Frankly, I had forgotten Jerry still wrote things, until David Field had to shout him down last month.
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Major cuts made at WMMR
- Thread starter radiodx10
- Start date
A different owner might have made a different choice - but when expenses exceed revenue, changes will occur.
That struck me too, and I was going to comment on it, but I figured everyone else here was going to bring it up. (Alas, we stand alone. LOL.)
I read that as coming from the 21-year-old me, who was so idealistic about the industry. (I realized I was wrong before I managed to turn 22.) Beasley, et al, care about nothing more than making money because they are businesses and businesses exist to do precisely that.
A guy driving down the road, listening to WMMR and having any sort of impression that station ownership actually cares about him is fooling himself. That driver is nothing more than a tool the company hopes to utilize in the pursuit of profit. The companies feel the same way about their employees, so to be on the inside in 2022 and still be able to be so idealistic must have been quite a feat. And to watch it all come crashing down around him/her, must have been an awful feeling. I know a lot of us have felt it.
You know I was thinking about all of this a bit more. Let's say instead of cutting Jackson, they just made Ben-FM automated? or run an adult hits satelite format?
I'd love to know what went into making this decision.
IMO- BEN-FM is also automated as it can be. Not having a morning show would hurt ad revenue--so an inexpensive morning show is lot more profitable than a 18+ year vet in the afternoon. This does not take into account the loss of an industry vet who was very respected and appreciated for what he has done for the local music scene. The decision was purely economical., reduce high on-air salaries and eventually replace them with cheaper talent.
No one in this industry expects to spend any length of time at one stations (even a stations steeped in rich tradition like WMMR). The Pierre Robert's of this industry are rare and will not continue. Even Preston and Steve are on their third frequency, thankfully in the same market and their success (ratings) have continued to increase. Morning shows are the only daypart that needs to be personality driven (IMO). Being in a larger market, we have been very lucky to have long standing personalities and not had to deal with the dearth of VT and syndicated shows as mid and smaller markets have for decades.
This is the beginning of the end, my friends.
WMMR is a heritage station and my feelings for this station run deep, I have been listening since the mid 80s. It saddens me, but like everything else things change.
Good Luck to the employees (both off and on air) who are out of work. Keep them in your thoughts.
This thread is painful to read. Many of us fell in love with radio because of the personalities we loved. While the corporate defenders on this board will continue to tell us that we are wrong about this and all of our other radio opinions, many of us can't help but feel that radio has become boring, stale, and devoid of personality - even in big markets like Philly. I have followed Jaxon in several markets (I have fond memories of him from his days in Providence in the 1990s), and I hope that he lands somewhere.
The real culprit in this is not greed or desire for profits. It's debt. The consolidations that started in the 1990s led corporations to take on unsustainable levels of debt. Perhaps the best thing is for some of these companies to go Chapter 7 (although it would be bad for shareholders) and the clusters get broken up.
The real culprit in this is not greed or desire for profits. It's debt. The consolidations that started in the 1990s led corporations to take on unsustainable levels of debt. Perhaps the best thing is for some of these companies to go Chapter 7 (although it would be bad for shareholders) and the clusters get broken up.
The debt was totally sustainable until the recession of 2008 hit. Radio never recovered the 30% or greater loss of revenue that the recession brought on.
But there are many companies that did not have unbearable debt that were hit just as hard. In inflation adjusted dollars, radio today bills about 30% of the 2000 level. Everyone has to adjust, even the well financed companies with reasonable debt.
Most companies, including Audacy and iHeart went through that exercise years ago. That includes tower lease-backs.
Wait, wasn't he on nights? There is no revenue from nights. Zero. It's been that way for decades.
You don't know that. Stock prices are WAY down for all publicly traded broadcast companies. Cutting a night live personality is low-hanging fruit, and not an indicator of the health of a company. A lot of large companies are planning on buy-outs based on seniority, but it doesn't mean anyone is planning bankruptcy.
The only thing a hedge fund or private equity would be interested in; is if they could pick up the whole shebang for pennies on the dollar, then liquidate the assets.
And then what? Do you think some mom and pop's are going to just buy stations on a onesy, twosy basis and be able to hire a bunch of airstaff? Who's going to finance that? Private Equity? Nope, that ship has sailed. Banks? That dried up by 2008. If so, you don't understand what the challenges faced by traditional media industry is like these days.
Kelly - Jaxon handled 3p to 7p weekdays. That's a very important daypart.
Audacy still owns or leases a decent amount of real estate. Gross book value of owned land and land improvements is $105 million per the 2021 Form 10K. It is possible fair value is much higher than book value given the inherent nature of this asset category.
I did not dig deep enough into the notes to obtain operating lease info for real estate, but will do so once I can log in from a PC.
My earlier prognostication regarding a distressed debt exchange or chapter 11 reorganization is based on debt load relative to cash flow, not share price. The weak share price is a byproduct of each company's overlevered cash flows, as well as AM/FM broadcasting's multi-decade decline.
Edit (update):
I found the operating lease discussion on page 120 of Audacy's 2021 Form 10K. Rent expense for operating leases relating to tower sale-leasebacks are a manageable $2.2 million to $2.5 million a year. Operating lease expense for buildings & equipment is currently running around $50 million a year - which is a fairly significant number for a company whose pro forma per annum Adjusted EBITDA run rate is in the ballpark of $150 million to $175 million (wow - that's lower than pre-pandemic Cumulus). Is it viable to shave off a significant cohort of that $50 million in annual lease expense? I have no idea.
Audacy still owns or leases a decent amount of real estate. Gross book value of owned land and land improvements is $105 million per the 2021 Form 10K. It is possible fair value is much higher than book value given the inherent nature of this asset category.
I did not dig deep enough into the notes to obtain operating lease info for real estate, but will do so once I can log in from a PC.
My earlier prognostication regarding a distressed debt exchange or chapter 11 reorganization is based on debt load relative to cash flow, not share price. The weak share price is a byproduct of each company's overlevered cash flows, as well as AM/FM broadcasting's multi-decade decline.
Edit (update):
I found the operating lease discussion on page 120 of Audacy's 2021 Form 10K. Rent expense for operating leases relating to tower sale-leasebacks are a manageable $2.2 million to $2.5 million a year. Operating lease expense for buildings & equipment is currently running around $50 million a year - which is a fairly significant number for a company whose pro forma per annum Adjusted EBITDA run rate is in the ballpark of $150 million to $175 million (wow - that's lower than pre-pandemic Cumulus). Is it viable to shave off a significant cohort of that $50 million in annual lease expense? I have no idea.
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Here we go with the arrogant responses (“you don’t understand the challenges faced…”). There are absolutely mom and pop owners who have local air staffs. And many of them exist in small markets all over the country. You don’t have to look hard to find them. My favorite example is WPLM/Plymouth, MA. They run a hell of a local station with a live, local air staff and live weekenders. I can even name some mom and pop operators in Iowa, of all places, where I’m sure revenue isn’t high.
If some of the huge operators went into Chapter 7, the assets would be sold for pennies on the dollar. There are plenty of wealthy individuals or businesses that would take on radio stations if they could be bought for cheap. Heck, a lot of big time sports owners are interested in doing just that.
will WMMR still continue to be high rated
You think WMMR goes completely automated anytime soon
No. P&S gone? AM not seeing it.
Philadelphia Magazine reporting Pierre Robert’s contract almost wasn’t renewed last year Friday Was a Strange Morning at WMMR
But that isn't really the case here. The real culprit here is the current advertising depression that has hurt sales at ALL ad-supported media. Beasley doesn't have "unsustainable levels of debt." The staff cuts are simply short-term fixes so the company doesn't in fact create any additional debt. They're managing their existing debt just fine. The interest rate hasn't changed, and neither have their payments. If they're forced to refinance by maintaining current expenses, it would cause new debt that would be at a higher interest rate. As a private company, they're choosing to cut expenses, which is the prudent thing to do. It's very possible the staff being cut are being told that if the advertising situation turns around, they could be offered their old jobs back. I've seen many examples of that in the past.
I was referring more to iHeart and Audacy when I was talking about unsustainable debt.
The debt hasn't changed for either company. What's changed recently for all radio companies is a huge drop in revenue combined with an increase in costs due to inflation. Insurance costs have gone up about 20%. Utilities have gone up 10%. Where does the money come from to pay those increased costs? Nobody wants to take on any more debt. The only way to avoid more debt is to cut any costs that aren't fixed, and that means personnel.
I didn’t say it’s changed. But they both owe massive amounts of money in addition to those other increased costs. Any prudent company wants to reduce its debt load and expenses in order to make more profits.
Then it has nothing to do with this thread. You can't cut debt when expenses are increasing and revenue is dropping. This same problem is facing mom & pop stations that have even fewer options, and are also cutting staff. Those stations are forced to replace local staff with outside syndication. Nobody wants to cut staff, particularly a family company like Beasley. The real culprit for staff cuts is decreasing revenue at a time of increased expenses due to inflation.
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