Clear Channel Planning Tighter Corporate Control

Well, Cumulus CEO Lew Dickey may be accomplishing his main mission in life after all – to be noticed by Clear Channel.

The Harvard grad is stubbornly and clumsily reinventing the wheel at Cumulus and now it appears Clear Channel’s John Hogan is the one who is getting envious.

According to sources close to Clear Channel, the company is installing remote monitoring devices on “most every technical aspect of many of their stations”.

This is not just in small markets but the top 25 as well.

In one Clear Channel cluster, they “were being required to install all kinds of remote metering devices on their transmission equipment, right down to a monitor of the 3 phase power supplied to their transmitters”.

With the installation of satellite dishes and remote monitoring and control equipment at the transmitter sites, reporting directly back to Clear Channel headquarters -- and not locally – my description of Clear Channel as the mother of all "Repeater Radio” is coming closer to reality.

Engineers will become an even more endangered species at The Evil Empire – at least full-timers.

Clear Channel also already has several “radio stations on wheels” – mobile studios that supposedly would be used in the event of a catastrophic event except now that catastrophic event may be bankruptcy.

Already, Cumulus has clusters that look like an abandoned old west town at high noon – swinging doors of radio studios with no one in them. One live person in the building at times during the broadcast day.

Cumulus has made no secret of the fact that it wants to run everything from the mothership in Atlanta – sales, programming, financial and, of course, management.

Dickey has finally become the Big Dog.

Clear Channel’s John Slogan Hogan is reduced to copying Dickey’s top down corporate sound.

No Cumulus type spy-in-the-sky sales meetings yet, but more and more things that used to be decided by local management are now being sent directly to corporate headquarters for decisions and resolution.

So here’s what to watch, as the big three consolidators prepare for a lean, mean (and I mean mean) radio machine for 2010.


You know about their inability to pay lenders the $150 million that is due January 15. I’m thinking a pre-packaged bankruptcy is in the works with debt being traded for equity and the bankers become the owners and operators.

What you may not know is that Citadel CEO Farid “Fagreed” Suleman starting next week is allowing infomercials in afternoon drive at KABC, Los Angeles.

That’s right, blatant sales pitches called programming on the first all-talk station in the country, a former proud ABC icon.

We hear the first infomercials will be about Fagreed’s favorite topic – your investment portfolio. You can bet that in addition to driving a lot of KABC afternoon listeners away, they will refer the ones who actually stay to listen to the trashing of KABC to the huckster's website to close the sale.

This is just laziness and cheapness.

This is Los Angeles, for God’s sake, there is talent everywhere most importantly on Citadel’s own station. The only reason anyone would be foolish enough to accept infomercials in PM drive on KABC is because it's easy money and less cost.

So, KABC risks a lot by pimping out afternoon drive in the country's second largest market.

Suleman has allowed the same thing to happen in the past to all-nights and weekends at other former ABC stations including flagship WABC in New York.

So Citadel will likely make whatever changes it can that result in savings during the year ahead. This could include more on-air efficiencies, cutbacks and assigning additional duties (again) to surviving employees.


The company continues to pare down its staff the old fashioned way – one market at a time – to avoid unfavorable publicity.

You may also see a brain drain at Cumulus as workers are not just getting fired – they are actually quitting (with or without new employment).

The stress level is likely to be high as the corporate mandate from Lew Dickey is to do radio his way – that is, from Atlanta. Dickey is obsessed with refocusing on health care and insurance prospects and feels radio keeps going after the same old accounts. However, never having sold an ad, Dickey is underestimating the importance of existing traditional ad categories and his sales force has been so diminished that Cumulus is vulnerable in this area.

Dickey reported 18% declines in revenue for the past quarter – about in line with the performance of other groups – but Cumulus is at risk next year, in my opinion, of neglecting categories that might traditionally support his stations.

Clear Channel

To watch the future of banker radio, simply observe Clear Channel.

Investment bank owners Lee & Bain have transformed Clear Channel into a number crunching business similar to any other one in their portfolio.

As mentioned earlier, expect Clear Channel to move to full Repeater Radio in 2010 not just in programming but operations.

All three major consolidators – the ones that set the trends for the rest of radio station owners – will run remote radio, remote selling with fewer account execs and management removed from the local city of license.

That, in fact, is the industry trend to expect next year in radio.

If 2009 was the year of the layoff.

2010 will be the year of the payoff.

Relentless cost-cutting now focused on efficiencies of operation – national management, repeater radio formats and mark my words – profits for the owners.

And sometime in the year ahead those majority owners will be – investment banks.

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