For years, outspoken Catherine L. Hughes used the airwaves to broadcast the voice of the African American cause as she saw it.

She vehemently defended the honor of black politicians such as former mayor Marion Barry and former Maryland state senator Larry Young when they were dogged by allegations of crime and corruption. (She later broke with Barry and hired Young as a morning talk show host.) To her listeners, she was the empowering voice of the black community, and in 1986 she led a scathing, 13-week protest against The Washington Post over its portrayal of a rap artist arrested for murder and over a controversial column.

In short, Hughes fashioned herself into the straight-talking icon of Radio One Inc., and in the process molded her chain of 27 radio stations, including pending acquisitions--the largest African American-owned public company in the country--into a larger version of herself: sassy, powerful and urban.

While it's an image and a strategy that have sold well on Wall Street, Radio One's culture is changing. It still tries to keep its finger on the pulse of its African American, urban listeners, sending--as it always has--employees to clubs and malls to keep close tabs on the culture on the streets. Now its new, younger generation of leaders--led by Hughes's son and Radio One's president and chief executive, Alfred C. Liggins III--is focusing on another goal: transforming Radio One into a national radio empire.

Locally, Hughes's erstwhile appeal as a black advocate is fading into the background as the company focuses more on bottom-line interests that play into a mainstream, majority financial culture. Both Hughes and Liggins say it's a natural evolution: Expanding in the capital marketplace is the ultimate realization of black empowerment that serves and broadens the voice of the African American community.

Lanham-based Radio One's stock price increased 166 percent last year and hit a high of $96.50 since it went public last May. The company raked in revenue of more than $46 million in 1998--42.4 percent more than in 1997--and its take in the first three quarters of 1999, $57 million, easily topped that 12-month total. Radio One is growing at a faster rate than much larger networks such as Clear Channel Communications Inc. and Infinity Broadcasting Corp. Now, Radio One has its sights set on gobbling up more of the market, with the goal of doubling in the next year.

"The track record of the company is outstanding; it's the best-performing radio stock," said Tim Wallace, a broadcast analyst for Banc of America Securities in New York. "They're very disciplined, as a company and as a business," bringing in "the right people as programming directors and making use of marketing research" to sell air time effectively to advertisers, he said.

Radio One stock climbs every time it acquires a new station because it is good at taking over marginal urban stations and aggressively marketing them, Wallace said. "Radio One has been smart to buy their urban market, pick their battleground and beef up in that area," he said. "They'll continue this pace of expansion for many, many years."

Changing Culture

Though she has been off the air for six years, Cathy Hughes's take-charge persona still shapes Radio One's image. Listeners know her as the teenage mother-cum-czarina of flagship station WOL-1450 AM who forged her way in the white male-dominated world without the benefit of a college degree.

"She is a human spirit--she's a businesswoman, but she never lost that human spirit," radio show host Imogene B. Stewart said of Hughes, whom she met in the 1970s.

In the years after Hughes took over WOL in 1980, it was housed in an "old piece of run-down trailer" at Fourth and H streets NE, said Stewart, who saw Hughes there regularly. "She'd have a mop in one hand and a baby [Liggins] in the other," said Stewart, who now hosts a Sunday morning talk show, "The Georgia Peach," on WOL. "She's tough. They don't make that kind of material no more."

Hughes has been very successful at raising capital in the last decade as she has broadened her ambitions nationally. She started the company in 1980 with $1 million in seed capital from a minority enterprise investment group and $500,000 from Chemical Bank. In 1987, Radio One got an additional $4 million investment from a minority venture capital fund and $5 million in financing from the former DC National Bank, followed by larger investments from AT&T Corp. in 1992, Greyhound Lines Inc. in 1993, and NationsBank and several other traditional investors in 1995. Radio One's high-yield bond offering in 1997 raised $75 million.

Hughes has also been successful at various times in getting financial incentives from the D.C and Maryland governments to expand her business. In Maryland's case, in 1997 she received $500,000 in "Sunny Day" funds to move her company from the District to Lanham, a grant that was wrapped in controversy from the first because of Hughes's strident political commentary. She later gave the money back, calling it "blood money" after the Maryland legislature expelled Sen. Young.

Hughes, now 52 and chairwoman of the company, and Liggins together own 26.4 percent of the company and 63 percent of the voting stock. The biggest 15 institutional investors, mostly mutual funds, own 59.81 percent of the company.

Liggins took over as president and chief executive in 1989, and although Hughes remains involved in most major decisions, she has ceded most of the day-to-day control to a new generation of leaders, most of whom are younger than 50.

Listeners say they can hear the change in the executive suite reflected over the local airwaves.

Eldon Pittman is a regular visitor on Radiodiary.com, a Web site established by WOL fans, many of whom complain about the changes at the station. When Pittman moved to Washington 15 years ago, it was Hughes's fervent voice on the air making an impassioned prayer that caught his attention and hooked him on WOL. Pittman, a labor relations specialist for the Postal Service, still listens to the station, but he says the strong community flavor has been lost in Radio One's business success. Indeed, WOL is simulcast now in Baltimore and Washington, diluting its traditional focus on the District. Hughes's office is in Baltimore, as well, while Liggins makes his corporate home in Lanham.

"I don't think they have quite as much of an impact because they're spread too thin," said Pittman, a D.C. resident. "I called in once and asked her: Did she think she could combine being an activist and being an entrepreneur. At the time she said yes, but time has proven that she can't."

On the other hand, going public has tamed the racially incendiary tone of some of Radio One's hosts, said David Friedman, director of the Anti-Defamation League in Washington. A few years ago, Friedman addressed some of his concerns in letters to Radio One but got little response, he said. Though "Radio One has not always been vigilant [about racial comments made by their hosts], as they go forward and become a national force" they're likelier to be "sensitized" to such matters, he said.

Liggins defends using the media and his stations as a forum for discussing race. "We at WOL embraced issues that were big in the black community," which many non-blacks consider controversial, he said. "It's all arguing over resources and entitlement--very real issues," he said. "The fact of the matter is, so long as humans will always delineate along race, religion, economics and social class," those concerns will continue to exist, he said.

The Next Generation

One need look no further than the change at the helm--from Hughes to Liggins--to understand the shifting focus at Radio One.

"On Wall Street, I and the CFO are the image of the company," Liggins said. "On the street, she is the image."

But pinning down Hughes's image can be difficult. She is idiosyncratic, alternately sweet and charming, tough and combative. Her strong opinions on politics and race belie the maternal sensitivity she brings to what her son calls the "soft," human relations side of dealing with employees and listeners.

One afternoon recently in her Baltimore offices (on a brick courtyard named Cathy Hughes Plaza), Hughes was running late for an interview because she was counseling a maintenance man about his personal problems. "I have a natural empathy with individuals when I witness injustice," she said in the same lyrical voice that hooked so many listeners in the '80s.

But in the next breath, she delivered an acerbic criticism of a reporter who, she said, misquoted her, adding with a frown and a gesture to the many framed articles displayed prominently in her office: "That's why I never read press on me anymore."

Jack Messmer, executive editor of trade magazine Radio Business Report in Alexandria, describes Liggins as "very much a button-down business school type," while his mother "is less Wall Street-oriented for sure," being more a product of the civil rights movement than of the financial sector. "She was building a radio company when there weren't many women or black women doing it," Messmer said. "She's still a strong bond to the black community that transcends the business."

In the past few years, "the culture [at Radio One] absolutely changed," said Scott R. Royster, an upbeat, well-dressed Harvard Business School graduate who joined the company as chief financial officer in 1996. "There was a need to clean house" within the leadership to fulfill Liggins's vision for growth, Royster said.

"[Liggins] brought a lot of traditional, professional people into the company and transformed it"--people such as Chief Operating Officer Mary Catherine Sneed and Vice President of Programming Steve Hegwood in 1995, Royster said. The transfer of control in the company was smooth because "Ms. Hughes allowed the senior management of this company to operate with tremendous autonomy--because she wanted to see this company succeed on a very big level and she wanted to see Alfred succeed on a very big level," Royster said. "And that was the bottom line."

Hughes frames the bottom line in a different way: "My cause has always been the improvement and elevation of the African American community," she said. "I see the radio station as our vehicle for the cultivation and development of our staff," which numbers about 700 people, about 75 percent of whom are African American, she said.

"Deep down, what we're doing for the African American community is amazing," Royster said. In addition to employment, "we've created a tremendous vehicle to continue serving" the community as a voice and an economic engine. "America is all about capitalism and the creation of wealth--the creation of shareholder value is like a mantra for Alfred and I--and that can be consistent with what we want to do." In other words, for Radio One, winning the capitalist game is what racial equality and empowerment are all about.

Down to Business

Liggins, who grew up in the business, is now responsible for delivering his mother's baby into a new age.

He speaks with the confidence of a self-made man, having dropped out of the University of the District of Columbia but graduated with an MBA from Wharton Business School in 1995.

A conversation with Liggins turns quickly to share prices, revenue, acquisition opportunities, all the nuts and bolts that drive Radio One's growth. "A year when the company has gone to $1.5 billion in market cap is the same year that employees feel more connected to the company," he said of the culture at Radio One.

He started working at WOL at age 15, but "partied" like a normal teenager during those early years when his mother made him help out at the station. After a couple of jobs in the recording industry in Los Angeles, Liggins returned to WOL in 1985 as an account manager, when "my job was to convince advertisers that this was a viable place to put their money."

It was a tough job. Black media outlets historically get lower advertising revenue than their mainstream counterparts, and for all its growth, Radio One is no exception. Advertisers' dictates not to buy time on urban or Spanish stations reduced African American radio station revenues by an average of 63 percent, according to a 1999 report by the Civil Rights Forum on Communications Policy, submitted to the Federal Communications Commission.

That trend is changing, though, and as advertisers take aim at the buying power of African Americans, Radio One's urban focus positions it well, analysts say.

Radio One is riding a wave of consolidation in the broadcast industry that was set in motion by the Telecommunications Act of 1996, which deregulated the industry and enabled companies to own multiple radio stations in the same market. Companies such as Radio One, Clear Channel and Infinity have rushed to stake claims on some of the 10,000-plus radio stations around the country, trying to realize gains in advertising revenue through consolidation.

Companies are not only buying up clusters of radio stations around the country but are merging with one another--a trend that analysts say will continue for several years.

"In terms of physical consolidation, we're in the sixth inning," with mergers such as that of Clear Channel and AMFM Radio Networks in October, broadcast analyst Wallace said. But the real benefits of consolidation are in capturing a bigger share of advertising dollars from other forms of media, where the industry is still in the third inning, he said.

Over the past few years, radio has siphoned off advertising revenues from other traditional media such as newspapers, Wallace said. "The radio business, which historically attracted 7 percent of total advertising [expenditures], got more than 8 percent this year, and I think will reach 10 percent in the next three to five years," he said. Nationally, radio took in $15 billion in advertising revenues in 1998.

Radio One, with a market capitalization of more than $1.7 billion, is still a bit player compared with behemoths such as Clear Channel, the industry leader with more than $28 billion in market value. Radio One's advantage is that unlike larger radio networks, it has a highly targeted market--an audience that is about 70 percent African American, a demographic group whose growth in population and income is outpacing that of the mainstream.

David R. Jones, senior vice president at minority investment firm Blaylock & Partners LP in New York, says Radio One's urban-format formula is one that will continue to work even outside of the target demographic. "Radio right now is a sexy industry anyway," and Radio One is a "little gem that is hitting on a niche market . . . the urban market, which is really growing so it is not just urban, it is also suburban," he said.

So where is Radio One headed?

"We want to be the premier vehicle for the urban market, whether that is news, culture or entertainment," Liggins said. That means exploring Internet options to expand the company's presence, with "a portal that reflects what our radio stations are."

Analysts say Radio One might consider being acquired to more quickly catapult it into the big time.

Hughes insists that she will never want to sell, and Royster says the firm will be able to grow for a while on its own. Right now it is in nine of the top 40 African American markets, with plans to enter into six more in the next six months. "As long as we believe that we are creating more shareholder value than any other entity, then we are going to hold on to these assets," he said.

But Liggins is acutely aware of the passage of time and the opportunities that flow with it. "I have a meeting in 45 minutes," he said as he greeted a reporter in his corner office overlooking a strip mall in Lanham.

Industry consolidation is happening at breakneck speed, and Liggins is demanding a place at the center of it. "There is no limit to what we want," he said.