By Jerry Del Colliano(Shown between "Doc" Fuller, left and Barry O'Brien at the Philly NAB Radio Show)
The NAB Radio Show now in progress in Philadelphia is like an old Italian wake -- it lasts three days and is very depressing.
Not that the NAB isn't trying to put on a good show or that those in attendance wouldn't like to hear better news, but this convention is grim this year.
The linchpin for the entire gathering was the Dickstein Shapiro breakfast bright and early in the morning on day one.
The usual suspects were on the panel and the usual listeners were hearing that in essence no one knows what is going to happen.
Radio will definitely rebound, but will it rebound enough -- said one?
New media is definitely taking media dollars from radio but will it continue -- another expert said.
But the real gall came when these bankers were outlining for the poor beleaguered broadcasters in the audience, three scenarios for the future.
One, the banks buy the debt of the consolidators which is quite substantial and they -- the banks -- walk away with ownership control of troubled radio groups. One panelist said that this is not necessarily the worst option because the groups would be free to operate their cash flow business in a favorable climate of little to no debt.
Not necessarily the worst option for whom?
In this case, the banks helped radio finance consolidation, the operators fumbled the ball and it's first down all over again for investment banks who get control of the game. They can run it. Sell off the pieces in a better climate and even keep the people who ruined these groups in place.
After all, it's better to stay close to the enemies you know than the friends who actually know how to run stations -- a sick philosophy that seems prevalent in the money community.
Isn't Michael Douglas playing Gordon Gekko filming the Wall Street 2 just 90 miles to the north in New York City?
The second option according to the experts I heard was refinance the debt -- as Citadel is trying to do -- but that this was not deemed the best option.
Not the best option for whom?
The banks or the owners?
Keep in mind that the banks always make their fees even when they screw up.
The last option was "kick the can" along as best as you can which probably won't work -- according to one Dickstein Shapiro expert.
See what I mean?
An Italian wake.
Where's the good news?
When is the mourning going to be over?
One career radio exec said to me that he was coming away from this NAB with the distinct feeling that investment banks are on "vulture patrol" -- his words -- ready to bend the industry over one more time and -- well, you know -- have its way by supplying one more round of financing in order to wrestle the stations away from bumbling consolidators.
And wouldn't that be a fitting end to consolidation -- at least for the investment banks?
But for the radio industry -- it is the worst possible alternative.
The sooner radio stations are returned to owners who want to buy them, operate them locally and take them into the digital future, the mourning can end -- the body of consolidation buried -- and resurrection begins.
At the Dickstein day starter I was standing next to one of my readers, Ben Downs, General Manager of Bryan Broadcasting that runs a handful of local stations and runs them damn well from what I hear.
All local.
And no voice tracking.
Digital products that are actually generating money this early into the digital revolution.
Radio needs more owners who are operators. Fewer Tricky Dickeys, Fagreed Sulemans and Slogan Hogans.
The investment banking business is on vulture patrol but it could be said by some small market broadcasters that they are actually on sucker patrol because in the end consolidators have no choice but to submit to the banks that hold the answer to their debt problems.
It's a detour -- a time delay -- that hurts our medium as new media emerges.
At the same convention where Arbitron reveals a study that says 90% of America listens to radio, you wonder why everyone is so glum?
But that's why Kool-Aid comes in many flavors and radio consolidators are suddenly very thirsty again.
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