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Media Mergers: Good or bad?
- Thread starter jdileo
- Start date
J
JustPastBuffalo
Guest
jdileo said:
First of all, welcome to the board. Secondly, you won't have to dig too deep to find the sentiments of posters on this board in numerous previous threads. Thirdly, it's likely only a matter of time before you get an eyefull of opinion in this thread.
I'd strongly recommend changing your major to Economics, Jounalism (look what it's done for Sarah Palin) or English. You might consider getting a degree in Secondary Education. Read the on-line communications business publication like Radio & Records as well as The New York Times or The Wall Street Journal and you'll get a good idea of why you really should explore alternate majors.
And if you insist on getting a degree in Communications (in other words, you're a Senior and it's too late to change your major) make sure you apply for an internship at 1040 WYSL, Avon. It's likely you'll learn more about radio, news, community service, production and sales there than you would at a station like, say... heh, let's just leave it at that.
Media Mergers -- Bad. TelCom of 1996 - Bad. Ambitious companies like Clear Channel and Entercom went on feeding frenzies after the TelCom Act was passed(which, among other things, did away with ownership restrictions) and paid greatly inflated prices for radio properties(the general rule of value: annual cash flow x 3 went to annual cash flow x 10). Much of radio is now owned by publicly held corporations who serve the needs of Wall Street, not the public. To save money, jobs were eliminated and most programming is now BORING!
I wonder now if even the captains of the radio industry are glad that dereg happened. The economy is tanking and they've got debt service up the you-know-what. Well, at least they have their private jets to escape from it all from time to time.
Despite what the fictitious Gordon Gekko claimed, greed is not good.
I wonder now if even the captains of the radio industry are glad that dereg happened. The economy is tanking and they've got debt service up the you-know-what. Well, at least they have their private jets to escape from it all from time to time.
Despite what the fictitious Gordon Gekko claimed, greed is not good.
Don't sell Koz's program at WBSU short...he's got several graduates working in the Rochester and Buffalo markets.
Anyways, JDiLeo, you'll find that sentiment on the Radio-Info boards will be almost 100% negative about mergers; these boards are mostly frequented by employees of stations (as opposed to managers/owners) and they're the ones hurt the most by mergers...fewer jobs afterwards, lower quality jobs afterwards, etc.
In general I agree; the merger mania of the late 1990's and early 2000's went so far out of control as to destroy the "farm system" of talent (start at a small, crappy mom-and-pop station and work your way up) because there weren't any mom-and-pop stations left...all the small stations were centrally-owned and -operated. However, I would also say that the previous system wasn't all sweetness and light, either. An awful lot of those mom-and-pop stations were severely underfunded. They'd be bought by some moderately-wealthy fool with stars in his/her eyes and skirt the edge of profitability for a few years until the owner gave up on 80-hour work weeks trying to make it succeed. Rinse, lather, repeat. And it's not like the jobs for the average Joe were great either...I didn't hear too many of my colleagues complain about being overpaid - just the opposite!
Revealing my bias here: one nice positive about mergers where that they made commercial radio so awful that a lot of people started discovering public radio.
Anyways, JDiLeo, you'll find that sentiment on the Radio-Info boards will be almost 100% negative about mergers; these boards are mostly frequented by employees of stations (as opposed to managers/owners) and they're the ones hurt the most by mergers...fewer jobs afterwards, lower quality jobs afterwards, etc.
In general I agree; the merger mania of the late 1990's and early 2000's went so far out of control as to destroy the "farm system" of talent (start at a small, crappy mom-and-pop station and work your way up) because there weren't any mom-and-pop stations left...all the small stations were centrally-owned and -operated. However, I would also say that the previous system wasn't all sweetness and light, either. An awful lot of those mom-and-pop stations were severely underfunded. They'd be bought by some moderately-wealthy fool with stars in his/her eyes and skirt the edge of profitability for a few years until the owner gave up on 80-hour work weeks trying to make it succeed. Rinse, lather, repeat. And it's not like the jobs for the average Joe were great either...I didn't hear too many of my colleagues complain about being overpaid - just the opposite!
Revealing my bias here: one nice positive about mergers where that they made commercial radio so awful that a lot of people started discovering public radio.
O
OttoM
Guest
cee said:
Not to come to the defense of the Fields, but Entercom didn't go on what would be called a "feeding frenzy" after Telecom '96 passed. The company made one big acquisition (the 46-station Sinclair group) and a few other purchases (the Boston stations). Nothing like AMFM/Jacor/Clear Channel did.
Media mergers remind of of Hitler taking over Europe. His idea was to go after one weak country after another. In the case of some media monsters, they buy up everything they can and then proceed to suck the life out of some stations by firing good people and replacing them with voice-tracking and automation. Granted some media giants still manage to keep a few on-air people employed.
So if you want my take on Media Mergers; it's just another example of less competition and more greed. And if you think that philosophy is good for the country, you haven't taken a look at Wall Street lately.
So if you want my take on Media Mergers; it's just another example of less competition and more greed. And if you think that philosophy is good for the country, you haven't taken a look at Wall Street lately.
Well, all of your replies were very interesting and helpful, so thanks a lot everyone.
And actually, I am a Theatre major right now, was looking into broadcasting but I'm not so sure it is for me. I will definitely be looking into it more. Koz is very truthful about the industry and has taught me a lot about it.
I'll have to see how it goes.
Thanks again!
And actually, I am a Theatre major right now, was looking into broadcasting but I'm not so sure it is for me. I will definitely be looking into it more. Koz is very truthful about the industry and has taught me a lot about it.
I'll have to see how it goes.
Thanks again!
Two good things I have found mega media ownerships: If you are lucky enough to get a paycheck, it won't bounce and there's usually toilet paper available- you don't have to bring your own.
jdileo, I have no connection with any media industry, other than as a listener/viewer/reader and very interested observer. Media companies behave no differently from other corporations. When they think it will suit them to merge, they will merge. When things go badly they they sometimes try to merge themselves out of trouble, probably in vain - think airline mergers, or GM-Ford (?). More often they sell part of themselves off - e.g., Clear Channel, AOL-Time Warner. In any event, mergers are always intended to advance the interests of the owners/stockholders, and when they conflict with those of the public - too bad.
Conglomerate radio owners have zero interest in responding to local preferences if they don't conform to their business model; also, they're failing dismally to compete with newer media. I would predict that any station which has to answer to some distant head office and cannot respond to its public will be devalued so much that the owners will eventually have to sell. Ownership rules should be rewritten with a bias to favor local ownership rather than absentee landlords whenever a station changes hands.
MBAs will have none of this, of course, but it's remarkable how often the economies that are always predicted when mergers take place fail to materialize even after wholesale firings, and more often than not they harm communities, whether through plant closings or degradation of media product quality.
One thing you might consider is that the original intention of the stock market was to raise financing for businesses, and that somewhere along the line this got turned on its head and now business has been regarded as a source of cash for Wall Street. This, I believe, has caused publicly traded corporations of all kinds to cannibalize themselves to the benefit of Wall Street - and, not by mere coincidence, of company officers and board members in their capacity as stockholders. Maybe the recent crash will help concentrate some minds among company managements.
For what it's worth, then, my answer is: "bad".
Good luck with your paper.
jdileo said:
Well as a media/communication studies major of Brockport myself I can't disagree with any of the sentiments alreay state here. Media consolidation since the '96 Telecom Act has just been bad news in general, as conglomerates and monopolies were born and the independent broadcaster disappeared from the scene.
If you want to read a really good book about the problems of media mergers/consolidation try reading Fighting for Air by Eric Klienberg. Not intending to plug his book or anything, but he describes the radio situation in Syracuse quite well with stories of independent and minority radio owners being driven out unable to compete with Clear Channel and how the CC-owned Syracuse stations basically on autopilot during the 2003 blackout because of CC's decision to elminate staff in favor of voicetracking. Quite fascinating stuff!
Mergers could have been a good thing for the business in some ways, but the big selling point for eliminating the caps on the number of stations a single company could own was that radio owners needed the freedom to achieve a "critical mass" with advertisers or, in other words, put together big enough packages of airtime across multiple markets to compete effectively with print.
It doesn't look to me as if that worked out any better than the old system of national rep firms bundling stations. What it did accomplish was enabling big broadcast groups to place enormous pressure on music acts and record labels, trigger the "new payola" scandals of a few years ago, and eventually serve to bloat the portion of airtime used for advertising.
I'm not so sure deregulation of ownership limits is really the culprit in the decline. I believe it has more to do with (a) too many stations for the ad revenue available, and (b) the relaxation or complete disregard of local community service standards.
The premise behind letting for-profit companies have a slice of the radio spectrum has always been that they're acting as trustees to administer the public resource in the public interest. This has been a joke for years.
One way to prevent the wild speculation on station values and takeover by a few big companies would have been to eliminate the "expectation of renewal," and evaluate bids based on how prospective licensees would serve their communities every time the license term ended. It would have made station licenses essentially worthless, and forced licencees to work hard to keep their stations.
It could have been administered the same way elections are, or maybe even as part of them. Station owners would have the same advantage as incumbant politicians, limiting turnover.
It might also have resulted in lots of radio people losing their jobs every four years, but the way the industry's gone, four years sounds like a pretty good gig these days!
It doesn't look to me as if that worked out any better than the old system of national rep firms bundling stations. What it did accomplish was enabling big broadcast groups to place enormous pressure on music acts and record labels, trigger the "new payola" scandals of a few years ago, and eventually serve to bloat the portion of airtime used for advertising.
I'm not so sure deregulation of ownership limits is really the culprit in the decline. I believe it has more to do with (a) too many stations for the ad revenue available, and (b) the relaxation or complete disregard of local community service standards.
The premise behind letting for-profit companies have a slice of the radio spectrum has always been that they're acting as trustees to administer the public resource in the public interest. This has been a joke for years.
One way to prevent the wild speculation on station values and takeover by a few big companies would have been to eliminate the "expectation of renewal," and evaluate bids based on how prospective licensees would serve their communities every time the license term ended. It would have made station licenses essentially worthless, and forced licencees to work hard to keep their stations.
It could have been administered the same way elections are, or maybe even as part of them. Station owners would have the same advantage as incumbant politicians, limiting turnover.
It might also have resulted in lots of radio people losing their jobs every four years, but the way the industry's gone, four years sounds like a pretty good gig these days!
B
Bob1370
Guest
When the first round of media mergers was launched in the 1980s, we were coming out of the rough 1981 recession and some small operators were struggling. Mergers looked like a good way to keep some signals on the air. Had we allowed things to stand there, perhaps we wouldn't be having this discussion. But the next waves of consolidation in the 1990s, which allowed clusters in every market to metastasize and station operators to do likewise on a national basis, created economic incentives for removing quality and localism from programming because, after all, quality and localism have costs, and without competition they figured people would have to take whatever they were being given. Much to some corporate giants' surprise, listeners started rejecting the result when they heard it, and turning away, not just from their stations, but from radio as a medium. When listeners started disappearing, revenue was sure to follow. The fact that people had other options for audio entertainment from the Web and from their iPods, many of which were commercial-free, made matters worse especially when it came to bringing new younger listeners to the medium to replace those who were aging out and/or dying out. We cut so much cost out of radio, we cut its quality and its appeal to its potential audience along with it. It proved a false economy. With few exceptions (one notable one being the CBS New York cluster, where the Jack experiment was put out of its misery and the restored WCBS-FM vaulted into the top 3 in the market on its return, and stayed there) no one has seen fit to correct the error yet.
If we'd left the rules where they were at the beginning of the 1990s, there would be more competition, but the business would be healthier even for the biggest players because they might have fewer properties in their portfolio but each of those properties would be more competitive and financially healthier.
Note that I haven't said much yet about the quality of the programming. Unfortunately that's because there isn't much to be said in that regard, in this age of satellite-fed and computer-automated radio. It's dull, and people can now do as well for themselves without having to put up with commercials. If we want those people back we'd better start to entertain again. There's still time to turn it around...but not a minute to waste. I hope we come to our collective senses soon, or else we're not even going to be able to develop and recruit the talent we need to bring the business back and make it what it once was, and could be again.
If we'd left the rules where they were at the beginning of the 1990s, there would be more competition, but the business would be healthier even for the biggest players because they might have fewer properties in their portfolio but each of those properties would be more competitive and financially healthier.
Note that I haven't said much yet about the quality of the programming. Unfortunately that's because there isn't much to be said in that regard, in this age of satellite-fed and computer-automated radio. It's dull, and people can now do as well for themselves without having to put up with commercials. If we want those people back we'd better start to entertain again. There's still time to turn it around...but not a minute to waste. I hope we come to our collective senses soon, or else we're not even going to be able to develop and recruit the talent we need to bring the business back and make it what it once was, and could be again.
Unfortunately the talent you talk about recruiting has either left, or been forced out of the business entirely, plus there isn't a pool of younger talent to select from since most communications graduates are either working for public relations firms, the government, or have gone into television.Bob1370 said:
The old "farm system" is long gone. That is where people, like us, came up through the ranks to eventually find employment in larger markets. Today most smaller markets consist of automation and airing syndicated programming. If there is a staff, they are mostly part-timers and board operators.
There are a few exceptions where live announcers are still around, but those people are staying where they are knowing all to well what it's like at medium and major market stations.
I couldn't even guess how many people have lost their jobs since the start of deregulation back in the 80s.
I'm just free-associating here, but I suspect that the 1996-2001 round of mergers wouldn't have been as extreme if two technological advances hadn't come around at the same time: high-speed internet for the masses, and the MP3 algorithm. These made it practical, for the first time, to have a single DJ effectively cover airshifts for several different markets and/or several different stations within a market.
Granted, the overall quality sucked because said DJ, by definition, couldn't really elicit that personal connection with listeners because he/she was often 100's or 1000's of miles away and had little real knowledge of any given area.
But it was hard to argue with the bottom line; suddenly instead of needing three to six fulltime DJ's and twice that in part-timers, just to cover ONE station...now you could have three to six fulltime DJ's, NO part-timers, and cover a DOZEN stations. That's a tenfold reduction in staff costs, which are often substantial.
Now, of course, we're learning that the piper always gets paid; after a decade of crappy radio, listeners are abandoning the medium in droves for other media that better serve them: the internet, iPod's, satradio, etc. So the savings in staff costs are being outweighed by the drastic reduction in revenue.
Granted, the overall quality sucked because said DJ, by definition, couldn't really elicit that personal connection with listeners because he/she was often 100's or 1000's of miles away and had little real knowledge of any given area.
But it was hard to argue with the bottom line; suddenly instead of needing three to six fulltime DJ's and twice that in part-timers, just to cover ONE station...now you could have three to six fulltime DJ's, NO part-timers, and cover a DOZEN stations. That's a tenfold reduction in staff costs, which are often substantial.
Now, of course, we're learning that the piper always gets paid; after a decade of crappy radio, listeners are abandoning the medium in droves for other media that better serve them: the internet, iPod's, satradio, etc. So the savings in staff costs are being outweighed by the drastic reduction in revenue.
I'm going out on a ledge here. So far out that a light breeze may cause me to take a header. The financial markets are a mess. The credit crunch and cautious bank-to-bank lending is wreaking havoc on businesses large and small. GM is bleeding about a $1 billion (b) per month. Chrysler may not make it to the end of the next year. Cox, Clear Channel, CBS, Entercom and Citadel are laying waste to staffs across America.
And here I am, some house painter, posting on a radio message board in Buffalo, New York, opining that radio may come out of this free-fall stronger than it went in.
German philosopher Friedrich Wilhelm Nietzsche (to whom I have only a sparse exposure, mostly because of World Lit, Philosphy 101 classes and knowing it's the name of a bar on Allen Street in Buffalo) said something to the effect of "what does not kill me can only make me stronger." This may be the case with radio and the broadcasting business.
Yes. Yes. Yes.
I understand that it's easier to offer an opinion as extreme as mine when you're on the periphery of the business and not caught in the daily vortex of layoffs and down-sizing. It has to be grueling for those getting the layoff notices and taking exit interviews.
But a year from now, perhaps two, when hard-learned lessons and a different reality exist in most large and medium markets, it may be that radio's power as a cost-effective advertising platform and (free) entertainment medium will be more appreciated by listeners more respected by local and agency advertisers, leading to more listeners and stabilized advertising rates.
It may be that the hard times we now endure and the potential harder times to come turn people away from iPods and picture phones, with Wi-Fi and all the accoutrements to which so many of us and our children have become acustom and by extension, feel entitled. It may be that in the next 12 to 18 months, most people won't be able to afford these items.
What then will be out there for us and them? Reliable radio: Free, better and more broadly defined and entertaining, and most of all, more atuned to the realities and demands of a new economy. It could be that the current economic colonic will flush the sytem of all toxins and the result will be that it's healthier. It's only a thought. I am not wearing rose-colored glasses. Unopened containers of paint thinner are nowhere to be found. Fire away and tell me I'm crazy and clueless. Or not.
And here I am, some house painter, posting on a radio message board in Buffalo, New York, opining that radio may come out of this free-fall stronger than it went in.
German philosopher Friedrich Wilhelm Nietzsche (to whom I have only a sparse exposure, mostly because of World Lit, Philosphy 101 classes and knowing it's the name of a bar on Allen Street in Buffalo) said something to the effect of "what does not kill me can only make me stronger." This may be the case with radio and the broadcasting business.
Yes. Yes. Yes.
I understand that it's easier to offer an opinion as extreme as mine when you're on the periphery of the business and not caught in the daily vortex of layoffs and down-sizing. It has to be grueling for those getting the layoff notices and taking exit interviews.
But a year from now, perhaps two, when hard-learned lessons and a different reality exist in most large and medium markets, it may be that radio's power as a cost-effective advertising platform and (free) entertainment medium will be more appreciated by listeners more respected by local and agency advertisers, leading to more listeners and stabilized advertising rates.
It may be that the hard times we now endure and the potential harder times to come turn people away from iPods and picture phones, with Wi-Fi and all the accoutrements to which so many of us and our children have become acustom and by extension, feel entitled. It may be that in the next 12 to 18 months, most people won't be able to afford these items.
What then will be out there for us and them? Reliable radio: Free, better and more broadly defined and entertaining, and most of all, more atuned to the realities and demands of a new economy. It could be that the current economic colonic will flush the sytem of all toxins and the result will be that it's healthier. It's only a thought. I am not wearing rose-colored glasses. Unopened containers of paint thinner are nowhere to be found. Fire away and tell me I'm crazy and clueless. Or not.
I do have an MBA (sparsely used these days) and I will note that whether a merger creates "productivity" or not depends on how creative your accounting happens to be.
As merely an "active listener," I can easily contrast my radio experience on a 14 state "Whirlwind Tour" of 1988, which was pre-mega-merger, with later experiences traveling the same ground following deregulation.
In 1988: It was fun to listen. I heard local people and local stations; I could tell that the chance of most of these folks getting out of East Overshoe wasn't very good (even taking away the pyramid-like structure -- lack of room at the top -- of the "farm system" that's been noted before). I would hear songs I hadn't heard in forever, because the playlists were at least somewhat under the jurisdiction of the local talent and management. "Home And Dry" by Gerry Rafferty (the third single off "City to City") came on just outside of Keokuk, Iowa and I almost drove off the road.
Afterward: The same, the same, the same, everywhere. Everything "off the bird." Badly mangled transitions between local insert ads, DJs on voicetrack who had no local knowledge or presence, and lame non-specific patter. Yuk. I retreated post haste to my CDs. As "fun" as 1988 was-- and that was hardly the Golden Age -- afterward was "sad." The good news is that I didn't hitch my wagon to the Radio Biz Star and didn't give up my day job.
To Radknowski: I don't think you're nuts, etc. in that I can envision a scenario in which you're describing can happen. (One of the "good" takeaways from my MBA training is the ability to think through multiple scenarios. Would that some of our overblown talk show hosts could do the same-- ah, but the Amen Choir beckons.)
I think the operative word is "free" though, and if we get to a point where we have to listen because we can't afford anything else, we're going to have a lot more things to worry about than what's fresh and local over at WZZZ. It's kind of "I hope so, but I hope not too."
As merely an "active listener," I can easily contrast my radio experience on a 14 state "Whirlwind Tour" of 1988, which was pre-mega-merger, with later experiences traveling the same ground following deregulation.
In 1988: It was fun to listen. I heard local people and local stations; I could tell that the chance of most of these folks getting out of East Overshoe wasn't very good (even taking away the pyramid-like structure -- lack of room at the top -- of the "farm system" that's been noted before). I would hear songs I hadn't heard in forever, because the playlists were at least somewhat under the jurisdiction of the local talent and management. "Home And Dry" by Gerry Rafferty (the third single off "City to City") came on just outside of Keokuk, Iowa and I almost drove off the road.
Afterward: The same, the same, the same, everywhere. Everything "off the bird." Badly mangled transitions between local insert ads, DJs on voicetrack who had no local knowledge or presence, and lame non-specific patter. Yuk. I retreated post haste to my CDs. As "fun" as 1988 was-- and that was hardly the Golden Age -- afterward was "sad." The good news is that I didn't hitch my wagon to the Radio Biz Star and didn't give up my day job.
To Radknowski: I don't think you're nuts, etc. in that I can envision a scenario in which you're describing can happen. (One of the "good" takeaways from my MBA training is the ability to think through multiple scenarios. Would that some of our overblown talk show hosts could do the same-- ah, but the Amen Choir beckons.)
I think the operative word is "free" though, and if we get to a point where we have to listen because we can't afford anything else, we're going to have a lot more things to worry about than what's fresh and local over at WZZZ. It's kind of "I hope so, but I hope not too."
TheBigA, I wasn't that surprised to hear a lot of people say that mergers were bad. I hadn't heard of some of the things people told me about, and it was interesting to hear people's views that work in the industry. I know there are two sides to everything, but I guess I was a little surprised to hear more than one person saying media mergers weren't that bad. Overall, I learned a lot from the people who responded back to me.
Keep in mind this is a community of broadcasters who've been around the block a few times and more than a few who've "gone off the reservation," if you know what I mean. Saw your post on the LA board. It appears you've received more attention and better input from the contributers here.
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