This reminds me of Cumulus.
CEO Lew Tricky Dickey is talks all about growing -- acquiring more stations even if the company he runs is upside down himself on its loans that come due in the next year.
That’s why Dickey has engineered a faux $500 million investment pot with Crestview to scare people into thinking he actually could make major acquisitions.
Accounts from Cumulus employees say that His Royal Ego is mouthing off about buying financially-troubled Citadel (again) just as US Airways has been “talking about” buying United again.
Just what the country needs -- two piss poor airlines rolled into one.
Just what radio needs -- two God-awful companies under Dickey mismanagement.
In so many ways, Cumulus is US Airways.
Both companies are poorly run and in financial jeopardy.
Both have CEOs drunk with power.
Both have the unhappiest employees in their segment working for them.
Both Cumulus and US Airways are giving their customers less.
US Airways is charging more and Cumulus would charge more if they could get it from suspicious advertisers. US Airways passengers hate the airline and local Cumulus audiences have to hate the fact that their stations are off-the-air at times, filled with irrelevant content and devoid of personalities.
On the other hand, Bonneville is the equivalent of Southwest Airlines.
Bonneville is definitely not in financial trouble and makes business decisions as operators not speculators.
Both Bonneville and Southwest Airlines have management that is smart, employee friendly and strategically on track. Neither is perfect, but they are at the top of their game faults and all.
Everyone seems to want to work for Bonneville if they are serious about staying in radio and Southwest is the best airline job to have in their industry.
Customers of Southwest know what the discount airline is and appreciate not having to pay silly and deceptive charges for checking luggage. Bonneville listeners get a quality product even in an era of less is more, repeater radio and fake localism.
What we have here is a perfect analogy for what happens when Wall Street sharks takeover two industries that have “air” in common (in and on).
It’s unimaginable that almost-bankrupt companies like US Airways and Cumulus could be in talks to acquire even a lemonade stand from two 7 year olds yet there you have it -- US Airways wants United and Cumulus just has to have anything and everything.
On Wall Street, however, this is the order of the day because it is not about successfully operating companies, it’s about acquiring, earning fees, getting out at a profit. The actual businesses as with airlines and many radio companies are simply collateral damage.
This kind of mentality clouds good strategic thinking -- the quality Southwest and Bonneville possess.
That’s why troubled airlines in the hands of lenders and speculators think it is just fine to charge customers who have already purchased a ticket to pay for checking their luggage. These add-on charges are helping poorly run airlines generate lots of revenue even if it kills off passenger loyalty.
Spirit Airlines (or as I call it MeanSpirit Airlines) is thinking about charging passengers $45 per bag for carry-on luggage.
Cumulus thinks the same way.
Cumulus cuts back on a different kind of “air” -- on-air programming -- generating pap that it calls local content and doesn’t worry about ratings, listeners or loyalty. This saves Cumulus a lot of money.
Failed airlines know the only way to survive is to get bigger -- not better.
Better doesn’t matter in the world of equity investors. Continental turned down United’s offer to merge and some industry experts think flirting with US Airways again will make Continental jealous and thus, merge with United.
Hard to believe?
Not really.
Continental sure doesn’t want to be left out when the last big legacy airlines become the few, the shamed, the consolidated.
Merge or die -- that’s the order of the day.
Except if you are Southwest or Bonneville.
Then it is operate or die.
Last year when the rumors circulated that Citadel was looking to sell some of its ABC properties to avoid bankruptcy, Bonneville was mentioned as a buyer (maybe because they were the only prospect that had cash on hand). I never believed for a minute that Bonneville’s Bruce Reese would buy even one of these formerly glorious ABC stations.
I believe Farid Suleman believed it, but not Reese.
Suleman is a circus clown.
Reese is a media executive.
Both radio and airlines have turbulence in common.
Airlines are victims of fuel prices, poor management, poor employee relations and bad customer service so even when the market picks up their pilots and flight attendants will not be happy.
Their inability to hedge prices on fuel (as Southwest does very successfully) makes them a continue victim of the oil cartel.
Fliers have to hold their noses when airlines recover because these airlines have no clue how to serve the public -- nor do they particularly care.
They just move bodies from airport to airport.
Radio companies like Cumulus, Citadel and Clear Channel have a dirty little secret you rarely read about in the press.
The only way they can keep operating when their debt is so high is to either hand over their companies to the lenders or borrow more at higher almost-impossible-to-repay rates to meet loan covenants and bide more time.
Or both.
This is the world we live in.
The one that worships Shitty Bank (I mean, Citibank) and failed Goldman Sachs and thinks of Warren Buffet as an old man.
Buffet buys management first and secondarily, the company along with the know-how.
Radio’s three biggest groups -- its trendsetters -- worship anyone who will lend them money to perpetuate all the mistakes they’ve made that can’t be fixed by further acquisition.
Goldman Sachs CEO Lloyd Blankfein stands to collect a $100 million bonus.
Lew Tricky Dickey just took an almost $500,000 bonus for running his company into the ground last year and that number could be as high as $1 million if he meets certain targets and God only knows what they are or how easy they are to meet.
How does the already wealthy Dickey take that kind of money when his employees are getting fired, working overtime for free in some cases and complain about being abused?
So if you ever wonder why the radio industry is acting more like the airline industry that’s because they are the same thing.
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