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STOP WHINING... THE MAYS BROTHERS TAKE A DEEP CUT TOO

K

kjallen

The Clear Channel cutbacks have stirred up emotion from people inside CC as well as onlookers. They have been referred to as the evil empire for years, but now the rhetoric is even hotter. I don’t know if they are the evil empire or not. We can debate that and get into the complexities of went wrong, who is evil, etc. But it what is happening is really based on a simple principle: at some point you must pay the piper.

The automotive industry knows this very well. Those guys are not evil or stupid, they just rode a wave for as long as they could, knowing that the ride will end at some point and they would not have a plan B ready to go. Clear Channel and more so Cumulus, have base their model on producing a quick profit, but would obviously not be sustainable. It is like enjoying free cable… you don’t know how you got it, but let’s watch it until we see static one day… then scramble around to fix it.

What disgusts me is this announcement by the Mays brothers that they are ‘down in the trenches’ with the rest of the remaining Clear Channel people. They are going to feel the hurt as well as they clamp down on their base salaries to a mere $500,000 per year (stepping up in following years, of course... there is only so long one can live like a pauper). I want to know if there is ONE single CC employee that paused in the break room this morning and said… God bless those guys, they are sacrificing just like the rest of us.

While we do not use titles that much in our small, three station radio company, I would be considered the top exec. I took my pay cut last freaking year when things tightened up. If I am going to be first person to enjoy the good times, I better be the first one to take the hit during the slow times. I am now the lowest paid fulltime person in the entire company, taking a gross salary of about $10,500… and I don’t have a million in the bank either. I have cut back and live as simply as I did when I worked part time years ago. Maybe I am naive and stupid, but I will absolutely not lay off one person until I know that I have done all I can personally to prevent it. Have the Clear Channel suits taken the biggest hit they can, are they down to one used automobile each, have they sold their houses? Are they really suffering like those they had to lay off and those that will be laid off in the next round coming soon?

It is not all Clear Channel. I am sorry to target them, but they have put the targets on themselves today. There are other companies doing the same thing, but thankful that the spotlight is not on them right now.

Now, off the soapbox and into the facts. For you recently released Clear Channel folks, those that are still hanging on nervously for now, or others in the same kind of situation with the other major companies: Listen to your family and friends when they tell you to hang in there. Here is why. The majors have not completed paying the piper yet. Starting just before May and continuing for the next year or so thereafter, these companies will be forced to do major market spin offs. Remember, FM facilities cannot voluntarily go away. They must be operated by someone no matter what the market conditions are like. The majors will continue to sell off stations and markets at pennies on the dollar, as they have quietly and randomly been doing already. Smaller operators will be back in the game with substantially smaller note payments. This means more room for payroll, even more than back when the economy was booming.

The age of the mom and pops are coming back, out of necessity. Just remember, that is not all a bed of roses either. You will get calls from the owner’s wife on the hotline telling you to drop a song because she does not like it. But, the emphasis will shift from shareholders venture capitalists to locally produced radio and the people that make it happen.

What about this shift to even more national syndication by the majors? Yes, it will happen in the short-term. But it does not permanently fix the problem and it will have no bearing on the lump payments due by some of the major companies. Only one way out of this mess for the majors… pay the piper everything he is due… regroup and come back to try it again next cycle.

Seriously, hang in there. This story is not over yet.
 
The opening post of this thread uses the automobile industry for comparison as we all stand back and try to make sense of Clear Channel and try to make sure our emotions about Clear Channel are honest and reasonable.

Let me offer Walmart as a possible comparison, and I don't personally like the obvious possible outcome.

Walmart has long been hated by many people. Many of us are from small towns were the merchants we grew up with and went to school with their children, were seeming put out of business by Walmart. At least that is the folk lore we receive and spread. I think of some of the people I used to sell advertising to in small town America and I have to admit: some of them were going to go out of business whether Walmart ever happened or not! Some of them just weren't good business managers.

If Walmart hadn't been the big monolithic demon turning retailing upside down, someone else would have done the dirty deed. Maybe K-mart would have figure out small town merchandising. Maybe Dollar General store would have done it. Maybe the Cracker Barrel Evins family would have stumbled into discount retailing in the county seat that didn't sit along the Interstate. When you look at the business world as a whole, sooner or later someone was going to be "the bad guy" if you think of Walmart as the bad guy.

So, is there any redeeming social value in Walmart? A lot of us left small town America to seek our fortune in the city. Some people can never pry themselves away from home town. Next time you are in a Walmart and see all of those people wearing the Walmart garb, ask yourself: What would they be doing if the Walmart store had not come to town.

Find your self a vendor, a manufacturer who sells to Walmart. Someone who travels to Bentonville to call on the company. Maybe someone who used to live in Bentonville and help staff the office that Walmart demanded be set up there to meet their supply needs. Ask them to give their evaluation of Walmart's management style. Are they innovative? Do they have modern, cutting edge ideas and methods?

Like it or not, What Toyota (and "Toyota Style Management") is to the auto industry, that is apparently Walmarts role in retailing. And they are maturing. Some early management people did not understand labor laws but the court system has given them a good education (an expensive education?) and they seem to be getting with the program.

In past years it has not been hard to generate a "we hate Walmart" pep rally at any social gathering. The times seem to be changing.

O. K. Now. What has that to do with Clear Channel?

Is Clear Channel in years to come going to be to broadcasting what Walmart has become/is becoming to retailing? The local merchants who survive in America's rural communities today either were lucky enough to be doing something Walmart doesn't do, or were smart enough to study Walmart and figure out how to compete.

As much as many of us would cheer loudly is Clear Channel and all the other aggregators were buried right next to Enron in the corporate graveyard in the next couple of years, I'm not ready to bet that it will happen.

WHAT TO DO?

If you are in broadcasting, and you want to stay, and you don't want to be part of Clear Channel, then you must get very smart, very observant, very adaptive, and very patient. You must figure out where the vacuums and voids are that the chains cannot fill, cannot conquer. You must re-invent yourself faster than they continue to develop.

If I were a bit younger I would be staying up very late every night putting the puzzle together. I think all the pieces will fit together if you know how to work at it.
 
Very good points, Goat. I can go to almost any Wal-Mart, any time and see it packed with customers; my friends and neighbors. So if "everyone" hates Wal-Mart, you sure wouldn't know it, and you're right, if it wasn't them, it would have been someone else. Mom and Pop downtown had inconvenient parking, inconvenient hours and high prices, plus you had to go to five different stores to get what you might get in one trip to Wal Mart.

Same can be said for Clear Channel. They still have a heck of a lot of listeners. 3 of CC's stations have major summer events here and they're all packed and sold out. If I was going to organize an anti-CC protest march in front of one of their events, no one would know why? If I said "because they don't have live DJs and they carry syndicated shows", folks might say they actually don't like DJs or like Delilah, Bob and Tom, etc. Doesn't bode well for getting the government involved to enforce some idea of "live and local DJs".

I love the "good old days of radio" as I knew them. We're in a different world now, and that's the problem.
 
gr8oldies said:
I love the "good old days of radio" as I knew them. We're in a different world now, and that's the problem.
Click to expand...

I live within the footprint of the tower that is populated by kjallen and his co-workers. Some of us just come here and spread some of our prejudices and dreams around like a crop-duster. Kj's optimism about the future of a form of radio other than what CC and the look-alikes are doing is not just idle talk. He is talking about the kind of radio that he and the company he is associated with are actually doing. If a total stranger contacted me and said: "I want to invest some money in radio in smaller markets for the long term. Where can I learn how? Who can I look to as a guru?" I would point him to the guy that Kj says "yes sir" to. They are doing it. They are making it work. Now.

Now, let me get the plane turned around. I have one more bag of boll-weevil dust that needs to be dusted on this thread about Christian radio and Translator towers.
 
I can appreciate the humor intended in that.... :)

but having met the man I assume he might say 'yes sir' to, and observed their operations, I would think that KJ might at least come up with "We'll get that done, Boss."

Does that still stretch my credibility?
 
i've sent you a PM...gimme a shout if you like once you read it.

Thanks for the compliments on Oconee River Broadcasting! KJ does an amazing job running our company and there's nobody else I'd rather have as a cohort!
 
I guess I should come back to the radio board more often to check for replies when I post. I just learned that I say "yes sir" and "we'll get that done boss" to someone. Now I just need to figure out who that is. And when I do I am asking for a raise!

In all seriousness, Benji, my other two partners, fulltime people and work-from-home people are all the best. I have never worked with a group like this in my career. Even in tough times, these people make sacrifices, work their butts off and keep everything running smooth. I love all of these people like family.

Also, thanks for the kind words Imofftheair. As we responsibly grow, you may be part of the family as well.
 
The Cowboy can sleep a bit later in the morning. I just took the egg of my face and I will nuke it in the morning for breakfast.

KJ is indeed exactly where I knew he was, but what I didn't know was that KJ doesn't need to say "Yes Sir" to another broadcaster that I think runs good radio.... KJ has signed and acquired some documents I let slip past me in the year just gone by.

So. Back to the topic at hand. There is indeed another way to do broadcasting other than the giant scary-sized entity known as Clear Channel. KJ and Benji and other entrepreneurial folks around the nation with their smaller organizations, and their small community bases may be much more visible in coming months as we sort out in these discussion groups: Who is it that knows what they are doing, and what they are doing makes sense.
 
No problem. I would assume that broadcaster is Mr. Sutton... and I agree, he is one of the good guys. While our approach is very different on a lot of things, he and his stations have done great things for the communities that they are part of.
 
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