THE ECONOMICS OF PIRATE RADIO
Illegal unlicensed pirate radio has been part of the airwaves from the first days of regulation. ‘Radio pirates’ initially were those who refused or failed to pay for a license to listen to radio while in later years it has referred to those who have broadcast without a licence. Pirate radio especially in the western world has been a commercial success and has created a radio industry once the preserve of state monopolies. In 2010, the British regulator OFCOM claimed that some UK land based pirate radio stations were making £5,000 per week from advertising. In 1965 and 1966 before the Marine Offences Act was passed by the British parliament in 1967, Radio Caroline broadcasting from International waters off the East coast of
Britain was generating £800,000 to £900,000 per year translating into today’s terms as £14 - £15 million pounds per annum in revenue streams. The cash for Caroline was garnered from spot advertising at £160 per spot having begun in 1964 charging £90 per 30 second spot, pay to play deals with record companies known as ‘Payola’ a
practice banned in many territories including the United States where one DJ, Phil Lind claimed at a Congressional hearing that he had been paid $22,000 to play one record and from US based evangelical preachers who purchased late night airtime at £150 per show transmitted. According to author Mike Barron Radio Caroline was an instant success,
‘One of London’s biggest advertising agencies was said to be planning to advertise with the pirate ships through its Dutch and French companies. On the advertising front it was Caroline which hit the jackpot. On May 11th 1964
£30,000 worth of advertising poured in.’
The pirates claimed according to Horace Robertson that by broadcasting records from little known artists or recording companies they played a substantial part in breaking the record monopoly in Great Britain where in the early 1960s ninety eight percent of all records sold bore the label of only four manufacturers. According to one claim with the help of the pirates small record companies were able to get twenty present of the market in three years.
In Ireland pirate radio especially throughout the 1980s created a fledgling radio industry that thrives today as the independent commercial radio sector. The so called super pirates of the 80s including Sunshine Radio, Radio Nova, WLS and ERI earned millions of Euro in revenue through advertising but were heavily criticised as many ignored the need to pay taxes or royalties. With Government inaction the pirate stations began to expand their boundaries broadcasting for longer, with better equipment and most importantly eating into advertising revenue. Initially this was not a major problem for the State broadcaster as the adverts aired were for the local butcher or corner shop who would never be able to afford or consider on RTE radio but with the arrival of high powered professional stations with massive ratings, corporate advertisers seeking for value for money began to drift away from RTE and create large profits for many of the pirate radio stations who despite the illegal status paid their taxes.
Illegal broadcasting has many monikers and therefore many versions of financial structures. Some titles attached to this broadcasting include pirate radio, free radio, clandestine radio and bootleg radio they are however all illegal and their operators subject to the rigours of laws that differ in severity and enforcement in various jurisdictions. At a radio conference in Luxembourg in 2018, Jose Perez who had been involved in illegal broadcasting in Madrid felt that ‘pirate radio’ referred to commercial illegal broadcasting, ‘free radio’ was exactly that, commercial free and the station subsidised by a co-operative with DJ’s paying subscriptions to get on air while ‘clandestine radio’ is primarily seen as politically motivated.
Illegal radio differs across the globe often dependent on the attitudes of the authorities towards the piracy of frequencies. In the United States, pirate stations are often described as amateurish, fun and quirky as the FCC pursues the broadcasters in a cat and mouse game. Stations move frequency and location regularly in an attempt to stay ahead of raids. Some stations have become part of a sub culture including Orphan Radio in Seattle. Orphan was launched by musicians Sage Redman and Joe Gillick with its first broadcast in June 2017 as a promotion tool for Orphan Records that the couple had began in 2015 but struggled to get airplay on local radio.5
In 2018 the FCC carried out four raids across the United States with levied fines totalling $161,844. From 1998 until 2017 the FCC made 2,187 visits and 148 raids on pirate stations across the country. There were Notices of Apparent Liability fines and illegal broadcasting fines totalling $ 4,701,558 (an average $425). Many of these fines remained uncollected despite the authorities in attempt to collect and court challenges. One of the largest fines levied was against a pirate television station that totalled $144,344. As of the summer of 2018, the US congress is debating a new law the ‘Preventing Illegal Radio Abuse Through Enforcement Act or the Pirate Act which would fine the pirate operator $100,000 per day broadcasting illegally and up to $2 million for each incident of conviction of pirate broadcasting.
In the UK the first wave of pirate radio in the 1960s was primarily based off shore with stations like Radio Caroline and the very financially successful Radio London broadcasting from ships in the North Sea with other stations based on World War Two defensive towers in the Thames Estuary. Many of today’s pirate stations especially in major cities like London and Birmingham are known as ‘tower pirate radio’ as operators base themselves on the roofs of many of the tower blocks. These pirate broadcasters air music by artistes that could not and often would not get airplay on mainstream stations whether they are BBC or ILR. OFCOM claimed not only that some of these stations were making £5,000 per week but that they were being used by criminal gangs to distribute drugs through coded message given out on air. Conservative politician James Brokenshire claimed in a House of Commons debate that these so called ‘tower stations’ displayed ‘a wanton disregard for the health and safety of others’. This was based on stories that some of these stations were siphoning off electrical supplies from electric door locks and elevator power units.
Kiss FM was launched in London in October 1985 broadcasting on 94FM. Those behind the station were Gordon ‘Mac’ McNamee, Tosca, Pyers Easton and George Power. After just three days on air the station was raided by the DTI but came back on air a couple of days later. Another more aggressive raid on December 11th with McNamee claiming that the raid ‘had caused significant financial problems’. D.J.s who made a name for themselves and went onto successful careers in national radio included Tim Westwood and Trevor Nelson. Kiss claimed at one time that they had half a million listeners and in 1987 even though a pirate station they came second in an Evening Standard newspaper poll as most popular station in London second to the legitimate Capital FM. McNamee knew the power of the revenue that Kiss was creating and he set up a front company for Kiss business dealings and created another revenue stream by starting hugely popular club nights which were heavily publicised on the station capitalising on its growing listenership base.
In 1988 Kiss FM the pirate closed and applied for one of the new licences in London which they won at the second attempt with the now legal Kiss launching on September 1st 1990. By 2010 Kiss was reporting £9.7m in turnover translating to a £3m profit.
In 1983, Skyline Radio in South London was raided twice within 48 hours. The first raid netted the authorities £7,500 in pirate equipment and the second raid a further £13,000 was taken. The DTI complained that while fines were being issued by the courts, the fines were not been paid and the cost of collection made it financially difficult.
In October 1984 Horizon Radio broadcasting from Bellenden Road, Peckham London was raided by the DTI (Department of Trade and Industry) enforcement officers and £20,000 worth of pirate equipment was confiscated. The station owner Chris Stewart was found guilty and fined £1,000 but because the transmitter went ‘missing’ between the studio and the DTI van the prosecution were unable to prove illegal broadcasting.
OFCOM identified two strands of revenue advertising dance and rave events and DJs paying 20 per hour to be on air to get exposure.
In 2014 Haringey Council in London reported that there 19 pirate radio stations broadcasting in the borough. A new policy was implemented that year with proactive patrolling of tower blocks to prevent pirate stations locating both their transmitters and antenna on the high towers. Within a year the Council reported that almost all pirate radio broadcasting has ceased saving the Council £90,000 in enforcement and loss of fines. They believed that should there methods be employed across the city of London where nearly 150 pirates operated that the city could save £1 million per year.
London pirate radio has been a breathing ground for award winning music artistes like Ms Dynamite, Dizzy Rascal and Normal Jay. Ms Dynamite acknowledged her success being grounded in pirate radio as a seventeen year old. She warned in her Brit Award acceptance speech that the music industry could not rely on TV talent shows to produces stars and that a purge of pirate radio would threaten music genre such as rap, garage and house music. Jazzie B a former pirate radio broadcaster and a member of the music collective Soul II Soul said that the pirate stations (especially in London) were ‘the windows for home grown talent’. There was a growing music industry around artists who only received airplay from pirate radio station.
In September 1978, the Irish Independent published an article under the headline
‘£1m Pirate Radio Threat to RTE Advertising’ in which RTE Assistant Controller of Radio Programming Kieran Sheedy claimed that the new wave of pirate radio stations across the country including Big D, ARD and Independent Radio Galway were a major threat to the finances of the state broadcaster. Three years later it was being reported that the figure estimated to be lost to the state broadcasters had more than doubled as the more professional super pirates took to the airwaves. On October 28, 1980 Aer Lingus a leading semi-state company, Aer Lingus, said that a statement concerning its association with a Sunshine Radio promotion that "The tie-in with Radio Sunshine involved no cash transaction." However, after Sunshine boss Robbie Robinson said he had photocopies of the Aer Lingus cheque, "which I am going to frame”, an Aer Lingus spokesman said that contrary to what had been stated previously the airline had in fact paid some money to the illegal station.
In June 1981, Taoiseach Charles Haughey called a general election. In the run up to the election political parties and independent candidates used the pirate stations like ARD and Big D to get their message across especially to the young voters who they knew listened in large numbers to these stations. The main reason for use of the pirates was that R.T.E. were unable to carry actual advertising apart from party political broadcasts which were strictly monitored and time restricted. The pirates, with no such restrictions added heavily to their bank balances for the airtime given to the political parties. The parties that on one hand promised to close the illegal operators were on the other embracing their medium to get their message across to the ever growing numbers of listeners. The leaders realised even if they did not want to admit it that the majority of the youth of the nation were now listening to the pirates all over the country. Some of the politicians who appeared on the airwaves included Mary Harney (then a Fianna Fail candidate), Michael Woods, the Minister for Health and Social Welfare and Richard Burke of Fine Gael who was interviewed on Big D. Mary Harney, who became the Tánaiste in the Fianna Fail/Progressive Democrats Coalition Government, went further than radio and appeared on the pirate television channel, Channel D who following their interview with Ms. Harney asked viewers to vote for Ms. Harney because of her support for independent television.
In 1982 a report pointed to the major pirate radio stations charging advertisers’ ir£20 – 25 per thirty second spot, RTE Radio 2 was charging ir£ 72 for the same slot and the main national station RTE Radio 1 charging 250.00 for the same advert.
As pirate radio proliferated across Ireland, the stations rarely registered themselves to pay tax, to pay wages within a statutory framework, to pay royalties but occasionally
State bodies intervened. In 1980 the Limerick based station Big L run by Mike Richardson and Hayman Harris found itself on the receiving end of a tax bill of ir£17,000. The state tax collection agency said that
‘They maybe illegal but they are a business and so they must pay tax. The amount is an estimated assessment in the absence of tax returns.’
In Ireland within two years of Radio Nova beginning broadcasting illegally in 1981, the station has a 40% listenership rating as compared to the legal state broadcasters pop music station RTE Radio 2 having only a 20% rating. Nova was opened by Chris Cary, a former DJ on Radio Caroline in the North Sea and he used a myriad of companies to run the station and to maximise profits. The station was so successful in its five years on air that advertising agencies and corporate Ireland were heavily using the station. The stations across Ireland, some more professionally ran than other all had high quality rate cards being produced. The station was described by David
McKenna in the Sunday Tribune newspaper as
‘a soundscape designed to produce advertising revenue. Its main aim is to make sure that listeners don’t change wavelength. Such changes would affect the figures on which Nova’s advertising rates are based. As far as possible the listener must forget that he or she is involved in a conscious activity.’
Nova’s transmitters were located in a portacabin on the grounds of the Green Acres Country Club whose owner Eugene Brady bought 26% of Radio Nova. Chris Cary estimated that the initial investment in the station was £150,000 of which he produced the other 76% with Eugene Brady. When Radio Nova was launched, Cary tried for five months to incorporate his company. The Register at the Companies Office refused to agree until November 1981 when Nova was registered under the Companies Act 1963. The company formed to oversee the running of Radio Nova was titled 'Nova Media Services Limited' and the memorandum and articles of association were drawn up by the solicitor firm of Cawley, Sheerin and Wynne.
Cary used his profits from his computer business Compshop to launch Nova while Brady in return for his 26% gave Nova the site for the transmitters and was provided free advertising for his club on Radio Nova. The property company for The Compshop was Uniminster Limited who leased 19 Herbert Street originally to the Compshop and then sub leased it to Radio Nova. With the space leased, the equipment for the station was leased from a company called Stratford Leasing. This company located in England was also owned by Chris Cary. When Radio Nova finally closed its doors in March 1986, Nova Media Services Limited's total assets was reported as a couple of chairs and eighty thousand car stickers.
In a Sunday Independent obituary piece of Chris Cary by Liam Collins in 2008, he noted that Cary claimed that his Radio Nova in its five years on air had generated €20 million in advertising revenue. At a press conference to launch the Irish Pirate Radio Archive former Nova DJ Declan Meehan said the Cary once claimed he was paying his DJ’s more than the then biggest star on BBC Radio 1, Steve Wright who presented the popular afternoon show on the British station. He also revealed that at one point a large travel agency was sponsoring a holiday giveaway on his Breakfast show when he was approached by a rival travel agency who wanted to wrestle the promotion away from their competitor and offered a larger prize plus the bonus of a free holiday for the presenter and a friend.
In order to boost their listening figures and therefore their advertising revenue, Nova and her sister station Kiss FM which had been set up to cope with the massive influx of advertisers, started a number of cash giveaways, for format of which were copied by various other stations over the years. In March 1983, Kiss FM announced that they would play three records in a pre-arranged order and that the fifteenth caller to the station to say 'You Did It' would win £5000.00. The winner on that occasion was Jane Biddulph from Churchtown. In September 1983, Radio Nova carried out a similar promotion, this time giving away £6,000. The records chosen in order were (i) Wanna Be Starting Something' by Micheal Jackson, (ii) 'Baby Jane' by Rod Stewart and (iii) 'Lets Dance' by David Bowie. Again the fifteenth caller when the records were played won the money but it was not always smooth sailing for Nova's promotions. Another promotion on Radio Nova ran into trouble when the phone lines jammed when the three records were played but when repair crews arrived at Stocking Lane to repair the problem they refused to pass the N.U.J. pickets. The next promotion that they ran was a written competition when they placed a cartoon in a number of daily newspapers and requested listeners to write in the funniest caption but the promotion did not have the same appeal or drama of the phone in competition.
On the charity front in 1982, 1983 and 1984, Radio Nova carried out projects called
'Operation Novacare' which in 1983 raised £14,000 for the National Rehabilitation Institute. Other revenue streams included The Nova Roadshow, a travelling disco, was based mainly at Nova Park but in the early days of the station it was based in Maxim's Nightclub on Claire Street. On a number of occasions the Nova Roadshow went to the Isle of Man where the station had a sizeable listenership. The Nova Boutique was launched from the ground floor of 144 Leeson Street. The shop sold Nova T-Shirts, pens, car stickers etc. and they also had a five pound membership club which entitled you to a sticker, a membership card and reductions to entry at Nova Park.
In 1988 just before the introduction of the new Wireless Telegraphy Act, the Law
Society in a hard hitting editorial in their magazine The Gazette criticised the Revenue Commissioners for allowing businesses to claim business expenses in their annual tax returns for advertising with illegal pirate radio stations.
There are many costs attached to operating a pirate radio (or indeed television) station.
In its final year on the air Robbie Robsinson successfully ran a number of listener competitions giving away prizes worth €20,000 in one while €50,000 was handed out in another. Like so many Irish pirate radio stations across Ireland, Sunshine closed at the end of December in accordance with the new legislation but it also unsuccessfully applied for one of the new Dublin independent commercial licences. While Robinson expended considerable finances with a High Court challenge to the awarding of the licence he did make one final profit from his pirate radio station when the station’s transmitters and aerial were sold to the company that won the national radio franchise licence, Century Radio.
The activities of political pirate radio stations can also have economic repercussions. Government oppositions have often resorted to using pirate radio stations to spread their propaganda leading to national financial instability and using the illegal airwaves to encourage civil disobedience. In Northern Ireland in the late sixties and early seventies as the so called sectarian troubles intensified across Northern Ireland both side Protestant/Loyalist and Catholic/Nationalists were using pirate radio stations in their enclaves and ‘no go’ areas to encourage their listeners to stifle the economies of their opponents by issuing calls onto the streets to man barricades, to boycott shops and businesses and the generally upset daily life such as hijacking and setting fire to buses to a steep financial loss for companies across Northern Ireland.
In the era of commercial pirate radio in Northern Ireland Kiss FM opened March 13th
1985 with the station opening covered by Ulster Television. Originally broadcasting on 96.5mhz, Kiss moved to 103mhz FM announcing 102.7 and using jingles from the Chris Cary station of the same name in Dublin. The station announced that it had taken an investment of £6,000 to launch the station as a seven day a week operation but this was offset with the £4,000 in advertising revenue that the station had taken for its first week of transmissions. This boost did not sit well with the British Department of Trade and Industry and at 1.50p.m. March 21st 1985 the station was raided and closed. Pirate radio was big commercial business.
Pirate Radio Cost Analysis
1. There are initial costs involved in setting up a pirate radio station. The transmitter is one of the main ingredients and the cost can vary from station to station depending on the operators plan for their station. Some stations in the 70s and 80s built homemade transmitters but even these
required the purchase of parts. Some transmitters were purchased on the black market from legal operators while other was purchased at considerable expense such as the super pirates in Ireland spending as much as € 10,000 on a good quality FM Stereo transmitter. Studio equipment is needed and while most operators purchased their own equipment others stole them from other pirate operators. An aerial is also required with proper earthing. Some stations need a location therefore studio and transmitter sites need to be rented. Other stations are located in an operator’s bedroom, the transmitter is homemade and the aerial is strung between trees and expenditure is limited but could make as much as a super pirate in advertising revenue.
2. A transmitter and the studio needs power and while some pirates hijack some one else’s supply many have electricity bills to be paid. Some stations purchased and ran external generators to keep their pirate on the air.
3. Some of the bigger stations paid staff and even Payroll taxes for their staff. Radio Nova in Dublin even recognised unions like the NUJ within their station even though Nova’s troubles with the unions helped to lead eventually to its demise in 1986.
4. As with any business generating cash, the business whether covered by a registered company or not is required to pay taxes. The bigger stations often set up limited companies to limited loses or to launder cash. The setting up of a company in itself cost money. Legal radio stations are required to pay performing rights such as IMRO and PPI. In the UK stations avoided this requirement by playing artistes who had not been signed by a major label.
5. Another cost that stations often to factor in is the cost of a raid for their illegal activities. There is a fine, court costs and the cost of replacing confiscated equipment.
6. Publicity for the station cost money whether it was invested in stickers, mugs or pens. Stations today use social media to promote their station on twitter or instagram. In the 1940’s one Irish station promoted itself by having supporters cross the city using chalk to write the station information on the pavement, which worked well until either the police
with a bucket of water or a heavy shower washed away their promotion.
And while there are costs involved in opening and running a pirate there are many rewards for shrew operators.
1. Advertising is key and the more powerful the stations signal and quality of that signal will lead to a wider audience. There have been many instances reported when Sales executives for the stations have disappeared with advertising revenue or stolen advertisers when a rival operation goes on air. While many mainstream stations use advertising agencies to source advertisers, pirate radio stations go into the local community and seek advertising from neighbourhood businesses, the local butcher, pub or taxi company. The authorities in many countries including Ireland and Britain have made it offence to advertise on pirate radio stations but very few have been prosecuted for doing so.
2. At some stations DJ’s paid in contributions to get on the air. This practice was known as ‘pay to play’.
3. While completely illegal the system of ‘payola’ is popular with pirate radio stations, this is where a record company pay a popular station or DJ to heavily promote and rotate a record.
4. Many of the UK and Irish pirate radio stations of the 21st century play dance, rave and garage music not played by mainstream stations and operators use their stations to promote raves and dance nights at nightclubs generating another revenue stream.
5. In the United States evangelical preachers pay radio stations to pay their shows. Similar revenue generation was carried out by pirate stations Radio Caroline and Radio Dublin.
6. Some pirate stations have eventually earned legal status (Mid West Radio, Ireland, Radio Caroline, UK, leading to even greater profits from advertising revenues.
7. For many DJ’s pirate radio has been a cheap effective way of both learning the art of radio and gaining experience leading them into full time media careers across both radio and television. This pirate radio training has also benefitted legal stations as their new staff have already a good grasp of their profession. In Ireland in the 1980s when legal radio replaced the pirates, many shows were presenter driven and when the pirate DJs moved onto the legal airwaves they brought a ready made audience with them.
 ‘Illegal Broadcasting – www.ofcom.org.uk
 ‘How a Radio Ship and 7 Men Shook Up Britain in 1964 (2014)
 The Suppression of Pirate Radio (1982) by Horace Robertson
 University of Luxemburg Summer School on Transnational Radio 5 www.seattlemet.com
 United States Federal Communications Commission Report
 Hansard – British Parliament Papers
 Interview with Gordon McNamee with www.smarta.com
 ‘Kiss FM From Radical Radio to Big Business’ by Grant Goddard
 Independent Newspaper UK February 22nd 2003
 Irish Newspaper Archives, the Irish Independent September 4th 1978
 The Irish Broadcasting Hall of Fame Blog
 Wireless on Flirt FM
 Radio Today interview with ‘Radio Maverick Robbie Robinson