Monkey See, Cumulus Do

Cumulus CEO Lew Dickey is not disappointing anyone who predicted he would use Clear Channel's recent assassination of 1,850 careers as cover to do the same to his employees.

Now, his dying company -- $1.87 a share (down 13 cents just yesterday alone) -- is following the Lee & Bain playbook for Clear Channel and trashing their assets.

Dickey initiated mass firings Friday when he wasted several dozen great and loyal employees.

According to Tom Taylor "the most likely to be riffed were midday personalities, nighttime jocks and morning co-hosts. But also office managers, some GSMs and AEs. There even are reports out of markets like Toledo and Fayetteville, NC that management is ordering part-timers to work for minimum wage. Several news staffs were vaporized, leading the Columbia (MO) Daily Tribune to ask whether talk WFRU (1400) can still call itself “the station Columbia depends on.”

My Repeater Reporters (named for "Repeater Radio") tell me it's even uglier.

Some market managers were let go over the telephone.

Classy. Real classy.

Cumulus survivors feel more cuts are coming and probably soon.

One Repeater Reporter said one Cumulus executive had a confidential telephone call with chief bean counter Jon Pinch and was advised to not have anyone else in the office -- and that includes the business manager.

Some Cumulus markets are running a whopping 40% behind last year which helps explain the suicidal mood at the mothership.

Agency business is vanishing -- Cumulus-supervised selling is the order of the day. Talk about nationalization of local radio. Some managers refer to Cumulus corporate as "big brother is listening".

According to a Cumulus Repeater Reporter Lew Dickey, in an unusual move, demanded market managers project revenue through March indicating the continued fear of a severe falling off of revenue.

What's unimaginable is that at least one Cumulus employee says Dickey is claiming to be working on taking over some other companies that are in deep trouble.

Perhaps management agreements with their lenders or the bankruptcy courts -- a scary thought.

That's the rationale Dickey is apparently using to spin the recent blow out of personnel.

But it wouldn't be surprising to see Cumulus itself in default or very close to some loan covenants.

So far Dickey has not volunteered to give up his near $8 million signing bonus for having his "arm twisted" to sign a new employment contract. Things are not that bad.

But he has become Tricky Dickey -- now you see his $8 million bonus, now you don't. Now you see your radio job, now you don't.

But wait. It gets worse.

It has become known that during a previous round of firings, Cumulus offered to keep some part-timers -- according to a Toledo morning show host -- for minimum wage.

Perhaps these things can help you get a better handle on what's so wrong in radio.

The consolidators are taking compensation for themselves like there is no recession -- no advertising downturn, business as usual. But for everyone else, it's Armageddon -- the battle between good and evil. Of course, they are the good. Everyone and everything else is evil.

Dickey has no conscience as he keeps his "signing" bonus -- a trumped up way to bury compensation that was totally unnecessary. Like -- where is Dickey going? Nowhere -- fast.

Again and again the consolidators who blew their chance to build radio into a powerhouse convergence of terrestrial and digital media, know no shame as they fire people, cut resources and put their companies in jeopardy -- while continuing to take their own inflated compensation.

Not much different from corporate America -- or Wall Street.

In fact, isn't that one of the reasons the U.S. is in this protracted recession/depression?

Not to be undone, Fagreed Suleman continues to hide behind Clear Channel's purse strings by firing the old fashioned way -- slow and painful. His latest torture was meted out under the guise of corporate cutbacks -- Mitch Dolan who had managed Citadel's 22 major market stations in nine markets and John Davison who was the LA market manager. (Bob Moore was quickly named to replace him).

For Fagreed -- slow and steady is still a disgrace.

You always ask me to spell out the alternatives when we see such gross mismanagement on the part of consolidators, so let me talk straight.

1. If revenues are down and cutbacks are necessary, let the station manager make the cuts. Tell her or him the budget number they have to work with and let them decide if they can do it.

2. Operating from headquarters never worked and won't work -- dismantle headquarters and give every manager his or her worst case scenario. If they sign on for it, then leave them alone. They -- and they alone -- know who they must keep. They -- and they alone -- should have the power to renegotiate contracts for talented employees willing to work for less. They can balance their own budgets without the help of corporate.

3. CEOs take a significant cut in salary. Only the most arrogant can take bonuses and benefits with uninterrupted compensation for screwing up. Send a message. If markets must take a 40% cut in budget, the CEO takes a 40% cut in pay. And, no funny stuff like earning it back in a year or so like the Mays brothers are doing or giving them worthless stock that might be worth something more later as "make-up" compensation.

4. Wake up to the fact that without a digital future there will be no radio industry. Require each station to come up with new media ideas that will bring in revenue. If radio came back 100% tomorrow -- and it won't -- it is 15 years behind technology and even further behind changing sociology. Ignore this at your own peril.

Of course, readers of this space already know that while throwing a grenade into your radio holdings is not a comeback plan, these consolidators are not about turning their properties around.

It's about keeping costs down while they hope for a market in which they can prey upon operators who will buy their stations and allow them to exit.

After all, that was the original blueprint for radio consolidation. Oh, you thought it was to operate stations?

Radio CEOs are not managing themselves out of a crisis.

They are managing themselves into a crisis because they've killed off the industry in which they've invested billions of dollars. As I wrote the other day, they have no plan B.

No leader.

You certainly can't call Clear Channel, Bain, Lee or anyone over there a turnaround expert.

No innovator.

It's been at least over 20 years since radio truly came up with an industry-enhancing idea.

No exit strategy.

Now they're screwed and it's about how much they can loot the groups for before they meet in bankruptcy court.

There is a sign on a bridge that spans the Delaware River in Trenton, New Jersey that says --Trenton Makes -- The World Takes. It's known to locals as the "Trenton Makes" bridge. But it also could help illustrate the sorry state of radio consolidation.

What Lee & Bain's Clear Channel makes, the consolidators take.

Good or bad.

Right or wrong.

This reminds me of the Japanese tale of Three Wise Monkeys.

Together they embody the proverbial principle to "see no evil, hear no evil, speak no evil". The three monkeys are Mizaru, covering his eyes, who sees no evil; Kikazaru, covering his ears, who hears no evil; and Iwazaru, covering his mouth, who speaks no evil.

Today "See no evil, hear no evil, speak no evil" is commonly used to describe someone who doesn't want to be involved in a situation, or someone willfully turning a blind eye to the immorality of an act in which they are involved.

Radio's three monkeys are John Slogan Hogan, Lew "Tricky" Dickey and Fagreed Suleman with Clear Channel being the biggest monkey of all. What they do, the others mimic. (And they don't even get a banana to boot!).

They cover their eyes lest they have to see how badly they are hurting their stations and loyal employees by gutting company assets.

They cover their ears so they don't have to listen to associates and employees with differing ideas on how to turn their stations around.

And they cover their mouths so as to signify that all employees are to quietly go to their career deaths.

You've probably heard about the Three Wise Monkeys but perhaps you didn't know that there was a fourth -- that is sometimes depicted with the three others symbolizing the principle of "do no evil".

That monkey -- the one symbolizing "do no evil" -- is on vacation from the radio industry right now which is why today's dilemma can be summed up by one phrase.

"Monkey see, Cumulus (and the others) do".

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