The Next 6 Weeks of Radio Hell

Six weeks and counting until January 15th – the deadline for the first failed radio consolidator to file for bankruptcy.

That’s when Citadel will either throw itself on the mercy of the courts or its lenders will bitch slap CEO Fagreed Suleman into a prepackaged reorganization that will cede operating ownership to the equity holders.

But to understand what will happen, keep in mind the problems at Clear Channel and Cumulus as well and you can see why the radio industry is in for a rough ride.

Its three largest consolidators are on the ropes.

Clear Channel is playing footsie with its lenders in a game of chicken that could backfire. After all, Clear Channel is largely owned by two investment banks and they’re playing too cute for their own good with their brethren on Wall Street.

Meanwhile, take a look at Clear Channel Outdoor stock and see how at least one major investor is buying it up with an eye toward twisting parent Clear Channel harder until it says “Uncle”.

Then, add to that the inept operation of Cumulus over the past few years as the mean get meaner. At Cumulus when the going gets tough, the tough make it tougher on their employees. CEO Lew “Tricky” Dickey is morphing into his father – Lew, Sr who some have nicknamed “The Cougar”. Does the branch fall far from this family tree?

Meanwhile, you should know that while you were preparing for Thanksgiving, radio’s consolidators have been actively at work reducing their work staffs.

Clear Channel’s 30 Day “Action Plan”

That’s another slick description of termination policy.

Here it is from the lips of someone close to a Clear Channel employee:

“It was strange that the employees that are under the 30 day "Action Plan" were all off the CC network over the weekend.....I was at a weekend event as a sponsor with another CC employee that was not under the plan and she had access all weekend. They could be getting geared-up for after the holiday”.

Clear Channel has a sales initiative it has been flying under the radar since late 2007 called “Radio Confusion” – oh, I’m sorry – it’s called “Radio Fusion”. Clear Channel is reportedly still working out the bugs in the program but it is apparently the future as they see it for radio sales – if you want to call it that.

Look at their description of “Radio Fusion”:

“This web-based CRM and Sales Force Automation tool maximizes radio account executives efficiency by allowing them to strategically manage contacts, create and submit electronic proposals, as well as predict probability of close for more accurate forecasting. ‘The real advantage to Radio Fusion is that all mission-critical data such as avails, rates, and even Arbitron station ratings are conveniently located in one place, the proposal workspace.’ said Ro Catalfo, Director of Customer Relations at LAN International”.

Oh, boy. Repeater Sales using just about everything you can name but relationship selling. Go ask Cox and the other good broadcasting companies. Tools are fine but in lieu of relationship selling it’s folly. Cheap folly, but folly nonetheless.

But there’s more – isn’t there always …

“What’s really cool and unique about VIERO Radio Fusion is that it includes critical information from three or four other systems. Sellers don’t have to go to multiple locations to get rates, ratings and to enter orders…it’s all there in one convenient place,” said Denise Atkins, DOS for Clear Channel Charlotte. “VIERO Radio Fusion is also a great tool for pending business. At any given time, I know exactly where orders are in the workflow, which tells me how much actual revenue is in the pipeline and facilitates much more accurate forecasting.”


You don’t need to know what’s in the pipeline, you need to look at your sales at the end of each day. That’s the pipeline. But then again, Clear Channel has an outbreak of Dickey’s Disease – the obsessive compulsive need to reinvent something that would work just find without their input.

Dickey’s Disease

It’s fatal if your last name is not Dickey.

This just in from a fired and angry Cumulus pro. I’m redacting the specific call letters to protect the fired in case they decide to file suit against their former employer.

“I worked for (Cumulus) and there were 8 sellers at the beginning of 2009, all experienced. Three of us were targeted in the beginning of the year and all of us are gone. Two quit, I was fired. Recently they shifted all agency business to 3 AEs. I am hearing that another quit last week and yet another had taken matters to the … Labor board.

Also on our floor was the (sister station) staff. They had 9 sellers at the start of 2009, mostly radio veterans, all mature professionals. They also had 3 AEs targeted at the beginning of the year, 2 quit, 1 was fired. Since then 1 more quit, and I'm hearing another left last week after a dispute about accounts being taken away from him.”

In essence this is information flowing in to confirm what we reported to you recently that the full court Cumulus press is underway to reduce its staff one way or the other.

“Add to that the cluster NSM was fired in late '08 (the DOS handles national!) and both FM PDs were fired (and not replaced) in the first half of the year as well. And that is just part of the carnage! Of course many low level staffers and paid interns were let go, the receptionist (after 20+ years!) was an early casualty. Upstairs … the staff also suffered the same kind of AE defections, plus their promotions director was canned. A traffic manager and an accounts receivable person were hired and fired in 2009. They were there less than 3 months I'd say”.

And their outstanding market manager was fired after nearly 40 years in radio – that’s more experience managing than all the Dickey's possess put together.

One reader related another infamous and insensitive Lew Dickey story that sums up the carnage:

“One thing I will never forget is something Lew Dickey said on a visit … in late 2008. He assembled the entire sales staff in the conference room... close to 30 AEs and 7 or 8 managers. We had never met with Lew before. Early in his speech he says 'we know that sales people only work about 30% of their day'. I was thinking did I hear that right?? And he repeated it. He went on to say that 'we need to change our DNA' and 'we need to transform from order takers to demand drivers'".

Order takers?

Most salespeople at that meeting worked their butts off to make Dickey’s numbers but what he was previewing was the beginning of CSOS or the Cyclops System, as I call it – the one-eyed, no brain system of ruining radio sales.

Honey I Shrunk the Radio Stations

If you’re wondering why the consolidators keep their mouths shut when I expose another new lie, perhaps it's because what I am saying is true.

This from a Clear Channel employee:

“I was appointed the Cluster General Sales Manager (a new position starting in 2004) for our seven station group and I had five sales managers, a DOS, a total traffic/NTR manager and a National Sales Manager from 2004 through 2006. Prior to that I had been the GSM of three of the stations. My "position" was eliminated Nov. 1, 2006, and I was informed that my salary was going to the hiring a number of internet sellers (the new hot plan at the time which of course was abandoned nine months later as no one had a clue what they were doing). This was ordered by a person who I had never met. I had been with our group for over 28 years and five owners.

My point is, tying in with your article today, that as well as all those sales managers, we also had a staff of 35-38 sellers. Yesterday I was at the stations and someone had put the new sales structure in my mailbox…I was actually stunned when I looked at the new set up to see that there are now only TWO managers and 12 salespeople to cover SEVEN RADIO STATIONS, plus National, NTR, Total Traffic, Internet!"

With bankruptcy six weeks away for Citadel, a less than boffo fourth quarter going on the books and a first quarter that could be so bad that 2009 could start looking good in retrospect.

In other words, as sad as it is, the worst is yet to come because the big three are out of options and desperate to cut costs.

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