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Massive reduction at Hubbard

PTBoardOp94 said:
I cannot blame a company who didn't plan their business decisions around contingencies for "at least 50% of revenue disappears in less than 60 days". This is not an ordinary recession where revenues might fall 5% or 10%.
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And specifically what has seemed to have dried up the most is the local revenue. Which is the reason why these companies have local stations.
 
Totally understand that it's difficult to make payroll when close to half your revenue has flown out the window.

That said - levering up your balance sheet when times are good, in an industry that is declining (even in good times) and is highly sensitive to macroeconomic recession, is an extremely risk proposition. It makes the pain during times like this worse than what would otherwise be necessary.

Seems to me furloughing employees would be a better idea than blowing people out. I don't understand the logic in decimating the airstaff & programming staff of one of the most successful large/major market CHR stations in the country.

I bet Ginny's sacred cow, MyTalk 107.1 in Minneapolis, will be left almost unscathed. BTW, how much of a sacrifice has she agreed to take from a compensation standpoint? Just curious.

Too bad each market wasn't set up as a separate subsidiary. If that were the case, those subsidiaries would've been able to apply for PPP loans, although within the last 24 to 48 hours, the Treasury Department has announced all entities within a corporate family can only apply for $20 million in aggregate financing (regardless of number of subsidiaries). ($20 million is probably a fairly small fraction of the Revenue hit Hubbard will suffer this year.)
 
MarkW said:
That said - levering up your balance sheet when times are good, in an industry that is declining (even in good times) and is highly sensitive to macroeconomic recession, is an extremely risk proposition. It makes the pain during times like this worse than what would otherwise be necessary.
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Hubbard doesn't spend money on acquisitions freely. If you study how they operate, they tend to cut costs in one area to finance an expense in another. That's what happened when they bought the WPB cluster. That was 2 years ago.

How much debt do you think they have? My sense is the only reason they're making these cuts is so they DON'T go into debt.

MarkW said:
Seems to me furloughing employees would be a better idea than blowing people out.
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Two problems: The company is still responsible for benefits, and the company has to set a term for the furloughs. Who knows how long this situation will continue? So you drop some employees, tell them in their exit interview that they'll get hired back when the situation is better, and leave it up to them to decide what to do. Most will sit it out and wait to get rehired. Not many other options besides cutting grass.
 
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I suspect most broadcasting companies will continue with layoffs, but ailing company revenue / listenership is just one of the factors here.

KQMV has been a market leader in revenue and ratings for how many years now? Why would anyone gut one of the most successful stations in CHR unless something else is going on...

I mean, nobody is talking about Scott Mahalick getting promoted to OM in all of this? Or the fact that nobody got cut from The Bull, which is.... who knows (or cares) where in the ratings??
https://radioinsight.com/headlines/...romotes-scott-mahalick-to-operations-manager/
 
Afternoon drive was not part of the layoffs it seems, though. Good point on promo director, but it's pretty small cut vs what was done at the big money making Movin - happy to stand corrected if somehow The Bull was making as much or more than Movin, I just can't believe that's the case. I think we'll see more Hubbard news soon.
 
MarkW said:
Totally understand that it's difficult to make payroll when close to half your revenue has flown out the window.
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It's much worse than that in most markets and for most stations. While the largest markets have considerable national business, once you get out of the top 50 or so markets you see stations off by 75% to even 90%.

I was asked to give some help on setting up music clocks for one to two minutes of commercials an hour. It meant changing rotations on all the recurrents and gold/throwbacks in the libraries.

That said - levering up your balance sheet when times are good, in an industry that is declining (even in good times) and is highly sensitive to macroeconomic recession, is an extremely risk proposition. It makes the pain during times like this worse than what would otherwise be necessary.
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That has hit nearly every business in one way or another. Nobody had a contingency plan for something nobody alive today witnessed or has a memory of; the last real pandemic was over a century ago.

Seems to me furloughing employees would be a better idea than blowing people out. I don't understand the logic in decimating the airstaff & programming staff of one of the most successful large/major market CHR stations in the country.
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As BigA says, a furlough is much more expensive than a dismissal. Some stations and groups are looking at the predicted slow start-up of the economy and evaluating their ability to stay alive until then.

Too bad each market wasn't set up as a separate subsidiary. If that were the case, those subsidiaries would've been able to apply for PPP loans, although within the last 24 to 48 hours, the Treasury Department has announced all entities within a corporate family can only apply for $20 million in aggregate financing (regardless of number of subsidiaries). ($20 million is probably a fairly small fraction of the Revenue hit Hubbard will suffer this year.)
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The real problem is that those medium sized groups can't get much government assistance. And when they go to banks, they find that the same banks that would not loan to radio for the last several decades have even less interest today.

So the only solution is to go into survival mode, and try to get with what they have until the light at the end of the tunnel can be seen.
 
Among my clients are some restaurants. They let most of their staffs go so they could collect unemployment immediately instead of cutting hours. In fact they spoke to the employees saying they had a job after this shut down concluded. So, while it appeared so many were simply fired, these business owners let their people go so they could collect unemployment with a guarantee of the same position they had at some point in the future. My point, is we don't know if some employees were let go so they could collect unemployment with the understanding their job was waiting for them when things recover. Obviously a morning show talent is not going to be happy with unemployment, but it beats nothing.

As for those restaurants, none will advertise now. They're scared. At the station I work for, restaurants actually pay and do so on time.
 
I predict many, if not most, radio stations will get rid of any expense they can't justify. This could mean many things, but my first thought is keeping a morning show intact, but ridding itself of personalities the rest of the day. We already have seen this in the pre-Corona years. I think this solidifies this tactic, and perhaps national shows will takeover many previous local morning shows. This will likely be bad news for local radio at the end of the day, except for some owners who will go against the grain. If this plays out, we are going to see a major sea-change in local radio, and it won't be good for the local talents currently working. But, again, this has already been happening for the past decade or two, so this will just cement it. Too bad.
 
seatownmedia said:
Too bad.
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Maybe, or maybe it's an opportunity for all of these folks. Maybe they've all been constrained and held back from their real talents. Now they can go out and see if they can attract an audience on their own. Start a podcast. Charge $20 a month. See who shows up. It might be a whole new thing. Who knows?
 
TheBigA said:
Maybe, or maybe it's an opportunity for all of these folks. Maybe they've all been constrained and held back from their real talents. Now they can go out and see if they can attract an audience on their own. Start a podcast. Charge $20 a month. See who shows up. It might be a whole new thing. Who knows?
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I do like your optimistic view of this!
 
I really do hope that The KVJ Show (97.9 WRMF - Hubbard Radio in Palm Beach) is safe from these cuts. If not, I'll be crushed. It's legitimately my favorite morning radio show, ever.
 
seatownmedia said:
I predict many, if not most, radio stations will get rid of any expense they can't justify.
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Sad to say that a Promotions Department falls into that category. Nice to have in a competitive market, but not essential for business continuity. Six months, nine months, or even a year, Hubbard will have no problem finding replacement Promotions people, eager to get into the game with a radio group.

seatownmedia said:
This could mean many things, but my first thought is keeping a morning show intact, but ridding itself of personalities the rest of the day.
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What's going to be the highest personnel cost in an operation? Usually the morning show. If revenue for that morning show has dropped to an amount equal-to, or below what it would cost without them, the answer of where cuts need to be made is (unfortunately) pretty obvious.

When caught off guard by unforeseen events like this, some companies will look to financing from lenders to keep their heads above water before FTE cuts, where others will make difficult cuts before taking on debt as a last resort.
 
So Ginny's fair-haired boy turfs Ricky Villa and Ron Harrell (blaming it on budget cuts) then replaces both of them by transferring WSHE/Chicago PD Cat Thomas to take both jobs. These guys make iHM look like saints.

I don't want to violate the quoting rules, so go search for the PR and see the BS that Ginny's son and Mahalick spewed about Thomas.
 
DN14224 said:
So Ginny's fair-haired boy turfs Ricky Villa and Ron Harrell (blaming it on budget cuts) then replaces both of them by transferring WSHE/Chicago PD Cat Thomas to take both jobs. These guys make iHM look like saints.

I don't want to violate the quoting rules, so go search for the PR and see the BS that Ginny's son and Mahalick spewed about Thomas.
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"Fair Usage" is not just our policy on this board. You can post, in quotes, roughly a paragraph from a larger article. It can be several individual quotes or, for example, the lead paragraph with or a longer article. This is how the press reviews books and other written materials, too. Same rule.

Don't be afraid to post the URL of material you find interesting, too.
 
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