Or, do they?
I don't know what it is with Citadel CEO Farid Suleman.
The more you see him in action, the less impressed you are.
Take his latest sideshow -- the quarterly earnings report for his 78 cent stock.
Suleman reported yesterday that Citadel revenues were down 9% in the second quarter. And some blame was put on Paul Harvey being away from his radio show causing some national ABC Radio Networks advertisers to pull back. The economy -- advertisers.
Blah. Blah. Blah.
Oh ...
Farid proudly reported $20 million in cost savings. (I'm getting excited). Fricken cost savings. As one of my readers sarcastically pointed out in an email yesterday -- with all these cutbacks radio is a great growth industry isn't it?
Farid is the guy who last quarter was tap dancing around the issue of having to employ too many salespeople. I believe he was quoted as saying something like lots of business comes to us without salespeople so why pay the commissions?
Really?
On the positive side there is Regent -- a small company run by the former head of the Radio Advertising Bureau, Bill Stakelin. Regent stock is 81 cents. But Regent sales were up 2.9 percent. Try saying "up" in the same sentence with a radio company's quarterly ratings.
Here's how Regent did it:
1. Local operating strategy. Compare this with Farid's meddling and Clear Channel's constant restructuring and everybody else's penchant for top down management.
2. Digital footprint -- the words Stakelin himself used when announcing yesterday's results. If I scream from now until the end of time, I don't think I will get the attention of the consolidators who continue to operate as if terrestrial radio is the business they're in. Without a digital future, there is no future. But don't believe me, ask your sons and daughters.
3. A big sales force. While Farid wants to cut his sales staff, Stakelin practices what he preached at the RAB and has increased his sales staff. More salespeople to sell more radio and cross-platform integration.
Regent is a small market operator. Citadel is a small time operator that also has some large markets acquired through their ABC acquisition.
One of my readers asked recently, if the digital future is so great, why don't more consolidators take your advice and get into it?
My answer?
Radio CEOs are as disconnected from the emerging market as a two term president in the last year of his presidency is from his constituents.
At least a president of the United States is required to leave office after eight years.
If radio CEOs had that same requirement, there might be some hope left for radio.
Instead, this out of touch group of dinosaurs is coming up with failed "solutions" that are leading to their diminished companies and declining radio industry.
Compare their strategies with some used at Regent to outperform their sector:
1. Cut back. And when you can't go any deeper, cut back some more. Brilliant. It must be working. Listening is down. Sales are down. Go ahead, blame the economy.
2. Ignore the digital future. You'll be retired anyway (sorry about the value of your stock -- after all, you made the big decisions). Look, how can I say this? If radio has to rely on its transmitters and towers, it's all over. The next generation is not growing up with radio. Getting into the digital future involves investing money. And that's after you know how to invest it by learning about the next generation. Getting back to my reader who wondered why radio CEOs don't listen when it comes to the things we write about here every day -- they're out of touch and out of answers. Ignore the next generation and it will go away.
3. Cut back on sales. That's right. When you say it like that it sounds stupid because it is stupid. You should be tripling your sales force. Paying higher commissions (OMG -- cardiac arrest is coming). You don't look at radio's sales decline for years and take more salespeople off the streets. Remember when some thought I was nuts when I criticized Google'sAdNonsense automated (no sales staff required) radio spot selling system. It really did wonders, didn't it? Radio is a relationship business -- with the audience and with advertisers. Have we forgotten?
Every once in a while a reader will snap and say, "you sound mad".
I am mad!
Sitting by and watching a handful of underachievers ruin the future of a once great business -- missing the digital revolution -- and concluding with the firing of the loyal employees who made radio stations worth enough to consolidate them -- you bet I'm mad.
Now it's time for those suckers called institutional investors and boards of directors everywhere to become inspired in this presidential election year to do the same.
Throw the bums out.
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