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Clear Channel To Cut $400M From Budget

This will be an unbelievably dark day for radio guys. If what happens is of the scope it seems, it will be difficult to even comprehend.

It. Is. Not. Good.
 
I am just so completely disgusted with this industry and THEN some. Recent reports about how the FCC was blatantly political in its policy making. Corporate fat cats cutting the essence of their stations to protect their own butts....and the freaking Investment Bankers and Wall Street crowd that is essentially RESPONSIBLE for the economic flushing we're all experiencing continues to skate by while we all mortgage our kids' futures to pay them off and bail them out.

Meanwhile this worst-kept "secret" from Cheap Channel has been hanging over folks' heads for quite a while with the whole "it's coming but we won't given anyone any info" so they get to show up each day at work and wonder how much longer that hell will continue. CBS has already been foisting THAT mindset on its crew for several weeks now. Meanwhile Cheap Channel plans to do this in a way that is blatantly spun for p/r purposes so their whole nasty game plan doesn't become the subject of ridicule.

People planning this are the same ones who time after time would mutter "people are our most important asset ... and we are ALL ABOUT LOCAL". We knew it was horssht then and it stinks even more blatantly now that we're all in the same enclosed room to hear it.


So maybe you flip to a news station to get some relief...and along comes a huge breaking story out of New York. An amazingly well-executed maneuver saves a planeload of people --- and the dang news stations (TV especially) can't wait to jump on and report "the crash". The whole point was there WAS no crash because the pilot had so much experience and wits....but the phrase "crash" is much better for our media whore reporters and talk hosts.

P-I likely closing (or at very least goes to an internet-only model), and yet MORE great media people bear the burder of their leadership. At least Hearst hasn't been playing the same game that Cheap Channel did ... these guys are more a victim of changing trends than corporate greed; but still part of the same sad story in that all these people who have contributed DECADES to their craft and have amazing talent will end up suffering for no fault of their own.

The people who helped architect the whole debacle? They're focusing on filling out deposit slips from our bailout bucks and sleeping it off with ankle bracelets in their NYC penthouses.

I'm SO worried about my friends who depend on this industry and who will be affected this next week. My thoughts are with you all, as they continue to be with the people who already have been affected by changes over which they had no control.

I guess it would sting less if there was a shred of any evidence ..... ANYTHING AT ALL .... that indicated the brain trust foisting these changes had any sort of conscience.
 
CorporateSuit said:
Check this out...

http://www.nypost.com/seven/01162009/business/clear_channel_plans_revamp_150374.htm

The company is hoping that layoffs across the country will not be noticed during Obama's inauguration celebration.

How many more people will be let go in this market? There is a lot of fat to trim over at KJR AM.
Click to expand...

From what I understand, they're trying to eliminate as much local airstaff as they can so they can syndicate as much programming nationally throughout their entire chain that they can get away with. It says "...on the radio side, move to a “national programming” model that would allow Clear Channel to eliminate lower-level staffing & announcers. The Post says, “restructuring will include layoffs across the company’s radio, outdoor advertising and international divisions as well as cuts to programming budgets and consolidation of back-office operations.” Actually, they've fantasized about this since the late '90s, now this economy mess has created the perfect excuse for something like this to happen.

Fat? All I see are bones in any radio cluster these days. So I guess they'll just have to whittle it down to a skull and maybe a couple femur bones, forming a nice "X" beneath it. And you know what that looks like. And somehow, you have to wonder if an image like that is the future of commercial radio. Deadly poison to itself, where the only locally talented radio remaining are pirate stations .

And further proof that everything people don't like about Clear Channel is valid. And don't be surprised when the economy recovers that this model of business remains with CC. Bad ideas die hard with radio executives....
 
Cowboys let the battle begin :mad:

It will be CC and CBS with national shows and syndication :mad:

Against operators that do local shows and little syndication ;D


Let the best horse win 8)
 
TakeItFromMe said:
Cowboys let the battle begin :mad:

It will be CC and CBS with national shows and syndication :mad:

Against operators that do local shows and little syndication ;D


Let the best horse win 8)
Click to expand...

NOBODY is going to win this one if all corporate stations adopt this model. It's just going to foster the idea in people heads that ALL radio is syndicated pablum. And there's the problem. Radio has long been considered a LOCAL and strongly PERSONAL medium. When a monster super earthquake rips apart Seattle, you would rather not hear Ryan Seacrest blabbering about Britney's latest meltdown. Or a computerized EAS voice telling you that you are experiencing an earthquake. Glad to hear it, but what about the best way to a shelter or anywhere with emergency aid - like, NOW? Local radio with any means of non-automated aural local electronic connection remaining outside the station can help HUGELY. With a local announcer and partners working to connect everybody and report everything as efficiently and TIMELY as humanly possible and that's what I love about KOMO radio. And for that, I listen to them every morning that I'm driving into Seattle or in the area around it and I'm not ashamed to say it. Because if listeners mean ANYTHING, it's that LOCAL connection.

There ARE documented instances of that online. Google them up. Regardless if it happened in the past, like they say "Those that don't learn from the past are condemned to repeat it". And believe me, nothing that the very worst KHIT had in 1985 could even remotely amount to THIS:

http://www.eou.edu/~mmustoe/easpapere.html

If I owned even the most underrated at the time and deliberately let something like this happen unattended under my nose, I would not be able to live with myself. i don't care if it's just "one" casualty because of an EAS malfunction or whatever, it's one too many.

Seasoned local music jocks know when to automatically swing into news/talk mode when it is a major local emergency. That means stopping the music, trying to get a grip on yourself (not easy for ANYBODY to do in less than 30 seconds after a massive disaster, like an earthquake - INCLUDING seasoned local music jocks, who usually have lives and families of their own in the area.) and if you, the station building and STL are still halfway functional and outside phone lines working, get straight to work on the story.

Yes. I know it's not easy and it's not cheap. NOTHING THAT IS THE RIGHT THING TO DO EVER IS. And GOOD radio is built by this......
 
The Wall Street Journal is reporting a 7% reduction in staff, and, according to them mostly in the ad sales sector.
 
MBFH said:
The Wall Street Journal is reporting a 7% reduction in staff, and, according to them mostly in the ad sales sector.
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What I don't get is, how does laying off salespeople who work on commission help your bottom line? Whatever savings there might be in health care costs would be more than offset by the revenue lost from having fewer reps on the street. Are they going to put the remaining people on salary?
 
"What I don't get is, how does laying off salespeople who work on commission help your bottom line? Whatever savings there might be in health care costs would be more than offset by the revenue lost from having fewer reps on the street. Are they going to put the remaining people on salary?"


That's the part that puzzles me also. Sure, fewer salespeople means lower L & I, medical, etc., but the primary cost is the sales commission. Perhaps they'll LOWER commissions at the same time, and due to the lower commissions, the sales crews won't be able to make their car payment unless their account lists increase...
 
Bill Wolfenbarger said:
"What I don't get is, how does laying off salespeople who work on commission help your bottom line? Whatever savings there might be in health care costs would be more than offset by the revenue lost from having fewer reps on the street. Are they going to put the remaining people on salary?"


That's the part that puzzles me also. Sure, fewer salespeople means lower L & I, medical, etc., but the primary cost is the sales commission. Perhaps they'll LOWER commissions at the same time, and due to the lower commissions, the sales crews won't be able to make their car payment unless their account lists increase...
Click to expand...


Another whiney corporation making layoffs while their CEO's are making billions. I guess that's the American way eh! Clear Channel and Entercom can both go belly up as far as I'm concerned. They aren't nothin' but 3-time losers as far as I'm concerned!
 
On one hand it's nice when people try new things so I don't want to come off as bashing "change" ... but if EITHER model of (a) nationally syndicated programming or (b) centralized sales (making local sales people less relevant) is on the "hey look what we are doing now" radar, all I can flash on is "hey these are the same brains that told us 'LESS IS MORE' is the wave of the future". Ooops.
 
The WSJ is chiming in...

"Clear Channel Communications Inc. plans to lay off about 7% of its U.S. staff and replace more local shows with syndicated content, moves that could affect the broader radio and outdoor-advertising businesses for years to come.

Tuesday, Clear Channel will lay off about 1,500 employees, mostly in ad sales, and implement other cuts aimed at saving close to $400 million"
 
Did anyone else see the Net News story on allaccess.com regarding the impending blowouts at CC tomorrow? Right next to the story is a huge ad for the syndicated services for Kidd Kraddick. It's comforting to know that perhaps 1000 people will be shown the door...and to immediately know who's taking your old show. I trust all CC jocks were air-checking and here's hoping you can somehow get some shut-eye tonight.
 
CorporateSuit said:
The WSJ is chiming in...

"Clear Channel Communications Inc. plans to lay off about 7% of its U.S. staff and replace more local shows with syndicated content, moves that could affect the broader radio and outdoor-advertising businesses for years to come.

Tuesday, Clear Channel will lay off about 1,500 employees, mostly in ad sales, and implement other cuts aimed at saving close to $400 million"
Click to expand...

What are they saving it for? Poor little whiney CEO's can't live on $500,000 per year?
 
TheBigA said:
Bongwater said:
When a monster super earthquake rips apart Seattle, you would rather not hear Ryan Seacrest blabbering about Britney's latest meltdown
Click to expand...

There is a procedure for handling local disasters. And I think most people don't know what it is. There really is only ONE station in Seattle authorized for emergency notification: KIRO

Read this: http://www.emd.wa.gov/telcom/telcom_emergency_alerting_systems.shtml
Click to expand...

Glad to hear it. So radio DOES got a one up against the iPods. Funny thing is, I receive KIRO-AM WEAKER than KOMO. And in the worst scenario for Skagit County, where KOMO comes in BETTER than KIRO's AM signal (I don't live there anymore, just work there a LOT these days), and since KBRC/KAPS will likely go straight to perfectly automated EBS feeds - i.e. assuming everything will work out FINE. As long as you don't pay top dollar for it. And since KIRO news has gone FM by this time, and DON'T EVEN get me started on what 97.3 FM reception is like - ESPECIALLY up in the Mount Vernon lowlands. Even in an absolute emergency, i will still not want to hear Jim Rome talk about the Celitcs last night. And if the Internet is down too, which it likely WILL be.

BUT.... KRKO, on their very own website, says:

http://www.krko.com/engineering/disaster/

Where it mentions "In Skagit County, pyroclastic flows from a volcanic eruption of Glacier Peak" could hit us down either from the Skagit River or elsewhere. I'm no geology expert, but I'll definitely believe sooner what the experts in THIS field when they say "You got some REAL s--t on your hands coming" than the so-called "experts" in radio say when they dismiss me as some stoner dude in Mount Vernon with a grudge against everything (which I'll admit, I DO have.) But I'm STILL RIGHT. Regardless.

(Meanwhile, the EAS on KBRC blips out and goes straight back to "Born To Be Wild" Steppenwolf, already in progress. As the Division Street bridge and most of downtown Mount Vernon is being wiped out..........)

A frightening dream I know, but one that still worries me.....Call me old fashioned. But in the end, I'm just KICK-ASS old school....

And the WORST CAN happen. Just ask the long time folks STILL in New Orleans......It doesn't matter if you're ten feet underwater or ten feet of mud - which is a LOT worse. IT CAN HAPPEN.

And where the KBRC/KAPS studios sit now, I shudder to think.......
 
EAS is not designed to do anything more than provide initial notificaton of emergencies. Beyond that, it is up to individual stations to proceed (or not) with information. Some do, some don't. The weekly EAS test (data only) and the monthly EAS test (with audio) are desigined only to test the system. Stations that are on autopilot at night (most of them) will retransmit real alerts immediately, although they may opt out of non-federal notifications.

The statewide network is just that... a network. Seattle stations monitor KIRO, and they'll get exactly the same alert message for retransmission as KIRO gets and sends. If they choose to, they will then go to extended coverage. One would hope that the Seattle clusters have a plan in place to do that. We do.
 
About CC saving that cash ...

Of course I'm not supporting their actions today nor at any time during the history of the company. And I'm really a financial dunce. But as it was explained to me once:

Let's say a station is worth a multiple of 10. That is, a station bills a million a year and would sell for 10 million. That makes everything in that station - from a pencil to a PD to a GM - worth 10x its current value. So if a jock making $50k a year is cut loose, it's really a savings of $500k - and that's not including benefits, etc.

In the crazy world of finance we're worth a lot more dead than we are alive.
 
You're on the right track, but...

I'm not aware of any developed stations that have sold at 10x revenues (and if anyone wants to pay me 10x revenues, please give me a call; I have a deal for you ;D). More common would be a multiple of 'cash flow', or net income disregarding non-cash items.

A station billing 1 million might have a 100k cash flow. If it were to sell at 10x cash flow, that would work out to $1million sell price.

One of the problems with CC and the others is that they weren't paying the more common 7-8x cash flow. They were paying 10x, 15x, 20x, etc. Bizarre but true.

Now back to that station with 100k cash flow selling at 10x that cash flow...

If they can pull 50k out of operating expenses, that makes cash flow 150k instead of 100k, and if selling at 10x cash flow, would change the value from $1million to $1.5 million.

And given that the equity firms are not "operators", that's what you can expect, that they will basically remove pieces of the engine until it stops running, and then put back one piece to get it running again, and hopefully sell it fast.
 
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