For the first two decades of Clear Channel's existence, each station manager had an annual budget meeting with Lowry Mays. Lowry would go over each expense, item by item, and grill the manager on the need for each. If the manager couldn't justify it, the item was deleted. That's where the term "cheap channel" came from.
When deregulation came, and the ownership caps were lifted, the business model changed. Combining stations allowed cost savings from every department, and allowed more leverage for rates. It also allowed more leverage over talent costs, since there were fewer alternatives for the announcer. (He/she couldn't just cross the street). Add to that the change from single owner to corporate stock listing, and the pressure was placed squarely on each cluster to maximize earnings, and minimize costs.
At first it worked. Billing and profits rose dramatically. Unfortunately, the pressure placed on each manager to keep increasing earnings led to excessive cost cutting, especially to promotion programming and talent. That's where things went wrong. In the stock market world, it's grow or die. They're done growing.
Add to that the valuations given licenses by the late '90s, and ridiculous return on investment expectations, and the squeeze was on. CBS found itself in the same bind, for the outrageous amounts it paid to build its clusters. Both chains wrote down tens of billions on the value of the licenses it bought.
The new pardigm of choices available has hurt deeply, especially at the younger end of the demographic.
BTW- I'd work for Roger Allen any day. I've worked with him (never for him) and always appreciated his style. His track record at KONO speaks for itself.
g
