W
warm590
Guest
saw this on a news blurb; wonder how it's gonna affect CC Hudson Valley????
Deep freeze, deep pain
Clear Channel’s John Hogan orders draconian spending cuts and hiring freezes – ASAP.
Friday’s “first quarter contingency plan” comes on top of bloody cuts at the end of last year, which cost probably hundreds of jobs and who knows how much promotional and marketing support. Now here are Hogan’s latest marching orders from San Antonio, starting with the rationale: “we are generating less revenue for Q1 than we budgeted and less than what actually ran last year. At the same time, our budgeted expenses for Q1 are up 4%. While there are a number of factors contributing to our revenue shortfall, the fact is we are behind on our revenue plan, up over last year on expenses, and as a result we will be well below our budgeted Q1 bcf” – broadcast cash flow. That’s important because Clear Channel’s still hoping its betrothal to Bain Capital and Thomas H. Lee Partners can be consummated at $39.20 a share. But to get back to Hogan’s memo: “As responsible managers, we need to address the shortfall not only by continuing to find ways to increase our revenue, but also by implementing cuts on the expense side until revenue production improves.” Please – no jokes about “the beatings will continue until morale improves.” This is serious gut-level stuff for managers and stations. T-R-I has the bullet-points of the newly-activated “contingency plan” -
To subscribe to this newsletter for free click here. | Download & print the pdf version
“The following Q1 expense reductions are to be implemented immediately.”
These are the items – specific expense cuts – that were to be reported via CC’s “Flash website” before 7pm Friday: “Expense reductions: All research monies after 2/1. All Advertising and Promotion monies after 2/1. All new sales hires not already implemented, effective immediately. Any new hires budgeted but not hired, effective immediately (do not hire any additional new employees). Any/all discretionary monies (i.e., travel, meals and entertainment, etc.) for your market. If you can save it, do so. Additionally, you are not to replace any departing personnel without specific approval from your EVPO.”
“I completely understand the challenges associated with implementing the above cuts.”
John Hogan says “It will make your job more difficult and have some long-term affect [sic] on your overall performance. It goes without saying that leading through these reductions will be challenging. If there were another, better alternative, we would not be requiring these reductions be implemented. Unfortunately, there is not another alternative.” (One reader commented about the corporate jets – plural – that the Mays family uses, as disclosed in SEC filings.) The memo winds up “It should go without saying that at the earliest opportunity, that is when revenues begin to stabilize and increase, we can reverse the expense reductions.” Managers are probably thinking: but you’re taking away some of the very tools we need to make things better. If this is a signal to Bain and Thomas H. Lee Partners that management’s capable of making “the tough decisions” – they’ll get it. But they have to wonder what shape the core radio business will be in if/when they finally take over. (Clear Channel Outdoor isn’t part of this Wintertime radio freeze: I just saw a recruitment billboard in Philly touting careers there.) There’s another culprit in addition to the general economy and possible recession: The business school teaching and the counsel of gurus like Peter Drucker that the instant a company’s announced as being for sale, bad things start to happen, and you want to minimize the time period before things close. But this transaction with Bain/Lee was announced over 14 months ago, and who knows when the closing will be? Will Wall Street look at this
Anybody hear anything from tucker drive???
warm590 ???
Deep freeze, deep pain
Clear Channel’s John Hogan orders draconian spending cuts and hiring freezes – ASAP.
Friday’s “first quarter contingency plan” comes on top of bloody cuts at the end of last year, which cost probably hundreds of jobs and who knows how much promotional and marketing support. Now here are Hogan’s latest marching orders from San Antonio, starting with the rationale: “we are generating less revenue for Q1 than we budgeted and less than what actually ran last year. At the same time, our budgeted expenses for Q1 are up 4%. While there are a number of factors contributing to our revenue shortfall, the fact is we are behind on our revenue plan, up over last year on expenses, and as a result we will be well below our budgeted Q1 bcf” – broadcast cash flow. That’s important because Clear Channel’s still hoping its betrothal to Bain Capital and Thomas H. Lee Partners can be consummated at $39.20 a share. But to get back to Hogan’s memo: “As responsible managers, we need to address the shortfall not only by continuing to find ways to increase our revenue, but also by implementing cuts on the expense side until revenue production improves.” Please – no jokes about “the beatings will continue until morale improves.” This is serious gut-level stuff for managers and stations. T-R-I has the bullet-points of the newly-activated “contingency plan” -
To subscribe to this newsletter for free click here. | Download & print the pdf version
“The following Q1 expense reductions are to be implemented immediately.”
These are the items – specific expense cuts – that were to be reported via CC’s “Flash website” before 7pm Friday: “Expense reductions: All research monies after 2/1. All Advertising and Promotion monies after 2/1. All new sales hires not already implemented, effective immediately. Any new hires budgeted but not hired, effective immediately (do not hire any additional new employees). Any/all discretionary monies (i.e., travel, meals and entertainment, etc.) for your market. If you can save it, do so. Additionally, you are not to replace any departing personnel without specific approval from your EVPO.”
“I completely understand the challenges associated with implementing the above cuts.”
John Hogan says “It will make your job more difficult and have some long-term affect [sic] on your overall performance. It goes without saying that leading through these reductions will be challenging. If there were another, better alternative, we would not be requiring these reductions be implemented. Unfortunately, there is not another alternative.” (One reader commented about the corporate jets – plural – that the Mays family uses, as disclosed in SEC filings.) The memo winds up “It should go without saying that at the earliest opportunity, that is when revenues begin to stabilize and increase, we can reverse the expense reductions.” Managers are probably thinking: but you’re taking away some of the very tools we need to make things better. If this is a signal to Bain and Thomas H. Lee Partners that management’s capable of making “the tough decisions” – they’ll get it. But they have to wonder what shape the core radio business will be in if/when they finally take over. (Clear Channel Outdoor isn’t part of this Wintertime radio freeze: I just saw a recruitment billboard in Philly touting careers there.) There’s another culprit in addition to the general economy and possible recession: The business school teaching and the counsel of gurus like Peter Drucker that the instant a company’s announced as being for sale, bad things start to happen, and you want to minimize the time period before things close. But this transaction with Bain/Lee was announced over 14 months ago, and who knows when the closing will be? Will Wall Street look at this
Anybody hear anything from tucker drive???
warm590 ???