CITADEL LAYOFFS?

[OttoM]

BIG goings-on at Citadel today - staff reductions in NYC, DC and Atlanta, one format change (in DC). Anything going on in the Queen City, or are these changes pretty much confined to the former ABC stations?

 

[ThePickleReport]

Nothing that we know of yet, but if it's like the Clear Channel and CBS cuts no-one is safe!

 

[Mark Giardina]

It's always tough to read about someone losing their job, especially now with the economy heading towards (dare I say the word) recession.

What is even more discouraging for those people out-of-work is that the prospects of landing another radio gig is getting slimmer all the time, even if they are willing to uproot their families and move to other locations.

Someone once wrote that broadcasting invented the word "downsizing."

One hates to predict what the job market will look like five or ten years down the road at the rate things are going.

 

[Bob1370]

"One hates to predict what the job market will look like five or ten years down the road at the rate things are going."

For the sake of the industry's survival, it had better be robust.

Broadcast radio has one advantage over podcasts, CD decks and satellite...live, friendly human voices who entertain and inform. That's the value added that can draw people to listen to radio over other media. Throw that away, as too many stations are now doing, and you've thrown away the main advantage that motivates people to keep listening and keep putting up with all the commercial stopsets. And you eventually throw away the listener base, and the revenue base.

Radio needs to once again become live, local and consistently stimulating and entertaining if it wants to stay alive as a business.

 

[Element9]

While discussing the ramifications here of Citadel's reported $840 million fourth quarter loss and subsequent Black Friday job cuts and format changes, it might be helpful to remember that although Citadel is cited as having "purchased" the ABC radio stations and ABC Radio network from Disney, in actuality the deal was a reverse-process wherein Disney actually owns 52% of "the company."

For reference:

1. http://www.citadelbroadcasting.com/invest/reports/CitadelABCRadioPressRelease.pdf

2. http://abcnews.go.com/Business/story?id=1586358

3. http://biz.yahoo.com/e/080212/cdl8-k.html

4. http://google.brand.edgar-online.com/EFX_dll/EDGARpro.dll?FetchFilingHTML1?SessionID=vBMYWO6BpJ9e5nB&ID=5227979

Particularly interesting in the preceding link: "The average Citadel closing stock price during that time was $8.47" Substantially greater than today's closing price. It's not hard to imagine shareholders, particularly institutional buyers, not particularly pleased with the events of the last three months.

5. Farid Suleman, terms of compensation: http://sec.edgar-online.com/2004/04/15/0001047469-04-012040/Section14.asp Particularly interesting in the preceding link, Mr. Suleman's stock options and strike price thereof.

Hope you find the reading informative and helpful.

-9-

 

[Kent]

While discussing the ramifications here of Citadel's reported $840 million fourth quarter loss and subsequent Black Friday job cuts and format changes, it might be helpful to remember that although Citadel is cited as having "purchased" the ABC radio stations and ABC Radio network from Disney, in actuality the deal was a reverse-process wherein Disney actually owns 52% of "the company."

You are correct that the deal was actually called a "Reverse Morris Trust." Also, it was modified to 57% for Disney shareholders. http://www.marketwatch.com/News/Sto...15D}&dist=rss&siteid=mktwdist=rss&siteid=mktw

By the way, Disney technically doesn't own 57% of the company; its shareholders do. While that probably doesn't sound like much of a difference, the shareholders owning the majority of a company's stock does not mean Disney corporate owns it. Passive investors, like mutual funds, normally own most shares of big companies. Yes, the corporate officers probably own some shares in Citadel, but not likely enough to force Farid out and run it themselves. In other words, John Hare isn't with the current Citadel, though a lot of current and former employees probably wish he were!

 

[Mike Sheridan]

"One hates to predict what the job market will look like five or ten years down the road at the rate things are going."

For the sake of the industry's survival, it had better be robust.

Broadcast radio has one advantage over podcasts, CD decks and satellite...live, friendly human voices who entertain and inform. That's the value added that can draw people to listen to radio over other media. Throw that away, as too many stations are now doing, and you've thrown away the main advantage that motivates people to keep listening and keep putting up with all the commercial stopsets. And you eventually throw away the listener base, and the revenue base.

Radio needs to once again become live, local and consistently stimulating and entertaining if it wants to stay alive as a business.

As usual you make some very valid points.

Let me add the reaction of the broadcast companies is to make cuts to save money. It's a bit like emptying your gas tank to make your car lighter. It's not going to get you very far.

 

[umtrr-author]

To paraphrase the Pointy Haired Boss of Dilbert: "If I fire everyone, there will be no expenses! It will all be pure profit!"

 

[x-raydio]

For what it's worth, from a longtime lurker, ex-radio news journalist from a market elsewhere along the Thruway who loves radio:

Radio *is* a local, personal medium -- the only one that speaks to you in a friendly voice in a non-scripted way about stuff that's happening to you right now.

HOWEVER: Radio hasn't really been a "local" medium in some time. The mega-megas bought up licenses in smaller markets, got permission to move them to the cities and created clusters that were supposed to be about doing business efficiently. (And not about doing local radio efficiently.) The vast majority of radio these days is no more "local" than the Buffalo News, the Rochester D&C, The Syracuse Post-Standard or the Albany Times-Union. They're "metro" media, with very little "local" relevance.

"Local" radio is, largely, dead. And will not return. The cost of doing business has risen above the ability of independent players to afford the continuing investment in new technology.

I would add that most local -- by which I mean "small-town" -- radio was poorly executed. Corny, decades-old imaging, windbag announcers, crappy commercials, records that skipped. But that was its charm. Or, if you don't accept that explanation, the poor execution was outweighed by the volume of useful local information -- localized weather, school lunch menus, listings of church dinners and school band concerts, on-air chats with local gadflies, the sale information nested in those crappily-made commercials.

It's useful to remember that radio as a business isn't much different today than it was in its local phase -- the majority of stations lost money the majority of years.

So what's the answer?

Better talent? More live and local? More news?

None of the above, in my view.

There is no walking back to radio's true local days. You can't unring a bell. Instead, the answer is to have fewer stations on the air.

Music radio is changing fast. Radio's only one part of selling a single or a CD these days. Radio is slowly being marginalized as a way to sell music, just as newspapers are "enjoying" a loss of circulation because there are faster ways to get news.

Each of those struggling music stations sucks resources from their station groups and spreads thinner the declining amount of ad money in the market.

Shut 'em off. Shoot the straggling frequencies. Concentrate resources into fewer signals and realize that live and local is all you got left. Clinging to music is clinging to a leaky life raft. If you do music, go broad and go back to a full-service format.

By shutting off the low-performing frequencies, you'll create fewer places for ad dollars to flow. Scarcity, and any hint of success, will create higher demand for ad spaces and therefore support higher rates.

I freely admit that this idea may have no chance of success. (Hey, discuss.) But you gotta admit: Nothing else is really working, either.

 

[SirRoxalot]

Fewer Radio Stations?

I'm sure that the FCC would love to recover a bunch of bandwidth that they could resell for billions to the cell companies and Google for delivery of more digital media streams.

The problem isn't with the number of signals. The problem is that the consolidators overpaid. Let them go bankrupt, sell the frequencies to real broadcasters at a reasonable price, and the problem will resolve itself.