Mad Radio

CNBC's Jim Cramer has been out to get terrestrial radio of late. The circus-like Mad Money show is hard to watch and even harder to tolerate if you work in radio.

Cramer's advice to investors owning radio stock is "sell, sell, sell" which is easy to say because he doesn't own Citadel at $1.32.

I don't know whether to advise you to listen to his most recent and scary rant, but we're all adults so here's the link. Promise me you'll return because there are some important points to be made.

1. Cramer worked in radio. Cramer no longer has his show. That makes it easier for him to pimp satellite radio. I can't imagine him attacking the industry in this way if he still had his show.

2. What is he on -- no, I mean, seriously not because his show is a circus but because he actually thinks satellite radio is a growth business. I haven't seen anything to indicate that satellite radio will fare much better than terrestrial radio. Does he have a horse in this race?

3. Unfortunately, Cramer is right about the demise of terrestrial radio, but he's got the reasons wrong. Terrestrial radio died because of people like him -- Wall Street folks who pumped lots of money into radio consolidation and stood by as worried shareholders withdrew their investments at a loss. Cramer and his buddies are the reason he can rant and rave. If I'm satellite radio right now I'd be worried, too, because even after the merger goes through, technology is outdated. Since the first and only two satellite radio companies asked for federal approval to launch their satellites, the Internet has come along.

4. I didn't hear Cramer mention how important Internet streaming through WiFi or WiMax is to the future. That's because Wall Street can only see the future one quarter at a time. They don't know what Main Street wants or what the next generation demands. If they did, they'd realize any business that allows consumers to listen to the Internet on the go is a growth business.

5. I guess Cramer fancies himself as a populist trying to incite his viewers that they -- whoever they are -- don't want you to have what you want -- presumably satellite radio (if he is to be believed).

6. Cramer refers to the deal Mel Karmazin promised regulators in return for approving the merger -- tiered pricing -- that Cramer thinks is good. Wait until the consumer sees what they don't get with bargain basement pricing. Kind of defeats the purpose of satellite radio. Who needs the equivalent of basic cable in the car?

What I'm saying is that Jim Cramer is right about radio for the wrong reasons. It isn't worthless. It still has huge -- albeit it older -- audiences. And in spite of the recession and recent signs of economic vulnerability radio still generates lots of cash flow.

I don't like to mince words about radio's problems. It's a proud industry that has seen its better day. The next generation got away and the present generation of radio CEOs have a lousy track record and an even worse understanding of what radio will have to be ten years from today to still be a viable revenue source.

As for Jim Cramer, I am sorry to have to knock a fellow Philadelphian. But from my years of living there perhaps Philly folks can use their patented response to his self-serving and misguided radio rant.


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