neo11 said:
Apples and oranges. Corporations such as Citadel, unlike the average homeowner/homebuyer, have the ability, presumably, to make sophisticated financial projections far into the future. They also have a large bank of data, namely the revenues of their stations, the stations they are interested in purchasing, and the industry as a whole, in which to base their decisions.
And nearly nobody saw the recession coming. In fact, we were six to eight months into it before the "experts" recognized it. Projections are based on the economy as a whole. While we once projected 3 to 5 years in the future, today we can't project 3 to 4 weeks.
It was posted here the other day that radio revenues in the NYC market have been dropping each year since 2004 or 2005, which is before the serious financial meltdown began.
No, the revenues grew through 2005, and then were off slightly in 2006. Remember, the economy was stalled by then, and then fell late 2007 and we recognized a recession in mid-2008.
And a lot of these acquisitions happened in the years since then.
No, none of them did.
The Disney deal was announced in February of 2006, and did not close for 17 months due to the complexities of the reverse Morris trust Disney desired to pass the capital gains along the new Citadel shareholders. When the deal was done, there was no hint that the economy was heading the wrong way.
Prior to that, we had Disney closing on the many-year-old LMA of 1560 AM in early 2007. The Infinity to Viacom thing was in 2000 and closed in 2001. Other than those, the sales have been thinks like WPUT, WRVP, WWRU, etc and don't concern any of the ratings driven properties or any significant property.
This is what I mean by trying to discuss something with someone who does not have the facts straight. And because you have the facts wrong, your overall impressions of radio are wrong, too, as they are based on fiction.
The truth is that these companies really, really overextended themselves. Even in a healthy economy, they would have had to consider the declining revenues of the radio industry, and should have also considered scenarios in which the economy itself would turn down, as I would hope that the "geniuses that be" in upper management would realize that the fairy tale ride would not last indefinitely.
The transactions of significance were done years before revenues started to fall. Looking at a larger revenue market, LA, while billings were flat from 2003 to 2007, it was not till 2008 that revenues fell. Phoenix grew significantly year to year through 2007, and only found problems when 2008 came along. Dallas was flat, but with no decline, 2003 to 2007, and then off in '08. Houston grew through '06, and was off a little in '07.
In other words, radio was flat to small revenue growth through 2007. There was no indication that things would not remain so until well into 2008, when we realized that we had more than the kind of blip we had in early 2001.
The radio industry outright failed and is paying for it now...and I can't say I feel sorry for them. I do feel sorry, however, for the air staff, support staff, etc. who are losing their jobs, just so those who created this mess in the first place can save themselves and their undeserved high salaries and bonuses.
There is a funny thing about good managers, sales managers and programmers... there are not enough of them, so companies that do not reward high performers and give them bonuses find that the good people leave and the company is crippled by not having leadership.
And, if one of the best run companies in America, GE, was surprised by the recession, don't expect relatively tiny radio companies to have staff economists trying to forecast the economyl
As for the maximum potential of the signal...well, isn't Univision one of the companies that is disputing the PPM methodology? That would seem to indicate that the maximum potential of the signal hasn't changed, but that the PPM methodology is flawed.
The methodology is not flawed... witness several accredited markets. What is in question is the implementaion of the mthodology, and that is why specifically the PPM is not accredited in New York.
The use of a panel vs. a weekly sample changes radically the base for performance.
If that's the case, then should we go one step further and assume that the diary methodology was not flawed...or at the very least, not flawed to the same extent as the PPM? If that's the case, then we have clear examples of Spanish-language stations that have been top 5 12+...and even #1 on a couple of occasions, such as WSKQ.
The two methods are not comparable. The diary methodology is over 50 years old, and we are now capable of passive measurement, which, on face value, is better than a memory-based system.
You are correct here, and I am well aware that tight playlists are not new to radio. However, when discussing the bad programming that is out there, one needs to look past just the amount of songs in the playlist but towards other factors that make radio "radio" and not just a broadcast version of someone's mp3 player.
One of the things the MP3 player has done is made many listeners reject even more the DJ and the talking over songs and such. Mixes and things like that are what radio needs more of, and those don't include anyone talking.
It's funny, because those same people who "don't know anything about radio" and who "don't work in the industry" could have, and did predict that from the outset.
Not so.
However, it seems that there is a mentality that says that it's okay to fail...unless that failure has to do with, say, dance music...in which case, it's okay to attack the ownership, the station, the genre, the music and the fans. That mentality has become abundantly clear here on this board. Double standard, no?
This one was doomed from the beginning. A format that has worked nowhere in the US for more than a decade, a TV channel audio, limited power, and owners with big plans and empty pockets. I've participated in the due diligence on failed dance stations in two major markets, and the scene was ugly. And then they started a donation drive on air. That paints a big target on the station... and makes the operator the subject of much industry humor.
In the end, 92.7 has turned out to be a very good proposition... no other station serves the Mexican community and there are many, many ad buys specifically targeting that group as well as the knowledge among Hispanic ad agencies that, due to the lack of a stratification variable in the ratings for national origin, many groups are severely undercounted. Dance, on the other hand, is just one of a myriad of English language music formats and buyers as often as not don't even bother with the formats except when r&f is being done. Que Buena is unique on multiple counts, and there is money attached to each of the points. Not so English music formats.
Well a lot of that same logic could be applied to Pulse. No other station serves the dance community, there are many ad buys specifically targeting that group (nightclubs, etc.).
There are no "dance buys" at agencies. There may be club buys for dance, just as there are for Salsa and Reggaetón and Hip Hop and so on... but nobody has a national dance specific budget. There are hundreds and hundreds of millions of dollars of Mexican targeted budgets, though.
Yes, dance is one of many English-language formats and certainly there is a much wider choice versus Spanish-language formats, but just because one is an English-dominant speaker doesn't mean that all of those English-language formats would appeal to him/her. One could easily say that, for the dance community, Pulse is unique on multiple counts.
And the failure of so many dance stations certainly shows that the dance community is much smaller than you estimate it to be.
