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CHUM Ltd.'s AM oldies stations were dying, so the Waters family dreamt up a format flip, launching an all-sports, all-talk national network. Fifteen months later, the experiment imploded. Layoffs, severances, regrets - it was the whole nine yards, and then some
Until now, Jim Waters doesn't seem the type to get easily riled, let alone curse in front of a stranger, but we're on touchy ground here. It is mid-December, days before the elder son of Allan Waters will host his first annual general meeting as chairman of CHUM Ltd., in the wake of his 81-year-old dad's retirement.
As part of his move into the role, Waters will, in a few months' time, give up his job as president of CHUM's radio group. But for now, he's left the task of explaining the division's distress, particularly the $10-million hole that resulted from The Team. It was Jim Waters's decision to create that national network by flipping eight of CHUM's AM stations from oldies to sports in the spring of 2001. The experiment was an abject failure, flaming out in just 15 months and denting CHUM's image as a benevolent operator in a rudely bottom-line business. Waters laid off 55 staff, and ended up being dually criticized for making the format switch in the first place, and for dumping it too early.
He wants to put it behind him now-"it's over, it's done with, it's time to move on," he says-but criticism lingers. Poorly promoted, poorly staffed, poorly planned: He's heard the shots, and hearing them again rankles. Sitting in his office overlooking Yonge Street in Toronto, near the famous neon CHUM sign, he pounds his desk in frustration. Thump. "People can say we didn't do this, we didn't do that." Thud. "We didn't promote this, we didn't promote that. Well, I say bullshit."
For nearly five decades, the Waters dynasty has occupied a lofty perch in the Canadian radio business. Allan turned Toronto's 1050 CHUM into Canada's first 24-hour Top 40 station in 1957, bringing rock 'n' roll out of the closet and into the front seat of the car. Bobby-socked teenagers, the British Invasion-in time, his empire grew to 28 radio stations, eight local TV stations and 17 specialty channels. Today, the company's market capitalization hovers around half-a-billion dollars, with the Waters patriarch controlling 87.9% of the voting shares.
For the better part of its lifespan, CHUM had also avoided big, public, money-losing mistakes. Until The Team. "We poured a lot of heavy resources into this thing," says Waters. "Maybe we were doing some things wrong. We're not perfect. Everyone makes mistakes. It just didn't work." The question is, why?
On launch day for CHUM's all-sports network, May 7, 2001, Jim Waters sounded like a man in for the long haul. "This is a significant financial investment," he told reporters. "You'd like to make money right out of the gate, but that's wishful thinking. We will be profitable. We just have to stick with it."
The fact is, he had to do something. With the exception of a few successful news, talk and sports formats, AM radio had become a relic by the start of the 1990s. In 2001, 59% of Canadian stations on the AM dial were bleeding red ink. The radio division at CHUM owned 13 AM signals from Vancouver to Halifax, and most of them were breaking even at best. It was an entirely different story on the FM side, where 64% of all stations in Canada were making money-none more than 104.5 CHUM FM, one of the most popular stations in Canada's biggest market, Toronto. As a group, CHUM's entire FM stable was posting 40% or more in profits, basically carrying the AM side.
"Lots of people say, 'Why don't you just turn [the AM stations] off?'" says Waters. The reason: the promise of digital radio.
Although it's still years away from widespread use, digital technology is considered by its advocates to be the future of the medium. The idea is to replace traditional bands with the crystal-clear sound provided by digital signals. The catch, Waters contends, is that the number of stations that regulators will let a company like CHUM broadcast digitally will be dictated by how many it broadcast in the first place. "If you turn your AM off, you won't get a position on the digital spectrum for it," says Waters, explaining how it's by and large a waiting game. "It's neat technology but it's not going to save us all in the next five years." With the exception of a few successful ventures-notably an all-sports station in Ottawa-CHUM's AM stations were really money-losing place holders.
Waters had to figure out what to do with his AM properties in the short term, so in the summer of 2000, he attended a meeting at the offices of the Headline Media Group in downtown Toronto. He'd been invited by John Levy, Headline's founder, and Paul Williams, a veteran of Toronto broadcasting. Williams had spent 18 years at Telemedia Inc. He built a network of stations carrying Toronto Blue Jays games and, in 1992, launched The Fan, Canada's first sports radio station.
After Telemedia, he was hired by Levy to launch the specialty sports channel The Score. Both men were now pitching Waters a proposal for The Score Radio Network, a national service that would leverage the TV brand. Waters wasn't interested-the numbers "didn't tumble," he says-so the talks ended.
But a bug had been placed in his ear. Shortly after that failed meeting, Williams parted ways with Levy and became a free agent. CHUM's vice-president of programming, Ross Davies, contacted Williams on Waters's behalf. Waters was still intrigued by the idea of knitting together a national network of AM sports radio stations and figured Williams could help him execute it. "We thought, Yeah, let's see if you can make this work," says Waters. "Our goal was losing less than we had been losing on our AMs, and maybe over time, breaking even."
The concept was based largely on economies of scale. Instead of having eight or 10 stations each staffed and producing its own content, programming would be produced out of Toronto and distributed nationally, with network stations given time for local sports, weather and news updates. Local stations would still be able to sell local ads, and in addition, there would be a vehicle for national advertisers-a departure for radio.
Initially, it would cost more. Talk radio, which is heavily reliant on hosts and producers, is pricier than music formats, and sports radio costs even more, with its need for rights fees for programming, plus high-profile (read: expensive) on-air talent. But the payoff-or just breaking even-would boost the radio group.
Waters agreed, and Williams pitched the concept to Doug Newell, senior vice-president of media buying operations for Harrison, Young, Pesonen and Newell, over breakfast at Bregman's Bakery, not far from the CHUM offices. Newell, whose agency recommends and buys advertising space for clients, was surprised. "I thought it was a big move because CHUM 1050 was the first rock- and-roll station in Canada, and the Waters family is extremely conservative. Both the boys [Jim and younger brother Ron, CHUM's vice-chairman] are very respectful of their father, and Allan was still calling the shots."
But when Williams assured him that Jim Waters was on board, Newell's interest was piqued. "I thought it was a great idea," says Newell. "One of the problems with radio right now is that it's so local, where in TV, the markets are very broad. [In radio] you have to do six times the analysis, the negotiations and scheduling. It's extremely expensive and labour-intensive. It's looked on as a tactical medium, for solving a specific problem at a specific time. Network radio would allow you to use radio as a strategic medium."
By the fall of 2000, rumours about CHUM's decision to flip formats began percolating in the industry. In December, a fax circulated around Toronto newsrooms seeking talent for a "new sports radio station in one of Canada's major markets." The sender was a studio called The Vault-CHUM was trying to keep things hush-hush.
The formal announcement that oldies were on their way out came in January. "It was a big pill to swallow. It hurt a lot," Jim Waters said at the time. "CHUM holds a real historic place in the music business in Canada.
It was a press release heralding the change that helped CHUM land its first big name. Jim Van Horne was a deejay at CHUM AM in the 1970s. Since 1984, he'd been a fixture on TSN (The Sports Network) and was best known for anchoring its highly regarded 6:30 p.m. newscast. He saw Paul Williams's name at the bottom of the release and gave him a call. They had worked out for years at the same gym, but Van Horne hadn't seen his pal in months. Now he knew why. "I called to congratulate him as a friendly gesture," Van Horne says, "and we were talking family and golf and I said, 'Hey listen, they're a great company, they really treat their people well, you're in for a great ride, good luck.'
"And he said, 'How'd you like to come work for us. Will you talk?'
"I said, 'Sure, I'll talk, but don't count on anything, I'm really happy here.'"
Van Horne's friendly call lit a fire under Williams and Waters. Here was a credible, popular host. He had a laid-back, gently funny manner that could set the tone at The Team, elevating it above the bombastic, love-me-or-hate-me style The Fan had built around its afternoon host, Bob McCown. Pair Van Horne with a co-host-say, Globe and Mail sports columnist Stephen Brunt-and The Team would have its afternoon anchors. The problem was convincing Van Horne to leave TSN.
"It became a real courtship," says Van Horne. He had pretty much decided to stay put when Waters phoned to invite him to dinner. Over three hours at a small, north Toronto Italian restaurant, Van Horne softened. "We talked philosophy, the family environment at the station, what he wanted to achieve, the direction he wanted to go. We didn't talk money at all. My wife and I came home and we sat down and she said, 'You know what, I like this guy, we should take this job.'" The money, when they got around to talking about it, was just fine too. Van Horne won't comment, but sources put his deal at five years for a healthy $1.1 million.
Waters left a voice mail for Van Horne the next day saying he knew how tough it was to leave TSN, but that people were jumping up and down the halls at CHUM. Van Horne signed on in March, 2001. Another veteran TSN broadcaster, Paul Romanuk, was later hired for the morning drive. Things were falling into place.
As launch day approached, Waters signed off on a plan, provided by Williams, which outlined the expenses for the next year-$8 million, offset by revenues of $5 million. It seemed more than manageable, given the company's cash on hand. "What I projected for network sales the first year, I thought was an absolute slam dunk," says Williams. But then push came to shove. "Two months before we went on the air, I said to our guys internally, We've got big problems: no revenue. None. We'd been selling since January, and by March, no revenue, not a penny."
If that weren't enough, Waters's enthusiasm wasn't shared by all. Spend any time with CHUM people, and eventually they'll mention something about The CHUM Way. Roughly articulated, it means: We don't do things in the heartless, top-down, bottom-line-first manner so common among our broadcasting peers.
One aspect of The CHUM Way is that local managers are given a lot of autonomy to run their shops, as long as the money keeps flowing upstream, or in the case of the AM division, the losses are minimized. But the sudden format flip wasn't broadly embraced. "I wouldn't say it was an easy sell, no," Waters concedes. He admits now that one of his mistakes was not anticipating how much resistance the format change would encounter, and heading trouble off at the pass. "Saying to people, You're going to do this, and Do it-that's not my way of managing," Waters says now. "It never has been and never will be. But in this case, to do it nationally, we needed everyone to fall in."
One holdout, according to sources, was Paul Ski, general manager of CFUN, the CHUM AM signal in the vital Vancouver market. His station had an all-talk format aimed at women; flipping to sports would mean a radical change. Ski wouldn't budge, and CHUM had to resort to partnering with Grand Slam Radio, Inc., a Vancouver-based company awaiting CRTC approval to go all-sports on 1040 AM. CHUM eventually paid $1.5 million for the station, plus more than $1.5 million in annual operating expenses, paving the way for the launch of Team 1040. Insiders wondered why CHUM would buy another AM property when it already had one in Vancouver-that seemed like taking the long way around. Waters saw it differently: CFUN was doing reasonably well with its female audience, and this move meant he'd simply own another voice in Canada's second-largest English-speaking market.
But there was a second mutineer in the CHUM family. Mark Maheu, general manager of Team 1200 in Ottawa, was a close confidant of Waters. CHUM had bought the all-sports station in 1999-it was the very reason Waters became interested in a nationwide format flip to begin with. Under Maheu, the station was popular, things were humming along quite nicely and there was no need for any radical change-not the least a bunch of programming packaged in Toronto. "How did we feel about a network approach? Not very good," Maheu says.
Maheu rejected most of the network programming in favour of his own local shows, the sole exception being a Toronto-produced midday show. In that slot, "our ratings fell 80%," he says. "It was like, evaporation. We had done our homework and put together a great local sports radio station in this market. It was ticking along just fine."
ON MAY 7, 2001, the 1050 CHUM era ended with Elvis Presley's All Shook Up. Jim Van Horne slid into a chair that had been covered in plastic wrap only a couple of days before, in a newly constructed studio inside CHUM Radio's Yonge Street headquarters. Van Horne and co-host Brunt represented roughly a $375,000 investment in annual salaries. More money had been spent renovating the CHUM building to accommodate 50-odd new staffers. An hour before going on air, everyone had been herded up to the roof for a Team photograph to mark the occasion, framed copies of which were distributed at the Christmas party, a perfect CHUM touch. There was tension in the building, and not just because it was the first day of school. For the old guard, that day marked the death of a cultural institution-a format that had built a company and launched many careers. It was as if the newcomers, full of vim and vigour, were treading through a cherished friend's funeral.
"It was pretty awkward," says one Team staffer. "People were in tears, but for us it was this brave new beginning, for them it's the death of their dog. There wasn't anyone wishing you luck or anything like that."
The awkwardness never really went away, and it only intensified as The Team struggled out of the gate. The final ratings for the oldies format gave 1050 CHUM a 1.3% share of male listeners aged 25 to 49, placing it near the bottom of all Toronto radio stations. There was nowhere to go but up. But the first set of ratings for The Team put a hole in that theory; by September, when the summer numbers were released, the station had slid to a 0.7% share in the same male demographic. "In my 30 years of business in radio, I've never been a [zero] point-something, ever," said Doug Ackhurst, then-general manager of rival The Fan.
There were some explanations for the drop-the format had launched softly, with almost no promotion, and the summer ratings only reflected The Team's first few weeks on the air. Still, it was a miserably low number. The morning and afternoon shows, where CHUM had spent massively on talent, had barely made a dent. Neither managed to register a full share point. In the face of direct competition for the first time ever, The Fan had earned a healthy 4.6% in the morning. McCown came up golden against Van Horne and Brunt, delivering a 6.4%.
Content was part of the problem. As some naysayers had predicted, trying to create a national network with three shows based in Toronto and one imported from Los Angeles-the syndicated Jim Rome Show-was not easy. Sports radio has worked best when it's local, when Lenny from suburban Montreal can call in and bitch about the Habs' power play. Not wanting to alienate the rest of the network, The Team tried to hide its Toronto-ness. During one broadcast that summer, Van Horne casually asked Stephen Brunt what he'd been doing before coming to work. Brunt replied that he'd watched REM give a free outdoor concert on Yonge Street. He was subsequently scolded by Team program director Gerald McGroarty for making reference to the already obvious fact that he was speaking from Toronto.
At the same time, creating a show with a national feel meant the hosts had to spend a disproportionate amount of time talking about things and places they couldn't imagine many people cared about. "We interviewed Randy Carlyle of the Manitoba Moose every day, which might have impressed the nine people in Winnipeg who were remotely interested, but everyone else tuned out," says Brunt. Critics weighed in on the soft-sell styles of Van Horne and Brunt, suggesting that two reasonable people talking reasonably about sports didn't necessarily make for great radio.
As the summer wore on, problems on the sales side continued to fester. Insiders say the root of the issue was that Waters didn't want to establish a dedicated sales force for the new network, but preferred to piggyback The Team on the existing CHUM national sales team.
Waters defends the choice: "When they were out at agencies they might be selling our FMs, but they would also say, 'Hey, we've got an all-sports network, it delivers males, 25 to 49 et cetera.'" Williams argued, unsuccessfully, that selling sports was altogether different from selling music formats. It was a niche market, catering almost exclusively to men, an intense and loyal audience. It required a sales force that understood this, who had a passion for the product. There may have also been a motivation problem: The Team staff were outsiders, newcomers to the CHUM family, which caused a friction that never really went away. It didn't help that when CHUM renovated its building to accommodate The Team, the existing CHUM sales staff lost their parking places.
Another problem was a resistance among the staff and the general managers to a common sales approach that Williams had used successfully when starting up The Score. It was basically to sign as many deals for as much cash up front as possible, while promising that if the numbers fell short, advertisers would receive make-up credits down the road. The important thing was to get clients on board and cash in the coffers. It was a departure for CHUM, and Waters and his sales team were hesitant to project numbers. They preferred to sell the all-sports concept, and assumed buyers would just fall in line.
"[Williams] took the approach that, 'We're new on the block, we want to be advertising friendly and we want to deliver a good product to have happy customers,'" says media buyer Newell. "I think that approach flew in the face of the general managers, who had become used to charging what they wanted. Their airtime was their airtime. Their attitude was, 'If I have to carry this stuff from head office, it better be better than what I was going to do.'"
By August, with revenue still falling far short of projections, Waters asked Williams to take more responsibility for network sales. But there were huge obstacles. When the dismal summer ratings came out, and The Team couldn't even earn a single share point, the horse was out of the barn. It was difficult to place a value on numbers that were that low, and while media buyers might take a flier on a new product with potential, they were less inclined to buy into a new product that was already floundering.
"The buyer's mentality is, 'If I screw up, I'll probably get fired,'" says Newell of his relationship to his clients, the advertisers. "At some point in time we get a report card, the BBMs [Bureau of Broadcast Measurement]. And if we're wrong [about those ratings], we have to go to the client and say we messed up. No one wants to do that. The dynamic makes you somewhat conservative."
There was another issue. Williams had prostate cancer and was having surgery on Oct. 1. He was in no position to try to clean things up until the new year.
In the meantime, at least one significant opportunity to enhance The Team's brand came and went. Nancy Lee, executive director of CBC Sports, had been talking with Williams about some kind of partnership with CHUM. Any association with the CBC would boost The Team's profile, particularly if it was to be the radio broadcaster for golden CBC properties like the Olympics and hockey games.
CHUM's talks with the CBC centred on having access to the public broadcaster's on-air talent, providing a radio outlet for Hockey Night in Canada and a weekly hockey current affairs show. Later that summer, at a meeting with Williams and program director McGroarty at CBC's Front Street offices, Lee said the deal wouldn't be going ahead.
There were various reasons, among them tone and fit. On a recent trip to Ottawa, Lee had tuned into The Team 1200's afternoon-drive show, a hard-core call-in affair aimed squarely at the male 25-to-49 demographic-a niche that Lee, one of the few women at the top of Canadian sports broadcasting, has an interest in reaching beyond. The steady diet of guy talk-cars, babes, hockey-didn't strike her fancy. But Mark Maheu wasn't about to change his hit show. "It was just a tad more racy than I felt our brand needed to be attached to," says Lee, "totally respecting the fact that if that's the focus they need to sell that radio station, that's fine. We just don't fit into that mix, I guess."
Later, another white knight appeared on the horizon, this time in the form of TSN. The BCE Inc.-owned sports channel had enjoyed a talent-sharing arrangement with The Fan for several years. But when BCE rival Rogers Media Inc. bought The Fan in August, 2001, it was clear that the arrangement would be coming to an end, and Rogers would begin installing personalities from its own Rogers Sportsnet. TSN might be looking for another radio outlet for its hosts. Its president, Keith Pelley, had four meetings-all of them, he says, preliminary-with CHUM executives, and was intrigued by the possibilities.
Jim Waters was keen, too, and his talks with Pelley lasted right up until CHUM decided to quit sports. A deal with TSN "could have really helped us," Waters says in retrospect. "But we would have had to hang in there for another eight months to a year for them to be clear of their deal [with The Fan], and they couldn't do anything with us until they were. We just couldn't stay with it that long."
While the buildup to CHUM's grand experiment was slow and deliberate, the end came quickly and caught most by surprise. The first tremor went out June 18, 2002. Three weeks earlier, the spring BBMs came out, and once again painted a grim picture, with The Team scoring a 0.9% share of men 25 to 49, compared with 4.2% for The Fan. Despite being on air for nearly a year, no significant progress had been made in any markets across the country, although Vancouver was showing signs of life at 1.6%. Toronto was still a disaster.
Jim Waters wasted little time and fired 11 staff, including Williams and McGroarty, the former Headline executives. The cuts were painful but justified, Waters says, because they were scrapping the national-network concept and moving towards local, live sports programming in all markets, especially in Toronto. More shocking was the simultaneous axing of two veteran CHUM Radio employees. Vice-president of programming Ross Davies and vice-president of sales Tim Steele were let go despite having been with the company for more than 50 years combined. The roots go deeper: Davies's father used to work with Allan Waters at CHUM. Waters contends their departures were unrelated to The Team, but he won't elaborate. When Davis was contacted for this story, he declined to comment, saying only, "It took me five-and-a-half months to get my termination agreement settled after 23 years with these people. It was not a pleasant parting." Whatever the details, the ties that bound in the CHUM family were wearing thin.
The next few months reflected a company of two minds. Waters had said when the ratings came out in May that he was still committed to sports for 18 months to two years. He acted the part in a series of meetings with the suddenly worried remaining staff, and even went as far as putting out feelers to hire Gord Stellick, the afternoon host of The Fan, and Nelson Millman, The Fan's long-time program director, with whom he had worked in Vancouver in the early 1970s. Then there were the talks with TSN. But as the losses mounted and the ratings slid, Waters said it became clear that something had to be done. "It was too expensive to continue, it was really that simple." An e-mail went out office-wide on Aug. 26.
It gave away little in the way of tone and content: The Toronto staff of The Team were asked to attend a 1 p.m. meeting at head office the next day. Recipients were left to draw their own conclusions. Despite the events of the summer, there was still hope, even expectations, that the meeting led by Waters and 1050 general manager Bill Bodnarchuk was more of a pep talk than anything else.
Paul Romanuk had come in to host his morning show, business as usual. But Jim Van Horne didn't know what to think. "I had a long talk with Bodnarchuk and I also had a long talk with Jim Waters," Van Horne says of the days after the management clear-out that June, "and they said they were still committed to the format and they wanted to localize it more so they could compete in Toronto."
Still, when he drove into the office that day, something didn't feel right. Van Horne called The Globe's Stephen Brunt, who had stepped down as his co-host in the spring but was still heard regularly on air. "What are you hearing?" he asked. Brunt said it didn't sound good.
Filing in for the meeting, staff members made their way by a receptionist, who avoided their gaze. Security guards were also present, brought in for the occasion. Jim Waters wasted little time getting to the point: The Team in Toronto was dead, as was the sports concept in Winnipeg, Kingston, Kitchener and Halifax. Vancouver, Ottawa and Montreal would remain all-sports, but would carry local programming only.
So at 3 that afternoon, in what was supposed to be Van Horne's drive slot, 1050 CHUM's music format was abruptly revived. The first cut? Elvis Presley's A Little Less Conversation.
IT'S LATE 2002, four months after The Team folded. At first reluctant, Waters is warming up to telling his side of the story. Professionally, it's been a blow.
"I feel bad for Jim," says Maheu. "Every time he's mentioned in the newspapers, The Team is right there beside his name. And he's done so many good things, and CHUM as a radio station has done so many good things, that one false step shouldn't be our legacy. It's a bit unfair."
Waters greets me in the small lobby of the CHUM building that he's been around since he was a young boy. He has an office here, just down the hall from his father's. There's a youthfulness to him. Maybe it's the early-'60s brush cut and the matching ensemble of sweater, jeans and loafers. Before starting the interview, he gives me a tour. Like a kid showing off his favourite-now broken-toy, he stops by the large, darkened L-shaped studio that was built for The Team. An old James Taylor hit plays over the speakers. In the corner: a computer terminal and mixing board, but nobody sits behind them; CHUM announcers record the fillers between songs and commercials the day before. It's the most cost-efficient way to do it, says Waters.
Sports fan? "I'm a big sports fan, most definitely," he says. The sofa in his office features a Toronto Maple Leafs banner. Above it are framed, poster-size photographs of Tiger Woods, Wayne Gretzky and a signed shot of Mike Weir teeing off at the 1999 British Open at Carnoustie. Waters likes that one because the late Payne Stewart, Weir's playing partner that day, is standing in the background.
When we finally talk about business, Waters resists laying blame at anyone else's feet but his own. This was the biggest gamble and biggest failure of three decades working in his father's business. He denies the widely held assumption that he flushed the sports format because it was the easiest way to stop the bleeding in what had been a very expensive year for CHUM Ltd. The company had launched two new television stations in B.C., and both were performing below expectations. CHUM's seven new specialty channels were losing money too.
More worrisome is Craig Broadcast Systems Inc.'s launch of a rival to CHUM's cash-cow CITY-TV. Toronto 1, whose licence application CHUM had unsuccessfully tried to quash in front of the CRTC, will be up and running by September. But Waters insists it has no bearing on The Team fiasco: "The radio and television division each had their challenges, but we operate independently and we each did what we had to do."
He bristles again when he's asked about the period between the June management clear-out and the station going dark in August. A number of staffers, particularly Paul Romanuk and fellow morning host Mike Richards, had gone public by then, claiming Waters had misled them about what was coming. "We didn't mislead anyone," says Waters. "Our integrity is at stake if you're doing that, and this company was built on integrity."
For the final time, it was his call to pull the plug, and the reason was simple. "We have a responsibility to our shareholders to run the business as best we can," he says. "I don't think I could have stood up in front of our shareholders and said I was doing the right thing if I had continued down the road we were going." Especially if the guy who controls 87.9% of the voting shares has an office down the hall, and you call him Dad.
THE COLLAPSE of The Team is still a fresh memory for the people who built it. Van Horne was the last of the laid-off to reach a settlement with his former bosses, agreeing to an undisclosed amount in mid-January. Soon after, he returned to TV to co-host Rogers Sportsnet's supper-hour newscast. "There were days when I wondered if I would ever work again," he says. His old program director, Gerald McGroarty, has also bounced back, becoming publisher of The Hockey News. But colleague Paul Romanuk hasn't been quite so fortunate. He does a weekly show on Leafs TV, owned by Maple Leaf Sports and Entertainment, and has done some freelance writing, but otherwise is "enjoying life with his wife and two dogs, and is available for odd jobs and babysitting." As for Paul Williams, his health is back to normal and he's working on an undisclosed project as vice-president of priszm brandz, John Bitove's company of KFC, Pizza Hut and Taco Bell franchises. Meanwhile, there is some irony that six months after the network idea was abruptly shelved, sports radio has proven to be a reasonable success as a stand-alone strategy for CHUM stations in Vancouver, Ottawa and Montreal, despite the debacle in Toronto.
For Jim Waters, the retirement of his father has ushered in a new and unpredictable era in the company. Jay Switzer, outgoing head of CHUM Television, has taken over as CHUM Ltd.'s president and CEO. Ron Waters left his role as executive VP in the December management shuffle, becoming vice-chairman. When Jim vacates his role as head of the radio group, no one named Waters will have a hand in the day-to-day running of the business-for the first time in CHUM's history. Some predict more changes are afoot, pointing to the mysterious sabbatical taken in January by Moses Znaimer, the co-founder of CHUM-controlled CITY-TV.
Waters still gets his sports radio fix, though. When he's not listening to CHUM stations on his drive north from his midtown office to his home in Aurora, Ont., he likes to tune in to an alternative: The Fan.
RADIO HEADS: The cast of characters
the patriarch
ALLAN WATERS
Founder and former president and chairman of CHUM Ltd., a media empire with 28 radio stations, eight TV stations and 17 specialty channels
the dreamer
JIM WATERS
Took the reins as chairman of CHUM after his dad called it quits last December. Mastermind behind The Team
the co-conspirator
PAUL WILLIAMS
Broadcast veteran helped Headline Media Group launch The Score. Hired by CHUM to set up The Team.
the enforcer
GERALD McGROARTY
Former general manager of Headline Sports Radio; hired as The Team's program director
the three sportskateers
JIM VAN HORNE
Beloved sportscaster who left TSN's popular Sportsdesk to join The Team the mutineers
PAUL SKI
General manager of CFUN, a CHUM-owned AM station in Vancouver. He wondered if The Team's all-sports format was a good fit for his core audience: working women
STEPHEN BRUNT
The Globe and Mail sports columnist and regular on TSN's Sunday Sportsdesk
Extra. Hired by CHUM as Van Horne's co-host
MARK MAHEU
General manager of Team 1200 in Ottawa. He was uncomfortable with The Team's national programming
PAUL ROMANUK
TSN's popular play-by-play hockey announcer who signed on as The Team's morning-drive-show host
As part of his move into the role, Waters will, in a few months' time, give up his job as president of CHUM's radio group. But for now, he's left the task of explaining the division's distress, particularly the $10-million hole that resulted from The Team. It was Jim Waters's decision to create that national network by flipping eight of CHUM's AM stations from oldies to sports in the spring of 2001. The experiment was an abject failure, flaming out in just 15 months and denting CHUM's image as a benevolent operator in a rudely bottom-line business. Waters laid off 55 staff, and ended up being dually criticized for making the format switch in the first place, and for dumping it too early.
He wants to put it behind him now-"it's over, it's done with, it's time to move on," he says-but criticism lingers. Poorly promoted, poorly staffed, poorly planned: He's heard the shots, and hearing them again rankles. Sitting in his office overlooking Yonge Street in Toronto, near the famous neon CHUM sign, he pounds his desk in frustration. Thump. "People can say we didn't do this, we didn't do that." Thud. "We didn't promote this, we didn't promote that. Well, I say bullshit."
For nearly five decades, the Waters dynasty has occupied a lofty perch in the Canadian radio business. Allan turned Toronto's 1050 CHUM into Canada's first 24-hour Top 40 station in 1957, bringing rock 'n' roll out of the closet and into the front seat of the car. Bobby-socked teenagers, the British Invasion-in time, his empire grew to 28 radio stations, eight local TV stations and 17 specialty channels. Today, the company's market capitalization hovers around half-a-billion dollars, with the Waters patriarch controlling 87.9% of the voting shares.
For the better part of its lifespan, CHUM had also avoided big, public, money-losing mistakes. Until The Team. "We poured a lot of heavy resources into this thing," says Waters. "Maybe we were doing some things wrong. We're not perfect. Everyone makes mistakes. It just didn't work." The question is, why?
On launch day for CHUM's all-sports network, May 7, 2001, Jim Waters sounded like a man in for the long haul. "This is a significant financial investment," he told reporters. "You'd like to make money right out of the gate, but that's wishful thinking. We will be profitable. We just have to stick with it."
The fact is, he had to do something. With the exception of a few successful news, talk and sports formats, AM radio had become a relic by the start of the 1990s. In 2001, 59% of Canadian stations on the AM dial were bleeding red ink. The radio division at CHUM owned 13 AM signals from Vancouver to Halifax, and most of them were breaking even at best. It was an entirely different story on the FM side, where 64% of all stations in Canada were making money-none more than 104.5 CHUM FM, one of the most popular stations in Canada's biggest market, Toronto. As a group, CHUM's entire FM stable was posting 40% or more in profits, basically carrying the AM side.
"Lots of people say, 'Why don't you just turn [the AM stations] off?'" says Waters. The reason: the promise of digital radio.
Although it's still years away from widespread use, digital technology is considered by its advocates to be the future of the medium. The idea is to replace traditional bands with the crystal-clear sound provided by digital signals. The catch, Waters contends, is that the number of stations that regulators will let a company like CHUM broadcast digitally will be dictated by how many it broadcast in the first place. "If you turn your AM off, you won't get a position on the digital spectrum for it," says Waters, explaining how it's by and large a waiting game. "It's neat technology but it's not going to save us all in the next five years." With the exception of a few successful ventures-notably an all-sports station in Ottawa-CHUM's AM stations were really money-losing place holders.
Waters had to figure out what to do with his AM properties in the short term, so in the summer of 2000, he attended a meeting at the offices of the Headline Media Group in downtown Toronto. He'd been invited by John Levy, Headline's founder, and Paul Williams, a veteran of Toronto broadcasting. Williams had spent 18 years at Telemedia Inc. He built a network of stations carrying Toronto Blue Jays games and, in 1992, launched The Fan, Canada's first sports radio station.
After Telemedia, he was hired by Levy to launch the specialty sports channel The Score. Both men were now pitching Waters a proposal for The Score Radio Network, a national service that would leverage the TV brand. Waters wasn't interested-the numbers "didn't tumble," he says-so the talks ended.
But a bug had been placed in his ear. Shortly after that failed meeting, Williams parted ways with Levy and became a free agent. CHUM's vice-president of programming, Ross Davies, contacted Williams on Waters's behalf. Waters was still intrigued by the idea of knitting together a national network of AM sports radio stations and figured Williams could help him execute it. "We thought, Yeah, let's see if you can make this work," says Waters. "Our goal was losing less than we had been losing on our AMs, and maybe over time, breaking even."
The concept was based largely on economies of scale. Instead of having eight or 10 stations each staffed and producing its own content, programming would be produced out of Toronto and distributed nationally, with network stations given time for local sports, weather and news updates. Local stations would still be able to sell local ads, and in addition, there would be a vehicle for national advertisers-a departure for radio.
Initially, it would cost more. Talk radio, which is heavily reliant on hosts and producers, is pricier than music formats, and sports radio costs even more, with its need for rights fees for programming, plus high-profile (read: expensive) on-air talent. But the payoff-or just breaking even-would boost the radio group.
Waters agreed, and Williams pitched the concept to Doug Newell, senior vice-president of media buying operations for Harrison, Young, Pesonen and Newell, over breakfast at Bregman's Bakery, not far from the CHUM offices. Newell, whose agency recommends and buys advertising space for clients, was surprised. "I thought it was a big move because CHUM 1050 was the first rock- and-roll station in Canada, and the Waters family is extremely conservative. Both the boys [Jim and younger brother Ron, CHUM's vice-chairman] are very respectful of their father, and Allan was still calling the shots."
But when Williams assured him that Jim Waters was on board, Newell's interest was piqued. "I thought it was a great idea," says Newell. "One of the problems with radio right now is that it's so local, where in TV, the markets are very broad. [In radio] you have to do six times the analysis, the negotiations and scheduling. It's extremely expensive and labour-intensive. It's looked on as a tactical medium, for solving a specific problem at a specific time. Network radio would allow you to use radio as a strategic medium."
By the fall of 2000, rumours about CHUM's decision to flip formats began percolating in the industry. In December, a fax circulated around Toronto newsrooms seeking talent for a "new sports radio station in one of Canada's major markets." The sender was a studio called The Vault-CHUM was trying to keep things hush-hush.
The formal announcement that oldies were on their way out came in January. "It was a big pill to swallow. It hurt a lot," Jim Waters said at the time. "CHUM holds a real historic place in the music business in Canada.
It was a press release heralding the change that helped CHUM land its first big name. Jim Van Horne was a deejay at CHUM AM in the 1970s. Since 1984, he'd been a fixture on TSN (The Sports Network) and was best known for anchoring its highly regarded 6:30 p.m. newscast. He saw Paul Williams's name at the bottom of the release and gave him a call. They had worked out for years at the same gym, but Van Horne hadn't seen his pal in months. Now he knew why. "I called to congratulate him as a friendly gesture," Van Horne says, "and we were talking family and golf and I said, 'Hey listen, they're a great company, they really treat their people well, you're in for a great ride, good luck.'
"And he said, 'How'd you like to come work for us. Will you talk?'
"I said, 'Sure, I'll talk, but don't count on anything, I'm really happy here.'"
Van Horne's friendly call lit a fire under Williams and Waters. Here was a credible, popular host. He had a laid-back, gently funny manner that could set the tone at The Team, elevating it above the bombastic, love-me-or-hate-me style The Fan had built around its afternoon host, Bob McCown. Pair Van Horne with a co-host-say, Globe and Mail sports columnist Stephen Brunt-and The Team would have its afternoon anchors. The problem was convincing Van Horne to leave TSN.
"It became a real courtship," says Van Horne. He had pretty much decided to stay put when Waters phoned to invite him to dinner. Over three hours at a small, north Toronto Italian restaurant, Van Horne softened. "We talked philosophy, the family environment at the station, what he wanted to achieve, the direction he wanted to go. We didn't talk money at all. My wife and I came home and we sat down and she said, 'You know what, I like this guy, we should take this job.'" The money, when they got around to talking about it, was just fine too. Van Horne won't comment, but sources put his deal at five years for a healthy $1.1 million.
Waters left a voice mail for Van Horne the next day saying he knew how tough it was to leave TSN, but that people were jumping up and down the halls at CHUM. Van Horne signed on in March, 2001. Another veteran TSN broadcaster, Paul Romanuk, was later hired for the morning drive. Things were falling into place.
As launch day approached, Waters signed off on a plan, provided by Williams, which outlined the expenses for the next year-$8 million, offset by revenues of $5 million. It seemed more than manageable, given the company's cash on hand. "What I projected for network sales the first year, I thought was an absolute slam dunk," says Williams. But then push came to shove. "Two months before we went on the air, I said to our guys internally, We've got big problems: no revenue. None. We'd been selling since January, and by March, no revenue, not a penny."
If that weren't enough, Waters's enthusiasm wasn't shared by all. Spend any time with CHUM people, and eventually they'll mention something about The CHUM Way. Roughly articulated, it means: We don't do things in the heartless, top-down, bottom-line-first manner so common among our broadcasting peers.
One aspect of The CHUM Way is that local managers are given a lot of autonomy to run their shops, as long as the money keeps flowing upstream, or in the case of the AM division, the losses are minimized. But the sudden format flip wasn't broadly embraced. "I wouldn't say it was an easy sell, no," Waters concedes. He admits now that one of his mistakes was not anticipating how much resistance the format change would encounter, and heading trouble off at the pass. "Saying to people, You're going to do this, and Do it-that's not my way of managing," Waters says now. "It never has been and never will be. But in this case, to do it nationally, we needed everyone to fall in."
One holdout, according to sources, was Paul Ski, general manager of CFUN, the CHUM AM signal in the vital Vancouver market. His station had an all-talk format aimed at women; flipping to sports would mean a radical change. Ski wouldn't budge, and CHUM had to resort to partnering with Grand Slam Radio, Inc., a Vancouver-based company awaiting CRTC approval to go all-sports on 1040 AM. CHUM eventually paid $1.5 million for the station, plus more than $1.5 million in annual operating expenses, paving the way for the launch of Team 1040. Insiders wondered why CHUM would buy another AM property when it already had one in Vancouver-that seemed like taking the long way around. Waters saw it differently: CFUN was doing reasonably well with its female audience, and this move meant he'd simply own another voice in Canada's second-largest English-speaking market.
But there was a second mutineer in the CHUM family. Mark Maheu, general manager of Team 1200 in Ottawa, was a close confidant of Waters. CHUM had bought the all-sports station in 1999-it was the very reason Waters became interested in a nationwide format flip to begin with. Under Maheu, the station was popular, things were humming along quite nicely and there was no need for any radical change-not the least a bunch of programming packaged in Toronto. "How did we feel about a network approach? Not very good," Maheu says.
Maheu rejected most of the network programming in favour of his own local shows, the sole exception being a Toronto-produced midday show. In that slot, "our ratings fell 80%," he says. "It was like, evaporation. We had done our homework and put together a great local sports radio station in this market. It was ticking along just fine."
ON MAY 7, 2001, the 1050 CHUM era ended with Elvis Presley's All Shook Up. Jim Van Horne slid into a chair that had been covered in plastic wrap only a couple of days before, in a newly constructed studio inside CHUM Radio's Yonge Street headquarters. Van Horne and co-host Brunt represented roughly a $375,000 investment in annual salaries. More money had been spent renovating the CHUM building to accommodate 50-odd new staffers. An hour before going on air, everyone had been herded up to the roof for a Team photograph to mark the occasion, framed copies of which were distributed at the Christmas party, a perfect CHUM touch. There was tension in the building, and not just because it was the first day of school. For the old guard, that day marked the death of a cultural institution-a format that had built a company and launched many careers. It was as if the newcomers, full of vim and vigour, were treading through a cherished friend's funeral.
"It was pretty awkward," says one Team staffer. "People were in tears, but for us it was this brave new beginning, for them it's the death of their dog. There wasn't anyone wishing you luck or anything like that."
The awkwardness never really went away, and it only intensified as The Team struggled out of the gate. The final ratings for the oldies format gave 1050 CHUM a 1.3% share of male listeners aged 25 to 49, placing it near the bottom of all Toronto radio stations. There was nowhere to go but up. But the first set of ratings for The Team put a hole in that theory; by September, when the summer numbers were released, the station had slid to a 0.7% share in the same male demographic. "In my 30 years of business in radio, I've never been a [zero] point-something, ever," said Doug Ackhurst, then-general manager of rival The Fan.
There were some explanations for the drop-the format had launched softly, with almost no promotion, and the summer ratings only reflected The Team's first few weeks on the air. Still, it was a miserably low number. The morning and afternoon shows, where CHUM had spent massively on talent, had barely made a dent. Neither managed to register a full share point. In the face of direct competition for the first time ever, The Fan had earned a healthy 4.6% in the morning. McCown came up golden against Van Horne and Brunt, delivering a 6.4%.
Content was part of the problem. As some naysayers had predicted, trying to create a national network with three shows based in Toronto and one imported from Los Angeles-the syndicated Jim Rome Show-was not easy. Sports radio has worked best when it's local, when Lenny from suburban Montreal can call in and bitch about the Habs' power play. Not wanting to alienate the rest of the network, The Team tried to hide its Toronto-ness. During one broadcast that summer, Van Horne casually asked Stephen Brunt what he'd been doing before coming to work. Brunt replied that he'd watched REM give a free outdoor concert on Yonge Street. He was subsequently scolded by Team program director Gerald McGroarty for making reference to the already obvious fact that he was speaking from Toronto.
At the same time, creating a show with a national feel meant the hosts had to spend a disproportionate amount of time talking about things and places they couldn't imagine many people cared about. "We interviewed Randy Carlyle of the Manitoba Moose every day, which might have impressed the nine people in Winnipeg who were remotely interested, but everyone else tuned out," says Brunt. Critics weighed in on the soft-sell styles of Van Horne and Brunt, suggesting that two reasonable people talking reasonably about sports didn't necessarily make for great radio.
As the summer wore on, problems on the sales side continued to fester. Insiders say the root of the issue was that Waters didn't want to establish a dedicated sales force for the new network, but preferred to piggyback The Team on the existing CHUM national sales team.
Waters defends the choice: "When they were out at agencies they might be selling our FMs, but they would also say, 'Hey, we've got an all-sports network, it delivers males, 25 to 49 et cetera.'" Williams argued, unsuccessfully, that selling sports was altogether different from selling music formats. It was a niche market, catering almost exclusively to men, an intense and loyal audience. It required a sales force that understood this, who had a passion for the product. There may have also been a motivation problem: The Team staff were outsiders, newcomers to the CHUM family, which caused a friction that never really went away. It didn't help that when CHUM renovated its building to accommodate The Team, the existing CHUM sales staff lost their parking places.
Another problem was a resistance among the staff and the general managers to a common sales approach that Williams had used successfully when starting up The Score. It was basically to sign as many deals for as much cash up front as possible, while promising that if the numbers fell short, advertisers would receive make-up credits down the road. The important thing was to get clients on board and cash in the coffers. It was a departure for CHUM, and Waters and his sales team were hesitant to project numbers. They preferred to sell the all-sports concept, and assumed buyers would just fall in line.
"[Williams] took the approach that, 'We're new on the block, we want to be advertising friendly and we want to deliver a good product to have happy customers,'" says media buyer Newell. "I think that approach flew in the face of the general managers, who had become used to charging what they wanted. Their airtime was their airtime. Their attitude was, 'If I have to carry this stuff from head office, it better be better than what I was going to do.'"
By August, with revenue still falling far short of projections, Waters asked Williams to take more responsibility for network sales. But there were huge obstacles. When the dismal summer ratings came out, and The Team couldn't even earn a single share point, the horse was out of the barn. It was difficult to place a value on numbers that were that low, and while media buyers might take a flier on a new product with potential, they were less inclined to buy into a new product that was already floundering.
"The buyer's mentality is, 'If I screw up, I'll probably get fired,'" says Newell of his relationship to his clients, the advertisers. "At some point in time we get a report card, the BBMs [Bureau of Broadcast Measurement]. And if we're wrong [about those ratings], we have to go to the client and say we messed up. No one wants to do that. The dynamic makes you somewhat conservative."
There was another issue. Williams had prostate cancer and was having surgery on Oct. 1. He was in no position to try to clean things up until the new year.
In the meantime, at least one significant opportunity to enhance The Team's brand came and went. Nancy Lee, executive director of CBC Sports, had been talking with Williams about some kind of partnership with CHUM. Any association with the CBC would boost The Team's profile, particularly if it was to be the radio broadcaster for golden CBC properties like the Olympics and hockey games.
CHUM's talks with the CBC centred on having access to the public broadcaster's on-air talent, providing a radio outlet for Hockey Night in Canada and a weekly hockey current affairs show. Later that summer, at a meeting with Williams and program director McGroarty at CBC's Front Street offices, Lee said the deal wouldn't be going ahead.
There were various reasons, among them tone and fit. On a recent trip to Ottawa, Lee had tuned into The Team 1200's afternoon-drive show, a hard-core call-in affair aimed squarely at the male 25-to-49 demographic-a niche that Lee, one of the few women at the top of Canadian sports broadcasting, has an interest in reaching beyond. The steady diet of guy talk-cars, babes, hockey-didn't strike her fancy. But Mark Maheu wasn't about to change his hit show. "It was just a tad more racy than I felt our brand needed to be attached to," says Lee, "totally respecting the fact that if that's the focus they need to sell that radio station, that's fine. We just don't fit into that mix, I guess."
Later, another white knight appeared on the horizon, this time in the form of TSN. The BCE Inc.-owned sports channel had enjoyed a talent-sharing arrangement with The Fan for several years. But when BCE rival Rogers Media Inc. bought The Fan in August, 2001, it was clear that the arrangement would be coming to an end, and Rogers would begin installing personalities from its own Rogers Sportsnet. TSN might be looking for another radio outlet for its hosts. Its president, Keith Pelley, had four meetings-all of them, he says, preliminary-with CHUM executives, and was intrigued by the possibilities.
Jim Waters was keen, too, and his talks with Pelley lasted right up until CHUM decided to quit sports. A deal with TSN "could have really helped us," Waters says in retrospect. "But we would have had to hang in there for another eight months to a year for them to be clear of their deal [with The Fan], and they couldn't do anything with us until they were. We just couldn't stay with it that long."
While the buildup to CHUM's grand experiment was slow and deliberate, the end came quickly and caught most by surprise. The first tremor went out June 18, 2002. Three weeks earlier, the spring BBMs came out, and once again painted a grim picture, with The Team scoring a 0.9% share of men 25 to 49, compared with 4.2% for The Fan. Despite being on air for nearly a year, no significant progress had been made in any markets across the country, although Vancouver was showing signs of life at 1.6%. Toronto was still a disaster.
Jim Waters wasted little time and fired 11 staff, including Williams and McGroarty, the former Headline executives. The cuts were painful but justified, Waters says, because they were scrapping the national-network concept and moving towards local, live sports programming in all markets, especially in Toronto. More shocking was the simultaneous axing of two veteran CHUM Radio employees. Vice-president of programming Ross Davies and vice-president of sales Tim Steele were let go despite having been with the company for more than 50 years combined. The roots go deeper: Davies's father used to work with Allan Waters at CHUM. Waters contends their departures were unrelated to The Team, but he won't elaborate. When Davis was contacted for this story, he declined to comment, saying only, "It took me five-and-a-half months to get my termination agreement settled after 23 years with these people. It was not a pleasant parting." Whatever the details, the ties that bound in the CHUM family were wearing thin.
The next few months reflected a company of two minds. Waters had said when the ratings came out in May that he was still committed to sports for 18 months to two years. He acted the part in a series of meetings with the suddenly worried remaining staff, and even went as far as putting out feelers to hire Gord Stellick, the afternoon host of The Fan, and Nelson Millman, The Fan's long-time program director, with whom he had worked in Vancouver in the early 1970s. Then there were the talks with TSN. But as the losses mounted and the ratings slid, Waters said it became clear that something had to be done. "It was too expensive to continue, it was really that simple." An e-mail went out office-wide on Aug. 26.
It gave away little in the way of tone and content: The Toronto staff of The Team were asked to attend a 1 p.m. meeting at head office the next day. Recipients were left to draw their own conclusions. Despite the events of the summer, there was still hope, even expectations, that the meeting led by Waters and 1050 general manager Bill Bodnarchuk was more of a pep talk than anything else.
Paul Romanuk had come in to host his morning show, business as usual. But Jim Van Horne didn't know what to think. "I had a long talk with Bodnarchuk and I also had a long talk with Jim Waters," Van Horne says of the days after the management clear-out that June, "and they said they were still committed to the format and they wanted to localize it more so they could compete in Toronto."
Still, when he drove into the office that day, something didn't feel right. Van Horne called The Globe's Stephen Brunt, who had stepped down as his co-host in the spring but was still heard regularly on air. "What are you hearing?" he asked. Brunt said it didn't sound good.
Filing in for the meeting, staff members made their way by a receptionist, who avoided their gaze. Security guards were also present, brought in for the occasion. Jim Waters wasted little time getting to the point: The Team in Toronto was dead, as was the sports concept in Winnipeg, Kingston, Kitchener and Halifax. Vancouver, Ottawa and Montreal would remain all-sports, but would carry local programming only.
So at 3 that afternoon, in what was supposed to be Van Horne's drive slot, 1050 CHUM's music format was abruptly revived. The first cut? Elvis Presley's A Little Less Conversation.
IT'S LATE 2002, four months after The Team folded. At first reluctant, Waters is warming up to telling his side of the story. Professionally, it's been a blow.
"I feel bad for Jim," says Maheu. "Every time he's mentioned in the newspapers, The Team is right there beside his name. And he's done so many good things, and CHUM as a radio station has done so many good things, that one false step shouldn't be our legacy. It's a bit unfair."
Waters greets me in the small lobby of the CHUM building that he's been around since he was a young boy. He has an office here, just down the hall from his father's. There's a youthfulness to him. Maybe it's the early-'60s brush cut and the matching ensemble of sweater, jeans and loafers. Before starting the interview, he gives me a tour. Like a kid showing off his favourite-now broken-toy, he stops by the large, darkened L-shaped studio that was built for The Team. An old James Taylor hit plays over the speakers. In the corner: a computer terminal and mixing board, but nobody sits behind them; CHUM announcers record the fillers between songs and commercials the day before. It's the most cost-efficient way to do it, says Waters.
Sports fan? "I'm a big sports fan, most definitely," he says. The sofa in his office features a Toronto Maple Leafs banner. Above it are framed, poster-size photographs of Tiger Woods, Wayne Gretzky and a signed shot of Mike Weir teeing off at the 1999 British Open at Carnoustie. Waters likes that one because the late Payne Stewart, Weir's playing partner that day, is standing in the background.
When we finally talk about business, Waters resists laying blame at anyone else's feet but his own. This was the biggest gamble and biggest failure of three decades working in his father's business. He denies the widely held assumption that he flushed the sports format because it was the easiest way to stop the bleeding in what had been a very expensive year for CHUM Ltd. The company had launched two new television stations in B.C., and both were performing below expectations. CHUM's seven new specialty channels were losing money too.
More worrisome is Craig Broadcast Systems Inc.'s launch of a rival to CHUM's cash-cow CITY-TV. Toronto 1, whose licence application CHUM had unsuccessfully tried to quash in front of the CRTC, will be up and running by September. But Waters insists it has no bearing on The Team fiasco: "The radio and television division each had their challenges, but we operate independently and we each did what we had to do."
He bristles again when he's asked about the period between the June management clear-out and the station going dark in August. A number of staffers, particularly Paul Romanuk and fellow morning host Mike Richards, had gone public by then, claiming Waters had misled them about what was coming. "We didn't mislead anyone," says Waters. "Our integrity is at stake if you're doing that, and this company was built on integrity."
For the final time, it was his call to pull the plug, and the reason was simple. "We have a responsibility to our shareholders to run the business as best we can," he says. "I don't think I could have stood up in front of our shareholders and said I was doing the right thing if I had continued down the road we were going." Especially if the guy who controls 87.9% of the voting shares has an office down the hall, and you call him Dad.
THE COLLAPSE of The Team is still a fresh memory for the people who built it. Van Horne was the last of the laid-off to reach a settlement with his former bosses, agreeing to an undisclosed amount in mid-January. Soon after, he returned to TV to co-host Rogers Sportsnet's supper-hour newscast. "There were days when I wondered if I would ever work again," he says. His old program director, Gerald McGroarty, has also bounced back, becoming publisher of The Hockey News. But colleague Paul Romanuk hasn't been quite so fortunate. He does a weekly show on Leafs TV, owned by Maple Leaf Sports and Entertainment, and has done some freelance writing, but otherwise is "enjoying life with his wife and two dogs, and is available for odd jobs and babysitting." As for Paul Williams, his health is back to normal and he's working on an undisclosed project as vice-president of priszm brandz, John Bitove's company of KFC, Pizza Hut and Taco Bell franchises. Meanwhile, there is some irony that six months after the network idea was abruptly shelved, sports radio has proven to be a reasonable success as a stand-alone strategy for CHUM stations in Vancouver, Ottawa and Montreal, despite the debacle in Toronto.
For Jim Waters, the retirement of his father has ushered in a new and unpredictable era in the company. Jay Switzer, outgoing head of CHUM Television, has taken over as CHUM Ltd.'s president and CEO. Ron Waters left his role as executive VP in the December management shuffle, becoming vice-chairman. When Jim vacates his role as head of the radio group, no one named Waters will have a hand in the day-to-day running of the business-for the first time in CHUM's history. Some predict more changes are afoot, pointing to the mysterious sabbatical taken in January by Moses Znaimer, the co-founder of CHUM-controlled CITY-TV.
Waters still gets his sports radio fix, though. When he's not listening to CHUM stations on his drive north from his midtown office to his home in Aurora, Ont., he likes to tune in to an alternative: The Fan.
RADIO HEADS: The cast of characters
the patriarch
ALLAN WATERS
Founder and former president and chairman of CHUM Ltd., a media empire with 28 radio stations, eight TV stations and 17 specialty channels
the dreamer
JIM WATERS
Took the reins as chairman of CHUM after his dad called it quits last December. Mastermind behind The Team
the co-conspirator
PAUL WILLIAMS
Broadcast veteran helped Headline Media Group launch The Score. Hired by CHUM to set up The Team.
the enforcer
GERALD McGROARTY
Former general manager of Headline Sports Radio; hired as The Team's program director
the three sportskateers
JIM VAN HORNE
Beloved sportscaster who left TSN's popular Sportsdesk to join The Team the mutineers
PAUL SKI
General manager of CFUN, a CHUM-owned AM station in Vancouver. He wondered if The Team's all-sports format was a good fit for his core audience: working women
STEPHEN BRUNT
The Globe and Mail sports columnist and regular on TSN's Sunday Sportsdesk
Extra. Hired by CHUM as Van Horne's co-host
MARK MAHEU
General manager of Team 1200 in Ottawa. He was uncomfortable with The Team's national programming
PAUL ROMANUK
TSN's popular play-by-play hockey announcer who signed on as The Team's morning-drive-show host
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