Titanic Radio

I don't think I would have liked being on the ill-fated Titanic with Cumulus CEO Lew Dickey.

Somehow I feel that he would have beat me out of a seat in a lifeboat.

I kind of feel that way because Dickey is fighting for his life at Cumulus and he's throwing everyone overboard but himself.

Dickey is the captain of the ship -- no doubt -- but I don't think even the captain of the Titanic would have had to be paid $8 million as a bonus to remain at the helm that he had no intention of abandoning anyway.

Let's not pick on only Lew.

Human nature is such that most people take care of what's best for them before considering others. I get it. Understand it.

There are other reasons I wouldn't want to be on the Titanic with Lew. We are from different social classes -- that was important in the days of big ocean liners crossing the Atlantic. I'm born of first generation Italian Americans. The Dickeys from money -- pedigreed college education.

I went to Temple. He went to Harvard. I wouldn't have had a chance of getting off that sinking ship.

There is no Kate Winslett character in my Titanic analogy -- but if there were, Lew Dickey might offer her a mandatory lifeboat furlough -- five days in the sea without a life vest.

Somehow in all of this -- as in real life radio -- everyone else suffers and the Dickeys just keep bumbling (I mean, rolling) along.

This in spite of the fact that in the just released 10-Q that Cumulus was required to file, they said they are “re-engineering” sales techniques through “enhanced training of its sales force.”

Say what?

enhanced sales training?

Someone's nose is gonna grow.

Cumulus reiterated its mandatory one-week employee furlough program for the second quarter that is going to save $1 million. It's going to hurt Cumulus employees in the middle of this awful recession -- little people in the cheap cabins below sea level -- if you get my drift.

Dickey could have given back $1 million of his signing bonus, cut his own salary or taken just a dollar a year until he rights the ship -- so to speak -- before resuming his mad dash for cash. But the thought apparently never occurred to this patrician.

Cumulus Media's annualized free cash flow during the 1st quarter was just $23,400,000. At that rate, it would take 29 years for the company to repay its long-term debt, without making a single acquisition or outside investment.

Cumulus, according to some statistical models, has an 80% probability it will face bankruptcy in the next 12 months.

Citadel is not far behind.

And, the big kahuna (forgive me, Ron Jacobs) Clear Channel is on the way overboard, too.

Mr. Honesty, Mark Mays put on his publishing hat recently and said financial trouble rumors are just speculation.

I don't know about you but when a Mays family relative says it's Tuesday I check the calendar.

So what do you know -- The New York Post reported Friday that "Radio and billboard giant Clear Channel Communications has begun reaching out to lenders about restructuring the company's massive debt load just nine months after the company was acquired in a $27 billion leveraged buyout, sources told The Post".

They'll probably sell more equity in the company but will avoid bankruptcy.

Where my analogy must depart from the script is that the captain of the Titanic knew he was in perilous waters but didn't have a lot of options.

Radio's Titanic has had warnings for years and the response was always the same -- throw careers, listeners, advertisers, local radio and competitive advantages overboard. There were plenty of other options.

The radio industry is littered with the residue of bad decisions made by consolidator CEOs at the helm.

Here's a sampling in just the past few weeks:

1. In Greater Cleveland, where in some parts of the market three separate Clear Channel KISS branded stations can be heard – all were playing the same music and using the same voice-tracking.

2. The music on some Clear Channel stations in multiple formats is now being programmed from a central source, according to BDS. A total of 17 stations were affected causing them to be dropped from R&R's chart panels. Why? They're not local, independent music playlists. They are syndicated or identical to each other throughout most of the day in spite of what Clear Channel President John Slogan Hogan would have you think.

3. Voice tracking continues to flirt with disaster. I've previously shared stories of tornado warnings being ignored in favor of voice tracked out of market fair weather forecasts. It happened again -- this time in Memphis a few days ago -- no radio coverage while the city was under the threat of life threatening tornadoes. Now this from one of my Repeater Radio Reporters (readers): "We were experiencing some severe weather in Raleigh, and everyone in the family was scrambling to turn on the TV to find out what was happening. When the event was over, I said to them "I thought it was interesting that you all scrambled to get to the TV, but not one of you said to turn on the radio to find out what was happening." My daughter ... said, "Oh yeah... The radio. I forgot we had one of those." Maybe John Slogan Hogan is right -- radio doesn't need to cover local weather emergencies because no one is listening anyway.

4. If you think a few PSAs can replace local involvement, then get this: A Yahoo Answers site within the past two weeks received a post that asked "Why didn't Connie and Fish from z104 do the American Family Children's Hospital radiothon this year?" Well, thanks for asking. Apparently Connie and Fish are no longer in Madison. They moved to Milwaukee and just pretend they're still in Madison. So John and Tammy from Star Country do the radiothon now. So much for valuing local fans.

5. News You Can Abuse is a better name for what Clear Channel calls local news imported from a few money saving national centers. The Clear Channel news hubs are already up and running according to another one of my Repeater Reporters: "They just fired the Fayetteville cluster newsman of 20 years. The news is now coming from Houston -- even local news and the problem with that is that they pronounce many of the local towns names incorrectly". It makes the station sound stupid and not credible. Also the Fayetteville cluster chief engineer is now responsible for the Fort Smith AR cluster after they canned their chief -- at no extra pay, of course.

6. Clear Channel just beat Arbitron out of some money by canceling audience ratings in some small markets and bitching about the cost of the People Meter in large markets. Cumulus is also nickel and diming Arbitron. This sends a wonderful signal to the advertising community that uses radio ratings to channel -- you know, money -- into their stations in the form of commercial advertising. If there were ever a suicidal move, it would be to walk away from the very yardstick buyers use to support radio.

7. The Almighty Google and its Almighty radio counterpart, Clear Channel, took it in the shorts last week when Google bailed out on the idea that radio advertising could be sold like search ads on Google. We knew better, didn't we? Why didn't they? This is indicative of what is wrong with the radio business where they want to make it less human and more automated. Saves money. Just like voice tracking. Except -- it doesn't work. Everyone made a big deal out of Google AdNonsense (as I call it). The trade press took advertising and they generally got a free pass for selling unwanted inventory. Now -- amazingly enough -- actions like these help contribute to making all of radio unwanted inventory.

This is wrong.

It didn't have to be this way.

Greed won the day and now we're all losing our way.

You can't owe more debt on stations you can't afford unless our economy is in boom times -- which it is obviously not.

You can't consolidate radio -- radio obviously works better as groups of 14 AMs, 14 FMs and 14 TV stations. I mean, the evidence is overwhelming. After 12 years of consolidation, no consolidator can operate what they bought.

You can't crap all over your employees and then fire them when you are not able to make your debt payments. It breeds a compromised product that audiences will not appreciate. It's not fair.

You can't live in 2009 and spend no time and no money on innovation. What does that say about the future of an industry that doesn't come up with fresh new ideas?

Hell, you even screwed up your coveted HD radio sham to create more channels of programming people don't want.

Radio is a sinking ship -- but it's on them not us.

The heroes are the loyal and talented employees who continue to bail water out of this sinking ship to keep it afloat while their bosses make their jobs more difficult.

So coming soon, I'll post a piece I'm working on now about innovative opportunities for radio people -- past and present -- that you can get a leg up on the future.

Don't worry -- no radio group will beat you to the punch.

They couldn't fund the digital future with a compass.

Their ship has sailed.

And now it's sinking

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