Monday, July 7, 2008

Radio: Okay, Rehr. Where’s the beer?

David “Fumbles” Rehr, chairman of the National Association of Broadcasters, this is your life so far this year:

You demanded that the FCC compel DirecTV to provide local TV service in every market by the end of 2008 as a provision on the transfer of News Corp.’s 40 percent investment in the satellite TV provider to Liberty Media.

Didn’t happen.

You demanded that DirecTV and Dish Network "provide empirical evidence to support their claims that they lack capacity to offer local-into-local service in high definition.”

Didn’t happen.

You demanded that the FTC deny the XM-Sirius satellite radio merger.

Didn’t happen.

You demanded that the FCC deny the XM-Sirius satellite radio merger.

Didn’t happen yet.

Now, you claim that even with your supposed connections in the beer industry as the former president of the National Beer Wholesalers Association –you had no advance knowledge of Anheuser-Busch’s plans to pull their advertising off radio?

Where was your head? Never mind. We already know and the visual isn’t pretty.

Does the phrase “a day late and a dollar short” come to mind?

Fumbles, don’t even think of blaming this move on the attempted hostile takeover of Anheuser-Busch by Belgian brewer InBev.

A-B isn’t cutting back on ad spending – they’re just taking radio out of the equation and distributing their $800 million ad dollars elsewhere.

This is the news rock and sports formats didn’t need to hear. Bye bye, Bud; Nice knowin’ ya, Mich; we won’t be seein’ you at Sea World.

That’s what – almost 60,000 spots – that radio lost?

Fumbles, beer is your old stomping ground and there wasn’t a brewer you were closer to than A-B.

You bragged about hanging out with August III and August IV.

You were “the beer guy,” remember?

But where are your brewski connections when radio really needs them?

Were you to the beer industry what you are now to radio? A big nothing?

Sure, we still have Coors, Corona, and Miller – but, if anything, A-B’s move will most likely influence their future ad buys.

Fumbles, when you were first introduced as the new NAB head, your initial meet-and-greet was billed as “NAB a beer with Rehr.” Remember? We do. Apparently, the beer industry doesn’t.

You must've had some expensive A-list publicists covering your ass when you were peddling the hops.

Do you recall, Fumbles, addressing the 2005 National Beer Wholesalers Association convention in Vegas?

You channeled Senator Joe McCarthy’s fight against Communism when you said, “There are foes poised to destroy us. We need to fight for beer’s rightful place in American culture (and) regain what is rightfully ours."

Even microbrews and imports were on your enemies’ list.

You assailed the American Medical Association (AMA), for trying to get the NCAA to ban beer spots from college sports programming: “There were more than 120,000 accidental deaths caused by physicians last year. You would think that might be a little more pressing than beer advertising."

You proudly stated, “I am Satan to them,” to Modern Brewery Age magazine in September, 2002, in reference to your on-going feud with Mothers Against Drunk Driving (MADD).

What happened? When did you turn into a dead fish?

How about your political connections? You were a “Bush Pioneer,” raising over $100,000 in individual contributions for the Bush-Cheney re-election drive.

That had to buy you an in with the GOP.

Fumbles, it’s an election year - just in case you’ve forgotten.

And your presidential candidate, Senator John McCain, is one part horny old goat and one part smooth operator.

He did what any red-blooded American gigolo would do. He married into money. But he also married into beer.

That's your cue, Fumbles.

His second wife, the former Cindy Hensley, who he married a month after divorcing his first, is an heiress to her father’s Anheuser-Busch distributorship in Arizona – and worth over $100 million.

Fumbles, you have something in common with Cindy McCain. You both love political action committees. When you were heading the NBWA, you routinely wrote checks totaling over $3 million on your PAC.

Anheuser-Busch's PAC was one of McCain's first donors. McCain’s father in-law and other Hensley beer distributor executives funneled so much money to McCain that the Federal Election Commission stepped in and ordered McCain to give some of it back.

And how large is Cindy McCain’s A-B distributorship?
Try third largest in the U.S. Last year it moved over 23 million cases of brew.
Fumbles, that means she carries some weight and could put in a good word about putting some dollars back on radio – but you have to start working her now.

The election is only three months away and a gigolo has never been elected President of the United States.

Just ask John Kerry.



Anonymous said...

You were right about Fumbles Rehr then and now. He is a useless figurehead. The problem is that there will not be an overhaul at the NAB until the current owners are put down and that cannot happen soon enough. John Hogan looks like he is well on his way to destroy what is left of CC and the other chains are no better.

Rock radio is a good as dead now.

Anonymous said...

Rehr or Fumbles as you correctly call him is a hired gun with no past present or future. He has no professional ties with the industries he represents. Due to that he has no connections in the beer industry. I am sure he has not talked to anyone in his former industry since he left. The same will be true when the NAB realizes what a nincompoop Fumbles is and replaces him. You will never hear from him again.

Anonymous said...

John, my question - Is David "Fumbles" Rehr on the board of the A-B Foundation? I believe he is.

Thank you, David, for using your connections to help your radio bretheran.

You are a disgrace to the radio industry.

Anonymous said...

Has Fumbles been successful in any thing he has done since becoming the head of the NAB? I don't think so. He is a loser all the way around.

Anonymous said...

here is something you didnt mention but should have. those a-b spots for bud, michelob, etc. are among the most creative and innovative on radio. when you wrote that piece on creative production (since copied by jerry lee i noticed)i meant to comment on the bud radio spots. though it means little compared to the lost revenue it is interesting to take notice of the fact that one of the few clients that knew how to use radio and create compelling content spots has now abandoned it.
radio has only itself to blame and i doubt there is anything david rehr could do to change that decision.

Anonymous said...

I'm as happy to poke fun at the NAB as the next person, but the NAB is specifically prevented from involving itself in trying to corral advertisers for broadcasters. No trade association can get involved in the business affairs of its members. Even a hint of that would bring about big anti-trust problems since the association would start to look an awful lot like a cartel. And the settlements would be huge. Look at the case law in this area and you'll see that the worst thing David Rehr could have done for radio would have been to try to strong-arm A-B into sticking with radio.

Kick David Rehr around all you want for his regulatory and legislative record, but you're barking up the wrong tree on this one. The only people who could have saved the A-B advertising are radio stations themselves. A-B is simply the latest company to accept what everyone else has already realized. Radio is failing to deliver for its advertisers, and the industry has dropped even the pretense that it is trying to improve its performance.

Sorry, but no association can rescue radio from itself. The industry fights better ratings metrics, it fights regulations to mandate better local content, it fights competition. It reduces salaries and benefits creating employee churn that destroys its sales and creative staffs. It continues to court investment bankers who bring on more and more debt throughout the industry. It ignores the wishes of both its listeners and its customers with an astounding degree of arrogance. But David Rehr is to blame for the loss of advertising? I think this blog entry needs to go back in the oven for some more baking.

Anonymous said...

I would say Jeff Haley at the RAB except that he surrounds himself with the same crowd of losers. They whine about how bad business is while they ignore how badly their product is presented. What radio badly needs is tough love and thorough cleaning out of its dead weight. Until then radio will continue to lose clients as fast as they lose listeners. The ad community is on to the ineffectiveness of radio. I disagree that David Rehr should ignore this issue though.

Anonymous said...

True, there is only so much Fumbles Rehr can do to save radio and as long as we have the old guard of Fred Jacobs, John Hogan, Farid Suleman - among the many that put radio in the mess that it's in nothing is going to change.

Peter Smythe came very close to bearing his heart but quickly retreated into blaming everyone else for radio's bad image. Get over it. Radio gave itself the bad image and Peter your heart may be in the right place but you are as guilty as everyone else for falling for the hype of the past ten years.

You want a radio comeback? Get creative, get involved, open up more hours to local programming. Put your staff on notice. More creativity or else.

Successful programming equals ratings which results in sales. Radio is not selling beer for A-B and that is the one and only reason they reallocated their ad dollars. Show them otherwise and they will return. Don't and you will never see them on radio again.

Radio it's up to you. While you're at it. Tell the NAB to get rid of Fumbles. He is a talking head and not a very good one at that.

Anonymous said...

Give Fumbles a can of Tab to get his attention and maybe he will make the call to John and Cindy.

Anonymous said...

Radio is not in a position to do anything less than go after the business and if it takes David Rehr to call in some favors he had better do so. Forget protocol. Do you think any radio station will replace that A-B business not to mention the visibility its promotions provide over the summer months and football season? Rehr, get the f on the ball.

Anonymous said...

Here's what I've learned: People are going to hate certain people no matter what they do.

Had Rehr used his beer connections to save radio advertising, the people criticizing him now would complain about his form of "insider trading."

The thing about AB advertising is it's national. But I thought everyone wants radio to be more local. If that's true, then no one should care about the loss of a national advertiser like Budweiser. If national programming is bad, so is national advertising. If the focus should be on local content, let's see if the industry can also make up the loss of national advertising with more local accounts. Let's be consistent.

Anonymous said...

The dollars are from A-B but the buys are made through locally owned distributors.

Anonymous said...

I discovered this blog from the Buzzard book blog. I am not in radio but used to enjoy listening to it. You radio people who read this may want to know that it was your decision to tighten playlists, hire raunchy grade school humor jocks and run dozens of commercials sometimes the same one two and three times an hour that drove me away from radio.

I still like new music but I don't hear the new music I like anymore on commercial radio. I am not a fan of satellite radio and I have only found a few internet radio stations I like though it is somewhat inconvenient to listen to them while carrying around a laptop.

If you want people to listen to the radio again you should blow up your formats, get rid of most of your jocks, reduce the commercial load and pay attention to what your listeners want to hear.

Anonymous said...

I could see Rehr calling McCain. By the time the call ended every beverage from soft drinks to beer would pull their spots from radio.

Rehr does more harm than good. He is an accident waiting to happen.

Anonymous said...

I think the best thing independent and smaller chain radio could do is to leave the NAB. That sends a message. The NAB is like that room full of old men in the X-Files TV series, smoking cigarettes and cigars and determining what is best for us. I also read Peter Smyth's startling discovery. It took him that long to figure out that he is one of the bad guys?

Anonymous said...

"The dollars are from A-B but the buys are made through locally owned distributors."

But the campaigns are national and centralized. So as far as the audience can tell, it's a national buy.

Anonymous said...

"If you want people to listen to the radio again you should blow up your formats, get rid of most of your jocks, reduce the commercial load and pay attention to what your listeners want to hear."

There are lots of radio stations that do exactly what you want, and they tend to be small non-commercial or college stations with smaller audiences. There's no motivation to duplicate what college radio is doing. If that's what you want, listen to them. That's what diversity is all about.

Anonymous said...

I predict the other beers will pull off too. What does radio have to offer? Rock stations are dead. Sports talk is only working in markets where the teams do well. Radio has not been moving beer since 2000 maybe earlier. Beer companies get no reaction to radio promotions anymore. Blame yourself.

Anonymous said...

"Radio has not been moving beer since 2000 maybe earlier."

You obviously don't listen to country radio.

Country radio is all about the beer. Most of the music is about beer, most of the artists have beer sponsorships. And country radio is one of the few music formats that is healthy right now.

Kenny Chesney fills 50,000 seat stadiums, and his sponsor is Corona. Lot of former Bud drinkers are now puttin' lime in their beer, thanks to Chesney. Bud is the Clear Channel of beer. I don't understand why all the CC haters are worried about Bud.

Anonymous said...

Have you seen radio stock prices TODAY? OMG there in free fall!

Vic in San Diego

Anonymous said...

"Have you seen radio stock prices TODAY?"

It's not just radio. Have you seen any stocks? We're heading towards a recession.

Anonymous said...

Gorman I have been following your writing on radio since your Radio Crow days. What you predicted in 2000 is coming true. I just hope you are right about the fire sales. Real operators can turn radio around even during an economic funk. There were some very successful radio stations during the 70s, yours among them, that bucked the trend of declining revenue.

Newsboy Pete said...

On the news....

Ahead of the Bell: Radio Stocks
Thursday July 10, 7:25 am ET
Citi cuts estimates for radio stocks, predicts shares will slide as ad revenue falls

NEW YORK (AP) -- A Citi Investment Research analyst said Thursday that radio stocks will fall as advertising revenue continues to decline and lending and credit pressures increase.
Tony Wible said industry revenue will fall about 5 percent in 2008 as advertisers spend less, meanwhile companies face larger amounts of debt as interest rates rise and credit conditions remain difficult.

Wible thinks the sector's stocks are expensive and expects Wall Street to trim its targets. He downgraded Cox Radio Inc. and Entercom Communications Corp. to "Sell" from "Hold," lowering his price target on both companies, along with "Sell"-rated Citadel Broadcasting and "Hold"-rated Entravision Communications Corp.

The analyst said radio ad spending fell about 5 percent per month from January to May, and because radio is a "secondary media buy," the industry is likely to feel a strong impact from decreased advertising spending.

He maintained a "Hold" rating on Entravision because of its "compelling" long-term opportunities.

Wible cut his target on Bala Cynwyd, Pa.-based Entercom to $5 per share from $9.75, and his target on Atlanta-based Cox to $8.50 per share from $12.50. He reduced his target price for Entravision to $4.50 from $6.50 and his estimate for Citadel went to 50 cents per share from 75 cents.

Entercom and Cox Communications did not immediately return calls seeking comment.

John Pierpont Morgan Knot said...

Citadel at $0.87?

ex Emmis mgmt said...

John I second those comments. The fall of radio stocks proves that eventually you cannot hide behind the magical tricks which radio has played with for the past decade. Emmis was once a great broadcasting company. I also remember that you worked for a company Malrite that at one time was also highly respected until its fall from grace. Emmis slide began when Jeff turned the day to day operations over to inexperienced and as you say inbred management that took the easy way out with Fred Jacobs and other "designer" consultants and their schemes. They also did not watch the storefront with their urban properties, did not understand the culture and that hurt their image. Jeff let go of the wheel and Emmis turned over its programming reigns to the wrong people and now they are paying for it. I doubt Emmis will make a comeback and doubt they will ever get a fraction of what L.A. and Chicago is worth if the decide to sell. They may not have a choice. Emmis was one of the best companies to work for and I had the honor of being a part of it. Like your experience with Malrite the company changed, the wrong management team took over and sucked the life out of it. I feel bad for Jeff.

Anonymous said...

"There were some very successful radio stations during the 70s, yours among them, that bucked the trend of declining revenue."

Anyone who thinks this situation is in any way comparable to the 1970s has their head up their butt.

And anyone who thinks you can turn a horse & buggy into a jet engine has their head up their butt.

In order to get back to the 70s, we need to have about 40% of the radio stations on the air today to go dark, and we need people to get rid of their computers and cell phones. Neither is going to happen.

Anonymous said...

Citadel has some of the top stations in the very largest markets, some locally top-rated money-demo FMs and some legendary big-stick AMs. $0.83?

Anonymous said...

Regarding Citadel, the things you list simply aren't important to investors.

Radio revenues are not growing, even if you own top rated stations. It's not a function of programming, content, live & local, heritage, or even ownership.

None of those things matter. And the wolves are at the door. Government wants to re-regulate, and the record labels want a big portion of radio revenue. And all anyone can do is either complain or criticize. Is this the kind of industry you'd invest money in if you had a spare grand? I don't think so.

Anonymous said...

>> And the wolves are at the door. <<

I couldn't agree with you more, and I still wonder how Lee and Bain could get slickered like this? What did they (or do they) expect to do with the stations?

Also, how does the Rush Limbaugh contract enter into all of this?

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