Can Clear Channel Sink Any Lower?

[SirRoxalot]

Service Issues

The services that radio offered in the past are not in question.

What is in question is what radio will be capable of after Clear Channel and others get done cutting people at the local level. BTW, Clear Channel is not the only one cutting, and - most importantly - the cutting isn't over. Indications are that there will be a LOT more cuts coming if the consolidators are allowed to continue on their current path.

NPR may end up being the last bastion of radio that actually serves the "public interest, convenience, and necessity". That's NOT the way that the laws passed by Congress read. NPR is facing its own problems with the downturn in the economy, but they are still generally staffing news departments at higher levels than the majority of consolidators. They aren't making the profit that the consolidators are making, but they're not going under. There IS some middle ground between maximum profit and no profit.

Clear Channel is leading the race for the bottom when it comes to serving the "public interest, convenience, and necessity". It will be interesting to see how long it takes before the Obama influenced FCC takes a hard look at the practices being put into place by the consolidators.

Radio isn't like the highway system. If you want to build a private road, buy the land and have at it. You CAN'T do that with the electromagnetic spectrum. If you don't understand the fundamental difference between being licensed to USE a portion of the electromagnetic spectrum and OWNING a piece of property, you need to take Broadcasting 101 at your local community college or trade school. Continued licensing of space in the PUBLIC spectrum for Clear Channel, Citadel, Cox, or any of the consolidators is a PRIVILEGE, not a RIGHT.

 

[Stewy]

Agree, Sir Rox, agree.

 

[gr8oldies]

Today a cash-strapped Miami University sold or turned over WMUB, a major regional NPR station to Cinncinnati Public Radio. Think their won't be cuts?

OKL, we all know the phrase "public interest, convenience and neccessity" by heart, but what does it mean and does it mean the same thing to everyone? If I just happen to like the station that plays 15 in a row with minimal talk,am i less a member of the public than someone who demands farm reports and interviews with the water inspector? If you're going to write laws to require minimum staffing (and to read comments here, it would seem that some of you would want no salesperson to ever be cut), how do you write that into law?

We had hurricane force winds in September that were remnants of Hurricane Ike. There was a high wind warning in effect, but we had had lots of high wind warnings in the past that did not warrant wall to wall weather panic mode. After it was apparent the damage that was being done, our local WHIO sprang into action and stayed live and local for a couple of days. Everyone knew where to tune for news...should we have had 30 stations in the market with wall to wall coverage? Is there a time even in an emergency that I might want to hear some music?

A part timer on an overnight shift can still be not paying attention when weather strikes. Can radio somehow operate as though profit and loss statements don't exist?

 

[TheBigA]

Re: Service Issues

What is in question is what radio will be capable of after Clear Channel and others get done cutting people at the local level.

I imagine that depends on the attitudes and dedication of those people, right? In my world, we all band together and soldier on, not wallow in self pity. I imagine that's how most people deal with change.

NPR may end up being the last bastion of radio that actually serves the "public interest, convenience, and necessity". That's NOT the way that the laws passed by Congress read.

Depends on what you mean. If you read the Public Broadcasting Act, the goal of public broadcasting was to provide services that commercial stations weren't able to provide. I think that's why commercial broadcasters supported it.

The fact is that most public stations run 70% national syndication from NPR and others. No one seems to be complaining. No hand wringing going on about that. Most of these stations operate with a ten person staff, and lots of volunteers. And most of those stations are owned by state governments and educational institutions. Most CC stations still have many more employees, making lots more money. Ask anyone in public radio, and they'll tell you they took a pay cut to work there. And they're doing the work of three people.

Radio isn't like the highway system. If you want to build a private road, buy the land and have at it. You CAN'T do that with the electromagnetic spectrum.

Sure you can. Sprint and AT&T own lots of federal spectrum right now. Who do you think is buying all the VHF space that the TV stations are giving up?

Continued licensing of space in the PUBLIC spectrum for Clear Channel, Citadel, Cox, or any of the consolidators is a PRIVILEGE, not a RIGHT.

It's neither. It's no privilege running a radio station right now, let me tell you. Lots of these companies would much rather own a cable franchise, and you may see more of that. And I don't think anyone views it as a right, especially when the government does everything it can to circumvent licensees. I really look forward to the day when this all ends up in court or Congress and the public hears the whole story.

 

[SirRoxalot]

Looking Forward

There's no wallowing in self pity here. Those of us left just keep on doing the best we can to act in a professional manner, serve the listeners and sponsors, and try to put aside the bitterness and pain caused by seeing good people get shafted by corporate. It's gotten to the point where numbers don't matter, and even revenue doesn't matter. You can be #1 on your station, and still get whacked. You can be #1 in your daypart, and still get whacked.

Here's what I see happening if Clear Channel (and others) are allowed to continue unmolested:

1. Entire clusters will be automated most of the day. Not just some stations. ALL stations. Morning Drive will be the last bastion of local programming. After that, bird food.

2. Listening will continue to decline, both in TSL and cume.

3. Revenue will decline faster than listening. Local advertisers will be less interested in advertising on syndicated shows. Syndicated shows will be paid for by giving up avails, or by increasing the number of minutes of advertising per hour. Neither will increase revenue in the long run.

4. Stations will go dark. The cost of turning on the transmitter will outweigh the income generated. Even some FMs will face this prospect. CC (and others) will avoid turning in licenses for as long as possible to prevent competition from other owners. As part of a "scorched earth" policy, they will sell off (or move) the hardware. Towers, studio facilities, and other real estate will be sold off, putting any prospective purchaser or anyone who applies for the frequency after they give up the license in an untenable situation. Finding enough land in a growing market where towers can be erected without running afoul of the NIMBYS is often outrageously expensive, or impossible.

5. Recording companies and artists will continue to clamor for an end to radio's exemption from paying performance royalties. Congress, seeing that radio no longer offers unique programming service to local listeners, will end the exemption. The cost to the consolidators will force even more cuts in programming and distribution costs. Many markets - especially in smaller communities - will have NO live and local radio available.

There are only two factors that I see that may reverse this outcome:

1. The banks, realizing that shrinking revenue means less likelihood of ever recovering the money that they loaned to finance consolidation, finally force the consolidators into bankruptcy.

2. The federal government steps in a re-regulates radio. The government regulates the selling of broadcast properties, towers, and sites to avoid a "scorched earth" policy, requiring current owners to build new facilities before selling off existing facilities. Minimum staffing levels are mandated, and licenses are awarded to challengers who promise to provide a greater amount of local programming, and demonstrate the financial wherewithal to make good on those promises.

I'm hearing rumors of more cuts today, specifically from Citadel. Ladies and gentlemen, welcome to "Le Deluge".

 

[amfmxm]

At "any" price? LOL!!!

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?

And the six-station CC cluster priced at $400K is where?

Running a small-market acquisition is not all that daunting if one has the sales chops--and if the station/cluster has a base of business at closing. Cash flow multiple is the key, and I'm not aware that CC has backed off their asking prices.

And that's why they can't "find" buyers. The notion that there are no buyers "at any price" is complete exaggeration.

Big A, you are again arguing for the sake of argument. I understand that this is cheap entertainment, but you really are stretching things a bit. Okay, now, get up and get out of the house (or the office). Gotta get some blood flowing through that brain!

 

[SirRoxalot]

Buyer Beware

amfmxm, you need to be aware that Clear Channel may indeed have a 6 station cluster for sale at $400K. What TheBigA isn't telling you is that they sold off the tower sites and studios, and have either short term leases, or leases that are not transferrable. If you buy the stations, your first job will be to either negotiate tower space with a company that knows that it has you by the short hairs, or try to buy sufficient land, and navigate both the local zoning nightmare and the NIMBYS who are afraid that they'll need full-body foil to avoid cellular damage from RF.

Clear Channel, and others, have sometimes given up grandfathered tower sites. They sold the land because population shifts have made the land more valuable than the radio station, or because a tower company with numerous cell phone and other customers offered them a short-term revenue bump that they just couldn't resist.

To be fair, they've also been the victims of "eminent domain" land grabs that have taken over tower sites, and been unable to find alternate sites that are either affordable, or acceptable by the FCC.

Either way, it doesn't really hurt CC overall if they are able to reduce the amount of competition, does it?

 

[TheBigA]

Re: At "any" price? LOL!!!

And the six-station CC cluster priced at $400K is where?

Funny you should ask. Minot ND. Site of the train accident 7 years ago.

I'm not aware that CC has backed off their asking prices.

Look a little deeper.

\

Big A, you are again arguing for the sake of argument.

I'm simply responding to posts by roxalot. Nothing more.

Speaking of which....

What TheBigA isn't telling you is that they sold off the tower sites and studios, and have either short term leases, or leases that are not transferrable.

Not the case in Minot. And the building is relatively new.

 

[TheBigA]

Re: Looking Forward

2. The federal government steps in a re-regulates radio. The government regulates the selling of broadcast properties, towers, and sites to avoid a "scorched earth" policy, requiring current owners to build new facilities before selling off existing facilities. Minimum staffing levels are mandated, and licenses are awarded to challengers who promise to provide a greater amount of local programming, and demonstrate the financial wherewithal to make good on those promises.

No one, repeat, NO ONE can afford to do that. Including state owned public stations. NO ONE will be left to run these stations, and the federal government will be stuck holding the bag again.

 

[SirRoxalot]

Don't Judge By YOUR Abilities

There are plenty of decent operators who haven't seriously overpaid for a facility - thus saddling the company with massive debt service - who can afford to both provide a majority of local programming, and demonstrate the financial wherewithall to make good on that promise.

The federal government would love to have bandwidth back. Trust me, they'd find someone willing to pay a price to get a slice of spectrum.

 

[TheBigA]

Re: Don't Judge By YOUR Abilities

There are plenty of decent operators who haven't seriously overpaid for a facility - thus saddling the company with massive debt service - who can afford to both provide a majority of local programming, and demonstrate the financial wherewithall to make good on that promise.

Hmmm...I'd imagine Citadel has a lot of debt. Yet all of their stations in Buffalo provide a majority of local programming. In fact two of their stations are local 24/7. How could that be?

Local programming is not a function of debt. Otherwise non-commercial stations would be live & local 24/7, and they're not. They are, on average, 75% national syndication.

 

[KyDXIn]

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

Thanks for the information. I'm glad the word got out.

 

[SirRoxalot]

Re: Don't Judge By YOUR Abilities

Hmmm...I'd imagine Citadel has a lot of debt. Yet all of their stations in Buffalo provide a majority of local programming. In fact two of their stations are local 24/7. How could that be?

Local programming is not a function of debt. Otherwise non-commercial stations would be live & local 24/7, and they're not. They are, on average, 75% national syndication.

Wrong number, Bub. As usual, when it comes to programming, you're out of your depth.

Don't believe everything you see on websites. Citadel has a TON of debt, and whacked the 7-Midnight guy on the #1 25-54 Male station in the market - 97-Rock. Tom Tiberi was a long-timer, #1 in demo at night, and had a number of advertisers the paid to be on HIS show. He was jettisoned when Citadel corporate whacked ALL the 7-midnight guys nationwide. 97-Rock is now VT from 8PM to 5:30 AM, and runs syndicated shows on weekends. Revenue is already down more than they saved on the shift.

The Edge is VT from 7PM - 5:30 AM. Mix 104 has Tesh syndication at night, and VT from Mid-5:30. Mix 104 recently reduced the morning show to ONE person. The PM drive jock left, and was replaced by the PD, who had been off the air since being replaced by Tesh in an attempt to bolster the numbers.

Now, you're going to say that they're "local" because two of the stations VT with local guys. The only reason they keep THAT in-house is to extract a little more value from two production guys. With the work load they've got, the amount of time they have to prep for a VT show is essentially NONE.

Citadel is worth $2.15-Billion. They OWE $2.10-Billion. If they didn't have a mountain of debt, and have to pay interest on that debt, they'd HAVE the money to afford live, local programming. As it is, the cuts that they've made in the last few months have already affected revenue, and the next book is likely to show further erosion in listening. Citadel has already gone from the #1 revenue-producer in Buffalo to the #3 revenue-producer under Farid's "management by decree". The next round of cuts - which I KNOW is coming - will cost them even more money.

SMART programmers opt for syndication when they have no other choice. At this point, corporate consolidators are giving local management no other choice, and it's all because of the debt load that they incurred trying to build "synergies".

Let me save you a little time. I know that you're about to extol the virtues of "big time syndicated talent", but save your breath. NOBODY, including Stern, every beat the local boys in this market when there was credible opposition. These cuts a purely mercenary, and listeners are giving up on radio because of them.

Enough. We've been over this ground time and time again. The corporate consolidators are committed to a course that is destroying the medium, and nothing said on this forum will reverse that. The cuts that they're making will reduce their revenue more than they'll "save". I hope that you're heavily invested in your favorite consolidator, and that you reap the rewards of what they're sowing.

 

[TheBigA]

Re: Don't Judge By YOUR Abilities

Wrong number, Bub. As usual, when it comes to programming, you're out of your depth.

No I'm not. Nowhere did I say these Citadel stations are live. What I said is they're local, and other than John Tesh, I am correct. You are wrong.

Now, you're going to say that they're "local" because two of the stations VT with local guys.

That's correct. If you put local people on the air, that makes it local. By definition. See how easy this is?

The only reason they keep THAT in-house is to extract a little more value from two production guys.

What's wrong with that? Especially if you're either of those guys?

These cuts a purely mercenary, and listeners are giving up on radio because of them.

Fine. Meanwhile, what's going on over at WBFO? Why do you keep ignoring non-commercial public radio? Do you think listeners don't know it exists? This is public supported radio, owned by SUNY. Not some corporate consolidator. How much better are THEY doing? How much more live & local are they at a station where profits and debt don't matter?

 

[TheBigA]

One more thing:

If they didn't have a mountain of debt, and have to pay interest on that debt, they'd HAVE the money to afford live, local programming.

What makes you think they'd spend any of it on live & local programming when there is absolutely no proof that it's what the audience wants? Having money doesn't mean you spend it. That's why this country is in the debt crisis it's in. People spend every dollar they make, and then go thousands in the hole.

As I've pointed out, there ARE stations in Buffalo that don't have a mountain of debt, and they choose NOT to put live & local programming on there stations.

 

[davideduardo]

Re: Don't Judge By YOUR Abilities

SMART programmers opt for syndication when they have no other choice. At this point, corporate consolidators are giving local management no other choice, and it's all because of the debt load that they incurred trying to build "synergies".

Smart programmers pick what is best for the audience they are seeking to satisfy. In many cases, the option of syndication offers something much better than what could ever be done locally. And we will take that option when it makes sense.

 

[SirRoxalot]

SS, DD

Blah, blah, blah. You guys both repeat the mantra taught to you by the Kool-Aid makers, and it still adds up to the same thing. BAD RADIO.

A, your blather about what's going on in the Buffalo market indicates that you're obviously not afraid to express totally incorrect observations based on insufficient knowlege. WBFO is a fine public radio station that runs NPR in the morning, does live and local jazz for a significant portion of the day, and runs a number of other NPR features during mid-days and in PM drive. I even contribute to them, and will continue to.

WBFO is a 2 share radio station. Their best daypart during the week is morning drive, with Morning Edition - significantly bolstered by their own local news presentation, does decently. Like most NPR stations, their biggest audience is 65+. Their 45-64 numbers aren't too shabby, either. Compared to WBEN - the old line AM news/talker that's live and local from 5AM to noon, then 3PM to 10PM? Not even in the ballpark. WBEN crushes them with 4 or 5 times the audience.

What's WBFO's strongest programming 25-54? David, you're going to LOVE this - a live and local BLUES show on the weekend. It consistently outperforms their weekday programming, and has for several years. So, their LIVE AND LOCAL programming consistently outperforms some of the best syndication available. In fact, WBFO has slowly expanded its live and local programming BECAUSE it outperforms their standard fare. They're working as fast as they can within the budget restraints that they have. With cuts coming to NY state funding of public broadcasting, and likely declines in donations due to hard economic times, they'll be hard pressed to continue - or even maintain - that trend. Oh, BTW, a lot of their live and local is done by part-timers, which saves significantly on personnel costs.

David, I'm impressed the you consider yourself as a "smart programmer". Hubris suits you.

Obviously, I'm not going to change the point of view that you've pinned your careers on. So, continue on. There are a LOT of us that see what's coming, and are doing are best to prepare for a bland, soulless radio future. Anybody who gets into this business at this point is out of their minds, and anybody who isn't prepared to be fired - regardless of great ratings, market-leading revenue, and "commitment" in the form of long hours wearing many hats - isn't paying attention.

Somebody will survive. There are operators out there who aren't eating their young, and destroying their product. If you're lucky enough to be on board with one of them, good luck. If you're on board with Clear Channel, Citadel, Cumulus, Regent, or any of the other consolidators whose debt is nearly equal to their enterprise value, be prepared to be replaced by syndication. For them, radio as we know it is over unless they go bankrupt, the government re-regulates, or both.

So, carry on, until radio's apocalypse comes to pass, or the government steps in and forces you to program "in the public interest, convenience, and necessity".

As I see it, the race is on. Which will happen first? Will radio kill itself, or will the Mayan calendar run out of time on December 21, 2012?

 

[gr8oldies]

The smart people won't have their heart set on becoming radio station employees, going to the radio station, sitting behind the console, doing four hours on the air, an hour of production and going home. Those days are gone and no amount of handwringing or government regulation is going to bring them back. The smart ones will have their own, or join content-producing companies that will produce content for the web, and yes even radio. I don't get the black-and-white thinking of 'syndication ALWAYS bad, local ALWAYS good". I know plenty of people who listen o Rush, Delilan, John Tesh, Bob and Tom etc. Even has a converstation with a Tesh fan, telling her how on this board many believe she can't possibly like Tesh because he's not sitting in a chair in her home town. I have another friend who travels for work quite a bit and always checks K-Love's website so she can listen to it wherever she's going.

Here in Dayton for years we've had a local conservative talk show host who is on opposite Rush. He hardly makes a dent. If Rox is correct, he should be number one because, after all, he's in a chair in Dayton.

I'll also point out that Robert W. Morgan, Larry Lujack and many greats of the 70s and 80s were one-man morning shows. Do we always need 30 people in a room laughing at themselves?

 

[TheBigA]

Re: SS, DD

A, your blather about what's going on in the Buffalo market indicates that you're obviously not afraid to express totally incorrect observations based on insufficient knowlege.

However, in order to make your point, you have to change the subject, from operating under budget cuts (which is what this entire thread is about) to demographics! No where in this thread have we even discussed it! Now you introduce it out of the blue, because it helps you make your point.

The point is that WBFO operates with minimal staff, minimal local programming, and they pick some occasional specialty shows because it attracts membership bucks. And they give less airtime to this blues show, in actual hours, than the Citadel station gives to Tesh. Yet you extoll the virtues of the blues show, and attack Tesh. If I'm running WBFO, I blow out all the national news and replace it with blues. I become Buffalo's Blues Authority, and build my entire presentation around it. Live and local blues, 24/7. Can they do it? No. Why? It interferes with their mission.

If Citadel ran their stations the way SUNY runs WBFO, with national syndication in prime dayparts and occasional local inserts with traffic and weather, you'd scream all day about how cheap and awful it was. But it's great and wonderful when the non-commercial station does it, and you even support it with your own money.

I thought it was hilarious that you said only Entercom has a local news person, ignoring the staff at WBFO. The goal of non-profit radio is to provide those things that commercial stations can't do. That is why the Public Broadcasting Act of 1967 was written, and why the NAB even supported it. So if WBFO is providing winter storm reports, there is no need for the local soft rock station to duplicate that same exact service. The audience is being served.

Oh, BTW, a lot of their live and local is done by part-timers, which saves significantly on personnel costs.

Great idea. I think Citadel should do the same thing. They should also encourage local volunteers who will program their classic rock station for free. I believe that would be a lot better than the lazy aging overpaid boomers they have now. Community involvement in the station would be promotable, give listeners a stake in their station, and be cheaper than syndication. I bet people would KILL to be on the air for free. That would allow Citadel to cut the spotload in half.

 

[KyDXIn]

Re: Don't Judge By YOUR Abilities

Citadel is worth $2.15-Billion. They OWE $2.10-Billion. If they didn't have a mountain of debt, and have to pay interest on that debt, they'd HAVE the money to afford live, local programming. As it is, the cuts that they've made in the last few months have already affected revenue, and the next book is likely to show further erosion in listening. Citadel has already gone from the #1 revenue-producer in Buffalo to the #3 revenue-producer under Farid's "management by decree". The next round of cuts - which I KNOW is coming - will cost them even more money.

Sounds like the wise and prudent thing to do would be sell stations until you are debt free and have the remaining $0.05 Billion yet. Thats simple enough for a 5th grader!