Whether that happens or not is hard to know as Citadel will be the first of the major consolidators to bite the big one come January if it cannot come up with a whopping $150 million debt payment.
Few on Wall Street think they will find the money -- of course, they could always sell some stations, but who could pay cash in this climate?
That brings me to Bonneville -- the best run radio group in the country and loaded with cash. Detractors like to say that Bonneville is propped up by the Mormon Church.
Bonneville is operating in the black and has always been a fiscally responsible operator. And even so, I'd sooner go to the Mormon Church for money rather than Wall Street. But I digress.
This Bonneville-Citadel rumor got me to wondering how the best radio group and the worst by your vote would look if best bought worst. For your voting on Best & Worst Radio Group, click here -- scroll down the right-hand column.
I don't know about you but I am getting kind of tired of people witnessing the destruction of this fine industry of ours and looking the other way afraid to say anything.
I saw it at the NAB when most of the 2,500 in attendance (700 full fare) sat rather quietly while some of the people who have ruined radio spoke.
These speakers didn't earn that right and while they were treated with respect, it was business as usual for some kissing their butts.
Bonneville has earned the right.
So here's how I think a Bonneville/Cumulus merger would look (and keep in mind, Bonneville doesn't want or need any Cumulus stations):
Oh, and one more thing.
Can you imagine working at, say, Citadel Detroit and waking up one morning and seeing the trades reporting that your station(s) were sold to Bonneville -- talk about dying and going to heaven! The chances of a merger with Cumulus are "Slim" to none with "Slim" being fired by Lew Dickey so he can hire a less experienced, cheaper Cintas employee instead.
I'll give you real life stupid consolidation tricks sent to me by folks just like you and then I'll give you my take on how Bonneville would handle the situation.
Ready?
1. No backup generator to keep an 8-station cluster on-the-air during a power failure.
All eight Macon, GA Cumulus stations went silent for an hour and a half a few weeks ago after electrical power problems hit their office building at 544 Mulberry Street. The GM estimated 100-125,000 listeners were sent elsewhere. Can't say they weren't warned. Similar electrical problems occurred earlier in the week with two stations going off the air briefly. No backup electrical source.
Bet you think I'm going to say Bonneville would have had reserve power. Well, you would be wrong. Bonneville would have had an engineer gainfully employed and on-call and the engineer would be empowered to power the stations during an electrical failure. After all, Bonneville employs people who do their jobs.
2. Jeff Wilks amends some dj contracts to include four free appearances -- a month!
You can't make this stuff up. A Repeater Reporter wrote:
"This week he sent revised contracts to all jocks that amended their contracts to include them making 4 FREE appearances each month on behalf of the stations they're employed by. Further, they would agree to drive the station vans to remotes, set up the remotes themselves as he was eliminating the position of Promotions Director. His employees have HUNDREDS of these types of stories...I just didn't want the consolidators to get all the credit for killing the heart and soul of what was the greatest business on earth."
Bonneville, if it had to ask for such economies that are sometimes called for during tough times, would make sure to be fair. That's why when CEO Bruce Reese called for company-wide paycuts, he made sure everyone sacrificed but made certain not to include anybody making under $50,000 to take a pay cut.
And he doesn't keep coming back and asking for more. His people aren't nervous about losing their jobs and they are happy to help in return for fair treatment.
3. Citadel saves money by taking the coffeemaker out of a station.
Previously when I heard Citadel removed the water machine from a station I chose to not believe it. Now, I'm not so sure.
So Todd and Erin, the morning team at a Citadel station in Salt Lake decided to bring their own coffeemaker in so other employees can use it and I hear it is working overtime -- along with the staff. Todd then tortured station management for weeks by starting a break live on-the-air, then drowning out our voices with the coffee bean grinder.
Another thing I like about Bruce Reese is that he is not going to be CEO of minutia. Coffee machines and water are local line items. That's why you have local managers. But I'll bet pulling water machines or coffeemakers out of stations at a time of great sacrifice would not be the route Bonneville and a lot of other good groups would take.
4. Voluntary offers to take pay cuts -- rejected and punished!
You won't believe this one -- from a person it actually happened to:
"At Entercom I offered to take a pay cut - name the percentage - because I was very much aware that sales were down and that my account execs had taken a sizable hit in the past year or two. 'We'll talk about it when your contract is up, thank you', was their response. Then three weeks before the contract expired so did my job. 'They want to make a change', was the new retort. NO, they wanted to downsize at any cost except to them. Even for a highly rated station, award winning manager who spent no less than that 60 hours in the office and a few more at home every week. You're absolutely correct Jerry - they just can't see that far."
This would not happen at Journal, Emmis, Bonneville or Cox or a few of the other radio companies that still operate with pride.
When one of your employees voluntarily comes to you and offers to take a pay cut without being asked, you deserve a pat on the back because you hired right. Don't fire that person.
5. Turning off some salespeople's computers as a punishment.
The GM of a Cumulus station came up with a brilliant idea a few months back.
Let me let one of their unshackled employees tell it:
"The GM felt that the sales team wasn't 'out in the field' during the exact hours dictated by our CSOS schedules, he has decided to have our desk top computers shut down from roughly 10am-3pm every day - this is done by our engineer. This action 'forces' us to be in the field seeing customers face to face. In reality, it cripples us, wastes our time, wastes our clients time, and does nothing but erode morale and causes huge delays in actually putting money on the books.
Not every client wants a face to face meeting, nor do they have the time. They want their information quickly and in a timely fashion. In addition, not all sales people are created equal apparently, as some select sales people have full access to their computers, while others have extremely limited access, There is no rhyme nor reason to this dolling out of 'privileges'.
We were told that if we were at budget and pacing where we needed to be, that we would get the computers turned back on, yet this has yet to happen, even though I personally have been over budget and over-pacing for the last 4 months....go figure."
The best radio group by your vote would never turn an employees computer off or for that matter tell them what to read on it. And to the credit of other companies -- to be fair, including some consolidators, they wouldn't mess with a person's computer rights, either.
Shortsighted to say the least because their disgruntled employees have another little computer in their hands (a smart phone) from which to tell the world that they are being treated like children -- as this person just did.
6. Us Against Them Employee Strategy
In his Thursday update to staff, Cumulus CEO Dickey Do quoted an email from Wichita Falls Market Manager Lindy Parr (earlier identified here incorrectly as Linda) that not only acknowledges the acrimony running rampant at Cumulus but his own love of the Dickey empire anyway.
As one of their offended employees quoted Parr:
"I love it when one of my people talk about how unfair that (they are) meaning Cumulus management. I waste no time letting them now that I am part of them. I am the Cumulus representative in Wichita Falls, TX and it’s up to me to represent fairness and understanding thru the CHANGES and Initiatives that are passed down by our company to our people. It’s up to me to represent to upper management and the needs and opportunities in my market, to give them a true snap shot at any time of what is going on in my market. Bottom line, I have always had no problem seeing things through positive eyes".
I'm sure Cumulus workers who aren't in such favor with Dickey Do are happy for him but talk like this (republished by the boss in his "pep talk") makes the others look like slackers with bad attitudes. That he cannot acknowledge the extreme work conditions others know too well creates an "Us vs. Them" environment.
And they are the ones management is calling negative.
Never would Bruce Reese put good and competent employees in a position to divide and conquer. It may be true the Dickeys are under siege lately, but they've done it to themselves.
However, things are beginning to change.
I'm hearing some employees are actually firing Dickey Do -- you know the old adage, "you can't fire me, I quit".
Lawsuits may follow, I'm told.
This is not about any one poor operator, it's about all of them.
We all got into this business because we were good at some things. Some of us were born into the business and never got good at the basics -- in fact, never learned how to do the things that CEOs are asking their people to do.
The Mays family, the Dickey family come to mind.
Radio has one best last chance to stave off the deleterious effects of consolation by embracing the future.
Radio has the best people -- and some of the biggest radio groups are firing more of them every day (in a future piece I'll share with you how they've changed their firing tactics compared to a year ago to avoid headlines).
What they don't teach you at Harvard Business School is that you have to earn the right before you can manage.
It's not about case studies. Yes, it's about brains but it's also about how to manage people.
I hear a lot of people saying they can't wait until some of the big operators go bankrupt so they can put together investors and buy a few stations at reasonable prices.
Let's hope if that happens that the next group of owners will not run radio in the same vacuum -- that is, in their own fiefdoms, reinventing local to be national, ignoring the Internet, disparaging mobile and social networking and dismissing the loss of 80 million Gen Y'ers.
One more thing.
Look at the best radio groups and you'll see they are the ones that treat their people the best. Not perfect, but better than the worst groups.
You don't have to go to Harvard to connect the lines between the two.
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