Mid-West Family Broadcasting: Building Equity at Home

Locally controlled, this radio family continues to grow, by focusing on the process rather than the product. Learn how clever thinking in a time of change has led to success.

Turns out you can go home again, despite playwright Tom Wolfe’s claim. For proof, just look to Mid-West Family Broadcasting and Mike Paterson.
The Freeport native, who has held management positions in major radio markets in Wisconsin, Texas, Georgia, Minnesota and Missouri, returned to the area in July 2013 to take on the duties of general manager at Mid-West Family Broadcasting in Rockford.
Mid-West’s purchase of Maverick Media, back in April 2013, was also a kind of homecoming for the Madison-based, family-run company, which has owned stations in Rockford twice before, dating back to the 1950s. “This building is the original Mid-West Family Broadcasting, when WKMQ bought it, and they always wanted to come back,” says Paterson.
He, on the other hand, wasn’t even thinking about a move. As general sales manager at KSHE in St. Louis, the 42-year-old Freeport High and Univeristy of Wisconsin-Madison grad was content. After having relocated from Atlanta to Minneapolis-St. Paul in 2009, and from there to St. Louis in 2011, he had no plans to move his family again anytime soon.
“We loved living in Atlanta, but my wife became pregnant with twins a year into the job,” Paterson says. “A month after the twins were born, I accepted a job offer in Minnesota, so that we could be closer to family. But I wasn’t happy in the position. My wife is from Madison, so we’re both Midwest kids, and so I found the position in St. Louis.”
Paterson loved working at KSHE. “Sales were growing 27 percent each year, it was a great company, and we were both close to home,” he says. “Every move I had made up to then was to work for a better company or gain more responsibility. I promised my wife we’d stay put this time.”
Then he got a call. “The people in Madison, who first hired me back in 1993, were letting me know about Mid-West Family Broadcasting getting Maverick, and said I should apply for general manager,” Paterson says. As a communications and journalism major at UW, Paterson’s first job in radio was at Z104, at the time, a Top 40 station in Madison. Even then, he was aware that the employee-owned Mid-West Family Broadcasting was among the top companies in the region.
“It’s still one of the top companies, but I wasn’t going to do it,” he continues. “We had just gotten settled and everything was great, so I said ‘thanks but no thanks.’ But she called back after about a week and said, ‘You really need to talk to these guys.’ So I did, and we came here last July. As much good as I believed I was doing at KSHE, I believed I would make a difference in Rockford.”
What drew Paterson to Mid-West is its unique corporate structure and culture, which empower employees and give them equity in the company. Mid-West has seven radio markets in Wisconsin, Illinois, Michigan and Missouri, and each is a separate company. Decisions affecting the company and community aren’t dictated from out of town, but made locally, to best serve each individual market. “I didn’t know this when I took the job, but I get to act as the local owner,” Paterson says. “I report to a board of directors, but I’m not hampered by corporate red tape when I make decisions about things like PR, sponsorships, staff. I have the board’s support.”
Mid-West also actively supports the communities in which its employees, advertisers and listeners live and work, by investing in local events and charities. For example, B103 is sponsor of the “Making Strides Against Breast Cancer” walk in October. Mid-West Rockford took part in National Night Out; is a large donor to Rockford’s fireworks; and is active with the Rockford Chamber of Commerce and Rockford Area Economic Development Council.
“From May 2013 to May 2014, we did $500,000 of in-kind advertising for community events,” Paterson says. “Community involvement is important, and we try to support charities that keep money here, rather than sending money off to some big national or international group. This is where we can make an impact.”
The ownership structure at Mid-West is unusual for radio. “It’s employee-owned, kind of like a law partnership,” Paterson explains. “Employees are given a chance to become shareholders and purchase shares in the company. If you’re not an employee, you can’t be a shareholder.”
Mid-West was founded in 1956 by William Walker, and the ownership structure has been in place since 1962. The founder’s grandson, Tom Walker, is president, but he’s not the largest shareholder, and the family doesn’t own the company. “You just don’t get the chance to work at a major media company and become an equity owner,” Paterson says. “There’s no other opportunity like it, but it does challenge people to change their thinking.”
The company’s philosophy, “Mid-West Family Broadcasting is not product driven; we are people driven,” mirrors Paterson’s leadership style. The wall next to his desk is plastered with inspirational sayings, and he points to one: “You don’t build a business – you build people – and then people build the business,” from motivational guru Zig Ziglar.
“My No. 1 priority is having good people,” Paterson says. “I want to build employees’ careers, by helping them to build clients’ businesses with marketing and advertising. Right now, the perception is that radio is dying, because of Pandora and satellite, but in the 1950s, they said television would kill radio, and it didn’t. Satellite radio does present new challenges, and I think that’s bred complacency, a ‘get it done’ attitude rather than ‘do it right.’ Good enough isn’t good enough anymore, and that’s the biggest challenge for people, which makes it my biggest challenge. How do I grow this business for our shareholders?”
Paterson offers some eye-opening statistics. “Radio reaches 90 to 95 percent of our market, and it’s always been free,” he says. “Satellite has about 25 million listeners, which sounds like a lot, but there are about 350 million people in the U.S., which comes out to 7 percent of the total audience. Then, when you figure that there are 300 satellite stations to choose from, one station may have just 15 listeners in Rockford. Mid-West reaches 45 to 50,000.
“It’s not that no one’s tuning in. The ads coming over the speakers aren’t cutting through and grabbing attention.”
He points to radio commercials by local appliance dealer Al Grace as examples of good ads. No matter how clever, the message must be tailored to the particular needs of that advertiser at that particular time.
“We can’t create a campaign until we know the advertising goal,” Paterson says. “I may go to a Ford dealer with a clever pitch for a Fusion, but if he’s paying rent on 50 trucks that he needs to move, it’s not what he needs. I can sell more advertising by knowing about a dealership and how it makes money, about food costs in a restaurant, the number of appointments a doctor needs per week to turn a profit.”
One of the obstacles is shifting focus from the result to the process. “It’s thought leadership in marketing and advertising, versus getting the deal,” Paterson says. “In sales, you want to be relatable to clients, and clients want to be relatable, too. Don’t pretend to be something you’re not. Be real, and build relationships.”
Another obstacle is the perception that advertising is an expense. “It’s an investment,” Paterson says. He points to another adage on his wall of wisdom: It is better to be sought than to be found. “Businesses can’t operate on the idea of ‘build it and they will come.’ You have to let people know who you are and what you have to offer, to make them seek you out.”
Mid-West has five radio stations in the Rockford market: 104.9 The X rock, B103 adult variety pop hits, 95.3 The Bull 20-in-a-row country, The Mighty 100.5 Rockford’s greatest hits, and La Movida 1330 Spanish hits. “Each station is carefully designed to appeal to the unique aspects of its audience,” Paterson says. “We offer unique digital and interactive optimizations for web advertising, and high visibility through the events we produce. Our advertisers can reach people with our full integrated media and marketing.
“The best bosses are willing to get their hands dirty with their employees, and I’ve held every job in radio. Some of the guys here kid me, because I take out my own trash. Sure, I could get someone to do it, but it’s my trash.”
Personal responsibility is vital to Paterson, who has no “five-year plan” for advancing his career with his present position. “I tell employees this all the time – and they hate it – but I don’t fire people,” he says. “They fire themselves, by their own actions or lack of action. So if I’m not in this chair five or seven years from now, I screwed something up.”
Much has changed since Mid-West came back to Rockford – format shifts, personnel turnover – and Paterson knows it’s been tough on employees.
“Progress requires patience and discipline,” he says, another philosophy posted on his wall. “Right now, we’re in the process of making sausage, and it’s kind of messy. In five or 10 years, we’ll have a great sausage, but it means finding the right mix of ingredients. You get the right talents, and assign them the right tasks, and you’ll get a great sausage.”
Shifting paradigms is never easy or quick, but Paterson is working through the process with optimism and confidence. “My goal is a great work environment, where people can build their careers by helping other businesses to grow,” he says. “I want this to be a building that people want to work in, where they’re working with the best of the best, in a company that gets the job done.”
If home really is where the heart is, then Paterson and Mid-West Family Broadcasting are at home in Rockford.