Can Clear Channel Sink Any Lower?

[SirRoxalot]

Cheap programming generally doesn't garner stellar ratings, or stellar revenue. The idea that "it takes money to make money" has not been disproven, despite the "new economics" touted by dot-coms, real estate speculators, and corporate radio executives.

Good syndicated programming is cost effective, and gives smaller markets access to large market talent. It also tends to be more economical, so everyone wins.

I'm not sure how many people either working in radio, or listening to the resulting product, will feel like a "winner" after these cuts.

The FCC, FTC, and others may not have anything to say about severance, but they have a LOT to say about the continuing licensing and operation of Clear Channel stations. They take a dim view of companies that promise one thing during hearings on topics like consolidation, then do something very different when those promises come due. Sooner or later, such practices will come back to haunt them.

Do you really think that any company that is suffering from declining income will be blamed if it has to adjust its staff size to that appropriate to the situation?

The FCC can not require a company to lose money.

I never said anything about Clear Channel's right to "adjust its staff size". I did say the Clear Channel promised certain levels of severance to employees who might be terminated during hearings before the FTC on whether to allow the Clear Channel's acquisition by Lee, Bain, etc. If they fail to live up to those promises, there could - and should - be repercussions.

 

[davideduardo]

Who else has covered the story? I didn't see it covered on ABC, CBS, or NBC. I did have trouble logging on here though last night. I guess hits were overloading the server.

It's not a big enough layoff to be on anyone's radar. The radio cutbacks were fewer than the custs at Warner Brothers, which also did not make the news outside of LA.

 

[TheBigA]

Who else has covered the story? I didn't see it covered on ABC, CBS, or NBC.

http://abcnews.go.com/Business/story?id=6694051&page=1

http://www.msnbc.msn.com/id/28700162/

 

[Carmine5]

Who else has covered the story? I didn't see it covered on ABC, CBS, or NBC.

http://abcnews.go.com/Business/story?id=6694051&page=1

http://www.msnbc.msn.com/id/28700162/

As blood has been spilled (figuratively speaking) in the Clear Channel firings so has the printer's ink.

Many, many newspapers have been covering the layoffs based on the radio personality and staff cuts in their respective cities.

Here are a few:

http://www.sdbj.com/article.asp?aID=86691217.1405651.1734148.70040802.40288.457&aID2=133387
http://www.nbcphiladelphia.com/news...Fired-Will-You-Miss-Diego-in-the-Morning.html
http://www.freep.com/article/20090120/SPORTS18/90120095/?imw=Y
http://www2.tbo.com/content/2009/jan/21/radio-cuts-include-mj-sidekick-joey-b/
http://www.startribune.com/entertai...elr=KArks7PYDiaK7DUdcOy_nc:DKUiD3aPc:_Yyc:aUU
http://www.mysanantonio.com/business/37940489.html
http://newsblogs.chicagotribune.com...ell-is-first-of-local-clear-channel-cuts.html

So, no, this travesty has not gone unnoticed despite Clear Channel's weaselly timing of the firings.

C5

 

[JimmyNeutron]

I am surprised to read the many posts that are basically referring to CC as evil. It is a large corporation that is within its right to buy and sell as the management sees fit. IMHO, CC has not done anything unethical or immoral, they have done what businesses throughout time have always done, tried to make money. How has the business practice of CC differed from WalMart, Google, or other corporation?

The ONLY thing that is going to keep a company in business is revenue. If the company is losing revenue, there are a few avenues that can be utilized and unfortunately, layoffs are one of the avenues. Show me one successful corporation that has hit tough economic times but held its entire staff, no layoffs.

There seems to be a notion where people hate big business. Business is like technology, it is always changing and the only way to stay in business is to stay ahead of the game. CC has made it a practice to stay ahead. For anyone who has posted negative comments about CC and the layoffs, is your view skewed because you had a friend or family member affected by the layoffs? Perhaps you have been laid-off in the past?

Let's not fault big business for taking care of its own. After all, CC does still have over 17,000 employees (estimated, this is not an approximate number) that are still employed.

And yes, I was dramatically impacted by layoffs and my point of view is that business does what business is allowed to do.

 

[Roger That]

How has the business practice of CC differed from WalMart, Google, or other corporation?

Those other corporations don't have dedicated industry forums/boards full of wanna-bes and washouts bringing this all to the forefront.

The lay-offs hit a lot of people very hard. It is unfortunate, but it's is, indeed, a function of big business.

 

[SirRoxalot]

Radio Ain't a Widget Factory

There are two problems with trying to run radio like a widget factory:

1. Radio is part of the media. The purpose of the media is to entertain and/or inform. The product is created by individuals who have a resource called "talent". Without talented individuals, radio ceases to inform or entertain.

2. Radio relies on access to airwaves that are owned by the PUBLIC. In return for that access, they PROMISE to serve the "public interest, convenience, and necessity". That means that decisions CANNOT be based solely on profitability.

If Clear Channel, Citadel, or any other corporation wants to "buy and sell as the management sees fit", and follow the business practices of "Walmart, Google, or other corporations", they simply need to get out of the broadcasting business and open a retail store, Internet access portal, or other non-broadcasting corporation.

EVERYONE is affected by the Clear Channel (and other) layoffs. The effects reach every listener, every advertiser, and everyone who relies on radio to keep them informed, especially in times when other media are not available. Whether its an ice storm, a toxic spill, an earthquake, or a hurricane, there's only ONE medium that is readily available to virtually everyone instantaneously, and that's radio. I doubt that you can find many homes in American where a battery-powered radio doesn't lurk somewhere in a drawer, or as part of another battery-powered device.

Clear Channel, and others, have a responsibility to assure that they are prepared to serve the public interest, convenience, and necessity, especially in the case of an emergency. Somehow, I don't think that stations that are unstaffed for many hours at a time are going to fullfill this function effectively.

 

[redneckriviera]

I am surprised to read the many posts that are basically referring to CC as evil. It is a large corporation that is within its right to buy and sell as the management sees fit. IMHO, CC has not done anything unethical or immoral, they have done what businesses throughout time have always done, tried to make money. How has the business practice of CC differed from WalMart, Google, or other corporation?

The ONLY thing that is going to keep a company in business is revenue. If the company is losing revenue, there are a few avenues that can be utilized and unfortunately, layoffs are one of the avenues. Show me one successful corporation that has hit tough economic times but held its entire staff, no layoffs.

There seems to be a notion where people hate big business. Business is like technology, it is always changing and the only way to stay in business is to stay ahead of the game. CC has made it a practice to stay ahead. For anyone who has posted negative comments about CC and the layoffs, is your view skewed because you had a friend or family member affected by the layoffs? Perhaps you have been laid-off in the past?

Let's not fault big business for taking care of its own. After all, CC does still have over 17,000 employees (estimated, this is not an approximate number) that are still employed.

And yes, I was dramatically impacted by layoffs and my point of view is that business does what business is allowed to do.

I doubt seriously whether anyone in radio begrudges Clear Channel a profit, any more than they castigate GM or Merrill Lynch a profit.

Part of the ill will comes from awareness of the fabulous wealth being sucked from the company by those at the top. The news that the Mays brothers have been paying themselves $5 million + annually--and still stand to "earn" $4 million annual bonuses for exceeding goals--while whacking 1850 jobs of moderate-income employees--strikes some as immoral. And, correctly.

And part of it comes from awareness that these people--the Mays family with a major-league assist from the Hicks family--gamed the system for their own benefit, steering the legislation that allowed them to scoop up about one-third of all the radio stations in America that were worth anything (okay... worth significant amounts of money) in a Wall Street play that netted them, personally, billions of dollars--stripping literally hundreds of radio stations to squeeze out every penny of profit. And, in the stripping, eliminating thousands upon thousands of jobs, thereby creating havoc in the lives of thousands of families. Mostly for the sake of making themselves even richer than they already are.

These people have personally driven our industry into a ditch. So, yeah, in our eyes, that strikes us as evil. And, correctly.

 

[davideduardo]

Re: Radio Ain't a Widget Factory

Clear Channel, and others, have a responsibility to assure that they are prepared to serve the public interest, convenience, and necessity, especially in the case of an emergency. Somehow, I don't think that stations that are unstaffed for many hours at a time are going to fullfill this function effectively.

In a world where you, or I, have thousands of instantly viewable, readable or listenable information and entertainment sources, the situation of the 30's and 40's where many cities had no media other than print and those that had stations had few of them.

Today, who is to say that playing AC ballads with voicetracked jocks is not a service? If it fills a need for a segment of the population, it is serving.

As to emergency alerts, remember that the EAS service is and must be triggered by a govenment authority, not the station. Whether manned or not, stations are set up to automatically enter the EAS system at whatever geographic level it is triggered.

Before automation, lots of stations just signed off at 11 PM or midnight; isn't it better to have them on and able to transmit EAS alerts? In any case, I know of few stations that ever had news staff on in the late night or overnight hours, so there is no reduction in service anyway.

 

[KFodor]

I want to chime in on this one...

You talk about radio's "responsibility to serve the public interest, convenience and necessity in the event of situations that require EAS activation." You are correct, however...

David is correct that, if the EAS equipment is set up correctly and local emergency officials take the time to properly learn and teach how to properly operate said equipment, it will provide adequate "first alert" messaging. When you bring up Minot, ND (as many often do)...it's important to remember that, while station management, at first could not be reached, the local law enforcement didn't know how to operate the EAS equipment properly. Both ends have to do their jobs for the equipment to work.

But, yes, radio has a responsibility. It boils down to the individuals in station management being a "backstop" to the equipment. That's why they're paid the (supposedly) "big bucks". Never in this business has it ever been said that a PD, or News Director, or even GM's job (in a really small town operation) is a guaranteed 40 hour work week.

A few years back, as a Program Director, I slept with a weather radio 14 inches from my ear. If a line of storms was approaching our area in the evening, I paid attention to the forecasts. Then, if that weather radio went off that night with a warning for our area, even if it was 3:30 in the morning (our station was tracked from 12M-5:30a), I got my butt out of bed and drove the 12 minutes to the radio station and took the "voicetracked" station live. And, no...I got no extra compensation for it. I did it...because I understand the need to serve the public interest, convenience and necessity.

Sure, it was easier on my work schedule when we had live jocks 24/7, but, with my background as a radio newsperson, I could do the job faster and better than a part-timer. There are times I wish things were like they were, but I accept what they are now...and do what I have to do to make it work.

 

[TheBigA]

Re: Radio Ain't a Widget Factory

That means that decisions CANNOT be based solely on profitability.

I don't think it is. If it was, they would have blown out 30,000 people, not 1875, and they would run their stations the way XM Sirius runs its channels. They aren't. There is still a lot of local programming, and a lot of local relationships taking place. Sure it's been diminished a bit, but not completely thrown out. Contrary to the points of view expressed on message boards.

Clear Channel, and others, have a responsibility to assure that they are prepared to serve the public interest, convenience, and necessity, especially in the case of an emergency. Somehow, I don't think that stations that are unstaffed for many hours at a time are going to fullfill this function effectively.

Keep in mind that local emergency systems have changed drastically since the 1920s when that line was first written into the Radio Act. There are now large staffs of local civil defense people who report to state and federal officials. None of that existed 60 years ago. Now when a disaster occurs, it is mainly the responsibility of police, civil defense, and Homeland Security, not some board operator or DJ. In the hurricanes last summer, radio stations were treated no differently by local civil defense than any other business. They were forced to evacuate their stations before the hurricane, and not permitted to return on the air until the rest of the population returned. How does that serve the public interest? I think it would serve this country well to have the FCC challenge a station on this issue, and have all these factors made public so everyone knows that the playing field changed a long time ago, and radio is simply a tool for these government agencies...nothing more. Many of the FEMA folks are still burned by the news media that presented them as buffoons, and they're not about to treat broadcasters with respect just because of a sentence in a 70 year old document.

 

[SirRoxalot]

The Cost of Consolidation

Personally, I hope that Clear Channel blows out 30,000 people and runs their stations like XM. It will hasten their demise, and drive down the value of the stations to the point where people who understand that broadcasting is MORE than a widget factory might be tempted to get back into the business. Many of them sold out to Clear Channel and other consolidators because they knew that they'd never make the kind of money being offered by the consolidators by operating their stations. Well, what's coming to light is that the consolidators can't afford the stations that they bought with borrowed money either.

As far as serving the "public interest, convenience, and necessity" is concerned, there is a large area of service between syndicated AC pap and EAS service. EAS is used in EMERGENCY situations. There are stations that provide entertainment and information before and after the actual emergency. When power is out, the Internet is down, people don't have power to turn on TVs, and even phone service is out, radio has traditionally been there to provide information to people. That's not going to happen if there is no local staff, or too little local staff to get that information on the air.

 

[TheBigA]

Re: The Cost of Consolidation

down the value of the stations to the point where people who understand that broadcasting is MORE than a widget factory might be tempted to get back into the business.

I read this comment all the time, as though it's true. Who are you talking about? Sam Zell? Really? Roy Disney? A lot of the people who sold out to CC ten years ago are in their 70s and 80s. Some, like Buck Owens, have even died. The insurance companies, like Nationwide, who sold to CC are in such terrible shape they have no money for broadcasting.

Give me the name of someone who is likely to come back into broadcasting if the price is right. One name.

When power is out, the Internet is down, people don't have power to turn on TVs, and even phone service is out, radio has traditionally been there to provide information to people. That's not going to happen if there is no local staff, or too little local staff to get that information on the air.

How do you know?

Did you know that most government agencies charged with serving the public are not staffed 24/7? No one seems to be concerned about that.

 

[SirRoxalot]

The Con in Consolidation

There are dozens, if not hundreds of operators, particularly in smaller markets, who got out of the game because the consolidators threw so much money at them that they could do better living off the interest than they could operating their radio stations. Some of them were single station owners, some were small group owners. Some were "big time" radio sales people or talent who wanted to "run their own shop" - and found out just how hard that was. They took the money and ran. You'd be amazed at how many miss the game, and would LOVE to take on the consolidators in a programming battle - but ONLY if the price is RIGHT.

You want names. Most of them wouldn't mean anything to you anyway, so why bother? Trust me, when station prices get low enough, they'll be there.

You obviously haven't been through an "emergency" situation recently. I live in the Northeast. This year alone, New England was hit with a major ice storm that knocked out power to some areas for a week or more. Having lived through that kind of situation, my ONLY link to news in the outside world was the radio. Until I got a generator - which took a week - there was no TV, Internet, or other electronic media. When necessary, government CAN and DOES function 24 hours a day. They have resources that they can call in when necessary.

Radio stations were hard pressed to provide vital information. In Buffalo, NY - market #52 - we have three major ownership groups - Citadel, Entercom, and Regent. Of the three, only Entercom has a real news person on staff. Their flagship AM has enough staff to go 24/7 if necessary. They have all the backups required of an EAS Primary, but they STILL have had instances where they couldn't broadcast because of breakdowns at the studios or transmitter sites during a major power outage.

The other groups? A couple of years ago, they were able to provide critical information - as well as "aid and comfort" - to people otherwise cut off from the wider world. Now? I'm not so sure. There have been continuing cuts in personnel, and they're likely to follow the Clear Channel example and cut even further. Some of the "old pros" - who DID know how to handle programming that was more complex than reading liner cards - are being "put out to pasture" because "they cost too much".

Clear Channel - and others - have NO interest in "serving the public interest, convenience, and necessity". They have ONE interest - PROFIT. Since they operate on PUBLIC airwaves, perhaps it's time that the FCC, FTC, SEC, and Justice Department reminded them of their OBLIGATION to serve the public as more than a "network repeater".

 

[TheBigA]

Re: The Con in Consolidation

Some were "big time" radio sales people or talent who wanted to "run their own shop" - and found out just how hard that was.

If they thought it was hard then, what makes you think it's easier now? Let's be serious.

You'd be amazed at how many miss the game, and would LOVE to take on the consolidators in a programming battle - but ONLY if the price is RIGHT.

What is the right price? How about free? Say they got a license for free...no cost at all. But the facility is in need of repair. Can they put the millions of dollars into the physical plant, and then the millions to hire a full time live and local staff? With no credit? Let's be serious.

When necessary, government CAN and DOES function 24 hours a day. They have resources that they can call in when necessary.

My point is they're not staffed 24/7 all the time. In the ANTICIPATION of an emergency. These are agencies whose only job is public service. We pay them with our tax dollars, and they're home in bed

Of the three, only Entercom has a real news person on staff.

How about WBFO? Isn't that a radio station?

A couple of years ago, they were able to provide critical information - as well as "aid and comfort" - to people otherwise cut off from the wider world. Now? I'm not so sure.

It is absolutely NOT radio's job to provide "aid and comfort." There are government agencies whose job it is to do that. Just because a frequency is licensed by the government doesn't mean radio is a quasi-government agency or institution. Speak with the real government agencies about that, and they do not support any mission by radio to provide "aid and comfort."

Clear Channel - and others - have NO interest in "serving the public interest, convenience, and necessity". They have ONE interest - PROFIT. Since they operate on PUBLIC airwaves, perhaps it's time that the FCC, FTC, SEC, and Justice Department reminded them of their OBLIGATION to serve the public as more than a "network repeater".

None of these clusters are operating as network repeaters. That's just a load of bull.

The airwaves are no different than public highways. You have a license to drive on them. How much aid and comfort do you give other drivers? And let's say the FCC takes a few licenses away. Who are they going to give them to? Who has the money to run these operations the way you want, with full staffs waiting for the next snowstorm? Even the state of New York doesn't do that?

Look...you have a lot of time on your hands. How much volunteer work do you do? Tell me. How many hours a week do you donate to non-profit radio in Buffalo? How much educational work do you do at the local universities? How much money do you raise for area charities? Before you blow up the radio groups in your area, take a look in their public files and see exactly how much money and how much work they do for area charity. Then tell me about how all they care about is profit.

 

[amfmxm]

Re: The Con of Consolidation

down the value of the stations to the point where people who understand that broadcasting is MORE than a widget factory might be tempted to get back into the business.

I read this comment all the time, as though it's true. Who are you talking about? Sam Zell? Really? Roy Disney? A lot of the people who sold out to CC ten years ago are in their 70s and 80s. Some, like Buck Owens, have even died. The insurance companies, like Nationwide, who sold to CC are in such terrible shape they have no money for broadcasting.

Give me the name of someone who is likely to come back into broadcasting if the price is right. One name.

Most of Clear Channel's acquistions--in volume of stations, not value--were in smaller markets, not large ones. So Rox is right, you wouldn't know the names. Nor would it be fair of us to put them on the spot.

In 1995, the CEO of the company I was then managing for--a group of a dozen stations--addressed the subject of impending consolidation at our annual meetings. He said that all licensees would have to decide whether to be buyers or sellers--there was no room in between--and that we would be sellers. As a Texan he knew Mays & Hicks and understood what was about to unfold--and said that being competitive would require access to more money than anyone in radio had ever thought about. So he gave us all a generous severance deal and liquidated within a year.

He loved radio. All of the GMs in that company were terrific broadcasters and most had also owned stations along the way. I'm the only one still active in radio, but all of us are capable of re-entering the ownership ranks. But not if it means leveraging our butts to the hilt in order to compete with a CC cluster of 6 or 8 stations in towns like Wheeling or Panama City or Cookeville...

 

[Roger That]

Re: The Con in Consolidation

Let's be serious.

Why so serious? ;D

My point is they're not staffed 24/7 all the time. In the ANTICIPATION of an emergency. These are agencies whose only job is public service. We pay them with our tax dollars, and they're home in bed

Minot aside, when I read about stations reacting to major events, I don't have memories of the times local radio didn't react well. If you were in radio on 9/11/2001, have been in a hurricane season in the Southeast, or a tornado hit in the Midwest, or California during an earthquake, did the majority of radio not pull through?

The gov't may not be full staffed, but don't they all come in when the sh!t hits the fan? In radio, people come out of the woodwork when a major disaster or emergency hits. Automated or not, there are still passionate bodies that can pull together and serve the public. It's happened in every experience I've had. Anyone else sleep at the radio station the week of 9/11?

The Corporate Empire can cut bodies, but for those that spend less time on here whining as though it's going to make a difference, and who spend more time continuing to be passionate about their jobs, serving the public in time of crisis is not nearly as lacking as one might think. At least, not in my experience.

 

[TheBigA]

Re: The Con of Consolidation

I'm the only one still active in radio, but all of us are capable of re-entering the ownership ranks. But not if it means leveraging our butts to the hilt in order to compete with a CC cluster of 6 or 8 stations in towns like Wheeling or Panama City or Cookeville...

You wouldn't have to compete with CC if you bought their cluster. You can buy a 6 station cluster right now for $400K. How cheap is cheap? As I said, the real problem isn't buying the station. It's running it. That's where the real money comes in.

But CC is at a point where it's willing to break up their clusters in order to sell, and they STILL can't find buyers.I think the reason CC made these cuts is they couldn't sell the stations in the first place. At any price. Some of these stations have been on the market for 3 years! You're going to see hundreds of small market AM stations go dark in the next six months. How does that serve the public interest?

 

[TheBigA]

Re: The Con in Consolidation

did the majority of radio not pull through?

Absolutely. I read in the Houston group how the staff at the CBS cluster worked around the clock during last summer's hurricane. Their own homes were being hit, and they stayed at the station. All the whining is coming from people who are on the outside.

 

[aunti-terrestrial]

Re: The Con in Consolidation

did the majority of radio not pull through?

Absolutely. I read in the Houston group how the staff at the CBS cluster worked around the clock during last summer's hurricane. Their own homes were being hit, and they stayed at the station. All the whining is coming from people who are on the outside.

Weren't most of those people let go?