Classic RIFs

[TheBigA]

the man does it all.

It's how to stay employed. If you do it all, they can't fire you.

By the way, I have never worked in small markets or propane sales. But I know about nuclear disarmament.

 

[SirRoxalot]

The biggest reason that the industry is in trouble is because CC and other major consolidators created a bubble in station values.

Then why is public radio, which wasn't affected by the "bubble in station values," in the exact same boat? They're letting people go, and consolidating. Obviously the problem is far bigger than a bubble in station values. And that bubble is only an issue if companies decide to sell.

So, CC isn't in trouble because of the massive debt burden hanging over their heads? They've been cutting staff because it's GOOD for the stations, not because they've got huge debt payments? C'mon, you don't really expect us to believe such hogwash, do you?

Non-coms are a different animal because they depend on fundraising. You - an old NPR employee - ought to be aware that fundraising is one of the first things to suffer when the economy gets tough. Most media buyers consider NPR and non-com radio to be a donation, and donations dry up quickly when bottom lines are getting hit. Some non-coms did buy more stations before the bubble burst - and overpaid, particularly for AMs. They have debt to service, too. Or, they bought FMs because they were trying to attract a younger audience, and couldn't sell their AMs for as much as they anticipated.

In past recessions, radio did well because it delivered a lot of bang for the buck, and it had a broad base of advertisers. A lot of businesses turned to radio because it was more cost-effective than newspapers. CC and others pushed a lot of companies off the air by raising rates. Those businesses aren't interested in coming back now that the big spenders aren't spending anymore. The perception now is that on-line delivers more bang for the buck - whether that's true or not.

 

[TheBigA]

So, CC isn't in trouble because of the massive debt burden hanging over their heads?

Once again, I don't work there, so all I know is what I read. But they seem to be spending money on capital improvements. Last year they spent $100 million on Metro Traffic. A few months ago they spent $70 million to buy WOR-AM. So they've got money from somewhere.

Here's what I know about running a business: Debt is only a problem if you can't meet your monthly payment, and the lender wants to collect. Otherwise, you just meet your payments on schedule, and use your cash flow to meet operating expenses. It ain't rocket science. As I said, what's causing the layoffs is (1) Certain markets aren't meeting their numbers, so their payroll needs to be cut, and (2) Certain dayparts are not critical to attracting revenue, so they can be outsourced. As I've been saying, news/talk stations were hit by a massive advertiser ban that has hurt their revenues. Executives at several other radio companies confirm that the ban, caused by a CC air talent, has also affected the entire industry, not just news/talk. Couple that with a disappointing political season that didn't bring as much money to radio as TV, and you get the current situation. But hey, what do I know?

 

[JustPastBuffalo]

So, CC isn't in trouble because of the massive debt burden hanging over their heads?

Once again, I don't work there, so all I know is what I read. But they seem to be spending money on capital improvements. Last year they spent $100 million on Metro Traffic. A few months ago they spent $70 million to buy WOR-AM. So they've got money from somewhere.

The WOR sale price was $30 million (according to The Daily News, Radio Ink and AllAccess.) Not too many years ago, Buckley reportedly turned down offers nearly three times the sale price.

Disney, in 2001, paid $78 million for 1050 WEVD, NYC. This is a clear indication as to how AM prices have plummeted.

In Buffalo, Crawford paid $875 thousand WNED-AM, a 5 kw full time AM on 970 (which is now temporarily silent.)

Clear Channel, like Cumulus, has serious issues. Knowledgeable sources who are conversant with financial matters and investments have opined that both companies will solve their financial issues by kicking the can down the road, by way of "bonds, re-financing and further staff cuts." As one analyst told me, that road may indeed have a few more miles on it, but it leads to a dead end.

 

[TheBigA]

The WOR sale price was $30 million (according to The Daily News, Radio Ink and AllAccess.) Not too many years ago, Buckley reportedly turned down offers nearly three times the sale price.

The point is that they paid cash. Obviously the "massive debt hanging over their heads" isn't enough to prevent them from spending even more cash on something they want.

Knowledgeable sources who are conversant with financial matters and investments have opined that both companies will solve their financial issues by kicking the can down the road, by way of "bonds, re-financing and further staff cuts."

Sounds like the US government.

 

[Element9]

The point is that they paid cash. Obviously the "massive debt hanging over their heads" isn't enough to prevent them from spending even more cash on something they want.

The point is $30 million is a lot less than $70 million, cash or credit. You got it wrong, Ron Radio.

 

[TheBigA]

The point is that they paid cash. Obviously the "massive debt hanging over their heads" isn't enough to prevent them from spending even more cash on something they want.

The point is $30 million is a lot less than $70 million, cash or credit. You got it wrong, Ron Radio.

And you've never made a mistake?

Money is money. They obviously have lots to spend on things they want to spend it on. If they were headed to bankruptcy, no one would give them $30, much less $30 million. Same with Cumulus.

 

[Mike Sheridan]

Bottom line, we all know this. These big broadcasting monopolies should never have been allowed in the first place. Running a radio station completely unattended should also never be allowed.

 

[TheBigA]

And while you're at it, we should never have allowed the computer to be invented. It ruined everything.

 

[Mike Sheridan]

And while you're at it, we should never have allowed the computer to be invented. It ruined everything.

You might have a point but I would never say that! Computers gave this X-DJ a new career. ;D

 

[SirRoxalot]

So, Clear Channel can scrape up $130-million to buy new programming, and an AM in NYC, but they can't afford to pay the people on their payroll, so they fire them. Nice priorities there. Traffic on the radio has that much upside? I thought you said that everybody got their info from their smart phones. Doesn't look like a very smart investment, does it?

I guess when you own 850 stations, you can come up with that kind of cash without hitting the market. Or, when you're owned by Bain Capital and Thomas H. Lee Partners you've got that kind of chump change lieing around from your other leveraged buyouts. I'm sure that they'll achieve "synergies" in traffic coverage that will make up for the cost of the acquisition. Stand by for even more hubbing.

 

[TheBigA]

So, Clear Channel can scrape up $130-million to buy new programming, and an AM in NYC, but they can't afford to pay the people on their payroll, so they fire them.

Once again, I don't work there, so I don't know the exact business structure. But from what I understand, CC Corporate bought Metro Traffic. I think CC New York bought WOR (although the money could have also come from corporate.) But the payroll situation is a matter for the local stations. If a local cluster isn't making it's figures, its their decision how they handle it. Local is doing the firing, not corporate. I've been told by people who work there that their checks come from lots of different places. Some people are still getting checks that say Southern Star. Bottom line is that the money isn't coming from the same place.

 

[SirRoxalot]

Oh, so there was no edict from corporate, no "formula" for determining who was "cost-effective", and who got let go, and it's just coincidence that it happened all over the country on the same day. Got it. Thanks.

 

[umtrr-author]

If a local cluster isn't making its figures, its their decision how they handle it.

The next question in my mind is who decides what the figures are. Probably not the local cluster...

 

[TheBigA]

Oh, so there was no edict from corporate, no "formula" for determining who was "cost-effective", and who got let go, and it's just coincidence that it happened all over the country on the same day. Got it. Thanks.

It happened on the same day because of HR. But if you look at it, a lot of markets had no cuts at all. So the cuts seemed to be based on specific markets, not across the board. Once again, I don't work there.

 

[Paul_Warren]

So, Clear Channel can scrape up $130-million to buy new programming, and an AM in NYC, but they can't afford to pay the people on their payroll, so they fire them. Nice priorities there. Traffic on the radio has that much upside? I thought you said that everybody got their info from their smart phones. Doesn't look like a very smart investment, does it?

Rox, Metro Traffic is one of the sources for the traffic that shows up on your smart phone.

And, being a for-profit enterprise, if Clear Channel can bring in more revenue by buying Metro, and not bring in more revenue by hiring or keeping live DJs, their priorities are predictable.

One reason for the devaluation of live, local air talent is the fact that the services for which you need these employees are no longer expected by listeners. Radio just isn't as important to many listeners, especially young ones, at it used to be, and the continued cuts are just part of riding the spiral down.

This didn't start with Clear Channel and consolidation. It started sometime in the late 1970s, when industry leaders decided liner cards and really tight playlists were more important than personality and relationships. Even 'KB fell through that trap door.