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CC plans to ax 75% of PD's nationwide!

calguy said:
My point is that lemmings follow the big boys and even if they aren't in debt like CC they will look at CC and say, hey, they cuts costs, we should too. Then we get more money. That's how the whole friggin industry hurts itself.

You have a very bizarre view of the way business works. My point is the guy making the operating decisions at CC, Bob Pittman, is a broadcaster. Bain just supplied the money. It's Bob's job to figure out how to pay them back. Bain isn't telling him to fire people. If he thought that he could hire more local jocks and raise ad rates to pay off the note, that's what he'd do. The goal in business is to MAKE money, not save it. You want to GROW the business, and you can't do that when you lay people off. Unless the people you lay off are NOT in the part of the business that's growing. Which seems to be the case at CC.

The reality is that even owners who have no debt, like Saul Levine, are cutting costs. For the same reason everyone else is: Ad money is hard to get, and operating costs, not debt costs, are rising every day. Saul isn't doing it because CC is doing it. He hates CC, and views himself as anti-CC. But he has some of the same problems they have. So do the state-owned public radio stations. As long as income doesn't keep up with expense, you will have owners looking to cut costs.
 
calguy said:
CC is "run" by a broadcaster (Bob Pittman) he has stock in the company, but I said most of the owners, Bain "owns" CC and they are not broadcasters.

While Bain (and other investment banking organizations) "own" much of CC, remember that they are simply placing client money.

I was looking at the Broadcasting Magazine stock quotes from the 60's, and it occurred to me that companies that were publicly traded like Storer, Taft, Metromedia, Mooney, Pacific & Southern, Rahall, Sonderling, Starr, Bartell, LIN and others were significantly and often principally owned by shareholders who were not broadcasters.
 
TheBigA said:
calguy said:
My point is that lemmings follow the big boys and even if they aren't in debt like CC they will look at CC and say, hey, they cuts costs, we should too. Then we get more money. That's how the whole friggin industry hurts itself.

You have a very bizarre view of the way business works. My point is the guy making the operating decisions at CC, Bob Pittman, is a broadcaster. Bain just supplied the money. It's Bob's job to figure out how to pay them back. Bain isn't telling him to fire people. If he thought that he could hire more local jocks and raise ad rates to pay off the note, that's what he'd do. The goal in business is to MAKE money, not save it. You want to GROW the business, and you can't do that when you lay people off. Unless the people you lay off are NOT in the part of the business that's growing. Which seems to be the case at CC.

The reality is that even owners who have no debt, like Saul Levine, are cutting costs. For the same reason everyone else is: Ad money is hard to get, and operating costs, not debt costs, are rising every day. Saul isn't doing it because CC is doing it. He hates CC, and views himself as anti-CC. But he has some of the same problems they have. So do the state-owned public radio stations. As long as income doesn't keep up with expense, you will have owners looking to cut costs.

I have a bizarre view? That's a new one. Funny, seems like everyone I know in the business, a considerable amount of people, some quite high profile, agree with me. But then again, we're all on the talent side, and we've seen the industry change, and with deregulation many changes, not for the better. If doing business meant really doing what's best for the shareholders people like Fareed Suleiman wouldn't have bankrupted his company and then gutted it while taking over 40 million dollars in compensation. Yeah, he came from the sales side, but he wasn't a real broadcaster in my mind. I don't disagree that ad dollars are tougher to get, but many companies are doing quite well and seem to cut costs for no other reason than to increase profits even more. That's cool, but why not do it by raising the money through earnings, not cheapening the product by firing it's most talented and hard working people. Pittman is a broadcaster, but that doesn't make him a white knight. He's operating the company in what he believes is it's best interest and because those idiots in Texas bit off more than they could chew by swallowing up companies faster than Ms. Pacman, and with those companies a huge amount of debt that no one believes can be paid off without selling off the company. Those idiots in Texas were bankers to begin with, NOT broadcasters. Saul? yeah, he supposedly bills about 25 million a year from KKGO and he has his vineyards. He isn't poor, and what he is doing may be smart when saving money, but it doesn't grow your business to reduce staffing levels that make operations impossibly tough.

My view isn't bizarre by the way, it's from the inside and while you may find it bizarre from a business standpoint, it isn't from this broadcaster's standpoint... Bottom line, we disagree...
 
calguy said:
If doing business meant really doing what's best for the shareholders people like Fareed Suleiman wouldn't have bankrupted his company and then gutted it while taking over 40 million dollars in compensation.Yeah, he came from the sales side, but he wasn't a real broadcaster in my mind.

Farid Suleman was a CFO, with posts including Westwood One, Infinity and CBS. He was not from the sales side, he was from the business side and was in broadcasting for nearly two decades.

Being on the air is not a requirement to be a broadcaster.

I don't disagree that ad dollars are tougher to get, but many companies are doing quite well and seem to cut costs for no other reason than to increase profits even more.

With radio revenues off by 30% since 2007, and even more in inflation adjusted figures, nobody is doing well. If the decline in revenues is, in most cases, greater than the gross margins of stations, then severe reductions have to be made. And even more have to be made on the terrestrial side since we have an inescapably shrinking business model there.

For example, if in many formats DJs are not needed or are negative, then that is a place where cuts will continue. I heard some listener interviews recently where it became clear that, while DJs were the heroes of the 60's and 70's, the mixer is the hero today... a total change, for sure, but simply a reflection of audience tastes.

Those idiots in Texas were bankers to begin with, NOT broadcasters.

Those "idiots" bought a failed FM in the 70's, and then an even more failed AM (on clear channel 1200) right after that... going against the thinking of the time and turning around, magnificently, those properties and then moving, bit by bit, into markets like Tulsa and such on their way to growth.

Saul? yeah, he supposedly bills about 25 million a year from KKGO and he has his vineyards. He isn't poor, and what he is doing may be smart when saving money, but it doesn't grow your business to reduce staffing levels that make operations impossibly tough.

KKGO is billing under $10 million, and in LA, that's a level that requires considerable economy in operations.
 
Defend them all you want David and nitpick about Suleman's history, he was terrible at his CFO job no matter what you say. His greed and ego blinded him.

No, being on the air is not a requirement to be a broadcaster, but neither is some guy with a business degree, just because he's got that degree.

Yeah the idiots did well with that little FM, but it doesn't change the fact that they were too greedy and their greed has hurt a lot of people. It also made them rich, but it came at a huge cost IMHO. Saul did bill 25 mil at one point according to the trades and excuse me if I don't always have the very latest stats, but 10 mil is nothing to sneeze at. He may not be doing well in your eyes, but he's no pauper either, and old Saul isn't exactly the sweetest guy. His fickleness with regards to 1260 AM has seen him fire God knows how many staffers over the years with some formats barely lasting a year. I've heard of filling the hole in the market, but he's ridiculous. See, I care about the industry and it's PEOPLE, so I guess I'm a bleeding heart who has great disdain for business people, people who ONLY care about the almighty bottom line and the size of their paychecks, or in the case of Suleman, quite a large golden parachute as a reward for bankrupting his company... A lot of the decline of the industry with regard to listenership and billing is in no small part the industry's fault. Deregulation was STUPID, a move fueled by greed, and no matter what Gordon Gecko would say, greed is not good. I'm sure you will take me to the woodshed with facts and figures, but I'm "living" it, and I know how it's impacted my friends and colleagues.
 
calguy said:
I have a bizarre view? That's a new one. Funny, seems like everyone I know in the business, a considerable amount of people, some quite high profile, agree with me.

The fact that a lot of people agree with you doesn't mean you're right. It means a lot of people don't like CC.

Yes the industry has changed, and it was changing before deregulation. You don't like big owners like CC, and you don't like small owners like Levine. The common thread is you don't like owners. The American system of broadcasting has always been based on profit. It's private business. Those who take the risk get to do it their way. If it was your money, you'd want the same liberty. But even the public non-commercial broadcasters are struggling. Take a look at KCET and the ordeal that's been going on over there. The kind of people you would want to run broadcasting don't have the money or business sense to actually do it. Those who make the transition, and I know a few who do, say you simply can't run a radio station now the way you did 30 years ago. It's impossible because there's too much competition and not enough advertising money. At the end of the day, someone has to pay for all these people, and it's simply getting harder to do. Before you come up with a lot of opinions about the business, you need to immerse yourself more in the business side. Try to run a radio station for a while. Do it with a small owner and see how tough it is. Running a radio station isn't a charity.

You said "why not do it by raising the money through earnings?" That's what they're doing. But the growth area isn't on air. So that staff has to get smaller. Take a look at the Sirius model or the Pandora model, and you might get a better idea where the business is going. If you think it's easy, simply say you don't want a salary any more, and you'll just take a share of revenue. The boss will take that deal, but you'll end up working for a whole lot less.
 
calguy said:
Defend them all you want David and nitpick about Suleman's history, he was terrible at his CFO job no matter what you say. His greed and ego blinded him.

Not quite. He did a highly leveraged deal to add the ABC stations and used a model that did not contemplate a near-depression among the range of possibilities. To his credit, he worked with Disney to create the reverse Morris based transaction that was tax-friendly to Disney and allowed the deal to happen.

We can not blame the recession on Farid Suleman, however. Did he make a mistake? Yep... he miscalculated the potential for a recession.

No, being on the air is not a requirement to be a broadcaster, but neither is some guy with a business degree, just because he's got that degree.

But the guy with the degree, at this point, is essential in that we are not going to get any more money from terrestrial radio. Big A already said the growth will come only from outside the transmitters on AM and FM. To do that, in my opinion radio must successfully move its focus from the declining revenue base of terrestrial and a push-to-many model to new media and a pull-to-each-listener custom model with a variety of web and mobile device experiences interrelated. This probably does not include many traditional DJs... but it includes lots of new opportunities in content, technology and marketing.

Yeah the idiots did well with that little FM, but it doesn't change the fact that they were too greedy and their greed has hurt a lot of people.

Clear was among the better companies in pre-consolidation. However, due to Docket 89-90 and other factors, radio was increasingly profitless. Consolidation was the obvious solution, and it was a world of eat-or-be-eaten and Clear did what had to be done. To their credit, they tried to develop AM in smaller markets and were open to new programming ideas, such as putting Air America on a dozen or so of their major AM facilities.

If you don't like their bigness now, look to the future. Only the major content providers will be around in a decade or so... independent stations will not for the most part even survive. And AM will be dead in a matter of years, and FM will follow... only the content will remain.

Saul did bill 25 mil at one point according to the trades and excuse me if I don't always have the very latest stats, but 10 mil is nothing to sneeze at.

His high billing point was $13 million in 2007. In LA, with the costs of operation (check how much the Forest Service charges for the Mt. Wilson sites, for starters) his current billing level will make several million, but that is not a huge amount. His station, once a magnet for offers in the $300 million range, is now probably worth $75 to $80 million and declining.

Saul got 105.1 in about 1950 and has stuck through the hard years, kept limited formats like jazz and classical for decades, and stepped in when there was a country void in the market and classical was losing him money... hardly an ogre. More like a shrewd independent broadcaster who made some money offering something unique the larger players would not touch.

Saul isn't exactly the sweetest guy. His fickleness with regards to 1260 AM has seen him fire God knows how many staffers over the years with some formats barely lasting a year. I've heard of filling the hole in the market, but he's ridiculous.

He has tried formats to see if they would work in an era where AMs in LA are nearly dead. You are faulting him for trying something, anything, instead of going to brokered or ethnic programming. Saul should get a lifetime achievement award for at least trying...

A lot of the decline of the industry with regard to listenership and billing is in no small part the industry's fault. Deregulation was STUPID, a move fueled by greed, and no matter what Gordon Gecko would say, greed is not good. I'm sure you will take me to the woodshed with facts and figures, but I'm "living" it, and I know how it's impacted my friends and colleagues.

Deregulation was a good idea when over half of the stations in the US were losing money, and the FCC had stupidly allowed another 15% increase in facilities as well as thousands of major upgrades and move-ins via 80-90. Consolidation had produced great results for the business and for the listeners all over Europe, Latin America and even parts of Asia and was the obvious solution. But then we got the dot bomb, 9/11, Iraq and a near full-blown depression plus new media which makes most people move radio down in overall appeal... and you have the reasons for what we live today.

The Mays family, Farid, and others only reacted to change as best they could. Rehiring DJs is, though, not going to fix radio when a) listeners no longer care much about them and b) listeners are increasingly caring less for radio... even if they use it as a convenience... still.
 
The 25 million dollar figure came from internet trade publications, so they got it wrong and I'm not privy to all you subscribe to.

I am an air talent, so what you're saying is I should just quit the business because as an air talent I'm on the extinction list. And when we're gone, what will radio sound like with no human touch? An ipod doesn't cut it for me, I want to hear an actual warm body on the other end. When I know it's automated, I don't bother to listen and my point here is that we're going in the wrong direction, again, just my opinion.

Degrees don't make you any smarter than anybody else, I know plenty of people with degrees who are dumb as a post. A business degree doesn't make you a broadcaster, but I suppose using your model David, anyone who owns or runs a station is a broadcaster.

Consolidation was a solution, but was it the correct one? We could argue that one forever. You know how I feel about it.

Talent now are considered providers of content, sadly that means regurgitating all the crud that AOL, Yahoo and MSN spew, Kardashian's and American Idol every day. Everyone uses the same info, but do listeners really want that? Hard to say, but a lot of what passes for great programming in today's' radio isn't really very impressive.

The ad dollars aren't' there anymore, so radio has to reinvent itself, the question is, are companies making the right decisions? Or are they just following the big boys right over a cliff?

My closing thought, and I won't be on-line to see your response until later tonight, my thought is that radio can sound great, it can paint pictures in your mind and delight the senses, but only talent can achieve that. Once you take that away, what is there but a jukebox? And I know that that is all some people want, but a great communicator can elevate a music format to something that excites and entertains...

By the way BigA, I don't hate owners, I dislike ones that ruin lives, and industries through stupidity and greed. At the end of the day someone has to pay, and for you, that's airstaff,or just staff in general. What about the back office people in say traffic, who have to stay until mid or late evening doing logs for more stations than any one person should be doing, or the street teamer who has to try and set up all the equipment by themselves because the station says they can't afford more than one person at an event. Ever watch a 5 ft 5 inch girl try to lug around equipment? It's pretty sad., and remember, the client paid for that. Running a business efficiently doesn't mean firing everyone, it means being smarter about running it. Not a lot of smarts at a lot of these companies.

Thanks for bringing my BP up...
 
Hay all,

A very interesting discussion indeed. I too am on the talent side and have seen the erosion of jobs for people with my skills. Thank God I am only a few years away from full retirement. (I can take early if need be - which at this rate it may!) Anyone going into the programming side of radio at this point needs to have their heads examined. Head over to the interactive side if you still want to be part of this business.

The latest Clear Channel cuts come on top of the October 2011 Clear Channel cuts in many mid and small markets, on top of the 3% of their workforce reduction in April of 2009, and the 9% reduction of their work force during Obama's inauguration Day. This past fall we saw staff reductions at Cumulus as well. This is not to mention the dribs and drabs of staff cuts in other groups that come at slower and less publicized ways.

We still have railroads but they ain't what they were in the 1930's!
Radio will still have some air talent - but not to the level it had 20 or 30 or heck even 10 years ago.

It is done!
Sad.
 
calguy said:
I am an air talent, so what you're saying is I should just quit the business because as an air talent I'm on the extinction list.

Air talents today are most secure if they are voicetracking multiple markets or have a cost-effective deal that delivers sales and ratings. They are most insecure if they are chatty and in PPM markets, or on stations targeting under-35 audiences.

Like so many people I know, if current employment is lost, there is either no replacement job or one that pays much much less.

And when we're gone, what will radio sound like with no human touch?

As I said previously, many younger listeners "feel" the human touch when they hear a great mixer; some can identify a mixer just by the style of the mixes.

What they don't want is to be talked to by some person on a radio station. They can chat with real friends any time, so why would they buy into the old jingle line of "your friends on the radio?"

When I know it's automated, I don't bother to listen and my point here is that we're going in the wrong direction, again, just my opinion.

And there are still plenty of people, mostly 45+, who like DJs in general. And more who look for the Seacreast type of thing in the morning. But remember that even in the 70's the top station or several stations in most markets were automated... and nobody cared.

Degrees don't make you any smarter than anybody else, I know plenty of people with degrees who are dumb as a post.

My bad. I was using "degree" much like many use "suit" to describe the management of a station.

The gentleman I worked with for over 20 years flatly refused to interview anyone who had "communications degree" on their résumé. He said that they all came in thinking they knew more than he did and thought they could replace him, too. Of course, he was just an engineer who worked hard and now owns about 12 stations in a Top 15 market...

But we need suits to run stations. Someone has to balance the insanity with reality.

A business degree doesn't make you a broadcaster, but I suppose using your model David, anyone who owns or runs a station is a broadcaster.

Yes, anyone who works in radio is a broadcaster. Like anything in life, there are good and bad in every barrel.

Talent now are considered providers of content, sadly that means regurgitating all the crud that AOL, Yahoo and MSN spew, Kardashian's and American Idol every day. Everyone uses the same info, but do listeners really want that?

Yes, they want things that touch their lives. Again, some do it well, others don't. One reason Seacrest makes the millions he does is that he sounds nice and he has cred; people know he is talking about people he knows and rubs elbows (does anyone use that expression any more?) with. That's why using Seacrest on a station in Lexington or Knoxville works better than some local person with copies of US and People.

The ad dollars aren't' there anymore, so radio has to reinvent itself, the question is, are companies making the right decisions? Or are they just following the big boys right over a cliff?

Save for a few major AMs, that show is over. FMs will continue to be a viable business as long as the costs are contained. The station groups that are making the right decisions are the ones that have developed iHeart Radio and such... because if there is any chance of preserving part of the revenue stream, that is where it will be.

Everyone is going over the cliff. Some will crash. Others will have brought hang gliders and will land on the other side with a very different view.

By the way BigA, I don't hate owners, I dislike ones that ruin lives, and industries through stupidity and greed. At the end of the day someone has to pay, and for you, that's airstaff,or just staff in general.

Here's a scenario that goes back many years and in a different department. I was GM of an AM which had a DA-1 at 10 kw, and required transmitter "engineers" 24/7. The costs of that and other things, like board ops, bad programming and such, had caused the station to lose money every one of the 6 years before I got there. I had the directional redesigned and it came out rock stable. The baby sitters at the transmitter went away... along with the board ops. We put the market's first computer traffic system in and the production guy did the logs, too. Traffic disappeared, as did two accounting people. But the station went from dead no-show last to #1 18-49, and the rest of the staff was paid as well as or better than anyone in the market... and we made money.

I give this example to show that there is truly a "greater good" situation that can occur where making dramatic changes ends up preserving the business and much, although not always all, of the jobs.

...or the street teamer who has to try and set up all the equipment by themselves because the station says they can't afford more than one person at an event. Ever watch a 5 ft 5 inch girl try to lug around equipment? It's pretty sad., and remember, the client paid for that.

In most cases, the client got that appearance as part of "moochindising" that had to be given to the agency to sweeten the buy or to make up for an uncompetitive CPP in the target demo. Like bonus spots, promotions and appearances are so often given away that management's statement that they can't afford to spend on more staff actually rings quite true today.
 
So if I understand all of you correctly, CC's biggest problem, as well as the other conglomerate owners, is that they purchased all these radio stations at the top of the market in 1997 or thereabouts, but never considered, or didn't make contingency plans for, the wholesale collapse of the advertising market in 2007-08?

David--- is your assertion that today's 18-34s are notfixated on chatty personalities as opposed to folks such as myself who grew up listening to Robert W. Morgan, Casey Kasem, Charlie Van Dyke, and the other radio LA radio legends of the sixties REALLY the case these days?

Back in the eighties, when KIIS reached a 10.0 share in the fall of 1984 when the format was ridiculously huge, weren't his 18-34 numbers as robust as his 25-54 numbers? I thought that they had to be, since stations such as KIIS & Z100, as well as stations in other formats with pricey AM drive talent were just as music-driven as they were personality-driven, correct?

When did the 18-34s out there decide that they didn't need to listen to a format megastar such as Dees or Scott Shannon in AM drive anyway?

I believe you stated in another thread that the actual cumulative amount of listening time for a radio listener during AM drive is less than 50 minutes of a 4-hour show when you factor in everything that a typical working stiff goes through in getting ready for work, and assuming that the folks at CC, Cumulus & others have access to the same data, is that another reason why AM drive in many markets features folks such as Bob & Tom or Kidd Kraddick who can draw audiences and revenue from large regions of the USA, without paying 'outsized' salaries (in this day and age anyway) to lots of morning show personalities in dozens of markets?

I would think that since fixed costs such as infrastructure can't be reduced substantially or as quickly as installing a star in AM drive & voicetracking the rest of the station, that getting rid of the air talent and some MDs/PDs is the quickest way to boost the bottom line while 'attacking' those mountains of debt?

Finally, Arbitron's annual 'Radio Today' study has stated that the percentage of folks who listen to the radio on a weekly basis in this country is still in the 91%-93% range, and has been there for several years running, and although Tom Taylor's daily newsletter has indicated some increases in revenue for certain radio companies, that the rest of the industry remains either underwater, or in debt up to their necks/eyeballs, with little hope of being to emerge from those mountains of debt anytime soon (10+ years down the road)?
 
Marv-L.A. said:
So if I understand all of you correctly, CC's biggest problem, as well as the other conglomerate owners, is that they purchased all these radio stations at the top of the market in 1997 or thereabouts, but never considered, or didn't make contingency plans for, the wholesale collapse of the advertising market in 2007-08?

My contention is that even if the CC stations had remained in the hands of their previous owners, they would have had to make the personnel changes they're making now. This isn't a function of purchase price. It's more a function of operating cost. The costs involved in running many of these stations now exceeds their income. That is most notably a problem with AMs and small market stations.

The Citadel purchase of ABC and its subsequent bankruptcy is closer to what you're talking about. But that purchase and bankruptcy took place within a shorter period of time, and happened, in my opinion, because the market over-valued the heritage AM stations, coupled with the unexpected costs of the ABC Radio Network. In the midst of this sale, Paul Harvey died, wiping out a huge revenue source for the network. And if you notice, although Citadel fired a lot of staffers, especially at ABC, in the year prior to bankruptcy, they couldn't prevent it simply by firing people. The amount of the debt was far bigger than the cost of the people. That's why I say this current wave at CC has nothing to do with their debt, but more to do with re-allocation of staffing among their properties to match expense with revenue, and absorbing staff from last year's Metro Traffic purchase.
 
Marv-L.A. said:
So if I understand all of you correctly, CC's biggest problem, as well as the other conglomerate owners, is that they purchased all these radio stations at the top of the market in 1997 or thereabouts, but never considered, or didn't make contingency plans for, the wholesale collapse of the advertising market in 2007-08?

David--- is your assertion that today's 18-34s are notfixated on chatty personalities as opposed to folks such as myself who grew up listening to Robert W. Morgan, Casey Kasem, Charlie Van Dyke, and the other radio LA radio legends of the sixties REALLY the case these days?

Back in the eighties, when KIIS reached a 10.0 share in the fall of 1984 when the format was ridiculously huge, weren't his 18-34 numbers as robust as his 25-54 numbers? I thought that they had to be, since stations such as KIIS & Z100, as well as stations in other formats with pricey AM drive talent were just as music-driven as they were personality-driven, correct?

When did the 18-34s out there decide that they didn't need to listen to a format megastar such as Dees or Scott Shannon in AM drive anyway?


Marv: I'm with you as far as personal preferences. But I'm not in the demo anymore.

1984 was 28 years ago. It is as far back as 1956 was then. And the 18-34s of 1984 are now 46-62. The 25-54s of 1984 are now 53-82. Times, tastes and technologies have changed. Format superstars were always the exception, not the rule...the people who could overcome the majority of the audience's desire for the jock to shut up and play the hits.

To expect today's 18-34s to embrace Dees or Shannon would be like expecting the 18-34s of 1984 to listen to Art Laboe and Hunter Hancock every day.
 
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