Clear Channel’s Frightening Plans for 2010

I want to show you the future of radio – Clear Channel style -- for the year ahead.

The pieces have been coming together in the past few months like a complex puzzle but now it is evident what investment bank owners Lee & Bain have in mind for the largest radio group in the world.

What I am about to share with you is significant because when Clear Channel burps you can imagine what Cumulus and Citadel will do.

That’s right, the other failed consolidators take their lead from the Evil Empire.

First, let me get this out of the way, Radio President John Slogan Hogan is not calling the shots here so you can't blame it on him. This plan came from the Wall Street banking firms themselves that own Clear Channel.

Hogan is the dummy and Lee and Bain are the ventriloquists.

They put the words into Hogan’s mouth.

Another caveat is that some localities may be different but increasingly during the year ahead, you are likely to see this scenario unfolding at Clear Channel stations and clusters.

1. Virtually no local management.

Regional offices will increasingly dictate what will be done in local markets in spite of all Clear Channel's hype about local radio. It's exactly the opposite. Fewer market managers. Managers are and will continue to be fired. You may even see some clusters that report directly to Centcom circumventing the need for more bodies and more salaries. Rest assured that at Clear Channel when it comes to management as well as talent -- less is still more.

2. Local clusters will be handed their target numbers and they will have to make them.

This should not be confused with that old management tactic called – budgeting. It’s now a one way street from Lee and Bain to you. Increasingly as the year goes on, Clear Channel will be run from headquarters and now that includes management and budget.

3. Skeleton staffs at local stations.

Local sales staffs will increasingly consist of a an ever decreasing staff of survivors, remaining professionals or inexperienced hires. This means buildings that have the minimum number of employees in them -- entire markets run by a handful of people. Even worse than currently.

4. One sales manager per cluster.

To handle the local direct selling effort (overseeing a reduced staff, of course). There may be exceptions to the one Sales Manager per market rule but you will be noticing how few people will be selling direct at the local level. Look to regional and even so-called Yield Managers in the new Clear Channel playbook.

5. Unbearable pressure to make sales numbers.

Local account execs will find it hard to make their numbers because advertisers sense the pressure on radio to make their numbers and have discovered that driving down ad prices even lower is not that hard to do. Lower rates for inventory – bet on it. The first clue you have is all this talk of the 15-second commercial – a supposed byproduct of Less Is More. These new 15-second spots where purchased are cheaper for advertisers and generate less for the stations.

See what I mean, another way to compromise the rate card.

6. Program directors will become extinct in all but the largest markets.

You already have observed that most consolidators have PDs doing double-duty or more. What’s next is the Program Facilitator who acts as a traffic cop and sends national Repeater Radio programming and voice tracked shows to individual conduits formerly known as radio stations.

7. More Non-Local Content.

These Program Facilitators will get to choose from the Clear Channel menu of cheaper national “local” programming alternatives that they call “Premium Choice". I call it “Ground Chuck” because it is Hamburger Helper for formats. Live morning shows will be gone in all but the most important and/or largest markets. Clear Channel is already famous for voice tracking its stations.

8. Automatically-logged national business.

National business will go directly into local programming logs – in fact, I’m told that this is happening now in some Clear Channel locations. No need to pass go, collect $200 or even check with anyone local. Radio is not local at Clear Channel. This is another example.

9. Regional business will be “checked” by so-called Yield Managers.

This is also happening right now.

When regional business is written, so-called Yield Managers are responsible to see that the “local” Clear Channel stations are getting a good price. Keep in mind that many of these Yield Managers are former hotel managers and have no idea what a good price is. They may know what rack rate is good but not a good regional buy.

Sounds like a corporate brainstorm.

No matter.

Someone at Lee and Bain thinks this is really a good way to run the radio business – like Motel 6.

Clear Channel’s apparent plan for 2010 is to cut expenses – again.

Well, there really isn’t any place to cut expenses at a radio station other than – personnel. And in spite of the fact that Clear Channel has been responsible for large scale termination of talent, it has one place to look for further cuts.

More staff reductions.

Big decreases in sales regardless of how badly the company needs to write more business.

Largely national programming to save personnel costs.

Now, Less is More when it comes to market managers and station executives.

This all sounds insane to most people, but not to my readers who know that cutting programming, sales and management is good for radio – that is, if your intention is to cut costs and eventually sell off the properties for whatever the market will support and whatever additional fees the sellers can earn.

Radio consolidators are not operators as I have been insisting for ten years now.

They are owners, investors, speculators.

So if you and I occasionally fantasize about how radio stations could improve their programming, sales and lead the way into the digital future, we can be forgiven.

But the consolidators who are gutting radio stations year after year to wind up with a license to sell and very little overhead cannot be forgiven.

Their intentions are increasingly transparent.

No Internet strategy – forget budgeting for digital – none of them do.

No mobile strategy.

No podcasting or webcasting strategy.

No social networking platforms.

No concept of the importance of local radio.

While I was attending the Flyers game out here in Phoenix over the weekend, a sixty-something man sitting in the row in back of me was showing another over 50 fan what Pandora was on his cell phone.

He played it – loud enough to be heard in a hockey arena (albeit it an empty one) – and went on and on about how great Pandora was.

These older Pandora lovers are radio listeners – or were.

While Lee & Bain, Lew and John, Farid and Judy and Bob, Carol, Ted and Alice are skinning the hide of the radio business, they may be winning the numbers battle but they are losing the war.

Radio is in big trouble.

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