Radio -- Small Elves outperform Big Warriors?

[Questor]

"And the meek shall inherit the [terrestrial radio] earth." -- Rush Sans Limbaugh

So many times the little guy gets laughed at. Can it be that for once in my life I've got someone who heehees like me, i.e., the little guy who laughs now laughs best? I wonder.

Here's what they're telling me as of 6/15. The small Elf market radio stations show more promise than the Big Warriors of the Clear Channel, Citadel, Cumulus and Entercom ilk. People generally write off the Elves as not being buff, not having the 50,000 Watt strength and resource muscles of those with 1200+ steroid stations and the like. Yet people are craving the individual attention an Elf can provide. They despise the preprogrammed radio Wizard set lists, replacing them with their own in iPods. They do like the little leprechauns who give you local weather in small patches where they're looking over a 4-leaf clover.

And so, the Elves make more treasure in this down economy. Moreover, the Warrior falls under his own weight, currently valued at only 90 cents a share. (Alas, Elves are private, no stock to offer.)

The feeling is that the Elves provide the local things the Big Warriors and Wizards either trip over (because they can't it get right, pretending to be local) or they've discarded it altogether. I'm seeing this headline of "Small Market Radio -- Better Days Are Coming." (Almost sounds like a Pat Metheny song called "Better Days Ahead.") See http://www.glgroup.com/News/Small-Market-Radio---Better-Days-Are-Coming-40523.html

Small vs. Large also comes up in the career conundrum arena. You could work for a Small company and do lots of things, yet get paid a pittance. Or you could work for a Large company and be boxed to do one thing (potentially as boring as boring radio), yet get paid big bucks.

So does it make sense to still be a Warrior in this economy?
Or would you rather be an Elf?

 

[TheBigA]

What if I told you that some of CC's stations were in small markets? Would that change your view?

This article seems pretty thin in documentation, and pretty heavy in opinion. If you agree with the opinion, perhaps there's reason to celebrate. But Jim Cramer was telling his viewers that Bear Sterns and Wachovia were good investments. We know how that worked out.

 

[amfmxm]

"And the meek shall inherit the [terrestrial radio] earth." -- Rush Sans Limbaugh

So many times the little guy gets laughed at. Can it be that for once in my life I've got someone who heehees like me, i.e., the little guy who laughs now laughs best? I wonder.

Here's what they're telling me as of 6/15. The small Elf market radio stations show more promise than the Big Warriors of the Clear Channel, Citadel, Cumulus and Entercom ilk. People generally write off the Elves as not being buff, not having the 50,000 Watt strength and resource muscles of those with 1200+ steroid stations and the like. Yet people are craving the individual attention an Elf can provide. They despise the preprogrammed radio Wizard set lists, replacing them with their own in iPods. They do like the little leprechauns who give you local weather in small patches where they're looking over a 4-leaf clover.

And so, the Elves make more treasure in this down economy. Moreover, the Warrior falls under his own weight, currently valued at only 90 cents a share. (Alas, Elves are private, no stock to offer.)

The feeling is that the Elves provide the local things the Big Warriors and Wizards either trip over (because they can't it get right, pretending to be local) or they've discarded it altogether. I'm seeing this headline of "Small Market Radio -- Better Days Are Coming." (Almost sounds like a Pat Metheny song called "Better Days Ahead.") See http://www.glgroup.com/News/Small-Market-Radio---Better-Days-Are-Coming-40523.html

Small vs. Large also comes up in the career conundrum arena. You could work for a Small company and do lots of things, yet get paid a pittance. Or you could work for a Large company and be boxed to do one thing (potentially as boring as boring radio), yet get paid big bucks.

So does it make sense to still be a Warrior in this economy?
Or would you rather be an Elf?

FWIW, our company figured this out years ago and sold its portfolio of major market FMs (all Top 20 markets, some Top 10) for a ridiculous amount of money and started cherry-picking solid small-market stations and clusters. That foresight has allowed us to operate with no debt and generous cash flow margins while (still) producing live/local listener-friendly and advertiser-friendly radio.

As I've stated here before, the structure of this industry is such that small-town stations & operators far outweigh the big guys, and while those Big Names choke on their short-sightedness, the bulk of the radio business is doing fine.

We just don't grab the headlines.

 

[pocket-radio]

Clear Channel, Citadel and the rest of the clones are upside down with more debt period.
Small market radio is about relationships and good local radio. Jim Cramer has nothing to do with small market radio, he's just a guy with a tv show. I think he once recommended Clear Channel and look how that's turned out.

 

[TheBigA]

I think he once recommended Clear Channel and look how that's turned out.

He's a big believer in Mel Karmazan & Sirius. He told everyone that if the merger went through, the company would be unbeatable. My point is that this thread was started with an article written by a financial analyst who said "Better Days Are Coming." What we learned last year is financial analysts don't know anything. If you believe better days are coming, and this article makes you feel good, then great. But the article could be complete crap too. Don't bet the farm.

 

[pocket-radio]

Clear Channel, Citadel and Cox got in trouble because the borrowed to much money, and their debt load is now killing them. Now if the economy didn't crash it wouldn't matter, well the unthinkable happened. The bubble burst.. So bankruptsies are probaly in their future.

Small market radio has shined because their debt is manageable, it's still about relationships,
and local radio still matters. Performance and hitting a magic number, is relative to what you owe the bank and stock holders..

 

[davideduardo]

Small market radio has shined because their debt is manageable, it's still about relationships,
and local radio still matters. Performance and hitting a magic number, is relative to what you owe the bank and stock holders..

There are probably more small and medium market bankruptcies and refinancing than there are in larger markets. Every week we read of station forclosures, sales and such. The small operator has fewer alternatives, and often mortgaged real estate other property to buy a station.

What you owe to the bank can be refinanced. The chances of refinancing increase if the bank has major exposure.

And shareholders are not owed anything (unless the shares are preferred) and only benefit if there is a profit. While shareholders can put pressure on bad performance, they can not expect much in the current economy.

 

[SirRoxalot]

The ultimate idiocy: "You owe us so much money we can't afford to let you go bankrupt - even if you can't pay us back."

 

[PTBoardOp94]

Even if hundreds of small operators went bankrupt since Jan 1, they would shed fewer jobs than the Big Cs (Cumulus, Clear Channel, Citadel, Cox) have so far this year.

 

[TheBigA]

Even if hundreds of small operators went bankrupt since Jan 1, they would shed fewer jobs than the Big Cs (Cumulus, Clear Channel, Citadel, Cox) have so far this year.

That's cause they were way understaffed already.