The Cumulus War Against Itself

Cumulus Media -- the 64 cent stock is all Harvard grad Lew Dickey, Jr. has to show for 13 consolidated years of radio -- is at war with itself.

This is my opinion.

When a company has to revert to tactics that inhibit productivity at a crucial time and dissipate the good will of their employees, it can only be due to desperation.

Cumulus is in free fall.

The stock price is in the toilet. The value of the company worth less than ever. The future mortgaged by overspending and now the employees in a sense pistol whipped because they need their jobs and the ruling Dickey family needs cheap labor.

It's not just about Cumulus or the Dickeys for that matter.

Clear Channel does the same thing. You don't earn the name "Evil Empire" by handing out gold watches. Hell, Clear Channel doesn't even give out Timex's when they're kicking employees to the street.

Citadel has flushed so much talent out of its company that it has no choice but to recycle its programming and run infomercials.

There's also a group of what I call bottom feeders who want to be Clear Channel and get their mean off by playing John "Slogan" Hogan (heaven forbid!).

Let me put my Dr. Phil hat on for a second.

These failed CEOs have self-esteem problems.

They must because they don't seem to like the people they hired (unless in Cumulus' case, they previously worked for a uniform company).

They are cruel -- cutting off lives, livings, careers - hurting families. You might counter that they really have no choice but to let these folks go and I would add, "but they do have a choice as to whether they take raises, bonuses, perks and the others things they all do even while they are firing employees".

They have anger issues -- I'm still being Dr. Phil here -- because why would you continue to hurt careers and families when you don't have to -- and when you absolutely don't have another option but to dismiss employees, compassion is missing in action.

My point is that most consolidation CEOs have run their companies from the beginning. Had virtually all the power. Puppet boards of directors. Until now, money flowed in from Wall Street banks to refinance and cover up the suspiciously overvalued prices they paid for their assets.

Clear Channel people are ticked that the founding Mays family took the money and ran -- twice -- while mixing the Kool-Aid employees were asked to drink.

Citadel employees have complained to me (and I've documented it in this space) that their leader Farid "Fagreed" Suleman was getting rich while the company was tanking and that his minion, Judy Ellis, was more than tough in her dealings with fellow humans.

Saga CEO Ed Christian -- although brilliant for avoiding running up company debt -- is criticized by some of his employees for making them take a 5% pay cut while he takes a pay raise.

What the hell is going on here?

But the Dickeys are presently number one with a bullet (to borrow a Billboard term) when it comes to waging war against itself.

You already know they "spy" on their employees with cameras installed at their radio stations. The sales meetings conducted via Skype appear to discourage the attendees more than inspire them to higher sales.

The Dickeys are being aggressive in trying to put down the employee unrest that threatens the company’s financial production at a critical time.

Here are their latest tactics:

1. Email surveillance
One employee reports “on the just completed Market Manager weekly beating conference call, John Dickey of the Dickey Ding Dong management team informed us all that Richard Denning the corporate counsel was creating a disclaimer for the bottom of all corporate emails, that prohibits them from being forwarded and or copied.” By the way, to show you how well watching employee email has worked, you’ll note all the corroboration from Cumulus workers in this piece are presumably from personal email accounts. Guess you can't keep people behind the Berlin Wall try as you may.

2. Sales meetings that employees fear

Cumulus employees that have contacted me definitely don’t appreciate the tenor and tone of the weekly half-hour spy sales meetings. Some say these meetings are enough to make you cry. Meanwhile, it never occurred to the Harvard-trained Lew Dickey that the best sales meeting may be no sales meeting at all. When I worked for the Dale Carnegie organization, they taught a meeting concept where all participants remained standing and the “business” was conducted more swiftly with less time wasted. Hey, it’s an idea.

3. Gaining needless unfair advantage with non-competes

It’s bad enough that Cumulus has every advantage over its employees -- a bad economy, a declining radio industry with fewer jobs available at other companies, etc. But it continues to make employees sign non-competes sometime up to one year making leaving even harder if they could find a job in the media business. It’s arguable as to whether these non-competes would even stand up in court but who has the money for court? Everything is stacked in the favor of Cumulus.

4. Romper room sales tactics
Here’s how a Cumulus salesperson describes the situation: “No one should be allowed to speak to their employees the way they do. It's never enough ... and the big wheels in Atlanta can't figure out why we are not closing 4 new accounts a month. Lets see, make 80 calls, 40 contacts, 20 appointments and close 4. That's the formula. With 12-18 sales people tripping over themselves calling the same people who are screaming at us to take them off our "list" ... try to find a number not called … and, oh, make sure to find elephant accounts ... is this a safari? Oh, and how (a) … veteran who is subjected to managers listening to their calls and evaluating them? If I don't know how to prospect by now, I should not be doing this.. I was told I said too many ummms, and not following the script to the letter .. lets see, for years a million dollar plus a year in sales with great client relationships, and doing all the things it takes to be a good account exec but suddenly I need to be re-trained?”

5. Commission cuts
One Repeater Radio Reporter checked in to say, “I have a friend who sells advertising for Cumulus, and she is severely suffering financially since the most recent pay cut where 'corporate' took 4 clients off her list. (This equals about $1200 a month off her commission.) Also, a couple of months ago, 'corporate' fired 7 people in the Savannah office. This is a travesty, and I truly feel that this company is EVIL!” When the seven people in the Savannah office were fired, it was actually 7% of the entire Cumulus workforce. Furthermore, they cut back all part time employees to minimum wage and cut out their benefits. Lew Dickey then awarded himself the half mil... and his BROTHER was given a bonus of 150,000 dollars!”

This is war.

Not with new media.

Not with Google.

Not with competitors.

Civil war within the borders of Cumulus.

The generals have dug in for the long haul – if from now until the next broken bank loan covenant is what you call the long haul.

The loyal soldiers have nowhere to turn but the unemployment line.

Every once in a while someone will say why do we care so much about the way consolidators run their companies?

Radio CEOs have had all the power they could ask for and now look where it got them.

There are lots of ways to look at the results of radio consolidation.

Penny stocks.

Loss of local radio.

Mass exodus of talented radio people.

Inability to keep up with generational preferences for new media.

Handful of CEOs dominating the markets like dictators.

Mortgaging the future of radio to investment banks.

But the sorriest, saddest and most representative indicator of just how far radio CEOs have fallen is to see this and other examples of how they routinely get away with abusing their employees and creating toxic workplaces.

Radio people know the industry's problems and know how to get started solving them.

It's employers like Cumulus who are standing in the way of their own survival.

Wall Street couldn't save a consolidator.

But radio people can't save radio CEOs from themselves.

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