Don't hurt him but don't let him out.
It's time for the good and great employees of Citadel to take back their radio company and turn it around themselves.
Farid hasn't been able to.
In the past year alone Citadel stock took a nose dive from the $10 range to $2.05 when it closed last week. Get him to keep his hands off the company and watch his employees fix it.
Farid Suleman is best known for being Mel Karmazin's bean counter at Infinity. He's not the only radio CEO who should get a time out. All of them should. And the shareholders who can't sell their investments for a profit because they'll take a haircut should be leading the charge.
The final blow happened just before the market closed last week.
Farid announced he was seeking investment bank help to sell some more stations and raise additional, badly needed capital. T-R-I's Tom Taylor speculates that some of the Citadel properties could be worth between $75 and $175 million. That is if they can find buyers and financing. These stations have reportedly been for sale privately but now the bean counter thinks making it public will help sell them.
Ever cautious, Farid puts on his best silly face and lowers expectations to beyond rational levels when he says it may take 12 to 24 months. Come again? There are so many stations on the market right now that Citadel will have to wait its turn and oh, by the way, you won't be selling them for a premium. You'll be lucky to sell them at all.
So, let's say this angry group of non-violent change agents puts Farid-the-Bean-Counter under house arrest. Give him some pictures of his old boss to study and definitely cut the phone lines and high speed Internet.
Let's say the rebel leader -- who we will call Sid Adell -- takes charge right away.
"Get me Credit Suisse and Deutsche Bank on the phone", he tells his secretary. Then he tells both of them, "Never mind, we're not selling. We're keeping all our stations. I know, I know the Street won't like it, but that's only until it sees things getting better".
This guy Sid Adell is a genius for keeping the assets. After all, selling off radio stations when times get tough is like setting lifeboats adrift as the Titanic sails through Iceberg clogged waters. There is no benefit and you might need them anyway.
Sid Adell then gets on the phone with WABC Program Director Phil Boyce and says, "Phil, get those infomercials off W-A-B-"Freakin"-C". It's one of the biggest stations in the world and we'll find another way to make money -- like, putting on good programming. Where's our pride?"
Seriously, WABC has been carrying infomercials lately such as the ones for colonics -- allegedly describing in detail the bowel habits of people who get clogged up and ostensibly need their cleansing products. What shitty programming -- and yes, I chose that word on purpose.
Checking back with Suleman, safely under house arrest, we see he's taking his meals and reading a book on Warren Buffett. Aah, now we're getting somewhere. How is it that Warren Buffett buys mega billion dollar companies and let's the people who know their business run them. Just asking?
Keep reading.
Farid and all the other top radio group heads should be held responsible for the mess they've gotten their companies, shareholders and industry into.
Farid wants to sell more stations now because apparently the costly and ego-gratifying purchase of ABC wasn't as accretive to the shareholders as he promised. So, in the tradition of Wall Street, they can always blame everyone else and do the same thing all over again.
Look at all radio stocks. They are worth next to nothing.
There's no other way to put it -- the guys at the top have failed.
Sid Adell knows this and so he's going to go to each station and hold a town meeting, but instead of telling everyone as Suleman does that it's my way or the highway, Sid is going to ask them to improve their programming. Well, let's listen in...
"You are responsible for the programming. Come to me with a budget. If it's reasonable I will approve it. Give me a time line. Give me expected results. I will hold you to both, but I will not interfere. You are professionals. You know how to do this. And make sure you have an Internet strategy and a plan for mobile content. Make sure you know what social networking is beyond clicking on Facebook and MySpace. From now on you will be free to move about your stations and I will judge you on whether you succeed or fail. Fair enough?"
Now, let's be frank.
This group of freedom fighters can't do any worse than Farid's $2.05 a share.
In fact, once word gets out that Citadel is going to run the company instead of run from the industry, the stock will temporarily drop to $1.05 (which it might have done anyway) and then will rebound once the new leaders show Wall Street that they know what they are doing. Selling stations is for bean counters. Running them is for talent.
The entire radio industry is entering 2008 -- the year of the station fire sale.
But it's time to hold radio CEOs more accountable.
These folks had been granted unprecedented freedom to consolidate under the Telecommunications Act of 1996.
Freedom to use their considerable platforms to embrace new, interactive media.
Freedom to hire and promote the best and the brightest.
Instead, they created anarchy.
So maybe you can see why in my mind -- admittedly concussed from my years of battling with another major consolidator -- I actually think the inmates could run the asylum better.
And, get the share price back up to improved and realistic levels.
There's no other way to say it. This crop of radio CEOs failed and yet they still insist upon staying in power.
Stop selling properties, firing people, cutting the budget to the bone, running embarrassing infomercials and bastardizing an industry that already has what it needs for a turnaround -- without their longtime leaders.
It's time for a coup.
(Even though I'm having fun with some of my friends in the radio industry here I am quite serious about this -- the same old tactics are not working. Time for a change).
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