense connections between listeners and hosts. “What Ginny understood was that anybody can play Katy Perry songs, anybody can play the new song by Bruno Mars, but it’s personalities that create the point of difference,” he says. Before Hubbard Radio’s big expansion outside the Twin Cities, he says that Morris wanted to develop a strong afternoon drive-time team at KS95 and “Moon and Staci” have achieved high ratings.
One big calculated risk that ultimately paid off for Morris was MyTalk 107.1 FM in the Twin Cities. In 2002, Seeman recalls, “she created a talk format aimed at women. There was nothing like it in the country. Up until that point, all of the talk formats were aimed at men, whether they were news and information, politics or sports.”
In an era when Oprah was getting blockbuster ratings on television, Morris wanted to fashion a radio station that met women’s needs.
The Lori and Julia Show, one of the inaugural MyTalk programs, is still on the air 13 years later. Morris signed off on hiring hosts Lori Barghini and Julia Cobbs. The two women, who became fast friends in 1991 while working at Carlson Companies, finagled a meeting with Morris and Todd Fisher, a Hubbard manager.
They gathered at the Egg and I restaurant, a popular breakfast spot just a few blocks from the Hubbard offices, to pitch their ideas. “What if you run out of things to talk about?” Morris asked them. Barghini, who described herself as thrice-married, a motorcycle chick and a voracious reader, says that she and Cobbs knew it was impossible for them to ever be at a loss for words. Their radio careers were born, and they’ve been recognized with a national Gracie Award for women broadcasters.
It took a while to turn a profit at MyTalk, but Morris was willing to be patient. “We wanted to do something that nobody else would copy,” she says, and Barghini and Cobbs were part of the approach to engage women listeners. Characterizing her decision to take a chance on the women without radio experience, Morris says, “They were funny. They had stories to tell. They were relatable. And quite frankly, we had nothing to lose.”
Morris laughs as she remembers what it was like to launch the women’s station, which has gone through multiple format iterations and now makes a solid profit under the programming banner of “Everything Entertainment.” Local media watchers took notice in 2009 when the station dropped programming on serious topics and shifted to a celebrity-driven format. “That’s really what was resonating,” Morris says. “That’s where the ratings were developing.”
The MyTalk experiment is an example of the Morris predisposition to thoughtfully watch how people spend their time, identify market niches and step out ahead of the competition.
A national radio player
The middle child of Stan S. and Karen Hubbard, Morris is the only one of the Hubbard daughters to work full-time in the broadcasting business. Her brother Rob runs the television operation, while sibling Stan E. is CEO of the ReelzChannel. Sister Kathryn is in charge of the Hubbard foundation, and sister Julia isn’t active in the business right now.
Morris got her broadcasting-business start in 1982 at KSTP-TV in the promotion department, switched to radio in 1990 and never looked back. Her father was responsible for the radio move. “I called her in and said, ‘Ginny, I’m going to put you in charge of radio. I know you can do it. We’ve got to turn the situation around,’ ’’ says Stan S. Hubbard, who has an office just down the hall from his daughter’s. “She immediately went to her brother Rob’s office and said, ‘Is Dad trying to get rid of me?’ Of course, she came to love radio.”
Stan, 81, is chairman and CEO of Hubbard Broadcasting. “My role model was my father,” Morris says. “More than anything, he taught me to be authentic, and I would say that is what guides me day to day.”
The values–in life and in business—that Morris says she learned from her father are “honesty, integrity, a willingness to take a risk, being fair, and trying to create a culture of creativity and accountability.”
While she has never done on-air work, Morris says, “I really love the relationship that gets created between a listener and the people behind the mic,” she says. “Radio is a very intimate and personal experience.”
Hubbard Radio has become big business in recent years, and the company has taken on major debt to finance its growth. “We assess debt and ability to repay,” says Moody’s Salas, adding that Hubbard Radio is “one of the top performers in our universe that we rate for radio.”
Salas, who has met with Morris and other Hubbard family members several times, says, “They have a very good track record of operating media assets and being prudent with leverage.” He notes that Hubbard Radio is reducing its debt level ahead of schedule. In 2011 and 2013, Hubbard Radio used $473.5 million in debt to partially fund its two big acquisitions, and Moody’s reports that debt was cut to $391.5 million by the middle of last year.
While the Bonneville transaction in 2011 allowed Hubbard Radio to enter four Top 30 markets, Morris recalls that she and her family members also considered buying Bonneville stations in Seattle and Phoenix.
“It became a question of price and how much each of us was willing to risk. We all gathered in a conference room, and not just the family, but the lawyers and financial advisors, key people who’d been involved in the diligence,” she says. “My dad took out a pen and paper and he went around the room and he asked everybody what they would be willing to pay for four or six markets. He added up both [columns of] numbers and he divided them by the number of people in the room, and that’s what we offered. It’s that scientific.”
Bonneville accepted the offer for four markets. But Hubbard Radio didn’t have to wait long to become radio owners in the Seattle and Phoenix markets because it did a deal with Sandusky Radio two years later.
Media consulting company BIA/Kelsey estimates that the Bonneville deal pushed Hubbard Radio’s annual revenue to about $200 million. It projected that the Sandusky properties would produce another $40 million a year.
In a company that has grown to 1,030 employees, Morris doesn’t get involved in hiring on-air talent anymore. She’s focused on the strategic direction of the national company.
Yet long-time Hubbard employees in St. Paul have watched her grow into her expanded leadership position.
Although Morris was raised in a prominent family, MyTalk’s Barghini says that she is someone who relates to working women who are constantly juggling competing demands. “She feels like an approachable friend, even though she is the woman with all the power,” Barghini adds.
One element of that power is owning WTOP-FM in Washington, D.C., which is the top revenue-producer in the United States. BIA/Kelsey estimates WTOP took in $63.5 million in revenue in 2013. Moody’s highlighted that more than 35 percent of Hubbard Radio’s revenue comes from WTOP, a news and talk station, and WTMX-FM in Chicago, an adult-contemporary station.
“WTOP is morphing into a digital media company by providing access to its audience in many different ways beyond over-the-air,” Mark Fratrik, BIA/Kelsey economist, says in a written statement. “Their approach is serving them well.”
In its August 2014 report, Moody’s noted that Hubbard revenues were declining in the early months of the year “due largely to soft ad demand in the Chicago market, which saw radio revenue drop mid-single digit percentages compared to the same period in 2013.” Morris acknowledges that the Chicago advertising market has been tough. “We are challenged by Chicago,” Morris says. “Everybody in the Chicago market is, but those things are cyclical. Markets and regions go up and down.”
Fred Jacobs, who founded the Jacobs Media firm that provides consulting services to rock stations, says, “Local is what got radio to the dance when television proliferated in the ’50s, and it’s the secret sauce today.”
He’s advising Hubbard Radio on programming in the Chicago and Phoenix markets. “Strong digital initiatives and development are the keys to growing radio brands,” Jacobs says. “Ginny has a great touch, strong radio roots and a firm understanding of what it’s going to take to keep Hubbard [Radio] ahead of the curve.”
Public school, hard work
Morris is the third generation of Hubbards to lead a broadcasting business. Her grandfather did radio broadcasts of dance bands that performed at the old Marigold Ballroom in Minneapolis. He also got involved in the aviation business and sent his son, Stan, to a private school, St. Paul Academy.
More than 65 years later, Stan Hubbard recollects his SPA experience: “We were made to feel that we were better than others, and I thought we were. But I had a lot of fun in school. My dad was called by the headmaster to come to meet in school when I was in the middle of eighth grade.”
Young Stanley was booted from SPA because he says he wasn’t learning much. “I got kicked out of there and the University [of Minnesota], too. I got back into the university and graduated,” Hubbard says.
Though he completed high school at Breck, another private school, Stan and Karen Hubbard decided to send their five children to public schools in Stillwater. Hubbard wanted his children to “mix with everybody, not just kids of well-to-do parents.”
The Hubbard children drove used cars. “They learned the work ethic,” Hubbard explains. “They learned how to get along with others, whether they be rich or poor. Many of their friends, in terms of money, had nothing. But they were good friends.”
When Morris was a teenager, Hubbard says, she worked at a Mr. Steak restaurant. “Ginny was always a straight thinker,” he says, but she did “kid stuff” like her peers.
“One time she wanted to have a party at our house,” Hubbard says. “She was in high school, and I said, ‘Gin, that’s fine. But you’ve got to promise there isn’t going to be any alcohol.’ And by golly, a kid came with alcohol and she threw him out. She was a junior or senior in high school, which took a lot of guts. A deal is a deal.”
Morris lives in the Macalester-Groveland neighborhood of St. Paul and owns a second home on the St. Croix River. She has two children in their 20s. Daughter Savannah is an Arabian horse trainer and also teaches children to ride. Her son, Wheeler, is attending college in Colorado.
Charlie Zelle, Minnesota’s transportation commissioner, has known Morris since their daughters were in kindergarten together at St. Paul Academy. Morris and Zelle, a former CEO of the Jefferson Lines bus company, have supported each other as they’ve built careers.
Zelle and Morris became members of the Young Presidents Organization more than 15 years ago. Within YPO, they joined an eight-person support group that has been meeting regularly every few weeks. The group members help each other through business challenges as well as coping with family and work stresses that executives face.
“Over the years, she has really gained confidence in herself and learned to trust her own instincts and judgments,” Zelle says. “She has real charm, she’s a person who has a backbone and can look you in the eye with great understanding and warmth,” he says, adding that Morris considers both the “human factor” and fiscal implications of decisions she makes.
Morris serves on several national boards and previously chaired the National Association of Broadcasters (NAB) Radio Board. “Ginny is not confrontational and her word is good,” says John David, NAB executive vice president of radio. “She listens and is willing to compromise, and is always focused on her company, but also on the future of all broadcasting. She is not naÃ¯ve, so shoot straight with her.”
Humble business leader
When Tom Forsythe recruited Ginny Morris to become chair of the Minnesota Chamber of Commerce, she initially resisted. “She was reluctant because of her time commitment to running the business,” recalls Forsythe, who is vice president of global communications at General Mills.
But he persuaded her to make the three-year commitment to serve as chair-elect, chair and past chair, and fellow chamber members say her even-keeled temperament and business knowledge were well-suited to the position.
“She was able to hear many perspectives, encourage discussion and debate, and then find common ground on public policy issues,” says Andrea Walsh, an executive vice president and chief marketing officer at HealthPartners.
“There are few Minnesota CEOs I’ve encountered with her combination of likableness, business savvy and leadership talent,” says Dave McMillan, senior vice president of external affairs at Allete, a Duluth-based utility company. In her role as Minnesota Chamber chair, he says, she displayed “a keen sense of where societal preferences, policy developments and business outcomes intersect.”
Morris was chair-elect of the Minnesota Chamber of Commerce in early 2008 when the business group endorsed a gas tax increase, and the Legislature pushed through a gas tax hike by overriding Gov. Tim Pawlenty’s veto. The chamber provided political cover for legislators.
“For the business community, this was a challenging issue,” says Jon Campbell, executive vice president of government and community relations at Wells Fargo. While business people wanted a better transportation system, some were concerned about a tax increase. “Ginny worked very hard on that issue, and it was a great example of her ability to convene people and come to a point that met the needs of a lot of people,” he says.
Joe Swedberg, Hormel’s vice president of legislative affairs, recalls that the gas tax issue showcased how Morris operates diplomatically among people with different views. “She has a way of helping people think beyond their normal boundaries,” Swedberg says. “I remember Ginny’s quiet leadership. She doesn’t try to overwhelm you with her opinion on issues.”
Several business leaders used “humble” to describe Morris. “She has a Midwest work ethic—she will figure out what it takes to get the job done and put the time in to do it,” Walsh says. “Ginny is never one to toot her own horn.”
In the corridors of Hubbard Broadcasting in St. Paul, Seeman also uses “humble” to characterize Morris. He theorizes that her humility is a result of how Morris was raised. In a nutshell, Seeman says, “she is always the first to take responsibility if something doesn’t go right, but she is always the last to take credit if something goes right.”
Liz Fedor is the Trending editor of Twin Cities Business.