Clear Channel...Nassau...Citadel...corporate crap

[radiowatch]

So here we go...just what many predicted a few years back. Sooner or later after the Clear Channels of the world figured out that their corporate ways do not translate into $$$$ they will just get rid of the smaller stations and grab their cash and run. They are all the same...CC...Nassau...Citadel and the rest. They just try like hell to bring their big corporate ideas into the smaller markets and screw it all up. I remember radio when I was really involved quite a few years ago. The stations catered to the individual markets. Not anymore. They would rather turn them into boring juke boxes and sterilize them because it's all about the almighty dollar. forget trying to put together quality programming. Listen to the Clear Channel stations in ANY market they are all the same. How about Nassau. There is a good example. God it's pathetic, every one of their stations sound alike----BORING. These big guys are killing radio. But now with the Clear Channel news there is a chance that good radio will return if local groups can afford to buy these stations back. Unless the Nassau's of the world start buying them up. Oh please not that!

 

[yocco]

Is radio in these smaller markets truly profitable for any of these other corporate groups? The CC report said less than 10 percent was contributed to the bottom line by all the stations below Market 100 as well as the TV stations. Citadel will probably have its own fire sale after the ABC deal goes through. Why in the world would they remain in Presque Isle, Maine for example? Farid likes to moose hunt or something? It's going to be local owners with investors who come to the rescue in some of these smaller markets..eventually. And with Scott Systems andProphet already in place with automation capability already in place..who really believes there will be live staffs again around the clock?

 

[ray ting]

With all due respect to those disagree, I think that a lot of us are rewriting history when we talk about the good old days of local ownership.

Yocco nails it in saying that even if local owners come back to radio, those automation systems will continue to be used. After all, look back to the 70's when the old tape and cart automation systems first hit the market. Who used them? The small market mom and pop stations. And when satellite programming (with those horrid fake drop-in local call letters) hit the airwaves in the 80's, who used it almost exclusively? Yes, the local mom and pop stations.

Today we still have a few locally owned stations here and there, but with a few exceptions, are any of them doing anything local or original or worth listening to? How many can you name?

I'm not an advocate of conglomerate radio. I'm just saying that if Clear Channel sells its Maine stations, we shouldn't expect a Shangri-La of fresh new exciting local programming.

 

[argytunes]

???

Ray...

Is there really such a thing as "fresh new exciting local programming?"

Most of the radio stations I've listened to...regardless of who owns them...DON'T consider "f.n.e.l.p!"

Most station groups are interested in programming that costs very little (aka bartering), is familiar to the desired age demographic, and IS EASY AS POSSIBLE to turn a quick profit! :-[

argytunes

 

[ray ting]

Agreed, Argy. And we all know that those "quick profit" tactics have no staying power. There's nothing wrong with trying to make a profit, but why can't the owners see the value in investing in quality? And by the way, I mean quality as defined by the listeners, not by radio people.

What does the average radio listener have good to say about commercial radio? Right. And radio people blow off the criticism by saying "the listeners don't know what they want" or "you can't please all of the people all of the time".

Okay. What does the average Starbucks consumer think of Starbucks? What does the average iPod user think of iPods? Exactly. You can't find anyone who'll say a bad word about them.

And gee... the users of those products are the same "dumb people" who supposedly don't know what they want in radio programming. At least that's what the radio programmers tell us. Hmmm.

Hope I don't sound too ascerbic here. I'm not blaming Northern New England PDs for the bad radio we hear. After all, there are still some good stations here and there. I'm blaming the corporate suits who've probably never even set foot in a market north of Boston, who think they have all the answers.

 

[Radiodeity]

Maybe it could have been spelled with a few letters moved around... like this...

...I'm blaming the corporate sluts...

L before I except after S.... Unless you will see it will follow a T... Or something like that....

I think... ???

I'm blaming the corporate suits who've probably never even set foot in a market north of Boston, who think they have all the answers.

 

[redneckriviera]

Yocco asks "Is radio in these smaller markets truly profitable for any of these other corporate groups?"

Sure, especially the privately held groups. The inherent problem with public (Wall Street funded) companies is that it's never enough. Every year and every quarter has to be better, or they (investors) will take their money and go looking for the next hot stock. In CC's case, though, the large markets are obscenely profitable, while the Bangors & Burlington's are only enormously profitable.

Since I know Burlington (a little) better, I'd take a wild ballpark stab at a top-line (sales revenue) figure of $4 million--most of it from Star & Champ--and a cashflow (profit) figure of $1.6 million. That'd be 40 percent.

Pretty good. Now look at CC's cluster in DC, for instance, and multiply sales by 30X and the profit by 40X (maybe 50X). Transmitters cost the same in DC as they do in Burlington; towers, too; computers, too; gasoline, too. Sure, they pay talent more in DC--maybe 5 or 6 times more, but not 50 times more. Same amount of effort... just a LOT more money.

Which brings us to Ray Ting's observation: "With all due respect to those disagree, I think that a lot of us are rewriting history when we talk about the good old days of local ownership."

Not really. Most "mom & pops" and even most pre-consolidation groups, would have been thrilled with $1.6 million in yearly profits. If "mom & pop" are sticking $1.6 million in their pockets every year, they're living like Kings & Queens in Burlington. Hell, $500K a year is royal compensation in Burlington, isn't it?

One more thing. All this came about because Lowry Mays & Tom Hicks--both Wall Street investment brokers from Texas--understood that federal rules & regs could be re-written to allow them to make a killing. So they had them re-written and this is their killing. To save radio, we (those who care about radio as an industry) need to have those "new" rules & regs reversed. It's been done before. Standard Oil. AT&T. Break up the monopolies and invite competition back into radio. Lowry & Tom don't care. They got theirs. Now we can do with it whatever we want.

So, what do you want?

 

[ray ting]

Redneckriviera, for the record, when I said that "a lot of us are rewriting history when we talk about the good old days of local ownership", I was referring to programming, not revenue.

I do wonder, though. Are you arguing that if CC sold off its Burlington cluster, that a) a local mom and pop owner could afford to purchase it, and that b) they could use the same economies of scale as CC to reap $1.6 million a year in BCF?

Back in the "7-7-7" days of local ownership, over 50% of American radio stations lost money. And that was with much less competition than would be faced today with more radio stations, more other media, and more other entertainment forms to compete for average quarter-hours and ad revenue.

I ask this not to challenge your implied contention, but rather to elicit your thoughts... cause this is a question I think we're all wondering the answer to: Could mom and pop owners make radio ownership financially worthwhile in a post-consolidation era?

 

[redneckriviera]

Ray Ting brings up some interesting ideas. Let me see if I can format this in readable fashion (sorry if I screw it up):

"Redneckriviera, for the record, when I said that "a lot of us are rewriting history when we talk about the good old days of local ownership", I was referring to programming, not revenue."

Prior to "duopoly" or "superduopoly" (remember those words) each station--even in an AM/FM combo--had to be competitive. Owners didn't have the luxury of just tossing a half-assed music format on a lesser stick just to flank a big rival.

I do wonder, though. Are you arguing that if CC sold off its Burlington cluster, that a) a local mom and pop owner could afford to purchase it, and that b) they could use the same economies of scale as CC to reap $1.6 million a year in BCF?

Affording it means financing it, so--yes--they'd have to have their financial act together. Operationally, under current rules--sure, the same economies of scale apply. Or they could make a legitimate programming & promotional effort with each station and reap a million a year. Or fully staff all the stations, do it right, and reap a half-million. That's still a bunch of profit.

Back in the "7-7-7" days of local ownership, over 50% of American radio stations lost money. And that was with much less competition than would be faced today with more radio stations, more other media, and more other entertainment forms to compete for average quarter-hours and ad revenue.

That "over 50% of American radio stations lost money" stuff was complete BS. You may or may not recall that in the mid-eighties, the feds de-regulated the financial industry, and a whole slew of non-broadcasters grabbed junk-loans and paid way, way, way too much for stations--and very quickly found themselves upside-down. I sincerely belive that Mays & Hicks (who both owned stations in Texas back then) saw their opening and used the NAB to front the campaign to first allow LMAs (Hicks had the very first LMA, in Port Arthur) and then abolish the ownership caps. Remember, too, that many "moms & pops" used the normal amortization and depreciation allowances--and other, conventional accounting tactics--to show a loss each year for the IRS, no matter how much profit they were making. I did. That's where they got the "50%" nonsense. It was a ploy.

I ask this not to challenge your implied contention, but rather to elicit your thoughts... cause this is a question I think we're all wondering the answer to: Could mom and pop owners make radio ownership financially worthwhile in a post-consolidation era?

A lot depends on what "mom & pop" consider to be "financially worthwhile." Some folks are satisfied making a half million a year, letting the company foot the bill for the boat, the Mercedes, the golf membership and the marina fees, and having a beautiful home in a great neighborhood. For them? Yeah. Others feel they need to make the Forbes 400 or they're failures. For them? No.

 

[NHRadio]

Like so many other "civilians" you wonder why the owners and managers of radio stations can't just follow your ideas and radio would be invigorated! The other poster who mentioned automation/satellite being used by individual owners was right on the money (pun intended).
Allow me to explain a few things...some of which you may know, some you may not.
Most "mom and pop" stations are in worse shape than the group-owned ones who can absorb huge costs like transmitters/antennas (station I work at put up a new antenna for $130,000 installed), processors etc. A new Optimod is $12,000. Most decent automation systems run 6 figures on a cluster basis. Don't forget the heavy debt Mr. and Mrs. Owner took on to buy their stations? It is not uncomon to have a million plus dollar debt even on small stations.
Do you think a local owner could afford $130K to improve his coverage? I thought not.
ASCAP/BMI/SESAC bloodsuckers take a healthy chunk, and health insurance is a huge expense.
How many "mom and pop" stations can afford top-level training for their sales reps? Can they even find them? Then where would the revenue come from to do all the things you'd like?
Point is this...you may not like "corporate radio". It has its drawbacks-but its HOW its done that matters. Notice Entercom/Infinity/Saga/Viacom have stations that aren't the same from market to market? They allow their GM's to DO radio and serve their areas, while Nassau/CC tend to limit creativity to the point of strangulation.
As in all things, some are better than others. Just because Nassau is the poster child on "how to screw up a radio station" doesn't mean ALL corporate owners are bad, evil, incompetent, greedy, etc.




Most of the radio stations I've listened to...regardless of who owns them...DON'T consider "f.n.e.l.p!"

Most station groups are interested in programming that costs very little (aka bartering), is familiar to the desired age demographic, and IS EASY AS POSSIBLE to turn a quick profit! :-[

argytunes
[/quote]

 

[redneckriviera]

NHRadio says "Most "mom and pop" stations are in worse shape than the group-owned ones who can absorb huge costs like transmitters/antennas (station I work at put up a new antenna for $130,000 installed), processors etc."

No real argument there. Most "mom & pops" have been driven out (or bought out) of the business in the past 11 years. And many still in the biz own very small rigs in very small markets. But for those still involved, financial capability is extremely important. Just like any business. That $130,000 antenna doesn't cost any more--or less--than a $130,000 18-wheeler. But "mom" isn't expected to have that much hidden in her cookie jar. This has always been a game for people with money, or access to it. It ain't a Lemonade Stand.

And "Most station groups are interested in programming that costs very little (aka bartering), is familiar to the desired age demographic, and IS EASY AS POSSIBLE to turn a quick profit!"

Again, like most businesses. Most restaurants are interested in providing food that costs as little as possible, is considered tasty by the customer, and is easy as possible to fix & serve so that they can earn a quick profit. But, you know, some restaurants choose to provide more expensive food and great service in an extremely attractive setting--and charge a bit more so they still make a good profit.

Cheap isn't the only way to do radio and make money. However, it does seem to be the most prevalent, right now. And that's not only difficult for those of us doing radio on a daily basis, it's also bad long term strategy for the industry.

NHRadio says "Like so many other "civilians" you wonder why the owners and managers of radio stations can't just follow your ideas and radio would be invigorated!"

Don't know if that was a shot at me, or not. But, no, I'm not a "civilian." I've been doing radio for more than 40 years and managing stations for more than 25 years; and have bought-and-sold a half-dozen properties, myself. I run a 6-station cluster now for a mid-size privately owned company that's more than "mom & pop," but doesn't squeeze every dime, either. My programming staff is the highest-paid in the region (by a large margin), we promote year-round on every media available, and the stations churn out great ratings and big profits.

So, yeah, there is another way to do this thing.

 

[NHRadio]

Redneckriviera: Not a shot at you at all. You get it, obviously. I was referring to certain posters who seem to have all the answers but have never worked behind a board a day in their lives...they know who they are..and aren't-so I won't name them. It appears you and I have very much in common in that we both know large owners aren't evil just because they're large, they're evil because SOME bad ones try to squeeze blood from rocks. I've worked for individual owners who've done the same thing, just ask me about working for Curt Gowdy in the 80's and 90's!
Bottom line-there are good owners and bad ones, regardless of size. Those who knee-jerk at Nassau's sometimes unexplainable antics and somehow think all group owners are that stupid cannot have much "real world" radio experience.


Don't know if that was a shot at me, or not.



But, no, I'm not a "civilian." I've been doing radio for more than 40 years and managing stations for more than 25 years; and have bought-and-sold a half-dozen properties, myself. I run a 6-station cluster now for a mid-size privately owned company that's more than "mom & pop," but doesn't squeeze every dime, either. My programming staff is the highest-paid in the region (by a large margin), we promote year-round on every media available, and the stations churn out great ratings and big profits.

 

[musichead]

I just gotta clear up one misconception. Don't put Nassau in the same sentence as "big corporation". Maybe it seems that way up here, but they have less than 400 employees. A lot of them have been kept on for years and years, even after their stations were sold. When Steve Garsh got fired from Millennium (after they bought his station from Nassau), Lou took him (and a lot of other people) back and created jobs for them. So, not a lot like CC.

I don't blame the NNE people for bad feelings, but hey, business is business.

 

[argytunes]

"You might not like corporate radio, but it's 'how it's done' that matters..." :-\

I guess this is one issue ALL of us could argue about...depending upon the format a station has...or the programming source it's carrying?

Most of us have at least one or two preferences when it comes to the type(s) of format we'll listen to. Unfortunately, what's enjoyable to listen to in morning or afternoon drive MIGHT be followed by a talk show host or certain music selections that are 'a complete turn-off!'

You can masquerade any station with the terms: "ALL-NEWS"/"OLDIES"/ "HOT COUNTRY"/ "ADULT-CONTEMPORARY"---but if the major portion of its content is crappy (the politically correct phrase is: 'undesirable to most listeners')...the format doesn't matter!

Simply because the audience you're expecting aren't gonna be around TO LISTEN...let alone enjoy those very l-o-n-g commercial stopsets!

argytunes