That's funny when you differentiate the strong from the weak by calling a $3 stock price strong.
Cumulus closed at 75 cents Tuesday which is pretty weak -- so go figure. Oh, and Lew Dickey is in acquisition mode.
The world is bankrupt. China is bankrupt. You're bankrupt when your debt exceeds your assets. The American people are fast going bankrupt. Banks are going bust. And there are 130 banks on the Fed's watch list to go down next. Governments of the world are trying to stabilize their economies and ...
Lew Dickey is predicting consolidation for a penny stock industry.
Can anyone get real for a minute?
Dickey is arguing that over the next 36 months some of the weaker groups will be selling stations (don't ask where the money is going to come from to buy them or how low their selling prices will be). And to Dickey because under his scenario half of his competitors will be gone. After all, Dickey is quoted as saying “Fundamentally this is still a very sound business" in a recent Atlanta Business Chronicle article.
I guess the next thing he'll say is that radio should have only one rep firm.
Oops. We do. Katz just signed Interep's two biggest clients -- CBS and Entercom. Kaput, as Tom Taylor put it.
So let's get this right.
All the radio consolidation that was rolled up from 1996 until, say, 2005 didn't work -- even before the present economic downturn. Radio has become a declining business that C.L. King analyst Jim Boyle says may not bounce back until 2010 -- if then.
So, how about more consolidation? More of the stuff that didn't work.
Radio executives live in their bubble. For years they've been saying less is more (in fact, that phrase may be inscribed on radio's headstone someday to describe death from consolidation). Now, Dickey is saying more for less -- more stations owned by fewer companies.
Have a good time.
Radio is declining for a lot of reasons -- it lost the next generation to the Internet and mobile devices; it has released many of its best programmers, sales people, doubled up on managers and fired top talent. What a time for cost-cutting -- when your stock is so low (with the audience, that is).
Dickey is clueless.
He says with great confidence that “iPods, Internet radio and satellite radio haven’t killed broadcast radio and never will".
Well, he's right -- for the wrong reason -- radio CEOs have killed off radio because they are out of touch, out of money and out of their heads when they think another round of same old same old is going to work.
Sam Zell has a radio group in waiting with Randy and the Rainbows, the talented bunch of Jacor people Randy Michaels hired away from Clear Channel to work on newspapers. There's a real good way for sharp radio people to end their careers -- on newspapers. Bad enough radio is becoming a black hole -- newspapers already are.
Zell, shackled by the purchase of Tribune, can only sit on the sidelines drowning in debt. And he's got the company already in place to run a group of radio stations.
So if you're naming your Thanksgiving bird this year, how about calling it Lew Dickey because only the selfishness, lack of vision, self-absorption of Dickey and his handful of comrades could come up with an idea so ridiculous.
Fortunately, the Obama administration is not likely to hear talk of any of this.
But if they want the advice of the anti-Dickey faction of the radio population, here's what they ought to do.
1. Breakup the de facto monopoly called radio consolidation. More competition is what made the radio industry attractive enough that Wall Street preyed upon its mom and pop owners. Not more consolidation. Not even the consolidation we already have.
2. Limit ownership to two stations per market and 25 markets max. I'm fine with negotiating these numbers as long as they don't get any higher. Back when owners were not allowed to have more than 14 AMs, 14 FMs, it was rare when anyone owned the full compliment. That was a good thing.
3. Help new owners get financing and require a real plan from licensee applicants to serve the public interest. Reward them with three-year licenses and review them before rubber stamping a renewal. Listen to competitors who may want to challenge a station owners fiduciary performance on a market by market, station by station basis.
4. Seek out minorities and women as owners of small groups. There is not enough diversity in ownership right now which may explain why all radio CEOs are reading the same lines together.
5. Require a plan to embrace new technologies before granting a license and do the new owners a favor because owning only radio in an Internet and mobile world is like owning a horse instead of a car today. Podcasting is the new radio. Internet streaming is the closest thing to radio a Millennial will hear.
6. Oh -- and fix the world's economies. Whew!
Bust this baby up. Radio monopoly ruined a lot of lives and killed off a good thing for millions of listeners.
What's not to like about the fundamentals of radio for Lew Dickey, Jr. He was paid approximately $8 million just to sign a new long-term deal as CEO of Cumulus. His hefty annual salary is additional.
With the playing field tilted so much toward the robber barons who run radio, why not turn to the only people who can save radio now.
Its talent.
Help them become the new owners, operators, content creators and digital pioneers.
Now that's a plan that has a future.
It's not going to happen. But that doesn't mean it shouldn't.
Fight for that wishbone!
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