New Cumulus Commission Cuts

The Dickey Dynasty is at it again – snip, snip, cut, cut – all in an effort to save their bacon from bankruptcy.

This time, CEO Lew Dickey has a new trick up his sleeve and it’s one he’s apparently convinced will work well. Nevermind that Dickey has no real radio sales credentials – he’s gone and done it anyway.

Cumulus is cutting sales commissions and they are doing it in the same mean-spirited way that Dickey Do has been running the once proud and promising Cumulus assets.

Here’s the deal according to some Cumulus troops who the company apparently failed to bind and gag enough to keep them quiet.

1. Cumulus is apparently holding back commissions in some markets – whether this is legal or not could be tested if and when an aggrieved account executive quits and hires an attorney.

2. Commission changes are now reportedly being held back in many if not all markets. Some real fine market managers fought the good fight while others caved to save their butts.

3. Local direct commissions are now 20% -- down from 25%.

4. Existing accounts are now 16% -- down from 20%.

5. Agency remains at 9% but agency business is being funneled to regional sales managers. It appears that the fortunate account execs who have been able to keep their clients is in situations which are considered make or break. In other words, if Cumulus fears the client will scream bloody murder. We have seen some evidence of that where Dickey Do & the Don’ts have had to alter their grand plan.

6. Some AE’s now selling in the 3rd quarter are at risk of not making their numbers – after all the content has never been more watered down and we do have a recessionary economy. Nonetheless they are feeling the pressure of Atlanta – an obvious offshoot of cutting commissions – and fear for their livelihood. Even though an increasing number of Cumulus employees have told the company to shove their jobs, many have families and have little alternative but to put up with policies made on the moon by bosses who have never been astronauts – so to speak.

Cumulus is not the only radio company fooling around with commissions.

Clear Channel is playing tricks with its sales force bonus structure – but that’s for another day. The point – when radio needs the best effort from their sales people, misguided consolidators take away their career-long incentives and replace them with a higher hurdle to make money for themselves and their families.

But it gets worse.

One brave Cumulus soul tells me what they witnessed (I used “they” to disguise gender because Dickey Do is on a holy jihad against anyone talking about their policies):

“All A/E's were asked what they Honestly expected to bill in September. No Fluff, just straight numbers. After taking the tally, our cluster was short by about (redacted to protect the Cumulus employee) of our must hit for the quarter, per Atlanta. The M.M. and G.S.M took the (sum), divided it out among (the) A/E's and said in addition to what you told us you will bill, you have to ALSO bill this extra… If you don't hit this total number, we will hold back commissions on one billing account in September. They then handed out the added amount and the customer in jeopardy to each A/E”.

For the account execs who recently had their agency business ripped from their hands there are some glum faces at Cumulus.

From the Dickey Do point of view, Cumulus is trying to save money.

No. Not trying.

Have to save money.

Cumulus is dodging their loan covenant restrictions like the other major consolidators beginning with the letter “C”. They overpaid, under strategized, mismanaged and now they apparently are whipping the race off to their imposed finish line even if it kills the horse.

I’ve always said that it is hard to keep the human spirit down. You’ve heard me say they couldn’t keep people behind the Berlin Wall and eventually people who are oppressed rise up.

One Cumulus Dickey rebel wrote recently:

“I will say that you are a (sic) underground must read for all of us. We don’t agree with everything lock step, but your (sic) a straight shooter. It's un-spoken policy that if the Market Manager see's your stuff up our laptop's, it will take our ass a week to catch up with us we will be fired so fast”.

Dickey Do and the Don’ts are taking it personally.

Their employees are frustrated and have nowhere to turn. Few report on business instead of the bad business practices that are being utilized by Cumulus, Clear Channel and Citadel.

When sales people have to spend almost two selling days (in hours) dialing for dollars in so called Cumulus “CSOS” telemarketing calls instead of good old fashioned meet and greet sales calls, you can see that this is headed nowhere good.

Cumulus employees should stay safe and do what they have been doing all along – giving 100% effort to the company. But they don’t have to like it.

And because a few brave folks have spoken up, we can all learn how not to run a radio sales operation.

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