I say that because evidence is leaking from Cumulus markets that even if you are a Dickey Nation true-believer you are not immune to getting screwed.
Light the coals, the Cumulus sweat lodge is in operation (and I say that with all due respect to legitimate religious sweat lodges not the ones making the headlines lately).
At the heart of the issue is turning radio into a commodity business.
Some Cumulus market managers have figured it out and that’s why I am sharing it with you.
I am told that some Cumulus market managers working side by side with the Dickey Doo Money Machine are placing spot schedules daily in all markets.
One informant told me,
“Three markets that I checked, he's placed over 2000 units in the month of January. EACH! And there was no corporate "push down" of revenue for all the fourth quarter inventory they took, and no push down for January”.
Here’s the deal.
Many Cumulus budgets this year are being done quarterly and there is a new spreadsheet that calculated total inventory available divided by the revenue goal the Dickeys handed out as their “base rate”.
What they didn't take into account is that apparently corporate is taking upwards of 25% of the inventory and running "no charge" commercials -- at least at the market level they are no charge. There are likely payments being made at the corporate level for these spots but the markets aren't seeing the money.
This is another example of how Lew Dickey earns his nickname – “Tricky”.
Dickey's plan accomplishes a couple of things: first it tightens the inventory so it drives the base rate up in every market.
And, as my reader puts it:
“…it allows them to keep the revenue and how they account for it I don't know, but by keeping it, they can still on their books credit the market with the revenue but not have to recognize it in the market which might give the market manager a chance to hit budget and make a bonus.
Pretty slick.
In other words, Tricky Dickey bases his managers’ goal on an increase of last year, set their rates based on available inventory and then take upwards of 25% of that inventory and sells it at the corporate level but runs it at the market level.
Ingenious!
If screwing your local manager’s budget is your end goal.
Foolish.
If motivating them to even meet their numbers starts with stealing inventory for corporate use.
So commodity selling is already well underway at Cumulus.
The Dickeys own Cumulus. Let me correct that. The banks own Cumulus and the Dickeys have to kiss their butts to stay afloat. Nonetheless, you get my point.
They can do what they want with their stations. I never knew anyone – even former Cumulus employees -- that wasted any time crying over that fact.
But, their markets are dependent on the cash flow to make budget, pay staff, or pay bonuses based on performance.
To quote an insider:
“It's like having the market managers prepare their team for the Super Bowl, train them, have the game plan in place, and then just before game time, tell the market manager oh, you can only have 8 players on the field. Well the plan was figured out based on a full team, inventory, and they are taking 25% of it. Wouldn't the more ethical way (don't laugh) to have done that is at least tell the market managers you were taking the inventory so they could redevelop a plan based on that reality?”
Needlessly mean.
This half-baked plan sets up the perfect way to give their loyal managers a no-win situation.
What could motivate smart people (even if they are mean like the Dickeys) to pull such a blatant screwing of their local market manager’s pooch (so to say) when doing so acts as a major disincentive to revenue growth as the economy tries to rebound.
The arrival of commodity radio.
This is the future – like it or not – and I don’t like it.
The current group of radio CEOs who are down on their last knee begging creditors for a chance to keep running the groups they have ruined are simply doing what is expected of them.
Equity holders want to keep it simple. Rarely do they successfully turn around the companies they buy.
Rarely do they care.
Their lives are built on fees and with equity shareholders there is never a recession in fees. Isn’t this the same problem on a larger level that has taken our overall economy down?
In Haiti, it used to be Papa Doc and Baby Doc.
In the Soviet Union, strongmen building walls.
In China, Mao.
In the U.S. it is a bloodless coup by financial companies having their way with the U.S. economy no matter which political party is in power.
And in radio, that means any strategy to monetize a losing operation even at the expense of the managers working to replenish the failed company’s coffers is --- well …
Business as usual.
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