Pay Cuts Fair Or Not?

[nojustice]

A friend of mine lost his gig most likely because he refused to take a second pay cut.

He is in Cali.

He had just come off his best book in 3 years.

Beating comp...3 to 1 18-34, and in a tie with the market 20 year heritage leader 25-54.

He was underpaid to begin with, then he was interim PD, then they asked him to take another pay cut.

He politely said no.

Two weeks later he was handed the axe.

So...does this sound fair? I know the economy is bad etc... (his show was sold out - BTW). He was told the station was sorry to do this, but they were going another direction (cheaper talent).

What other job could care less about your job performance? PEOPLE ON THE TOP WAKE UP! It is the peeps on the bottom that keep you in place.

That is my opinion, enough is enough.

 

[Goat Rodeo Cowboy]

tell me my friend, have you ever run a business?

Have you ever had to go lean on customers and beg, plead and threaten to get them to write you a check so you could make payroll for your people that day?

Ever spent three months arguing with your accountant over where your business will be in six months from now if you keep on doing what you have been doing?

Ever have your wife read the riot act to you: get your business life in order so you don't come home grumpy every day, taking 13 calls on your cell phone while we try to have dinner with the children and teach them how to move into adulthood. Then she "accidentally" leaves her cell phone out so you can see the town's best known divorce lawyer in on her speed dial.

You listen to the radio and to your ears the world sounds WELL.

The boss listens to the bank account and world looks like HELL.

So who gets to decide what is fair?

 

[DominiqueRadio]

I feel if you are doing good ratings-wise that they should look elsewhere to trim the fat. If a jock has great ratings it should secure their job. If a sales person has good sales, it should secure their job. That is how I see it. Unfortunately, that is not reality.

 

[OldNumber7]

The issue isn't whether pay cuts are "fair." It's a question about how much labor is worth in a marketplace. If there is a glut of available labor, the price that the market will pay for that labor will go down. That's supply and demand. Your friend chose to risk unemployment rather than work for less; that's his decision. Inasmuch as there are ton of out of work radio people looking for some kind of paycheck, the employer will likely find someone willing to work for less. Conversely, your friend will now have to compete with a ton of out of work radio people for the next available job.
From the management perspective, the potential customers (advertisers) are demanding better prices or taking their money elsewhere. The marginal cost of labor per product (spot) sold is being driven down by market forces. If management doesn't compensate with lower overhead, it can't survive and employ ANYBODY.

 

[davideduardo]

So...does this sound fair? I know the economy is bad etc... (his show was sold out - BTW). He was told the station was sorry to do this, but they were going another direction (cheaper talent).

Since this is the Austin AND the SA board, let's look at reality.

First, SA as a market is off about 22% in total market revenues (2009 vs. 2007) and Austin is off 30% for the same period. Since the profit margin in medium markets can typically be in the 30% to 40% range, that means that operating profits are very thin and if there is any debt to service after BCF, it may not get paid.

Second, SA is in the PPM now, and Austin begins pre-currency in 6 weeks. The PPM shows a PUR that is about 35% below that of the diary, and since transactional buys (anything where evaluations are made based significantly on ratings) use cost per point, a lower PUR means a lower rate for everyone.

When you say "sold out" you have top know the average unit rate in the show. Is it 35% lower than 2007? 30%? Are the sellers making less because the average sale is smaller?

Nobody is happy with this, but it's the reality of a non-growth industry in a severe recession.

 

[nojustice]

Ole 7

Who are they employing now? If they can not run the place out of the red. They need to close shop.

This is all before Obama's required healthcare hits.

It is only going to get worse. My point is not that running a radio station is easy, my point is should talent take any job paying peanuts and just be glad to have a job? (what kind of job is that?) If that is where we are at, then let them all go dark...If things are really that bad then all the suits need to call the local mercedes dealer and have them pick up the car.

There has always been a glut of radio wannabes...$10 an hour wannabes. This guy is at the top of his game. Remember that he did take a pay cut and he was underpaid from the start. THEY HATE TALENT, THEY ALWAYS HAVE.

 

[Goat Rodeo Cowboy]

There has always been a glut of radio wannabes...$10 an hour wannabes. This guy is at the top of his game. Remember that he did take a pay cut and he was underpaid from the start. THEY HATE TALENT, THEY ALWAYS HAVE.

You don't like President Obama.

You don't like management.

I sense a lot of anger going on here.

You talk about someone who may or may not be at the top of his game, and already being UNDERPAID before the axe fell. Sounds like a good time for my J. C. Penney story.

I was maybe 25 years old, doing radio in a little county seat in the county next to where J. C Penney (the person, not the company) had grown up and was spending some of his retirement time. I was in a market that seemed too small to have a J. C. Penney store but I guess HE wanted one there. I was selling radio advertising. I took some copy in for approval before we put it on the air. The store manager taught me two lessons. (He told me to be careful because I might walk in sometime and find Mr. Penney visiting. I never did.) First lesson: a coin is the penny. The man's name has two e's. Spell it Penney... just like the sign on the front of the store. Second lesson: As long as Mr. Penney is alive, NEVER EVER NEVER write copy that says "Regular $50 dress now marked down to $29.95." The man had a firm policy. If the dress didn't sell for the original price, then it was NEVER a $50 dress. You may say it has been marked down, you may say the price has been reduced. But simply say: The dress is now priced at 29.95.

You say your friend was underpaid in the beginning. If he was worth what he was being paid or if as you say he was worth MORE than he was being paid, someone decided he was overpriced.

What I like to think I am worth is one thing. What the market is willing to pay for me may be something else. If my evaluation of my worth is different that what my employer thinks I am worth.... who can say which one of us is right?

 

[nojustice]

I never said I did not like President Obama. I just said his healthcare plan will add costs to already whining employers who are undervaluing their radio talent.

Radio management seems to bend over backwards to find reasons to not pay on air staff.

Now they have a boatload of reasons and talent is in a worse environment than ever.

That is a fact.

Excelling at your job should be the point. Otherwise working is pointless.

 

[davideduardo]

Radio management seems to bend over backwards to find reasons to not pay on air staff.

It's management's job to not overpay for anything and to try to get what is needed at the lowest cost possible. That goes for janatorial supplies, insurance and labor...

And this is nothing new. When I launched my first station, decades ago, my business model was different than that of the Red Cross. I watched expenses, just as managers today do.

 

[grantchester]

It's management's job to not overpay for anything and to try to get what is needed at the lowest cost possible.

...and with radio consolidation, the owners have the leverage over wages. It is in the employees best interest to refuse low wages.

 

[Prais]

GOOD automation, used properly, would solve the problem for the boss.

 

[Dick Skinner]

Ohhh...you wanted fair! Sorry, we're all out.

 

[radiogroupie]

I never said I did not like President Obama. I just said his healthcare plan will add costs to already whining employers who are undervaluing their radio talent.

Radio management seems to bend over backwards to find reasons to not pay on air staff.

Now they have a boatload of reasons and talent is in a worse environment than ever.

That is a fact.

Excelling at your job should be the point. Otherwise working is pointless.

I agree with both sides. I agree partly with no justice because I once was offered a job by the consultant to do mornings in a top 30 market. This station was #1 in ALL demos and the #1 biller. This was the late 80s. The GM flat out told me he didn't think i was worth 120k a year but he went along with the consultant. This GM also went on to say personally i would pay you HALF that. The two previous morning guys were making 100+ going back to the early 80s. Again this station was a huge money maker. So for almost a decade morning hosts were doing 100+. After i left (1990) they fired the consultant and the gm started paying 80K. the station was still the #1 biller and even making more than the year before. But..1992 he brought in anotherr morning man for 50K..within 2 years the station went from #1 to #12 and revenue cut in half. This example is where I agree with no justice.

 

[Goat Rodeo Cowboy]

The following logic or information does not change what is fair and what is pleasant. But it might be helpful to radio people to pay attention to other lines of work.

I just spent the last seven days making a car purchase. I worked in the world of car dealerships 20 years ago. The pay structure and opportunities for car sales people today is as radically changed as it is for radio morning shows (or radio in general).

Talk to your mature friends who have worked as computer programmers and system analysts. Some of their war stories will make radio announcer stories seem tame.

Even people coming out of med school, dental school and law school face an interesting job market.

School teachers who thought they had secure futures with plush retirement and automatic cost-of-living and time-in-service pay raises are being laid off and having benefits cut.

Yes, if you are going to work in radio, like all other professions, you must seek out the best employment opportunities and understand "how the game is CURRENTLY being played"... but you have to get over this fixation about radio management and unfairness. You have to learn to at least partially smile when you come across the philosophy I read on a bumper sticker stuck on the big red toolbox of an automobile mechanic:

"Life's a bitch. And then you die."

By the way: Good automobile mechanics make more money than good radio announcers... on average.

 

[radiogroupie]

The following logic or information does not change what is fair and what is pleasant. But it might be helpful to radio people to pay attention to other lines of work.

I just spent the last seven days making a car purchase. I worked in the world of car dealerships 20 years ago. The pay structure and opportunities for car sales people today is as radically changed as it is for radio morning shows (or radio in general).

Talk to your mature friends who have worked as computer programmers and system analysts. Some of their war stories will make radio announcer stories seem tame.

Even people coming out of med school, dental school and law school face an interesting job market.

School teachers who thought they had secure futures with plush retirement and automatic cost-of-living and time-in-service pay raises are being laid off and having benefits cut.

Yes, if you are going to work in radio, like all other professions, you must seek out the best employment opportunities and understand "how the game is CURRENTLY being played"... but you have to get over this fixation about radio management and unfairness. You have to learn to at least partially smile when you come across the philosophy I read on a bumper sticker stuck on the big red toolbox of an automobile mechanic:

"Life's a bitch. And then you die."

By the way: Good automobile mechanics make more money than good radio announcers... on average.

I never said it was unfair. I do agree with your latest statement. I'll go even further:

A good McDonalds Manager makes more than a good radio dj and has much more security.

I was going to college in the mid 70s and worked partime at KFC, then to fulltime cook, then to asst manager then to manager. Getting raises every step of the way. At 21 I was a KFC Manager making 30K in 1975!! Full benefits, 401k, Etc Shit if i were to put in 30 years into KFC i would be a well off man. NOT WITH RADIO.

 

[MisterRadio]

I too can see both sides of this issue. As somebody who recently lost my radio job after over a decade, I can certainly sympathize with the word unfair. I too feel I was underpaid for most of that time because my pay never increased even though the cost of living did many times. Are they doing okay without me? No, not really. The air product has suffered and I can forsee some sales opportunities that will dry up without my expertise. The problem is that today's management in radio isn't concerned with being successful, they are concerned with servicing debt because that is what their banker bosses are concerned with. I agree that running a business sometimes means tough choices about who you can keep employeed and what you can pay, but we are not talking about the coffee shop on the corner or the mom and pop gift shop. These are billion dollar corporations who so over did it with consolidation and debt that they will soon have no choice but to chop up the companies and sell them off in pieces. Does anybody remember the movie "Wallstreet" where corporate raider Gordon Gecko would buy companies and break them up and sell off the assets without really knowing anything about how to run that particular company? We are pretty close to that now in radio after all the de-regulation. It truly saddens me to see an industry I love get destroyed by greedy corporate a-holes who want to make money at the expense of everyone else, especially one that is supposed to be run "in the public interest". Sorry Gordon Gecko, but greed is not really that good.

 

[Logs4Less]

Bingo! It really doesn't matter how good you are, how much revenue is coming in to the station or how high the ratings are, if the CEO and executive team of the company are running the company into the ground and cannot manage pay off the debt or interest on their debt...there's little chance you'll get a raise. Fair? There is the distinct possibility you'll get canned.
So word to the wise... do a little research on the company you work for. If they're struggling, perhaps you should find another job at a more stable company... or take the paycut they ask you to take and start looking.