The Fall of CBS Radio

Clear Channel was first in every way.

First to amass over 1,000 radio stations. First to not be able to run 1,000 radio stations. First to move to sell off 400+ radio stations -- a mini-Clear Channel. First to declare victory while share prices fell from the $90 range to the $30 range. First to know when to fold 'em and get out.

But the other Clear Channel is CBS.

I'll give you that CBS doesn't have the hard nose, take no prisoners attitude of the Mays family business, but when it comes to running radio stations into the ground they are in good company -- they take a backseat to no one -- except, of course Clear Channel.

Last week, The New York Post said CBS Radio Chairman Joel Hollander is getting ready to step down before his contract expires at the end of the year -- "sick of (Les) Moonves' Radio Ga-Ga". As they say in South Philly, "who don't know that?"

CBS Radio has been second in revenue. Second to Clear Channel as a big, bad consolidator. Second to realize that even with every advantage that the near monopolistic powers of the Telecommunications Act of 1996 gave consolidators, they can't run the stations they own to the lofty standard of increasing "shareholder value". Down from the $50 range when consolidation was going strong after the turn of the century to --- you guessed it -- the $30 range today.

So you may be asking, is all of this just because radio people are incompetent? Isn't it all Steve Jobs' fault (ha! ha!)? No, radio people are not the problem. They are the general managers, program directors, sales managers, talent that has to work for these suits. The suits are the problem -- and I say that cautiously, since I wear suits.

Well, let's get back to that incompetent theory.

I can't remember the name of the magazine that used to run a feature called "Can This Marriage Be Saved?". Maybe it's still out there somewhere, but I was thinking if I offered the CBS dilemma to my very astute readers (industry types, professors, students, the press), maybe they could answer the question "Can This Consolidator Be Saved?".

Obviously, Joel Hollander would be Houdini if he escapes with his job after the public dissing The Post is claiming. Let's look at CBS' problems and you decide:

  • So, Howard Stern tells CBS he is leaving for satellite radio a year before he goes. CBS CEO Les Moonves keeps Stern on the air until he bolts for Sirius Satellite Radio -- $500 million richer. Hollander reportedly wanted Stern off the air. Moonves wanted the money and kept him on the air then sued him when he left for misuse of airtime and plugging his new show. Who is the goat here? Hollander can be faulted for not finding a suitable replacement for Stern with a year's notice. Stern's first replacement, David Lee Roth laid an egg. Mornings are still hurting for CBS depressing their stock. Wouldn't you think the radio guy should know that if his number one biller leaves (and in morning drive at that) that he is responsible to find the next big biller. Moonves knew that without Stern CBS Radio billing would be hurt so he kept Stern on the air and went with the money. Shame on your Black Rock -- someone should have either paid Stern $600 million to stay (and that would have been a bargain) or have a plan B without Stern. Blame goes to both Hollander and Moonves.
  • What Einstein blew up WCBS-FM in New York -- the legendary oldies stations that sources say was cashflowing $15 million a year before they turned it into "Jack" -- the station that plays what it wants? CBS had other options in New York to put "Jack" on the air if it was burning a hole in the hot clock of Hollander and his brother Les who was brought in to help with sales in the nation's biggest market. What kind of strategy includes blowing up an oldies station that is still churning out that kind of billing? This one is on Joel Hollander. I'm not sure Moonves even knew what kind of music WCBS-FM played.
  • It gets worse -- what about the old WNEW? He inherited "Blink" from the Sykes regime, approved another dance station (The "Mix") and wound up in desperation flipping to "Fresh". Ching...Ching...another $10 million in estimated revenue down the drain. Arguably, WNEW as a rocker might have done $15 million a year.
  • Oh no, more? K-Rock. Gone. Millions more down the drain. I don't have enough room to go into Chicago. All of this is on Hollander.
  • Who picked Rob Barnett as National PD even though he hadn't worked in radio for 15 years? He was gone six months later. A coincidence? Could an alien from Art Bell's world have kidnapped Barnett and taken him away from the insanity of post-consolidation radio? Oops, it's got to be on Hollander. He was in charge.
  • Selling 39 stations -- hard fought and paid for as part of the consolidation run-up -- for $668 million. Now what's that all about. Who sells stations when your government and regulators just about craned their necks to look the other way and allow you to consolidate? Maybe a company that can't run 39 more stations. Is this sounding like Clear Channel again? Never mind, I don't want the stations. Where's the door? This one is on Moonves. Hollander would have had to be crazier than a loon to go to his boss and say, "let's sell some stations and only bring in $600 million".
So, "Can This Consolidator Be Saved?" or better yet, "Can This Consolidator Be Saved From Itself?"

Who makes stupid moves like not having a backup to their bread-and-butter morning guy?

Who flushes tens of millions in in-the-pocket revenue down the drain by blowing up successful radio formats with no proven way to even equal the lost billing?

Where do they come up with these silly formats like "Jack", the station that brags "we play what we want" while the next generation counters with "We play what we want -- it's not a radio anymore, it's an iPod".

What would I do? Thanks for asking.

Since Joel Hollander is supposedly leaving anyway, I'd beg WCBS-FM Program Director Joe McCoy to come back and fire up the beloved oldies station and New York will love me. I'd make WNEW a rocker again. I'd call some of my many talented program director friends and consultants and have them fix the broken stations. How about some of the talent they already have in the house at CBS -- untie their hands and let them do it. I'd get an Internet strategy real fast. A mobile strategy. I'd get a five-year plan going to develop future talent (I mean, if the morning show represents 50% of your total station revenue, could you trust me on this one?).

But, I can hear it now. What do you know, Jerry?

You're happily lost in academia now. You're the former owner of Inside Radio and you sold to to Clear Channel! How do we trust you? And I heard your act back in the day. And you did the Drake format, isn't that the original "less is more" (less commercials, more music)? And your friends are all former PDs from the 60's, 70's and 80's and what do they know? Okay, Okay. The "Can This Consolidator Be Saved?" game sounded like such fun, I wanted to get in on it.

Hey, it doesn't take a genius to figure out what CBS has done to waste its radio assets.

And that's exactly what we've got -- two geniuses who have for whatever reasons wasted a perfectly good radio company.