The biggest problem is that the FCC doesn't seize equipment as much as they used to and they don't have as many field agents to catch pirates.
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Connoisseur Media acquires Bonneville’s San Francisco Cluster
- Thread starter TheM1ghtyBear
- Start date
They would rather have their lawyers doing investigations on how news departments edit their interviews.
Dividends also help boost returns for 401(k)s and pensions. Most people are stockholders without realizing it.
That's actually one of the tensions at the heart of journalism: sometimes people don't want what journalists are serving. "This will be good for you" isn't that much of a winning argument. Moreover, radio broadcasters, particularly program directors, have been working hard for more than four decades to denigrate the notion that radio is a public service or has any kind of public service obligation whatsoever. It would require an equal amount of time to reverse that, and it's not going to happen. The Internet, once it was commercialized, developed no concept of such obligations. Over-the-air radio and TV developed when content and transport of that content were packaged together, utilizing scarce spectrum. This provided the legal basis for regulation. The Internet is merely transport; content (and any platform) that rides on that transport can take advantage of much greater capacity. That's where the "net neutrality" arguments come in, but they are focused mostly on the "last mile" of individual connections to the broader network and ensuring that they are not throttled for commercial or political advantage.
That said, let's look at what happens when companies get big. They become bureaucratic, averse to innovation, and sluggish. Good executives realize this, and take actions, sometimes harsh actions, to try to avoid it. That's what Jeff Bezos talked about through his concept of "Day One". That's why Jack Welch laid off so many people. Bezos was trying to keep a bureaucratic mindset from insinuating itself into Amazon; Welch was trying to reduce the influence of that mindset at GE (though he and Jeffrey Immelt fell into the traps of financial engineering, but that's another story).
For two years in the late 1990s, I had a front-row seat into a mass-market company whose business was in decline and just could not seem to correct its course: Sears. (I was at headquarters, not in a store.) Many good people, many good ideas, but poor leadership. It was a good education in how not to do some things.
iHeart, for one, has gotten big and bureaucratic, seeming to have vice-presidents stockpiled against the day that they might have something to do. But they need to cut costs, pretty much continually. Where do they cut? Mostly, it seems, at the front lines of people actually creating content for an attention economy and people who sell that attention ("commercials") to advertisers. That's the big-company mindset.
If there's further consolidation, expect to see more of that rather than less. Then, in a few years, the big companies may break themselves apart "to unlock value". Only the investment bankers and lawyers will profit.
So, essentially, removing ownership restrictions will be welfare for investment bankers and lawyers and a few top executives.
That's not to deny that over-the-air radio has what I call "structural problems": it's a mass-market, time-locked medium at a time when markets are fragmented and specialized and people want what they want when they want it. People who grew up and understand instinctively this new environment will be the ones to figure out the role of over-the-air radio. Government regulators won't; the best thing they can do at this point is just leave things alone.
You're ignoring the main problem iHeart has: Owning radio stations is a declining business. Hiring more staff won't solve that problem. The stations were losing money 20 years ago when they had more staff than they have now. If they could hire themselves into profitability, they'd do it. Instead, they're redirecting resources from the declining broadcast business to the growing digital business. Pittman estimates the digital revenues could exceed broadcasting very soon.
Bonneville was facing the same situation in San Francisco. That's why they got out. The stations they owned were all music stations. That's a declining business. The news & talk stations attract more revenue, plus that content can be turned into digital content. They don't own the music. That's an expense. So they sold off the declining music stations, and then consolidated their growing sports properties. Good business move.
Because it's a declining business. That problem isn't solved by retaining ownership limits. The FCC tried that in the 80s, and companies like GE and Nationwide got out of the radio business. The government can't force companies to lose money. That's what ownership limits do. If radio was growing, the way it was 50 years ago, things would be different. But people are in love with their phones, and there is no amount of ownership regulation that will cause people to stop using digital devices and start buying transistor radios again.
If so, then those bankers and lawyers are stupid. The track record on radio investment is there for everyone to see. How many bankruptcies does it take before you stop investing in a declining industry? What Connoisseur is saying to the FCC is they need more stations just to stay even. So they're saying out front that more stations won't lead to growth. It's the bare minimum they need to stay in business. That's not exciting news for investment bankers. Lawyers can still make money on bankruptcies.
Then the business will continue to decline, people will continue to get fired, and religious broadcasters will continue to buy stations.
You're arguing with a shadow, but I will say that, if music-formatted stations are declining faster than talk-formatted stations, then iHeart is making a bad decision in Denver by not dumping one of its music stations for a full-power KOA simulcast, not to mention KHOW or KDFD.
Actually, it can, assuming the proper legal authorities have been granted, with the recourse being some form of bankruptcy.
Investment bankers and lawyers make money regardless of whether their clients are making money. They are not in it for the long term. They are there to facilitate the transaction.
Actually, it is: it gives other operators an exit strategy. And their bankers, brokers, and lawyers can make money from fees. Again, that latter group's not in it for the long term.
They're declining differently. Talk stations are non-existent with anyone under 60. Music stations are declining evenly across the board. So KOA is doing what works best for the news/talk stations. iHeart can't help KOA by putting its over-60 talk format on an FM that still appeals to younger women. We've already seen that with WBAP in Dallas. The ratings it's getting now are as good as it will get. Same with KFI.
Bonneville is doing what works best for sports stations. That appears to be the best option. As I said earlier, I think Bonneville would have stayed in San Francisco if it could have bought KNBR.
Nothing is permanent. Expanding ownership rules only delays the inevitable a few years. That's why congress wrote the act in such a way that ownership rules should be updated every four years. The fact that they haven't since 1996 is why things are in the hole they're in.
Keep in mind that multiple administrations from both major political parties have reviewed every major radio merger over the last 30 years. None found the antitrust laws would be applicable to the mergers. A few mergers might have had a few forced divestitures it wouldn't have otherwise had or otherwise had to divest different stations than it might have had to unload under a different administration, but the big picture has broad agreement. Radio ownership doesn't have Democratic and Republican ways of looking at it.
Admittedly, I'm not a lawyer (and I'm thankful for that), but I don't see much of a case for saying the current, or even revised, ownership limits would violate any of the antitrust acts. Remember, most medium and small markets have roughly the same number of owners they had in 1980. Also, I don't remember radio having even 25% of the total advertising dollars in the old media days. The newspaper used to get more than all of radio. Advertising has been in steady decline since the Great Recession, and what few new dollars are going into advertising are going almost totally to digital.
As I've mentioned before, I don't like the idea of a total removal of ownership caps either. Maybe it's a bad idea that's time has come but I'd rather see a more managed approach to further consolidation if it's truly necessary. I don't really see that further consolidation would create a lack of diversity in viewpoints. Talk radio has been skewing more conservative for decades, and that's unlikely to change regardless of ownership. We have a lot more sources for diverse viewpoints in the internet age than we ever did in the old media era. Granted, we've seen that this has been a double-edged sword as fake news and misinformation seems to spread more easily than it once did, but most people listening to talk radio were never concerned about the facts.
This isn't really the place to talk about conservation, but, if we were talking that, we'd probably agree a lot more than you might think. I don't think anyone has argued the public airwaves are a limitless resource. Almost all resources are limited. The difference is that limited doesn't mean scarce. For resources to be scarce, demand has to be present. If radio spectrum had demand, we'd see more buyers and higher multiples. I've mentioned a small market with two clusters that would like to sell but can't find buyers. I understand the freedom to fail (and tend to be an advocate of it), but those operators did radio exactly the way you would seem to think it should be done. They were dedicated to their communities, employed as many locals as they could, and at least one of them turned down an offer from Clear Channel around 1990. The reward they may end up getting for doing what so many think everybody should've done may be selling their stations at depressed prices or otherwise leaving their families who don't want their stations to find ways of getting rid of them.
I agree. In order to do that, the government would have to prove that a radio company is using its size to unfairly compete in the marketplace. Perhaps by overcharging advertising clients. Such an idea today is ridiculous. Radio companies are thankful for any money they're able to take in. Radio's view is they have to compete against unregulated digital media. The audience sees them as interchangeable. Any advantage broadcast radio may have in terms of accessibility is countered by limitations, both in physics and regulation. In any event, broadcasting is unable to benefit in any way from the scarcity principle. Compare iHeart, Audacy, Cumulus, and Connoisseur with Apple, Amazon, Google, and Spotify. Who poses the greater threat to fair competition?
Corporations, large or small, have a goal of creating a profit for their shareholders. Part of that objective is finding the best management; that requires paying them competitively and well so that the company’s objectives can be achieved.
In broadcasting, stock options are almost universally worthless.
A large percentage of any earnings in broadcasting go for taxes.But so few are making money off broadcasting that this is a moot point.
But advertisers don’t just buy one ad. They buy 20, 39, 40 a week and reach much of the cume of each station. So a station with a “one moment in time” share of 5 may have a cume rating in excess of 20 to 25, which is a large portion of the total radio audience.
Aren't you the guy who always tells us advertisers don't buy cume? I think we agree that the "total radio audience" is a lot smaller than it used to be.
You are failing to take into account that radio is part of an industry we can call”audio” which today includes all available sources, sick as everything from satellite to podcasts to streams.
One company could own all the AM and FM stations and still not be a monopoly.
Yet in some younger demos, even owning all the radio stations would not be a monopoly as radio usage among teens and 18-24 is nearly non-existent and 25-34 is far less than a majority penetration.
Radio listening is off by about 75% since 2005… in the early 2000’s PUR was around 20 in the average market and now it is around 5 to 6.
Big station owners don’t express personal social or political views in their program choices… they pick formats based on what will get the most listeners,
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Yet in “audio” there are indeed limits eles resources.
They don’t buy cume. But to ignore the fact that an ad campaign will reach more and more total persons as more and more ads are run is a fact.
So even then, they reach 20-25% of 25% of adults. Which is why they need more stations to stay even.
On that we agree. The real issue is that advertisers have so many choices, and they don’t want to be called on by 20 different radio stations. Advertisers would love to make just one radio buy (if they buy radio at all) and not have to deal with many different and annoying sales people.
The below is from one of Mark Roberts' responses. Since it is part of a much larger response (even the paragraph it's in goes off in a sort of different tangent), I'm going to place his sentence in quotation marks and follow up with my response to just that sentence.
Mark Roberts said:
"Moreover, radio broadcasters, particularly program directors, have been working hard for more than four decades to denigrate
the notion that radio is a public service or has any kind of public service obligation whatsoever."
If over-the-air radio is no longer considered to be a public service, then I, at a personal level, can no longer consider it to be worth fighting for. As far as I'm concerned, the Internet can eat it for both lunch and dessert!
Mark Roberts said:
"Moreover, radio broadcasters, particularly program directors, have been working hard for more than four decades to denigrate
the notion that radio is a public service or has any kind of public service obligation whatsoever."
If over-the-air radio is no longer considered to be a public service, then I, at a personal level, can no longer consider it to be worth fighting for. As far as I'm concerned, the Internet can eat it for both lunch and dessert!
I don't think you can generalize about radio. As I often say, radio is not one thing. Public radio is very committed to public service. Audacy all news stations have a pretty strong commitment to public service.
The real problem in the current administration is defining public service. The FCC seems to believe news that is critical of the administration isn't public service. So you have the agency that oversees licensing using public interest to promote a political agenda, rather than actually serving the public. How do you address that?
And iHeart doesn't.
It depends on what you call "public service." I have competed against iHeart stations, and I can tell you they are very involved in a lot of community service projects, such as food drives, charity fundraising, and even job fairs. That last one might seem strange for a company the lays off so many people. But that's just the tip of the iceberg for them. They've been in the radio business for 40 years, and in that time, I'm not aware that any of their stations have been challenged at license renewal time for failure to serve the public.
Here's one example, but I could post hundreds:
Meanwhile you use one company that owns less than 5% of the stations in the country to make a broad generalization about radio.
PR. Radio stations have done that for a long time. I'm referring here to actual over-the-air programming.
No, I'm using it as an example of a broader phenomenon that has endured for decades.