KROQ IS BACK ON A ROLL AFTER YEARS OF ‘STATIC’ : Owner of FM Station Overcomes Debts and License Challenges

How much would you pay for an FM radio license? $10,000? $20,000?

Ah, but the station is in Los Angeles, hottest radio market in the land. And it has a transmitter site in studios in the affluent heart of old-money Pasadena.

Now, how much money would you pay? $200,000? $400,000?

But wait. It’s KROQ-FM (106.7), which has built up a hard-core rock audience over the last decade in part by nursing some of the Southland’s preeminent novice deejays--Frazer Smith, Rodney Bingenheimer and Richard Blade--into smooth, wickedly funny professionals.

Now, how much would you pay? $1 million? $2 million?

“I’ve had offers to buy it for as much as $25 million,� says KROQ owner Ken Roberts.

And what makes the license such a valuable piece of paper? Well, KROQ rightfully takes credit for introducing Culture Club, Prince and other current superstars to a young, mainstream audience. It is still very much “The Roq of the ‘80s� as it calls itself, and it seems to have recovered from a two-year slump in the quarterly Arbitron ratings of listenership. It climbed back up among the Top 10 stations in the Los Angeles market just this summer, with ratings indicating as many as 800,000 listeners in any average quarter-hour.

Now, how much would you pay? $20 million? $30 million?

“Forget it,� Roberts says gruffly. “After what I’ve been through, I’m not selling.�

In his gray cardigan and oversized pale yellow shirt, the graying owner of KROQ (who re-created it out of dead air almost 10 years ago) looks more like Willy Loman between road trips than the premier purveyor of rave-outrage radio (a mix of raunchy adolescent humor and new-wave music) in the Southern California area.

The 46-year-old former concert promoter seldom visits the station, choosing instead to operate like a puppet master from the sprawling 113-acre Mandeville Canyon ranch where actor Robert Taylor once lived. There he alternately watches stock reports and “Entertainment Tonight� on his desk-top TV while wheeling and dealing on the telephone.

The high-security ranch again belongs to Roberts after years of belonging to the bank. And Roberts credits KROQ with the turnaround. He mortgaged “Casa KROQ� to the rafters in order to fight a 10-year battle with his former business partners and the Federal Communications Commission to keep the station--a station he wasn’t even all that interested in when he first became a partner.

In 1973, a partnership of 12 men and women bought the FM license for $1.2 million. Until then, it had been KPPC--generally recognized as the first “underground� FM rock station in Los Angeles. The partnership, which called itself Burbank Broadcasting, changed the call letters to KROQ and turned the day-to-day station operations over to KROQ’s general manager.

For the next year, KROQ listeners were treated to the very best kind of commercial radio available: absolutely no advertising between songs.

The gimmick of selling no commercial time was meant to build an audience, which is exactly what happened. But, by 1974, the station was $7 million in debt. Promotional giveaways, concerts and billboards telling Los Angeles that “The (KROQ) Revolution Is On!� had cost at least $1 million alone, according to FCC documents.

One of KROQ’s debtors was a Hoboken, N.J., concert promoter who was committed to bring Sly and the Family Stone to the Coliseum for a KROQ-sponsored concert. So Hoboken-born Ken Roberts decided to pay for the concert himself, accepting a small share in the debt-ridden radio station as payment for the Coliseum show.

Roberts says now he didn’t realize what he was getting himself into until he attended his first partnership meeting several months later. KROQ’s owners turned out to be a doctor, a pair of dairymen, a Sacramento lobbyist, a secretary and several other small investors who knew little or nothing about broadcasting. Roberts found himself elected president on the strength of his experience as a concert promoter--as close to actual radio experience as any of the KROQ partners had.

Roberts set out to renegotiate KROQ’s enormous debts but found himself overwhelmed. On July 29, 1974, KROQ succumbed to the ultimate cost-cutting technique: It went off the air for two years.

When it came back on the air in 1976, Roberts rebuilt slowly. There was no more commercial-free broadcasting or million-dollar promotional gimmickry. KROQ had to return from aural oblivion on the strength of its format.

From his Mandeville Canyon hermitage, Roberts juggled KROQ’s debts, the various demands of his 12 nervous Burbank broadcasting partners, an order from the FCC that KROQ surrender its license for having mismanaged itself off the air for two years and the ticklish question of establishing a unique, identifiable format.

“Rick Carroll likes to tell everybody he was the one who turned it around,� Roberts said of his current program director. But, according to Roberts, Carroll is given too much credit for creating the avant-garde format for which KROQ is now best known. Roberts says he is responsible, for instance, for making KROQ the first mainstream pop station in Los Angeles to regularly play Prince, an artist who had been consistently heard only on Los Angeles’ four black stations until the early ‘80s.

But Roberts does concede that Carroll’s skill in picking hits before they become hits has been a key to KROQ’s success. Beginning with the Sex Pistols in 1978, new acts have been able to depend on KROQ airplay when every other door in town has been shut to them. By the time the acts are staples on the Billboard Top 100, they’re passe at KROQ and Carroll has steered the station’s musical course onto something else.

While he was winning over Southern California’s trendies, Roberts was confronting a new set of KROQ enemies. Several broadcast companies took advantage of the FCC’s anger over KROQ’s rock history. The station’s debts, mismanagement and two years of dead air led to several years of FCC hearings, during which a half-dozen challengers tried to wrest the KROQ license from Burbank Broadcasting.

By 1982, the challengers had been boiled down to two: KACE-FM owner Willie Davis and James Gates, a former sales representative of a San Diego-area radio station. At the same time, Roberts was buying out his former partners one by one.

Finally, Roberts owned controlling interest in Burbank Broadcasting. He changed the name to Mandeville Broadcasting, in honor of Casa KROQ, and tried a maneuver without precedent in Los Angeles broadcasting: He paid Davis and Gates to drop their bids to take over his station.

In theory, the $1.5 million he paid Davis and the $2.5-million payment to Gates are seen by the FCC as reimbursement for legal fees and out-of-pocket expenses incurred by the challengers in their license takeover bids. In reality, it is “dropout settlement� to cut the costly red tape of FCC hearings, according to Roberts.

“The theory behind allowing a dropout settlement is to avoid a hearing,� FCC Audio Services attorney Robert Hayne told The Times. “Up until a couple of years ago, reimbursement of a dropout was limited to out-of-pocket expenses. That comes down to exactly how much you spent--it doesn’t include your own time, even if you spent, say, 60 hours a week just trying to get that license.�

Under the current FCC--a champion of deregulation and the cutting of red tape--such dropout settlements are encouraged. Roberts said FCC Chairman Mark Fowler greeted him at a broadcasters’ luncheon shortly after Roberts settled with Davis and Gates last year: “He shook my hand and thanked me for ending the whole damn mess.�

So, now that the license is his, Roberts faces no more challenges until 1990, when regular renewal time rolls around again. Between now and then, he plans to manipulate his prize to the very top of the Los Angeles radio market.

And he plans to do it from his Casa KROQ armchair, by second-guessing just what the Next Big Thing will be in pop music.

There are those among the vanguard of Los Angeles radio listeners who already regard Cyndi Lauper-streaked hair and Los Lobos’ sound as passe.

These are the bona-fide new music true believers . . . the questers after truth and trend who can immediately tell anyone who actually played “Erotic City� over the airwaves first and most frequently in Los Angeles.

KROQ fans are a cult who don’t realize that the station is run by a middle-aged millionaire in Mandeville Canyon.

They’ll listen, no matter who owns the radio license.