Craig Karmazin’s spacious, yet sparsely furnished Warehouse District loft apartment doesn’t resemble one of an heir to a media mogul.
Inside you’ll find not much more than a 10-foot-long wood dining table, a small sofa, an Xbox, and a 70-inch Sony flat-screen high-definition TV. The dwelling has all the accoutrements of a bachelor pad — which it would be if he didn’t live with his longtime girlfriend, Kelly, and their Jack Russell Terrier, Maddie.
As of now, the apartment, which Karmazin moved into late last year, is his Cleveland headquarters (he also has places in Beaver Dam, Wis., and Milwaukee). From his bedroom, he can link to any of the 10 radio stations he owns around the country and talk on the air about his favorite topic: sports.
Sports talk is the hallmark of Karmazin’s company, Good Karma Broadcasting. At only 31, Karmazin has already assembled a handful of radio stations in select markets in Wisconsin, Illinois, Florida and two stations he purchased last year in Cleveland. Although conservative in his approach, Karmazin is carefully building a radio empire focusing on sports, the industry’s most rapidly growing segment.
But perhaps it was destiny because radio seems to be in his blood. Craig’s father, Mel Karmazin, is the CEO of Sirius Satellite Radio and former president and COO of Viacom, which owned CBS, MTV and several other TV networks and radio stations. Mel started as a salesman for New York City radio.
On the same day Craig Karmazin spoke with Inside Business in late February, Mel was in New York City speaking to the press and stock analysts about a $13 billion proposed merger of his company with its competitor, XM Satellite Radio. But this competitive threat doesn’t phase the younger Karmazin.
“I think satellite radio is awesome,” says Craig Karmazin, who, like his father, is a born salesman. “It’s a great product and all the things that we’re able to do locally in the communities, they’re able to do things nationally, and I don’t see where it’s any kind of intense competition.”
Craig and Mel Karmazin talk almost daily, Craig says. (Mel called Craig during our interview, but the conversation was cut short.) The multimillionaire father, however, is not bankrolling Good Karma. Not one penny. The last name certainly helps securing loans, but the debt belongs to Craig.
“My dad is amazingly supportive emotionally and has always been there to give me advice and talk me through issues and problems and I still call him to this day for advice,” says Karmazin, slowing his words: “But he is not involved financially in the company.”
Born and raised in the New York City metro area worshipping the New York Yankees, Knicks and Jets, Craig Karmazin launched his sports radio firm in 1998 in the tiny lakeside town of Beaver Dam, about 40 miles northeast of Madison, the main campus of the University of Wisconsin.
Karmazin discovered the town when he and lifelong friend Steve Politziner visited a friend who was a student there. The men became enamored with the inexpensive, but sports-obsessed city, which at the time was the home of a Big Ten championship football team and near the Super Bowl triumphant Green Bay Packers.
“Originally, we hoped to be good enough just to be on the air overnight in any size market,” says Politziner, who has a daily show on several of Good Karma’s stations where Karmazin is a regular co-host. “We realized that a great long-term plan would be to merge our love for being on the air with managing and owning stations, but as interns we were more excited about being on-air hosts.”
At only 22 years old, Karmazin secured a loan from a New York bank in 1997 to purchase three stations in the Madison area for $3.5 million. Karmazin was now the CEO of Good Karma Broadcasting.
The management lessons came early. After a night out in Madison, Karmazin returned to a friend’s house where he was lodging to turn on the TV and see a weather alert for a severe thunderstorm — which had the right conditions to become a tornado — approaching Madison. It was 2:45 a.m.
“I instantly learned that being an owner and being in radio meant that there was never a time where I was completely off the clock,” Karmazin says. “At that point, I drove straight to Beaver Dam and we were there that entire next day, straight through the day and the night. We were the only place that listeners could come to find out when their power would come back on or it was safe to go outside. It showed the strength of radio in a small town.”
Those small-town stations multiplied as Karmazin purchased two more stations in Wisconsin, a station in Rockford, Ill., and then one in West Palm Beach, Fla., (where Politziner is based). Before Cleveland, Karmazin’s largest market station was in Milwaukee where he, as he did in Cleveland, integrated syndicated ESPN programming, such as “Mike & Mike in the Morning” and “The Jim Rome Show.” He also branded the stations as “ESPN Radio,” a name popular and instantly recognizable with advertisers and his target market of male listeners.
“It’s just the best format for getting advertiser results because it’s programming that people are actively listening to, which is what we learned by starting in such a small town as Beaver Dam,” Karmazin says. “We learned there that you better sell product for people and we’ve taken that approach and brought it to larger cities.”
Karmazin arrived in Cleveland last summer to acquire WABQ 1540 on the city’s East Side, which at the time was a gospel music station. He purchased the ESPN brand right away from sports talk station 850 WKNR in Broadview Heights and reformated WABQ as a sports station. Only months later, WKNR’s owners put their station on the market and Karmazin bought it. Both stations cost a combined $9.5 million.
“Craig is young, he’s energetic, he’s smart and he’s got some great stations,” says longtime Cleveland radio, TV and media entrepreneur Tom Embrescia, who owns the land where WKNR’s broadcasting tower is located. An acquaintance of Karmazin’s father, Embrescia helped Craig Karmazin navigate a city he had never visited until he was shopping for the stations. “Craig could live on in his laurels and do nothing, but he’s doing it all. He embodies, in my mind, young, smart, aggressive broadcasters,” Embrescia says.
In late February, Karmazin relaunched WKNR as ESPN 850 WKNR and WABQ as KNR2. Both stations carry ESPN programming, as well as original local shows featuring Cleveland personalities such as Tony Rizzo, Kenny Roda and Bernard Bokenyi. He plans to consolidate the stations downtown at the Galleria at Erieview.
“While there may have been other markets that were larger or had projected higher growth of the overall economy, I was going to put my money behind the sports fans of Cleveland over any other city,” says Karmazin, who had investigated stations in other similar-sized markets. “I have felt comfortable doing business and living in both the Midwest and East Coast and felt that Cleveland was the best of both worlds.”
For now, Karmazin is in Cleveland 80 to 90 percent of the time, when he’s not traveling to major sporting events, such as the NCAA men’s basketball tournament in Atlanta this month before he returns home for the women’s Final Four. As far as expanding to other cities, Karmazin is content with where his company is now. But if history and genetics are any indicators, we’re likely to see Good Karma spreading across the country for years to come.
“My goal is to be successful with what we have,” Karmazin says. “Growth is always exciting, but growth only comes from developing the stations and the people that we have. So none of my goals ever involve buying additional radio stations, they always involve outperforming our expectations with our existing stations.”
Craig Karmazin’s father, Mel, is CEO of New York City-based Sirius Satellite Radio, which on Feb. 19 announced a $13 billion merger agreement with rival XM Satellite Radio, based in Washington, D.C. The merger still needs regulatory approval by the Federal Communications Commission and the companies’ shareholders.
Previously, Mel Karmazin, 63, was president and COO of Viacom, owner of CBS Television, MTV Networks, BET, Showtime Networks, Infinity, Viacom Outdoor, Paramount Pictures, Paramount Television, Paramount Parks, UPN Blockbuster, Simon & Schuster, from 2000 until 2004.
Prior to that, Karmazin served as president and CEO of CBS Corp. He joined CBS in 1997 as chairman and CEO of CBS Radio through a merger of Westinghouse/CBS and Infinity Broadcasting. He had served as Infinity’s president and CEO from 1981 until Infinity became a subsidiary of Viacom in 2001. Before Infinity, Karmazin spent 10 years with Metromedia, which owned radio and television networks around the country.
Source: Sirius Satellite Radio