• Get involved.
    We want your input!
    Apply for Membership and join the conversations about everything related to broadcasting.

    After we receive your registration, a moderator will review it. After your registration is approved, you will be permitted to post.
    If you use a disposable or false email address, your registration will be rejected.

    After your membership is approved, please take a minute to tell us a little bit about yourself.
    https://www.radiodiscussions.com/forums/introduce-yourself.1088/

    Thanks in advance and have fun!
    RadioDiscussions Administrators

Clear Channel bloodbath FORETOLD...11 YEARS AGO!

H

Holland Cooke

It's a blue Christmas at lots of Clear Channel stations, as firings continue.
www.RadioAndRecords.com has actually created a web page to track them.

And it's not just Clear Channel.

On July 12, CBS Radio abruptly terminated 115 people, of all job descriptions; some recently hired, others longtime employees; at stations all over their O&O map, including stations they were offering for sale. Shocker firings included President of Programming Rob Barnett, who had just keynoted the Talkers magazine New Media Seminar.

But all of this is after-the-fact reporting, of a train wreck that began in 1995.

What you are about to read could give you chills.

One radio station owner, in Texas, was a lonely voice, trying to warn the most influential person in broadcasting that industry deregulation -- which RADIO STATION OWNERS were being rallied to support -- would end with what's happening in markets everywhere right now.

The detail with which he predicted PRECISELY what has happened to radio since the Telecom Act of 1996 is no less than stunning.

Unlike many mom-and-pop owners who were seduced by Clear Channel and other Big Corporate Conglomerates' willingness to over-pay for stations, this Texan kept his stations. To this day, he's still there, in the corner office, managing an operation that employs more local talent than many larger market stations now have. It's called local programming, a notion that now seems quaint.

Recently, he found the eerily prescient letter he wrote to then National Association of Broadcasters President Eddie Fritts...a letter that went unanswered...back before what-is-now-playing-out began to unfold.

This was 1995...so long ago that it took the writer a while to get modern computers to open the file he had written with word processor software then in use.

When he did, he sent me the letter.
When I read it, I was as taken-aback as you will be.

I asked him, my client Paul Gleiser, if I could print his letter, for the entire industry to read.
Without hesitation, he drawled, "PLEASE DO!"

Make sure you're sitting down before you read http://hollandcooke.com/1995warning.pdf

Holland Cooke
News/Talk Specialist
McVay Media
www.HollandCooke.com
 
Holland,

Outstanding letter! Can I print it out and read it to the FCC Commissioners on Monday in Nashville?

Unreal!
 
Holland Cooke said:
When he did, he sent me the letter.
When I read it, I was as taken-aback as you will be.

I asked him, my client Paul Gleiser, if I could print his letter, for the entire industry to read.
Without hesitation, he drawled, "PLEASE DO!"
Click to expand...

OMG... I knew this industry was insular and myopic but I didn't realize how bad it is until I read your post. I mean, you're not just some disk jockey. You're a consultant who has seen at least as much of the business world as I have. You mean you find it amazing that somehow, someone figured out in 1995 that ownership limits were lifted merely so money-grubbing capitalists could cash in on sacred radio? I knew this in 1995 and I was a second year business major!

Look, radio is not in its current state because ownership limits were lifted. It's where it is because of technology. Have you not noticed that newspapers and television are facing an even more challenging business environment?
 
Look, radio is not in its current state because ownership limits were lifted. It's where it is because of technology.

[/quote]

Yeah, right! Technology is used as an excuse to hide the obvious. And the obvious is that the Clear Channel's of the world cut and slashed, and got rid of otherwise talented people just so they could impress a bunch of analysts and stockholders on Wall Street. Apparently, that didn't work, otherwise, CC and a few other consolidators wouldn't be going private, or even dumping stations in smaller markets, for that matter.
 
RE "I knew this in 1995 and I was a second year business major!"

University profs should be using this whole episode as a case study on the unintended (or WERE they?) consequences of deregulation. Young people like yourself come into the industry at a watershed moment.

Salty Dog said:
radio is not in its current state because ownership limits were lifted. It's where it is because of technology. Have you not noticed that newspapers and television are facing an even more challenging business environment?
Click to expand...

Certainly, technology has been -- to use the A.A. term -- the "enabler."
Radio's bad timing was to be mailing-it-in AS iPod/streaming/satellite radio/et al came along.

ALL "old media" are under-the-gun.

Here's the difference between what-happened-to-radio and what's facing TV and print:

TV was a preview of what radio's facing in competitive terms. The multiples buyers are paying for VHF stations is daffy, when 75% of Internet users are now on broadband, and 300 cities are-or-are-about-to light-up WiMax. The genie is out of the bottle. Anyone with files on a server is, theoretically, "a TV station." But television ownership hasn't been deregulated to the extent radio has. 1996 teed-up a pigout that saddled radio owners with debt metrics that choked programming resources.

Just the other day, CNBC did a piece on the multiples newspapers are selling for RIGHT NOW. The gist of it was that deft newspapers are parlaying the revenue they still enjoy into transitioning readers to the Internet. And newspapers' web sites are generally the most content-rich in each market. After all, until broadband, web sites have been largely consisted of "pages," what-newspapers-had-that-radio/TV-didn't, pre-existing depth-of-content in text and graphics.

Several years ago, ABC (Audit Bureau of Circulation, the "ratings" of newspapers) deemed Wall Street Journal online subscribers as "circulation" since online was a PAID subscription.

The bottom line? The bottom line!

As Mr. Dylan sang, "ya better start swimmin' or you'll sink like a stone, 'cause the times they are a-changin.'"

HC
www.HollandCooke.com
 
Re: RE "I knew this in 1995 and I was a second year business major!"

Holland Cooke said:
Certainly, technology has been -- to use the A.A. term -- the "enabler."
Radio's bad timing was to be mailing-it-in AS iPod/streaming/satellite radio/et al came along.

ALL "old media" are under-the-gun.

Here's the difference between what-happened-to-radio and what's facing TV and print:

TV was a preview of what radio's facing in competitive terms. The multiples buyers are paying for VHF stations is daffy, when 75% of Internet users are now on broadband, and 300 cities are-or-are-about-to light-up WiMax. The genie is out of the bottle. Anyone with files on a server is, theoretically, "a TV station." But television ownership hasn't been deregulated to the extent radio has. 1996 teed-up a pigout that saddled radio owners with debt metrics that choked programming resources.

Just the other day, CNBC did a piece on the multiples newspapers are selling for RIGHT NOW. The gist of it was that deft newspapers are parlaying the revenue they still enjoy into transitioning readers to the Internet. And newspapers' web sites are generally the most content-rich in each market. After all, until broadband, web sites have been largely consisted of "pages," what-newspapers-had-that-radio/TV-didn't, pre-existing depth-of-content in text and graphics.
Click to expand...

The contrarian view would suggest that a "perfect storm" was created by a convergence of technology, globalism, deregulation and other factors. To blame any of the current problems or challenges of radio on the doorstep of consolidation seems to me to be a limited viewpoint that serves only the interests of some radio insiders.

Many things happened pre-consolidiation (1996) that were already in motion and hastened consolidation. First in line is the deregulation of the 80s, starting with "Fariness" and ending with the new stations and move ins created by Docket 80-90.

Deregulation created the ability for stations to deeply specialize by virtually removing the requirements for news and public affairs. 89-90, save a few markets, added viable FM stations to the local band and forced further specialization and "niching" of formats. 80-90 also created a crisis for owners, who now had more competitors. In medium and small markets, the ability to make a profit evaporated.

Consolidation was the effect, not the cause, of all these things. It was the effect, also, of the independent broadcasters who started FMs in the 60's reaching an age where they wanted to sell and retire... or of second generation AM owners fromt he 40's finding that profits were more elusive. Those with vision could see satellite, webcasting, video games and more and more cable options as future competiton.

There was, in fact, a rush to sell. But in the early 90's, there were few buyers. Ownershiip caps kept broadcast companies small, and limited their acccess to the capital markets by virtue of that same smallness.

So we had less profitablity, fewer buyers and a desire to sell coupled with the uncertainties of rapidly changing technology and new competiton. If any cause is sought for consolidation, it was not an individual issue, but the melding of many.

Some companies engaged in a debt binge (Radio One), but most emerged with less debt to equity than, say, General Electric (Clear Channel, etc.) and some, like Hispanic Broadcasting, had zero debt after going from a few stations to 75. Programming isses have to be laid on management making poor choices in operations that are short sighted. The considerations on debt service today are no more significant than when Gary Stevens and Doubleday bought what would become WAPP nearly 30 years ago.

The real issue is that some companies maximise profitability without any considerating for sustaining the business model into the future.
 
Re: RE "I knew this in 1995 and I was a second year business major!"

DavidEduardo said:
The real issue is that some companies maximise profitability without any considerating for sustaining the business model into the future.
Click to expand...

I believe that is the problem in a nutshell.
 
Re: RE "I knew this in 1995 and I was a second year business major!"

Holland Cooke said:
television ownership hasn't been deregulated to the extent radio has. 1996 teed-up a pigout that saddled radio owners with debt metrics that choked programming resources.
Click to expand...

You've gotta be kidding. Ten years ago there dozens of independent TV syndicators. When the FCC removed the fin/syn regs they were all gobbled up by the big TV station and program owners like NBC, CBS, ABC, and Fox. Also, TV station owners have been awarded similar ownership increases by the FCC. I think that groups can now own stations covering 35% or country and multiple ownership in local markets in okay (replacing the lma's that operated in the 90's) The FCC has also relaxed rules of cross media ownership etc. etc.
 
Holland Cooke said:
But all of this is after-the-fact reporting, of a train wreck that began in 1995.

What you are about to read could give you chills.

One radio station owner, in Texas, was a lonely voice, trying to warn the most influential person in broadcasting that industry deregulation -- which RADIO STATION OWNERS were being rallied to support -- would end with what's happening in markets everywhere right now.

The detail with which he predicted PRECISELY what has happened to radio since the Telecom Act of 1996 is no less than stunning.

I asked him, my client Paul Gleiser, if I could print his letter, for the entire industry to read.
Without hesitation, he drawled, "PLEASE DO!"

Make sure you're sitting down before you read http://hollandcooke.com/1995warning.pdf

Holland Cooke
News/Talk Specialist
McVay Media
www.HollandCooke.com
Click to expand...

Paul Gleiser was not the only one who saw this coming. Another seer was Stephen Godofsky. He might prefer that his words from 1995 not be dredged up since he's now a corporate bigwig for Entercom.

"In remarks at the Federal Communications Bar Association Annual Meeting June 22, 1995, Larry Irving, then Assistant Secretary for Communications and Information For the Department of Commerce said: “’Recently, I received a letter from Stephen Godofsky, a radio broadcaster from Tampa Bay, Florida, who underscores the need to protect the public interest. He writes:

"for economic reasons, again it is the public who will receive short shrift if broadcasting is totally deregulated. As these large companies attempt to gain control of more and more properties, they will bid up the prices of broadcast facilities around the country. And once, they attain a degree of control economic reality will no doubt set in and they will attempt to attain efficiency (i.e. cut costs) in areas which are the easiest to eliminate. Those areas will no doubt be those relating to public service and community involvement -- ironically the primary areas for which broadcast licenses were originally intended."

Here is the link to it: http://www.ntia.doc.gov/ntiahome/speeches/lifcba_062295.html
 
Status
This thread has been closed due to inactivity. You can create a new thread to discuss this topic.


Back
Top Bottom