Meltzer exits CC Cleveland with UPDATED ANALYSIS
> AllAccess.com is reporting that CC RVP/GM and Cleveland
> Market Manager JIM MELTZER is exiting after 8 years. Key
> word here is "exits".
>
Fired? Interesting. Receipts must be down--I guess "Less is More" is also applying to CC employees too.
UPDATE:
After having had time to stew about this in the midst of research on Rule 23 class action attorney fees (someone's gotta get paid, may as well be me!), I have some thoughts here.
Meltzer, if I remember right, was probably associated (closely?) with Randy Michaels, persona non grata in Clear Channel world (and that's being kind. See, e.g., John Gorman and Ron Jacobs for additional insight.) Surprised he lasted this long.
When Meltzer came here in 1997, Jacor had just bought the prime real estate in Cleveland radio--the Nationwide cluster and WTAM/WMVX, as well as WKNR (for a time). WMJI was the top station then, securely placed as one of the top oldies stations in America (rivals: WCBS-FM, K-Earth, and maybe WOGL in Philly), with all sorts of awards coming out of its derriere. WGAR was one of the top country stations in America, with similar awards. WMMS had alot of heritage to its name, but was in the midst of the disasterous Neumann experiment (after dumping a very successful alternative format). WMVX was showing signs of life after a few years in the trenches.
What did each of those stations have in common? Live, local 24 hours a day--even overnights (WMJI's Sandy Bennett was one of the best overnight jocks--simply scrumptous). They also knew their places in life, and stayed there.
I have no doubt that Clear Channel's situation now (relying on "less is more," mass firings going back to that black day in 2001, e.g. Scottster and Danny Wright, then one a couple weeks ago, and now Meltzer's "exit") is related to the fact that CC was so keen on being big that they spared no expense getting there. They overpaid for stations across the country and now are scrambling to make up for it. They need money, and are cutting corners to spare expense where necessary. If stations aren't pulling in the dough, they don't dump the stations--they dump the managers, the jocks, the PDs, the promo staff. Sales is key.
And that's where CC is wrong.
Owning a radio station is not just bringing in money, money, money. It's providing a product that listeners want, so advertisers will want to lure those listeners to their stores or to their products. The station is merely a conduit for that transaction (and, yes, the station is also there to provide service, and entertainment...but let's ignore those important functions for the moment).
The station is a business, and like any business it succeeds by performing well, getting its target share, and defeating the competition. It then moves to either (a) keep its static share, or (b) expand.
Here's where the situation with CC breaks down. Because CC's interest is cash flow--and money to pay off the debt created by buying so many stations. As a result, the owners are interested in just enough of the three points above so that cash flow is maximum, while loss is negated or ignored. So, using as an example, WMJI--monster ratings, monster billing. WMMS--lesser ratings, somewhat monster billing. WGAR--monster ratings, monster billing. WMVX--so-so ratings, so-so billing (not WMJI level). WTAM--monster ratings, monster billing.
Now, we see that three stations bill huge; two stations bill less. (I'm leaving Kiss out of this for the time being--it really adds nothing to the argument I'm about to make.) Each of those stations cost about the same amount when purchased.
CC is interested in reaping the benefits of that billing, be it monster or otherwise. But, it will not allow, say, WMJI to compete with WMMS for those listeners; or WGAR to compete with WMJI for those listeners. That is--within the cluster, the competition is lacking. No station has an incentive to do better, gain more ratings, and, necessarily, bill its advertisers more. So, as a result--ratings stay essentially the same (WMJI has been level--very high, but level) for a long time. WGAR recently upticked, but that happens from time to time--and is independent of WGAR's operation. Normally it is also level--and relatively high.
So, seeing as how you're all probably bored as I am already too, Clear Channel has essentially instituted self-imposed caps and trade restraints. It will not allow the cluster to be harmed by an individual station's potential success beyond CC's own closely calculated success. This restraint has been harming the product of radio for years, and now, as we have seen, is harming Clear Channel itself.
The solution: either loosen the chains and let every man be for himself and compete like stations used to do, or sell the stations that aren't performing. Or both.
But, as John Lennon once famously said of Apple: "If they carry on like this, they'll be broke in 6 months." Maybe it's not that imminent and impending, but the CC business model right now is not working. Much like GM, CC is showing signs of its bad management decisions to the public.<P ID="edit"><FONT class="small">
Edited by Johnny Morgan on 11/30/05 04:56 PM.</FONT></P>
