Phil Rosenthal on The Fall of Webio

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: Webio spent money like there was no tomorrow : Phil Rosenthal | Media : June 17, 2009 : Among the public service announcements that ran in place of paid ads in the final hour before Chicago Sports Webio shut down Tuesday was one urging vigilance for fraud. : "If you're a victim, reporting the con to the public authorities will prevent others from suffering the same fate," it said. "To learn more about how to keep your family safe from con artists and scams, visit ncpc.org." : A tad late for that at Webio, a name easier to bookmark than roll off one's tongue. : Webio, like David Hernandez, the man who bankrolled it, was soon to vanish. : Downers Grove police said Tuesday that they were looking for Hernandez, whose wife had filed a missing-persons report. The Securities and Exchange Commission had filed a lawsuit a day earlier, accusing Hernandez of bilking investors to support a very nice lifestyle for himself and to finance the local Internet radio startup featuring Mike North, Dan Jiggetts, Chet Coppock, Ray "Boom Boom" Mancini and others. : Lost in the bittersweet mix of recollections and condemnation from Webio staffers before the plug was pulled was that much of what made them all so nostalgic for happier days just a few weeks ago, before checks started bouncing, were the very factors that likely would have undermined them even if their backer had been beyond reproach. : "For three months, this was a great place to work," Jesse Rogers, who left CBS Radio's WSCR-AM 670 to be program director for Webio, told listeners. "We were making good money. We were spending money, which is what you have to do to make a good station." : Maybe you have to spend money to make money. You don't have to spend so much. : Perhaps the greatest advantage an Internet startup has on its mainstream media rivals is it can get going without so many of the built-in costs that a long-standing enterprise accumulates. It doesn't need big offices or big names. It's not locked into an existing payroll. It can broadcast without a transmitter and studios and publish without a press and delivery trucks. : The reason cutting costs became so fashionable among broadcasters and publishers even before the economic downturn is that, with audience and revenue spreading out across the Internet, there was no longer the money available to support all that it once did. A digital startup need only spend what's absolutely necessary. : Webio was a digital operation that acted and, more important, spent like an old-time analog outfit. Before the downturn. : "In the couple of weeks prior to us getting on the air, man, we were treated like kings!" Matt Weber, a WSCR staffer who left for the Webio, wrote on his blog this week, recalling two kick-off parties, a White Sox suite, TV commercials and more. "We had first-class Webio merchandise, nice business cards. I mean the whole nine" yards. : Many involved in Webio talk about how they were paid much more than they had been in their old radio jobs. Hundreds of thousands were spent on marketing for the station. It sent five people in style to Detroit for the Blackhawks' playoff series. : The site, which grew out of the online talk show North established last year, launched with a full-time daytime weekday lineup the week the baseball season began. It didn't last to the Crosstown Classic, although North said ads sold all right. : With a simulcast of North's Comcast SportsNet Chicago morning show with Jiggetts as Webio's anchor, did it need to spend so much for so many others? Wouldn't it have made business sense to slowly build up? Part of the plan was to bank on new cars eventually being equipped for Internet access, but how many new cars are being sold these days? : As Webio wound down Tuesday, one could hear the staff dealing with the paradox that, yes, Hernandez was why it ended, but he was also why it began. : Left unknown was whether he ever ran Webio with a long-term plan in mind. : "I think he knew he was going to lose money for a little while," Rogers said before leaving Coppock and company to wrap up the final show. "But I think he thought this would truly explode after a year or two." : Instead, it blew up. : "He wanted this to work," Rogers said. "But you can't work based on a lie."

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