The other shoe has now dropped as many of the major consolidators have followed their leader -- Clear Channel -- with layoffs, firings and cost-savings caused by bad business and bad strategy.
We're now seeing CBS with program directors overseeing two separate cities. That will really work now, won't it? Inside Radio reports several dozen positions wiped out yesterday. Three PDs in New York were fired: Crys Quimby at WCBS-AM, Tracy Cloherty at "K-Rock" WXRK and Rick Martini of "Fresh 102.7" WWFS. Pittsburgh GM Jim Meltzer is out as is Chicago WXRT General Manager Michael Damsky. Several sales managers -- fired. And old friend of mine from the Paul Drew WIBG, Philadelphia days -- KOOL-FM, Phoenix morning personality Bill Gardner -- fired.
Emmis, radio's most people friendly company, has been forced to cut 5% of its employees eliminating 46 positions in New York, Chicago, LA, St. Louis and Austin. An Emmis spokesman actually said with a straight face "Emmis took these steps as an expense reduction effort and to better position the company". Emmis has offered generous packages to its people and says this is it, but who can be sure.
With Clear Channel pioneering the way in firings -- even before Christmas -- to keep the company attractive to its new buyers Lee and Bain, how far behind can Citadel be? Citadel -- $1.43 a share up from $1.37 earlier in the day. Ouch.
Entercom fired three part-time talk show hosts at KIRO, Seattle for budgetary reasons. That won't be all. There are whispers that the northeast stations could be among those affected. Entercom -- from $65 to $11.75 in ten years.
Just about two weeks ago Clear Channel President John Hogan told the Southern California Broadcasters Association "Radio today is challenged but not by performance or capability, it is really challenged by perception".
He was kidding, right?
Because my perception is that radio is going down for the count and it looks like Wall Street is getting the life boats in the water as well.
Analyst Jim Boyle, one of the few left standing and always one of the best, is quoted in Inside Radio as saying "radio is indeed the 'new newspapers' with its slow to no growth prospects". God, that's awful. Radio the new newspapers? Newspapers are dying even faster than radio.
What's that part about perception again, John?
Clear Channel, the proponent of HD radio subchannels, just announced that it is pulling the plug on all but 46 of its format lab's Internet HD stations. Hell, I might start having the perception that HD isn't that important right now if you judge their actions and not their words. Closing the $19 billion buyout with Lee and Bain -- priceless (and shameless).
You can't spin such incompetence as tough times or position yourself for the future -- there is no future and radio's leaders are the reason.
You can let them off the hook if you're in the mood, but these folks own all the good stuff. They fell into a gift -- the legislation that allowed consolidation. They were welcomed by Wall Street. Their stock was mighty and it looked like they had everything going for them.
One problem.
Radio consolidators turned out to be lousy operators.
And if you think that is too harsh then consider that we haven't had a recession for the entire 12 years since consolidation began. The iPod was only introduced in 2002. Social networking only became all the rage in the last two years. Cell phones were still for business people not kids as late as the turn of the century.
What gives?
The truth is that radio works best when it is local and consolidators are not local.
Remember the many times Clear Channel and others realigned their management structures? New regionals, new market managers, cluster this and cluster that. Well the consolidators now all looked like a bunch of cluster pucks for their ineptitude.
Radio is an art not a business. Sorry, but it is. You can't just turn the key, start it up, have Google sell the ads, cut benefits and be a booming business.
They forgot something.
You have to convince listeners to listen. To be loyal.
Radio had done a pretty good job of this for decades prior to 1996 when consolidation kicked it. These CEOs and presidents squandered the surplus of talent they inherited the way politicians can't help but spend a surplus. In other words, radio had it right, but in their move to add real meaning to the word consolidate, our industry leaders squeezed the life out of the part of our business that actually attracts listeners.
An objective source -- say, an alien from Mars -- would land here and say "What are these consolidators doing? You can't cut-cut-cut to make your quarterly numbers without it catching up with you". Hey, these Martians are pretty smart, aren't they?
Radio's worst cuts are happening now and they are the deepest because they are now cutting into the backbone of what makes radio attractive to listeners.
I'm not naive. I know corporations have to cut the budget when expenses don't equal income.
But, they are either naive or plain deceptive if they think that radio is going to come back from arguably the last six years of unchecked budget cutting -- a move designed to please shareholders and keep their stock prices from tanking.
Now they've tanked. Well? Are the shareholders pleased?
My old buddy Jim Carnegie tracks these things at his new RBR site. Radio down 14.77% since December 31, 2007. Don't even compare them to eight years ago, or when the market leader Clear Channel was selling in the $90 range.
Radio is local.
Consolidation is national.
Wall Street is the anti-radio.
Consolidators were not up to the challenge of doing local radio on a national platform.
No one was watching technology.
They let the next generation get away without a fight.
And now, their solution to bringing radio back is to implement the worst cuts at the worst time imaginable. And there will be more. I said in December -- looking forward -- that 2008 was going to be that kind of year. And radio stock prices will likely remain in the toilet.
Consolidators are the FEMA of radio. When there's a disaster, they make things worse.
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