Glad to see I'm not the only one who thinks there is more to this story. One other thought, saying "in the fall" tells me they have no firm plan on when they plan to return (if ever, under this ownership) will it be 9/20 or 12/20??
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Trio goes dark!
- Thread starter Whiplash
- Start date
This was posted this morning:
THE HUSBAND AND WIFE PRINCIPALS OF THE LICENSEE RECENTLY EXPERIENCED PERSONAL CIRCUMSTANCES, INCLUDING MEDICAL SITUATIONS, THAT HAVE TEMPORARILY COMPROMISED THEIR ABILITY TO OVERSEE THE STATION WITH THE SAME DEGREE TO WHICH THEY ARE ACCUSTOMED AND COMFORTABLE. AS A RESULT, THE LICENSEE BELIEVES THE BEST COURSE OF ACTION IS TO TEMPORARILY CEASE OPERATIONS. THE LICENSEE EXPECTS TO RE-COMMENCE FULL OPERATIONS IN APPROXIMATELY 10-12 WEEKS.
THE HUSBAND AND WIFE PRINCIPALS OF THE LICENSEE RECENTLY EXPERIENCED PERSONAL CIRCUMSTANCES, INCLUDING MEDICAL SITUATIONS, THAT HAVE TEMPORARILY COMPROMISED THEIR ABILITY TO OVERSEE THE STATION WITH THE SAME DEGREE TO WHICH THEY ARE ACCUSTOMED AND COMFORTABLE. AS A RESULT, THE LICENSEE BELIEVES THE BEST COURSE OF ACTION IS TO TEMPORARILY CEASE OPERATIONS. THE LICENSEE EXPECTS TO RE-COMMENCE FULL OPERATIONS IN APPROXIMATELY 10-12 WEEKS.
While I sympathize and empathize with any hardships the owners may face, this certainly sheds new light and verifies that there is more to the story than a simple re-tooling as many of us suspected all along. I'll bet dollars to doughnuts the number one reason is financial and the inability to make payroll and other general operating expenses which comes down to one thing: Lack of local sales, which falls on the shoulders of the local GM, GSM and sales team. And if this is in fact the reason, if it were me in Bolton's position, I'd hire new local management and a new local sales team and then terminate those who are being replaced. Again, that way all the re-tooling efforts are in place without the necessity to shut anything down, and the community has its radio stations.
I knew the name Scott Savage (listed as general manager) sounded familiar:
http://www.savagemediagroup.net
http://www.savagemediagroup.net
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ok walters
Guest
jmtillery said:
Yep - that will work. Here is how that interview would go:
So how much is the station billing now?
Not enough to pay the bills.
So you want me to save it? For what pay scale? 25% commission?
End of discussion.
Whoever is last out of the building, be sure to put the cat out and turn off the lights.
And it seems there have been a lot of IRS liens recently that have also forced the hand on the station
See this story here: http://lakecityjournal.com/main.asp?SectionID=13&SubSectionID=73&ArticleID=10204
See this story here: http://lakecityjournal.com/main.asp?SectionID=13&SubSectionID=73&ArticleID=10204
I believe that Scott Savage could have been more upfront about this instead of using a presser to lie to the community, two newspapers and even an online newspaper. I would have rather been told straight up honest. I guess honesty doesn't work too much these days and instead lets lie to the community and people will forget about it.....it won't be the case on this one though because people use to listen to them a lot in this town, even with the 50,000 watt blow torch 22 miles away in Live Oak known as "The Big 98."
JAWilson said:
That tells a lot. So, reading between the lines: the previous manager didn't pay the IRS payroll taxes for a very long time, possibly pocketing the surplus for himself while assuring the absentee owner that everything was all right (all speculation, of course). This probably went on until the IRS put liens on the properties and likely garnished the bank accounts. Once the IRS has control of your bank accounts, you have a serious problem because they are merciless. They don't care if you can't pay your other bills or make payroll and that's likely exactly what's happened to these stations. In the end, there's no point in continuing to operate because the IRS liens guarantee starvation and death for just about any struggling business.
If it were me, I'd hire a tax resolution service to help out, murder fire whoever was in charge before (which has been done). Then, automate the station and run it super-cheap with only my top salesperson and one part-time voice talent to cut spots and schedule them. I'd probably see if one of my top advertisers could be convinced to temporarily "hire" my two staffers through a temp agency. I'd likely operate the AM and Perry stations at reduced power, too. Eventually, those IRS liens will resolve, so the name of the game is survival until that happens. I'd have done just about anything to keep the existing advertisers on the air. BUT, all that said, I'm not 80+ years old and have just been raked over the coals by my former employees and the IRS. It's not hard to understand why that decision might have been made. Again, this is all conjecture and speculation based on very scant facts. Likely, much of the guesswork is wrong, but IRS liens do indicate serious financial problems that confirm that this is much more than just a format adjustment.
Given Scott Savage's history as a bankrupcty trustee, I would speculate that they took the stations dark to stop the bleeding and circle the wagons in preparation for a Chapter __ (fill in the blank) filing.
Posters have wondered why they didnt keep the stations on to at least maintain existing clients. I've heard that in similar circumstances the IRS contacts the advertisers and tells them to mail their checks directly to them! If that's the case here, then the owners dont even have cash flow to pay the electric bills, hence the throwing of the switch(es). And as Kmagrill suggests, the IRS probably grabbed their bank accounts first!
The big unknown is the amount of the IRS liens and if those are just part of the picture. What about property taxes, ascap/bmi, and any other myriad of bills that tend to get pushed aside to pay staff, electric, etc? Gut feeling is there is a lot more bubbling under the surface. THis was a drastic move that I believe is reponse to a drastic situation. Refer back to my first paragraph.
Posters have wondered why they didnt keep the stations on to at least maintain existing clients. I've heard that in similar circumstances the IRS contacts the advertisers and tells them to mail their checks directly to them! If that's the case here, then the owners dont even have cash flow to pay the electric bills, hence the throwing of the switch(es). And as Kmagrill suggests, the IRS probably grabbed their bank accounts first!
The big unknown is the amount of the IRS liens and if those are just part of the picture. What about property taxes, ascap/bmi, and any other myriad of bills that tend to get pushed aside to pay staff, electric, etc? Gut feeling is there is a lot more bubbling under the surface. THis was a drastic move that I believe is reponse to a drastic situation. Refer back to my first paragraph.
Certainly anything involving IRS liens and seizing company bank accounts is a serious problem which goes well beyond a simple retooling effort. I definitely feel for the owners in attempting to resolve this issue and expedite a resolution as quickly as possible. KMagrill nailed it if what has been speculated is the real underlying issue behind taking the stations off the air. Many people are effected negatively by this situation.
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ok walters
Guest
"if it were me in Bolton's position, I'd hire new local management and a new local sales team and then terminate those who are being replaced. "
If the station can't pay its bills how are you going to hire new management and a sales force that are any good? When that is the situation, who is going to be willing to work for you for what you could pay? Do you think anyone would ask what happened to the last sales force? Would it matter to a new applicant that they were or were going to be all axed Clear Channel style? Of course it would, so hiring a new sales force that can actually make a difference wouldn't be easy and may not even be possible in some situations. If someone is any good, the conversation would go something like I illustrated - been there done that - and I am very sure you have too.
If the station can't pay its bills how are you going to hire new management and a sales force that are any good? When that is the situation, who is going to be willing to work for you for what you could pay? Do you think anyone would ask what happened to the last sales force? Would it matter to a new applicant that they were or were going to be all axed Clear Channel style? Of course it would, so hiring a new sales force that can actually make a difference wouldn't be easy and may not even be possible in some situations. If someone is any good, the conversation would go something like I illustrated - been there done that - and I am very sure you have too.
ok walters said:
Without going into any details, I have a way it can be done, and without hiring a sales staff. I have done it before in a situation almost exact to this one involving WQLC, WGRO and WNFK. I have taken a small market FM station that was losing money each month and was on the verge of going dark, and turned it around into a break even within a week and turned its first profit within the first 90-days. In fact, the very first day I took over the station, the power company showed up within an hour of my arrival ready to turn off the power because the station had not paid its power bill. I managed to negotiate an additional week with the power company GM to pay the outstanding power bill. I had four days to come up with the money, so I pre-sold several packages and had the money to pay the bill a day early, paid the bill, and continued selling sales packages until we hit the black. I paid myself last after the station was financially stable, so, yes, I made a few sacrifices in the interim, but the delayed payoff was handsome for me and everyone else because we later sold that station, that was worth maybe $50,000 when I took over management, for over $4 million cash. I'd say that was a good run.
Mark, I love your insight as always and always love to hear the experiences you have had in this business. My dream has always been to own a few stations and just run them right to the serve the communities. I may never see this happen, but who knows one day it may happen.
Anyways, this situation resting with Power Country seems like is only going to get deeper before it gets better, I feel. Really not having 102.1 FM on the air is like losing a child because Lake City does have a nice little market for itself and having a void like this does not help. Hopefully things will get straight and Power Country will return or something of a music format with service to the area will return on the frequency soon.
Anyways, this situation resting with Power Country seems like is only going to get deeper before it gets better, I feel. Really not having 102.1 FM on the air is like losing a child because Lake City does have a nice little market for itself and having a void like this does not help. Hopefully things will get straight and Power Country will return or something of a music format with service to the area will return on the frequency soon.
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ok walters
Guest
jmtillery said:
So you found someone (yourself) who would work for free until the situation turned around - if it ever did. Turnarounds like that are the rare exception, and not the rule especially in today's economy. You said you would fire the sales force and hire a new one, but didn't hire one in the above situation because you couldn't. Now you don't even need a sales force - good thing because as I said above there is no money to hire one.
You took that deal many years ago, and wouldn't touch it now without a guarantee or outright ownership of the station. You know why? Someone who could make it happen (read "has a track record of success") isn't working for free, or only for an "upside" on a station on its down side. It is also seriously debatable whether such a turnaround could happen in today's radio market and in this exact situation. The situation just got more complicated as the stations are now dark.
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