Has there ever been a truly successful broadcast group that's excelled simultaneously at running big-market radio and small/medium-market radio? (EMF doesn't count, since they don't run "local" stations as we understand the concept.)
Guess it depends on what you consider successful
Market conditions, and whether the parent company shares are publicly traded, generally dictate success, failure, or mediocrity.
Back in 1996, when groups like Clear Channel started buying up practically anything with a tower, credit for those sorts of acquisitions was flowing like a raging river. CC was growing leaps and bounds, and because of the rapid growth, were considered a successful media darling in the eyes of Wall Street. With free flowing credit for media companies pushing consolidation, and the promise of increased operating margins purely based on volume, effectively owning markets, lines of credit were plentiful and welcomed. Then 2007-2008 hit, and the bottom fell out.
Was the concept of a handful of corporations owning the majority of radio or TV a flawed model? On paper, not really. In my view the problems became:
1. Banks and Private Equity who were lending to dot.com's, didn't understand how traditional media worked. They saw the proposal of the large groups as "fixing" the traditional media revenue model through consolidation appealing. Station values provided to lenders based on cash flow estimates were overly optimistic, but lenders didn't know anything about that world, so they took the word of the station groups.
Hey if broadcasters are valuing their individual markets at X-times-cashflow, that means these properties consolidated, are worth WAY more than they're borrowing.
2. What became large broadcast groups felt that their world of traditional media would never change, and that scale was the next logical step. Problem was, they believed too much of their own rhetoric.
If the banks are willing to lend us all this money, we must be doing something right!
For all the negativity about iHeart on this discussion forum, I feel they did the best at turning things around. As part of the reorg, they were forced to cut fat while at the same time being innovative about how to focus more on leveraging their content in the forms of streaming, podcasts, and traditional radio, while whittling-away at concrete debt shoes of having purchased AM stations at ridiculous multiples, and low-performing stations in small markets.
