back office cuts

[SirRoxalot]

Yeah, but the radio groups who most ignored both listeners and advertisers led the way to bankruptcy. The guys "who will retire without worrying about outliving their retirement money" did it by screwing stockholders and investors. Now, maybe Karma won't catch up with them, and maybe they don't have a conscience, but it that who you want to be?

 

[TVradioguru]

Yeah, but the radio groups who most ignored both listeners and advertisers led the way to bankruptcy.

Really! Can you please give me at least one example of a radio station or group that went bankrupt because they specifically ignored both listeners and advertisers?

 

[TheBigA]

What I'm saying is that revenue is coming back, which means that radio stations can afford to hire back some of the people cut due to economic exigency. Would revenue expand more quickly if the on-air product was better? Quite likely. Would the on-air product be better if production people had more time to do better work, with better copy from an expanded continuity department, written from information provided by a less harried sales person?

It's been my experience that increased time doesn't lead to better copy. Writers work best under deadline. As for quality leads to revenue, that logic simply doesn't work. People like what they like, whether it's better quality or crap. In fact, the crap seems to create the highest passion. If production people need more time to do their job, maybe their not too good. The pros I work with get it right the first time, because they know what they're doing. If you don't know that, then you don't know jack about radio.

 

[Goat Rodeo Cowboy]

Yeah, but the radio groups who most ignored both listeners and advertisers led the way to bankruptcy. The guys "who will retire without worrying about outliving their retirement money" did it by screwing stockholders and investors. Now, maybe Karma won't catch up with them, and maybe they don't have a conscience, but it that who you want to be?

It is possible you are looking out and seeing what you want to see... whether it is there or not.

No, some radio groups are anything but bankrupt today.

The guys who will retire without worrying about outliving their retirement money in many cases make the bucks only because they reward the investors and stockholders.

Tell me what other business you can be in today that does not stretch your conscience to near the breaking point some days?

Yeah. I grew up in rural, small town America where we knew how to give the appearance we were all very loyal, brave and trustworthy and some of us really believed it was true.

My restaurant man is selling me crap for food. My clothier sells me duds that sparkle but wrinkle too easy and wear out too soon. My kitchen appliances have to be replaced every 12 years or so. My hardware store sells me brass screws that break off when I screw them into wood. I don't even expect the kind of perfection from my pastor and my church you are saying the radio industry owes the public. And those people who do give the tender love and care to their radio station that I always gave and wanted to give may not do as well when you look at the books as do the hard-ball players in radio you dislike so much.

Radio does not do well if it programs like it did in 1948. Radio does not do well if it does business the way it did in 1948. And those of us who have an emotional content to our attachment to radio really have problems figuring out what 2010 is really all about.

 

[SirRoxalot]

Wow. The amount of cynicism here is overwhelming. I guess that the lesson I'm supposed to learn is that dealing honestly and fairly with customers, and providing customer service is "1948"? Otherwise, I can't see where restoring some of the jobs cut because of the dire financial straits caused by a combination of mismanagement and the recession is advocating a return to radio doing "business the way it did in 1948". I think a lot of people would be happy to return to 2007.

To answer your questions:

Citadel went bankrupt ignoring listeners, advertisers, and their own market managers. Regent quietly went bust, overshadowed by theh Citadel debacle. Clear Channel ain't exactly out of the woods, and neither are several other groups.

The idea that deadlines make for better copy is laughable. The "pros" that you work with "get it right the first time"? What pros would those be? As evidenced by at least one famous tirade, even pros like Casey Kasem don't always get it right the first time. And the idea that crap works as well as quality is just what your competition is relying on.

 

[TheBigA]

Citadel went bankrupt ignoring listeners, advertisers, and their own market managers.

False. Citadel went bankrupt for one reason: Too much debt. Had they not bought ABC Radio, they would not have gone bankrupt. Same with Regent. Had they not bought the CBS stations, they would not have gone bankrupt. It's simple economics.

And the idea that crap works as well as quality is just what your competition is relying on.

Believe what you want to believe, but pouring money on a problem solves nothing.

 

[SirRoxalot]

A, I notice that you deliberately ignored the "bad management" portion of my original comment. Is overleveraging your company not an example of bad management? You're right, it's simple economics.

Anybody who thinks that overworked people can produce better quality, and that better quality doesn't matter, ought to have a lot of opportunities at some of the radio groups out there. At least in the short term. That's the attitude of someone who's looking to strip mine an industry, not someone who's looking to rebuild it in a new economic and media environment. Once again, get out of your office and into the trenches to get a clue as to what's really going on.

 

[TheBigA]

A, I notice that you deliberately ignored the "bad management" portion of my original comment. Is overleveraging your company not an example of bad management? You're right, it's simple economics.

And you deliberately ignored the "ignoring listeners, advertisers, and their own market managers" part of your own comment. That is false. Running away from it won't make it true.

 

[SirRoxalot]

I'm the one who WROTE "ignoring listeners, advertisers, and their own market managers", so I hardly ignored it. Citadel made Draconian cuts in personnel, and in compensation to those who were left in an attempt to stave off bankruptcy. Now that bankruptcy has relieved them of the debt burden, there have be precious few people brought back onto the payroll, and nobody (outside of upper management) has had their compensation restored to previous levels, despite the fact that their workload has increased dramatically.

Citadel's revenues dropped significantly more than the average in 2008 and 2009, and have not rebounded as fast as the average in 2010. Most market managers will tell you that they lost talent from sales, programming, and operations, and that the people they have left are overburdened. That's why Citadel is lagging behind the marketplace.

 

[TheBigA]

Citadel's revenues dropped significantly more than the average in 2008 and 2009, and have not rebounded as fast as the average in 2010.

Citadel is stuck with a lot more dead or dying AM frequencies than most other major companies. I think those stations are dragging down the company overall. And they have yet to absorb all of the inefficiencies of ABC Radio. I don't think they've bottomed out in that regard yet. Those employees who feel "overburdoned" should get out.

 

[SirRoxalot]

I'll pass along your advice. Several of them have gotten out. Unfortunately, there aren't a lot of places to land - yet. We'll see what happens as radio recovers, and other opportunities open up. I don't see a lot of loyalty to Farid & friends - or ANY coming back in the other direction.

PS - It's spelled "overburdened".

 

[TheBigA]

I'll pass along your spelling information to the lead singer of the Animals.

 

[davideduardo]

Citadel made Draconian cuts in personnel, and in compensation to those who were left in an attempt to stave off bankruptcy.

As BigA explained, Citadel has a lot of AMs of the KGO sort that had enormous staffs. As AM listening aged, and radio revenues dropped with the economy, it became obvious that AM would have a lesser and lesser part to play in ad driven radio (as opposed to brokered or paid programming models). While other companies could either make the adjustments or even move AM formats to FM, Citadel was too dependent on the never-to-be-recovered AM revenues and unable to move most big AMs to FM (KGO again). AM dependency, the economy and debt made their perfect storm.

Most larger markets revenues were off 30% to 40%, so draconian cuts were obligatory everywhere. But at the AMs, a revenue drop of 40% is beyond the margin of most such stations, so many lost money and continue to do so.

 

[Mike Sheridan]

Citadel made Draconian cuts in personnel, and in compensation to those who were left in an attempt to stave off bankruptcy.

As BigA explained, Citadel has a lot of AMs of the KGO sort that had enormous staffs. As AM listening aged, and radio revenues dropped with the economy, it became obvious that AM would have a lesser and lesser part to play in ad driven radio (as opposed to brokered or paid programming models). While other companies could either make the adjustments or even move AM formats to FM, Citadel was too dependent on the never-to-be-recovered AM revenues and unable to move most big AMs to FM (KGO again). AM dependency, the economy and debt made their perfect storm.

Most larger markets revenues were off 30% to 40%, so draconian cuts were obligatory everywhere. But at the AMs, a revenue drop of 40% is beyond the margin of most such stations, so many lost money and continue to do so.

And somehow Citadel didn't know this when they bought the stations? Duh!

 

[Mike Sheridan]

What I'm saying is that revenue is coming back, which means that radio stations can afford to hire back some of the people cut due to economic exigency. Would revenue expand more quickly if the on-air product was better? Quite likely. Would the on-air product be better if production people had more time to do better work, with better copy from an expanded continuity department, written from information provided by a less harried sales person?

It's been my experience that increased time doesn't lead to better copy. Writers work best under deadline. As for quality leads to revenue, that logic simply doesn't work. People like what they like, whether it's better quality or crap. In fact, the crap seems to create the highest passion. If production people need more time to do their job, maybe their not too good. The pros I work with get it right the first time, because they know what they're doing. If you don't know that, then you don't know jack about radio.

I think this post says a lot about the current state of radio today. Pick your crap!

 

[TVradioguru]

And somehow Citadel didn't know this when they bought the stations? Duh!

As I recall the deal to buy ABC radio networks and the O&O's were being negotiated over a long period of time, not an impulse purchase by any means. Did Citadel overreach with debt just before the economy tanked? Obviously the answer is yes, but publicly traded companies are under pressure by Wall St. to grow. Between their timing of purchasing a division probably larger than the parent, combined with the stable of AM properties, Citadel bit off much much more than they can chew, it happens with non-radio organizations as well. I have to say that the assumption that somehow programming on those stations have caused the fall-off of AM stations, Citadel's debt load, or the economy in general, is completely without merit.

 

[SirRoxalot]

Let me simply reference the latest San Francisco ratings, with special emphasis on the fate of KGO. This is quoted from Taylor on Radio Info:

San Francisco – You already know about Giants-crazy KNBR, which rode this year’s Team of Destiny to the World Series championship, 3.6-5.3-7.2. How rare is that in San Francisco? Ratings savant Chris Huff says “KNBR becomes just the sixth station ever to hold the top spot in the 44-year history of Arbitron ratings in the market.” The others are KGO, KCBS, KSFO, KFRC and KOIT-FM. All-news KCBS-AM/FM has to be content with second place this time (6.2-6.1-6.3). Nice month for public radio news/talk KQED, 5.2-5.2-5.6, now in third place. An unusual soft month for soft AC KOIT, 5.5-5.3-4.8 – which will be forgotten as its all-Christmas format takes off. Talk KGO drifts down 5.1-4.7-4.4.

While we're at it, let's take a look at the number 2 market in the country:

Chicago – Consistency pays off for all-news WBBM-AM, going 5.7-6.2-6.2 since September, and easily retaining its #1 ranking, age 6+ AQH share. (It also doesn’t hurt to have Bears football.) Tribune talker WGN pops back up, 5.0-4.6-5.1. It’s tied for second place with urban AC “V103” WVAZ. More election-talk success, this time benefiting talk WLS-AM – 3.9-4.3-5.0 since September, and ranking fourth, just like New York sister station WABC.

AM is still viable in markets where the programming is compelling.

KGO is an example of what happens when corporate rules by decree, based on an agenda that has little to do with what's going on locally. If they simply set reasonable revenue targets, and let local management determine how to get there, they'd likely be more successful. But Citadel has a syndication division to prop up. Oh, well. KGO was only an AM anyway.[/sarcasm]

 

[TheBigA]

Those numbers are nice to look at, and make great conversation items, but they're 6+, not selling demos.

The KNBR numbers are an anomoly, caused by the World Series.

KGO is an example of what happens when corporate rules by decree, based on an agenda that has little to do with what's going on locally. If they simply set reasonable revenue targets, and let local management determine how to get there, they'd likely be more successful. But Citadel has a syndication division to prop up. Oh, well. KGO was only an AM anyway.[/sarcasm]

KGO isn't carrying Citadel syndication. It's live and local 24/7. The one syndicated show it ran, Dr. Dean Edell, was just cancelled.

KGO wasn't ruled by corporate decree. Instead it was mismanaged under ABC, and operated under a bloated local bureacracy. That overstaffing was possible when combined with a TV operation. But once that was removed, all you're left with is expenses.

Citadel's problem in San Francisco is it owns two stations, both talkers on AM. It's very tough to make money that way.

KGO's biggest problem now is an aging demo and the lack of format options.

 

[davideduardo]

AM is still viable in markets where the programming is compelling.

WGN and KGO have one thing in common: neither is in the top 20 in 25-54.

Both are just about 100% locally programmed with local talent, so that excuse does not work.

Neither has an FM it could move to.

And that gives you an idea of what an AM with ageing demos and no endgame is like.

 

[davideduardo]

Most larger markets revenues were off 30% to 40%, so draconian cuts were obligatory everywhere. But at the AMs, a revenue drop of 40% is beyond the margin of most such stations, so many lost money and continue to do so.

And somehow Citadel didn't know this when they bought the stations? Duh!

No, radio revenues were pacing a tiny bit upwards through '07 and were the Citadel people to have been able to predict the recession, they would have been heralded as visionaries.