Questions

[deff junction]

How can an account executive make "too much money"? An AE at my station was hassled by management for that reason. He left because they wouldn't let up.And possibly was fired, but no one really knows. Now the station is pleading poverty.In fact, the whole company is pleading poverty.
The ratiings were great for one of the staions in the group. The morning team was told they were"too good" What is up with that? How can one make too much money and have too good ratings?The company has been desperate to sell for quite a while.

 

[dmargalotti]

Can you say "tax write off"?

 

[davideduardo]

Can you say "tax write off"?

Every buisness expense is deductible to determine the taxible profit of a company. In most cases of daily operations, there are no "tax write offs" because everything is deductible.

 

[amfmsw]

I worked for a combo that was efficient, had fair ratings, but lots-o-goodwill and profitable. It was bought by an out-of-state "investment group" and operated by the Company's new "corporation". It was upgraded with nice equipment, and operarted well. But it made more money than expected, and the new owner began sucking ALL the cash from it.

Personell was thinned through attrition. Then lay-offs, starting with the full-time engineer, seen as a luxury. Then sales took a commission cut, and the good ones left. Then the overnight's flew solo, even if it meany running Larry King with blips and beeps and local avails with dead air...lots of dead air. Then the AP machine went with the sports guy. Then the full-time news department alltogether. The standard 4 overhead 40 watt flourescent bulbs in studios and hallways were reduced to 2! Fianlly, the FM station, that was Drake-Chenault automation when purchased, was, you guessed it, re-automated. The AM went satellite.

It ran this way with 3 salepeople for several more years, and sold off at a 10x profit. I think it's safe to say it went from a cash cow to a tax write-off for the out-of-state owner.

 

[Goat Rodeo Cowboy]

There were some really strange tax laws 20, 30, 40 years ago. "tax write off" was a phrase that made sense back then.

Under today's business conditions and today's tax law, 'tax write off' seems to be a polite way of saying: too stupid to make a profit.

I don't know that there any tax write off scenarios that put value in your pocket while losing money.

 

[grantchester]

It's all about cash flow. Incompetent managers see how much of it is going to the sales people and decide to take it... without considering why it is coming in.
It takes a couple of years between when a station is de-contented and when revenues crater. Graph it as a 5 year average, and it looks like a solid money maker.
Buyer bases purchase on a multiple of free cash flow, thinking he's so smart, he'll know where to cut...
Been there, done that, got the tee shirt, wore it out.

 

[MickJ]

It's all about cash flow. Incompetent managers see how much of it is going to the sales people and decide to take it... without considering why it is coming in.

Sometimes incompetent managers assume that AEs who make a lot of money must be doing a good job. May AEs make a lot of money because they know how to game the system and all the existing accounts flow to them. Bad managers let this happen. Sometimes good ones fire the highly-paid but non-productive AE.

 

[SirRoxalot]

Sales Weasels

Sometimes weasel managers take the accounts that good salespeople have developed over several years for themselves. The AE who developed the account to the point where both the client and the station were comfortable with schedules targeted for peak periods throughout the year is left out in the cold. Ultimately, the manager who thought that the buys were "automatic" doesn't service the client well, and revenue ultimately drops.

If a sales person is bringing money through the door, they've developed a relationship with the client over time, and they're servicing the client satisfactorily. It's not about gaming the system, it's about knowing the client and their needs.

With that said, there are times when lists need to be shuffled, and new eyes need to look at advertising plans to see if they're working as efficiently as possible. Sometimes sales managers need to talk directly to clients to see if the AE and client are on the same page.