OUR FUTURE BEFORE US

[jharmon]

The NAB Radio Board has three new members: Cumulus chairman, president and CEO Lew Dickey; Entercom president and CEO David Field; and Cox Radio executive VP and COO Marc Morgan.

Are these not part of the group of people who have slashed jobs, crashed careers and uprooted families all across the country in the name of shareholder value, which by the way is next to nothing?

Was Fagreed Suleman not available or John Hogan to make it a perfect bunch to lead the radio industry exactly where it has been going...down the toilet.

Does anybody wonder if there is a future for this industry?

 

[Tynosaur]

Does anybody wonder if there is a future for this industry?

Me! Me! Me!

'Course I still have my stock certificate in the Memphis Pros, my shares in the Amish Buggy Whip Company of Shipshewana, Indiana and my faded red T-shirt that says, "Nuke the Gay Whales for Jesus." You can't fool me, though, I'm not investing one red cent in Citadel stock!

 

[tomservo]

Does anybody wonder if there is a future for this industry?

Me! Me! Me!

'Course I still have my stock certificate in the Memphis Pros, my shares in the Amish Buggy Whip Company of Shipshewana, Indiana and my faded red T-shirt that says, "Nuke the Gay Whales for Jesus." You can't fool me, though, I'm not investing one red cent in Citadel stock!

I hear Coke has this new formula that's gonna be huge!

 

[Professor]

The Professor continues to be a bit befuddled by all this prattle of the coming death of radio.

Whenever there is any sort of downsizing or shuffling of Titanic deckchairs, there is much hand-wringing and gnashing of teeth. “The medium is being destroyed,” is always the mantra. “If we could only go back to the glory days of high-priced talent and fleets of vans patrolling the streets, it would all be OK. WHY DON'T THE SUITS GET IT?”

The suits do get it. To use Les Nesman's terminology, it's the dungarees that don't.

The Professor learned long ago, the Titanic has sunk. Radio is simply no longer relevant. It hasn’t been for years. And, it’s not just because of the current crop of cheap, Jurassic Memphis morning shows, followed by hours of hot Prophet-run jams, it’s because the world changed, and radio was unable to change with it.

Professor won’t rehash radio’s problems. If you have read Time or Newsweek, or even watched FoxNews you understand the media soup we all live in. But, there’s more to it. Professor has read that radio revenues will be down ~11% in 2009. 11%! Radio, then, has no choice but to cut. It’s that, or shut down transmitters.

There will always be radio. It’s portable and easy to use. But, the business model has changed. It had to. Clear Channel was not the disease; it was merely a symptom.*

The era of big-time radio is over. It’s just that many here have failed to recognize it.

Professor is done teaching. Class dismissed.

-Prof.

*OK. To be fair. Citadel? They are, indeed, idiots.

 

[fm100fan]

Professor, I think you're half right. Radio couldn't adapt FAST enough to technology. Had there been someone with a college education present when internet radio was developing, radio would have jumped on it, then invented something like MySpace so listeners could interact with the station in real time...

Ooops, I forgot, listeners can't interact with voice tracks...

High priced talent - no arguement there, but one seems to forget that listeners remain where their favorite personality is. Once they're gone, listeners change the station with no reason to be loyal to the one that the jock got fired from. Radio shot itself in the foot... and if what you say was inevitable, that radio is a dinosaur, management still could have squeezed a few more years of life out of it instead of throwing in the towel.

Why does this sound like a broken record? I said that about AM top 40 a few years ago too....

 

[DeadElvis]

There’s a lot here, of course. The big question is, “what happens now?”

There is a small handful of large radio groups that have serious, serious problems. R&R just published a story raising questions whether Clear Channel can stay clear of debt default. Other companies’ troubles are well-documented. At some point, one of those companies is going to hit the wall. And, as we have seen with Chrysler, senior debt-holders will only go so far in making concessions. Then what happens?

The obvious answer is that whatever company it is will be sold off in pieces. And that may be true. “It’s the return of locality,” some may argue. Well, maybe not. Don't start dancing in the streets just yet.

No matter how you look at it, revenues are down. The 11% “Professor” wrote of is low – I have seen numbers as bad as -16%. One simply can’t run a full-service radio station at that price point. Period. So, perhaps, the owners will change, but the medium will not.

Will stations in large markets go dark? Maybe; but it will take a while. The properties have SOME value (excepting, perhaps, some large multi-tower arrays that are just too costly to maintain). Taking them off reduces the value to 0. While I can’t discount that it will happen, in at least the foreseeable future, someone will belly up to the bar to take a shot at running radio.

DE

 

[TheBigA]

While I can’t discount that it will happen, in at least the foreseeable future, someone will belly up to the bar to take a shot at running radio.

You think? If you had $5 million to stick somewhere, would you spend it on radio? Be honest. If your IRA depended on it.

 

[radioman148]

>>I'm not investing one red cent in Citadel stock! >>

Doesn't Citadel have a major bank payment they have to make in June? Hmmm

 

[DeadElvis]

> Be honest. If your IRA depended on it.

As with everything, it all depends on price.

Let's assume, arguendo, that the price of broadcast properties plummets (and, some say it has -- note that the article I mentioned earlier stated that some value Clear Channel at less than $7B). At some point, properties will drop to the price at which someone will want to buy them. Getting $1m for a big signal in a town like Memphis or Nashville is better than turning a transmitter off and walking away. And, let's be real -- if a Class C were for sale at $1m, buyers would line up. Heck, I would buy it. With little debt service and automation, it would be possible to make a station profitable.

But, again... I am not sure that there will be buyers for multi-tower arrays like WHBQ. Maintaining a 5-tower array may not be worth the trouble.

And, another important point... as the price of radio properties falls, companies like EMF and AFR will go on a shopping spree.

So, yeah. In the near term, there will be buyers for broadcast properties. Price will find an equilibrium.

And, a quick aside about buying Citadel stock. If one had bought stock on or about the day it got delisted and went OTC, a killing would have been made. As I type, CTDB.OB is trading at $0.12 -- not a lot, to be sure. But, if you had bought a week ago at $.06, or on delisting day at $.01, you would have made a nice bit of change. I made a little (really little) by buying Sirius a few months back.

DE

 

[radiosaur]

I DID buy some Citadel on that day...or the day after, I can't remember. I even posted here about it. I did it on a whim...and now the family is going on vacation in a few weeks courtesy of Citadel.

So now I'm sorry I didn't put a bunch of money in them that day...but I'm satisfied.