Bad decisions about buying good stations

[PTBoardOp94]

The station used to employ an Operations Manager who doubled as a production director and provided most of the voices for the spots. When he left in 2012 the owner decided to try not replacing him and going with free lance voices instead. The results have been extremely positive. The different voices on the station tend to make the advertisers stand out from one another while the station owner doesn't have a full time salary to pay.

This is the biggest upgrade many small station owners could make to their sound. First, it doesn't sound like your morning host is shilling for every business in town. It gives the AEs the opportunity to be creative with using voices with accents, children, two women, etc. And it just makes the station sound bigger. If you listen to a big city station, you won't hear the same six of voices doing all the ads.

None of that should be a concern for a company the size of Entercom though. This is all about cost cutting and efficiencies.

 

[flybynight]

If they don't like the changes, they can work for Buddy.

You mean "not Buddy".

 

[four4rock]

This is the biggest upgrade many small station owners could make to their sound. First, it doesn't sound like your morning host is shilling for every business in town. It gives the AEs the opportunity to be creative with using voices with accents, children, two women, etc. And it just makes the station sound bigger. If you listen to a big city station, you won't hear the same six of voices doing all the ads.

None of that should be a concern for a company the size of Entercom though. This is all about cost cutting and efficiencies.

From above: "If you listen to a big city station, you won't hear the same six of voices doing all the ads."

This may be a bit of an askew rant, but who is the woman that does WYRK's self-promotion things? She's a relatively recent voice. I find her monumentally annoying... the voice, the delivery, the tone, the timbre, the perceived attitude, the technical/production characteristics. Literally, made me change the station. And they seemingly use her for everything round the clock. I have no idea if she's local or what... but if that's a representation of centralized efficiencies, it begins to erode the reason to listen to a 'local' station.

 

[SirRoxalot]

There's a big difference between a mom & pop with one or two people voicing everything and a multi-station cluster with a plethora of talent with the responsibility to do voice work for commercials. How much efficiency is involved in having to email back and forth because a read isn't "just right" - with a remote production person having to describe "why". The idea that a staff of writers is going to be available to tailor production to a client instead of simply filling in the blanks in a copy book is laughable. And anybody who's been in the trenches understands that variability of AEs to write copy.

This is one of those things that looks good to bean counters, but doesn't end up performing well in the long run. It won't make a bit of difference for the 20% of national business, but it's likely to increase the workload for AEs and cost customers more if they want something that doesn't sound like the same-old, same-old. In markets where relationship selling is key, it will simply make it easier for the competition to offer "a little something extra."

About the only advantage I can see is that Sandy Beach's tired old voice might not be heard as often on Entercom airwaves. That would be a bonus.

 

[TheBigA]

How much efficiency is involved in having to email back and forth because a read isn't "just right" - with a remote production person having to describe "why".

You're trying to invent excuses to retain the status quo. Typically when out of town sessions are done, everyone is linked in by conference call. That way there's no confusion over performance or script. This kind of thing goes on every day in places outside Buffalo. And as I said, there's no reason why the former production person can't be hired on a per-project basis if that's what the client prefers. BTW just because the local production job is gone now doesn't mean that position won't return somewhere down the road.

 

[SirRoxalot]

You're trying to invent excuses to retain the status quo.

You're inventing excuses for fixing a system that ain't exactly broken. I think that the evidence for "cutting your way to prosperity" has piled up during at least two major bankruptcies.

The point is moot. No discussion here will change things. Time will tell who's right. BTW, have you admitted that Big Corporate Radio got almost everything wrong over the last decade and a half - as demonstrated by the bankruptcies and sell-offs? Yeah, I didn't think so...

 

[TheBigA]

You're inventing excuses for fixing a system that ain't exactly broken.

Who said they're "fixing a system?"

I think that the evidence for "cutting your way to prosperity" has piled up during at least two major bankruptcies.

You keep saying that as though it's true. It's not. In neither case did any of their cuts lead to bankruptcies. Both were caused by accumulating too much debt. There is no connection you can prove between staff cuts and bankruptcy. No one is trying to "cut their way to prosperity." They just want to be able to meet payroll. No point keeping a station at full staff if the revenues are dropping. Just as you can't cut your way to prosperity, you also can't HIRE your way to prosperity. More staff doesn't mean more revenue.

BTW, have you admitted that Big Corporate Radio got almost everything wrong over the last decade and a half - as demonstrated by the bankruptcies and sell-offs? Yeah, I didn't think so...

If CBS thought they could make money with radio, they wouldn't have sold it. That goes for anyone else. You don't see Amazon or Apple buying radio stations. Other than Buddy, how many other people in Buffalo are running around buying up radio stations?

 

[davideduardo]

The point is moot. No discussion here will change things. Time will tell who's right. BTW, have you admitted that Big Corporate Radio got almost everything wrong over the last decade and a half - as demonstrated by the bankruptcies and sell-offs? Yeah, I didn't think so...

Several of the companies erred by getting one thing wrong: they overpaid with borrowed monies in the pre-Internet and pre-smartphone expectation of continued revenue growth.

When growth stalled in the early 2000's, and then the recession hit in 2008 (coupled with changes in ratings measurements in the highest revenue markets) the premise failed, and the companies with excessive debt had to take extreme measures.

However, the two major failures were due to other factors: Clear Channel was bought at the height of LBO acquisitions by investment banking interests at way to high a price, and Cumulus was the victim of a mismanaged amalgamation of a large market group with a fundamentally smaller market company.

While there have been other bankruptcies or distress sales, that is nothing new and instances of that in radio go back to the 50's at least.

On the other hand, more prudent operators did well. Bonneville, Hubbard, Saga, and Beasley are examples. and there are smaller regional groups that are prospering thanks to being able to have clusters of stations in a variety of medium and small markets.

In fact, the larger sell-offs have been done not due to the lack of profitability but the desire to get out of radio due to wall street pressures for accelerated growth, something radio does not offer (and the transformation into new media enterprises is hampered by the lack of a profitable business model in that field).

Examples: ABC did not grow in the consolidation years of 1996 to 2000; they found themselves in a weak competitive position in very large markets. Lincoln Financial sold because the parent company underwent a merger and radio was spun off to finance, in some part, those changes. Susquehanna was sold because the heirs to the Pfaltzgraff fortune wanted to "see the money". Greater Media was sold, also, due to a later-generation of the family not wanting to run a radio company.

Remember that consolidation came late in the US. In many parts of the world, ownership of multiple stations in the same market has been possible since the 50's and 60's, and was, for half a century a formula for success.

So, really, radio's problems and issues are not caused by bad management of owners big and small but by changes in the advertising markets caused by the growth of digital, a competitor nobody could envision in 1996.

 

[davideduardo]

There's a big difference between a mom & pop with one or two people voicing everything and a multi-station cluster with a plethora of talent with the responsibility to do voice work for commercials. How much efficiency is involved in having to email back and forth because a read isn't "just right" - with a remote production person having to describe "why". The idea that a staff of writers is going to be available to tailor production to a client instead of simply filling in the blanks in a copy book is laughable. And anybody who's been in the trenches understands that variability of AEs to write copy.

I don't even want to think about sellers bringing laundry lists of copy points or, worse, writing copy that reads like a newspaper specials ad. Professionally written copy can always be better.

There is a reason why AEs at agencies don't write copy, either. They are different specialties with different skill sets.

And today, when a spot is cut in a production center, it can be done while the seller, or even the client, is online with the production team to give guidance and and to make instant changes. It's not done by email. In fact, copywriters may even speak in advance with the seller and the client to get guidance; they client will be impressed that they are getting a complete staff of pros behind their ad buy.

 

[TheBigA]

So, really, radio's problems and issues are not caused by bad management of owners big and small but by changes in the advertising markets caused by the growth of digital, a competitor nobody could envision in 1996.

And really, even with the hand-wringing in this thread about Entercom, they really haven't changed the way they've run any of their stations, whether they're heritage Entercom stations or CBS stations. They haven't replaced local talent with national syndication. They haven't spent lots of money building a big bureaucracy. They've kept operations local under local GMs, and allowed them to decide how to find the synergies rather than impose them from the home office. Lots of differences between Entercom and the other two companies mentioned.

 

[kw1025]

Several of the companies erred by getting one thing wrong: they overpaid with borrowed monies in the pre-Internet and pre-smartphone expectation of continued revenue growth.

When growth stalled in the early 2000's, and then the recession hit in 2008 (coupled with changes in ratings measurements in the highest revenue markets) the premise failed, and the companies with excessive debt had to take extreme measures.

However, the two major failures were due to other factors: Clear Channel was bought at the height of LBO acquisitions by investment banking interests at way to high a price, and Cumulus was the victim of a mismanaged amalgamation of a large market group with a fundamentally smaller market company.

While there have been other bankruptcies or distress sales, that is nothing new and instances of that in radio go back to the 50's at least.

On the other hand, more prudent operators did well. Bonneville, Hubbard, Saga, and Beasley are examples. and there are smaller regional groups that are prospering thanks to being able to have clusters of stations in a variety of medium and small markets.

In fact, the larger sell-offs have been done not due to the lack of profitability but the desire to get out of radio due to wall street pressures for accelerated growth, something radio does not offer (and the transformation into new media enterprises is hampered by the lack of a profitable business model in that field).

Examples: ABC did not grow in the consolidation years of 1996 to 2000; they found themselves in a weak competitive position in very large markets. Lincoln Financial sold because the parent company underwent a merger and radio was spun off to finance, in some part, those changes. Susquehanna was sold because the heirs to the Pfaltzgraff fortune wanted to "see the money". Greater Media was sold, also, due to a later-generation of the family not wanting to run a radio company.

Remember that consolidation came late in the US. In many parts of the world, ownership of multiple stations in the same market has been possible since the 50's and 60's, and was, for half a century a formula for success.

So, really, radio's problems and issues are not caused by bad management of owners big and small but by changes in the advertising markets caused by the growth of digital, a competitor nobody could envision in 1996.

I totally disagree. Big corporate radio has been creamed by bad managers and leaders. Buddy is is great manager, that is why he and his staff love it there. Buddy has the only radio station in Buffalo that has spent more to receive more. Not cut. No other radio station has dis on m-f 6a to 12 mid. Buddy does. He believes that helps the credibility of the listening experience. Bad management and no vision has killed corporate radio. We need more Buddy’s to be in positions of leadership.

 

[Rob Piotrowski]

I totally disagree. Big corporate radio has been creamed by bad managers and leaders. Buddy is is great manager, that is why he and his staff love it there. Buddy has the only radio station in Buffalo that has spent more to receive more. Not cut. No other radio station has dis on m-f 6a to 12 mid. Buddy does. He believes that helps the credibility of the listening experience. Bad management and no vision has killed corporate radio. We need more Buddy’s to be in positions of leadership.

The one tiny detail you left out is that Buddy doesn't have shareholders demanding more of a return on their investment. The only shareholder is him. Makes it a LOT easier to decide on spending money when you only have to answer to yourself.

 

[davideduardo]

I totally disagree. Big corporate radio has been creamed by bad managers and leaders. Buddy is is great manager, that is why he and his staff love it there. Buddy has the only radio station in Buffalo that has spent more to receive more. Not cut. No other radio station has dis on m-f 6a to 12 mid. Buddy does. He believes that helps the credibility of the listening experience. Bad management and no vision has killed corporate radio. We need more Buddy’s to be in positions of leadership.

I usually sprain my elbow when I try to pat myself on the back.

 

[four4rock]

I totally disagree. Big corporate radio has been creamed by bad managers and leaders. Buddy is is great manager, that is why he and his staff love it there. Buddy has the only radio station in Buffalo that has spent more to receive more. Not cut. No other radio station has dis on m-f 6a to 12 mid. Buddy does. He believes that helps the credibility of the listening experience. Bad management and no vision has killed corporate radio. We need more Buddy’s to be in positions of leadership.

"Bad management and no vision has killed corporate radio." <<< Truth! And, frankly, even 'DavidEduaro's' opinion overview above points directly to bad management.

 

[SirRoxalot]

And really, even with the hand-wringing in this thread about Entercom, they really haven't changed the way they've run any of their stations, whether they're heritage Entercom stations or CBS stations. They haven't replaced local talent with national syndication. They haven't spent lots of money building a big bureaucracy. They've kept operations local under local GMs, and allowed them to decide how to find the synergies rather than impose them from the home office. Lots of differences between Entercom and the other two companies mentioned.

I can guaranty you that the idea of cutting local production didn't come from the local GMs. I can also guaranty that the new "compensation plan" for AEs wasn't generated locally. GMs are also not exactly in charge of budget decisions or how much locally-generated revenue should be used to upgrade local facilities. It's not as top-down as Cumulus attempted to be, but there are plenty of edicts raining down from corporate and one-size-fits-all solutions being generated using former CBS practices. That's ironic considering that Entercom was in considerably better shape financially than the former CBS stations.

 

[davideduardo]

"Bad management and no vision has killed corporate radio." <<< Truth! And, frankly, even 'DavidEduaro's' opinion overview above points directly to bad management.

Most of the "bad management" did not come from radio professionals... it came from investment groups that bought companies like Clear Channel or financed unprepared groups like Cumulus.

The major problems in the industry have come from investors overpaying expecting continued growth and the typically high margins of post-consolidation radio. They were met with the PPM, the Great Recession and the Smartphone. None of those were in their business models.

 

[four4rock]

Most of the "bad management" did not come from radio professionals... it came from investment groups that bought companies like Clear Channel or financed unprepared groups like Cumulus.

The major problems in the industry have come from investors overpaying expecting continued growth and the typically high margins of post-consolidation radio. They were met with the PPM, the Great Recession and the Smartphone. None of those were in their business models.

By any reasonable definition all of that is bad management. Before, during, and after. It happens. Possibly, they all did the best they could... it just wasn't good enough.

 

[Tibbs4]

There is never a crystal ball when you need it. I have said many times on various posts that the concept of multiples should have been canned twenty years ago. While no one could see the exact evolution of online music, there were plenty of predictions of what would eventually happen. And those signs were pretty clear. The world will continue to evolve and whittle radio down more. You don't see the big price tags for a reason. The feeding frenzy of the 1996 Act and the push to quickly assemble a larger than accomplishable business model were the first major missteps in what we have seen evolve. The literal physical structure of the radio building was too weak to stand. The foundation could not carry the eventual floors of disaster to be built on top. Many of the original costs and plans were to extravagant and included continual growth and success without much consideration of a downturn economically or the rise of online music.

Radio did and has attempted to divest and diversify. The recent adjustments and sell offs are the first really smart and humbling moves. They are a decade to fifteen years too late. But what we are seeing now is at least a reasonable and rational business model that can keep radio viable for several more decades.

By the way, for what it is worth, very few markets have all in-house and locally made commercials. It may be 50/50 and in some cases local spots suck and in other cases, it's pretty obvious them people in that spot ain't local. I don't think the every day listener cares or catches the issue. The advertisers may have a different take. Hard (headed) to be believe this issue has been harder fought than all the other more important issues that radio is facing.

I think radio may well be on the smart track to being realistic on next decade and perhaps recover from some pretty dumb decisions that have hurt e v e r y o n e. Hopefully. One thing is for sure. No one ever has known what tomorrow really holds, but the ride seems to be stabilizing and debt layoffs are better than the B-word.

 

[Rusty Bridges]

It's easier to make your nut when employees are retired, on social security and medicare, work part-time and make 18.75 an hour.

 

[Tibbs4]

It's easier to make your nut when employees are retired, on social security and medicare, work part-time and make 18.75 an hour.

No doubt. That is some people's version of success. That's a lonely road. And also why the corporate world of radio rarely hits their full stride.

I believe in the concept of rewarding the people that over perform and stick with you through thick and thin. You go through a handful of folks that are not ever going to engage or "get it." That's the law of averages, I guess. But, some people will step up, stay up and stand up and those have worked with me for decades and when they retire, then we will cross that bridge together because they were the bridge for me. I understand that is sadly not radio today in many cases, but it could and should be. Sleep better at night.