Sunday, August 10, 2008

Radio: Citadel crumbles

Citadel. Farid Suleman, your fortress is crumbling.

Farid’s the guy everyone in radio loves to pick on and there’s raison d'être for it. He was the last guy in the pyramid scheme. The last one to believe his own hype.

Bravado poured forth from the pack already benefiting from the spoils, as they swapped stories of how much money they made when they went from reg to dereg. He watched his contemporaries buy waterfront properties, load up their garages with vintage cars, and take exotic trips around the world.

And when Wall Street needed stroking, all they had to do was thin the herd.

Farid spent years sitting quietly at the edge of the megawatt radio crowd of Mels and Lowrys, and Jeffs, drinking it all in, and wondering when the time would come to make his own move into the major leagues.

He had to be in awe of Clear Channel. Their ploys were so elaborate and well conceived that the FCC and the DOJ couldn’t crack their layers of illegal lease marketing arrangements and transmitter moves.
For sixteen long years he was COO of Mel's Infinity/CBS Radio.
But number two wanted to be number one and shake off his "mini-Mel" moniker.

He lusted for his own New York radio stations. His own L.A. His own radio networks. He visualized his own stable of talk show wingnuts.

So he ended up at Citadel and bought ABC Radio.

But it was all for naught.

He was under the impression he bought a healthy radio chain. But in veracity, he bought a country club.

Now, Citadel is in trouble. It’s a penny stock.

Even worse, he knows the sting he’s feeling now is nothing compared to the things to come – specifically, those other declining revenue land mines yet to be stepped on.

The downward spiral has picked up too much speed and now all he can do is watch his company spin uncontrollably around him on its decent.

Usually, when losing altitude, you lighten the load – just like Clear Channel and CBS have to do. In Farid’s case, he’d hoped that by parting out some stations and putting them on the block he’d might be able to pull out of his free fall.

But, sayeth Farid, “We have several deals we’ve started and then financing could not be found for them.”

And let’s not forget Farid’s misguided infatuation for that talentless clown Don Imus.

Even CBS was late in putting him out to pasture. His numbers skewed old and older and dumb and dumber. Farid blindly bought that milked-out cow. Why would anyone hire a has-been hack like Imus whose only claim to fame as of late is that of an easy magnet for Al Sharpton?

Then there’s Paul Harvey. Harvey’s style is ageless and timeless but his mortal coil is not. Farid, the guy’s 89 years old. He’s suffered personal tragedy. His health is failing. How long did you expect to keep him pumping revenue for you? You projected him for – what - $40 million?

Then you say, says “The good news is he’s come back and done more shows so we would expect some of the revenues to start coming back.” Yeah, for how many weeks?

Read the numbers. ABC Radio Networks - 11% revenue decline. You’re lucky. It could’ve been worse.

You think coming up with new shows with Michael Baisden, Doug Banks, and Big Boi will save the radio net’s sorry ass?
Stop here for a moment. What’s absent from Farid’s vocabulary? Start with content, creativity, on-line, opportunity….need I say more? That's why he will not survive.

“It was another tough quarter for the company and the industry,” you say? An industry you thought you knew so well?

Citadel revenues declined 9% over last year. Network revenues were off 11% and there was an 8% revenue drop at Citadel stations.

You claim that your $20 million in programming and personnel cuts from, as you put it “a whole bunch of positions” and expense cuts from the last quarter are beginning to show promise – and did you really say that you predict it will ramp up to $15 million in revenue by 2010?

You say you’re probing for “even more opportunities” to make cuts since you don’t know when the ad market will turn around?

You always wanted to be Mel. He makes it look so easy – and still does.

He gets his Sirius-XM merger approved and its déjà vu all over again. He’s promises $400 million of cost synergies to shareholders by slashing programming and marketing budgets.

Farid’s asking himself, “Why does it always work for Mel and never for me?”

Meet the radio industry’s Charlie Brown.

Disney saw him coming. They sold him ABC Radio the same week they bought Pixar. They traded in the past for the future.

One could say that Farid bought radio from Disney but ended up with what we used to call a “Mickey Mouse company.”


Anonymous said...

Are there ANY radio companies that you think are doing ANYTHING right?

Anonymous said...

Farid is an accountant who knows nothing about product. He doesn't have a clue about content. He doesn't even know what the definition of 'product' is. I hope you are right and that he is the last of Peter Principle CEOs in radio. We have sure had enough of them.

Anonymous said...

Farid = Charlie Brown? You capped that one right.

I will grant him that ABC radio was a country club op. The bar was never set that high and softened up even dynamo competitiors like Michael Scott Shannon. Can't blame him. He is paid more to do less and his retirement is firmly in place.

I worked for ABC for a short time and could not believe how laid back and un-competitive it was.

Farid had to have freaked with what ABC turned out to be especially after toiling under the Karma man.

Farid has no one to blame but himself. He wanted to be in the big leagues and bought his way in. Now he is trying to dig his way out.

My advice to Farid is to drop trou on price. Unload your properties. Bigger is no longer cool and being the numbers guy you played the fool. You did believe your own hype.

Anonymous said...

Suleman is not a radio man. If he were he would not have hired Don Imus or expected Paul Harvey to live forever. Take it a step further, there is not a single radio man heading a radio chain. Maybe Jeff @ Emmis was once but has not been for years. The Mays family could/should run car dealerships. More their style. Mason? Put a PD in charge of three or four FMs? I thought he was a radio guy. I was wrong.

The previous comment got it right in that bigger is not better. I look forward to the radio chains shedding off properties they can not run. (remember when the FCC had stations maintain a year's operating expenses is escrow?) I do not believe we have to re-regulate necessarily. Smart radio companies will realize that more than a couple of dozen stations maximum is enough though limits should be put on the number of stations a company owns per market.

Above all we need radio people running radio stations and that may include a few women.

Anonymous said...

Radio people running radio? Look around any radio station and find me the bright up-and-coming radio people who are going to lift this industry out of the gutter. Newsflash for you guys, there are no radio people left. The industry hasn't attracted talented, young people in 20 years. And those few that do join the business against all advice are the first ones laid off or they wake up and jump ship. Churn and burn. That's the mantra in radio. It was a great wave to ride if you got on while it was cresting. But that was long, long ago. At least once a month my phone rings with calls from colleagues who want advice on leaving the business. And every year they've gotten younger and younger. Don't cry for Farid. He's making $2 million per year in salary. Has been and will continue to until the carcass of Citadel is finally drained dry. Let's see. Six years running Citadel and $2 million would be his worst payday. So he's taken $12 million to the bank so far. He'll walk away with $25 million minimum by the time he's done. More if he can find a way to sell the loser company. No, don't cry for Farid. Cry for the chumps left in the business who will be left high and dry when it finally ends.

Anonymous said...

Gorman, I hope you are right and some real broadcasters pick up the pieces from Farid, Mays, Moonves, etc. These guys did you-know-what to radio's funeral.

Anonymous said...

From Radio-Info HD Radio:

"Did I just read that 'iBiquity borrowed money to meet payroll?' Is that actually true? If so the company is circling the drain. Anybody who's been in business ten minutes or so knows you don't borrow money to meet fixed recurring expenses like that. At least not without a game plan to get out of the death spiral. If you can't afford your payroll, you can't afford payroll with debt layered on top of it."

Can anyone confirm this?

Anonymous said...

Farid does walk away with a ton of money for making a bad company worse - true. But what is also true is that there will be none after him. I think that may be the point of this blog. We had a dozen years of robber barons ruined radio. With fire sales imminent while other stations will be forced to go dark we face two possibilities. 1. Broadcasters will get back in to ownership and understand the importance of an on line marriage or 2. Radio will become a dated medium that will follow newspapers into oblivion.

Anonymous said...

For the past decade the radio business has been about rewarding failure. The greater the failure, the larger the reward. The Mays family, Mel Karmazin, even Farid Suleman. Each CEO ruined their companies and was rewarded handsomely for their failures. Newspapers are no different. We know that when the Tribune Corp. is destroyed, Sam Zell and Randy Michaels have their fleet of armored cars readied. Maybe the reason America is losing ground on the world market has to do with this rewarding of failure.

Anonymous said...

Wow...I can understand you crabbing about Farid. But attacking Paul Harvey is like the media attacking Bill Clinton's cat. How low can you go?

Anonymous said...

Oh Farid, Mass media is dead! Your listeners want to control the content period. They want to watch or listen to what they want, when they want. And technology is giving your listeners the tools. Radio’s back is against the wall and like it or not we’ve reached a tipping point where radio won’t survive and must change or die.

And streaming mass media radio on the web is just stupid!

Anonymous said...

I did not read that as an attack on Paul Harvey. Just the opposite. The poor man has been through a lot over the past year and the least Suleman could do is NOT refer to him in so many words as one of his cash cows. Suleman should not have put so many of his eggs in Paul Harvey's basket. The same applies for Don Imus whose best is clearly behind him.

Anonymous said...

John your blog had the reverse effect on Citadel. For the first time in recent memory, Citadel stock actually cracked a buck. $1.05 to be exact. What is that all about? More rewarding of failure? What is next? The clueless will inherit the earth?
Until failure stops being rewarded I fear we will see a continuation of business as usual in the radio industry. It will take a real crash to wake them up but I'm sure the principals will know when that is coming and dump out, leaving shareholders holding worthless paper. Thank you Farid.

ive had enough said...

why are you and del colliano going after citadel? what is your problem with farid? this reads like a conspiracy. gang up on a decent broadcaster who is trying to turn the industry around in critical times and for what purpose???????? radio is a business. you and del colliano write like frigging communists. leave farid and citadel alone. it is a decent company and he is a good man. idiots.

Anonymous said...

There have always been bad and good operators, owners, managers, programmers, what have you. What there had never been before was this massive deregulation that put so few people in charge of so many stations. Those with the money and influence were not necessarily the best owners, operators, managers and the like. Over the past few years it has only gotten worse and even that went against the grain. When Wall Street saw reality and radio stocks started to drop radio got even worse. Today it is populated by some of the most incompetent group of people I have ever encountered. Whoever said failure is rewarded is so right in their assumption. Will it ever turn around? I read pros and cons and whether it is worth it or not. The more I read the less I understand and I am beginning to believe that maybe radio has run its course. The good people can't get back in or don't want back in.

Anonymous said...

Farid, your kingdom is crumbling but your employees are going to take the heat and lose their jobs while you continue to make millions for doing absolutely nothing other than ruining radio.

Anonymous said...

Mel makes me sicker than Farid. Mel thinks he is a celebrity when he is that only in his mind.

Anonymous said...

ive had enough said...

"you and del colliano write like frigging communists"


Anonymous said...

"When Wall Street saw reality and radio stocks started to drop radio got even worse. Today it is populated by some of the most incompetent group of people I have ever encountered."

"RAIN: Consumers, Wall Street Not Buying HD"

"Wall Street’s not buying in anymore. The radio industry’s aggregate stock price has fallen by roughly half in the last year... There is no apparent revenue model for HD Radio. So what's the play here? There doesn’t seem to be one."

Hey, Struble - who's "chuckling" now?

Anonymous said...

"Suleman should not have put so many of his eggs in Paul Harvey's basket."

I don't think Farid did that. I think Disney is who put all their eggs in Paul's basket. And then walked away, leaving Farid holding it.

Anonymous said...

To last anon.

Farid was dumb enough to buy ABC radio hook line and sinker just so he could be a player. He will never be Mel. He will still milk a lot of money out of the deal at the expense of fired employees and screwed over shareholders. Farid is a bottom feeder.

Anonymous said...

>"Farid is a bottom feeder."

Everyone working in radio is a bottom feeder at this point. They're making their living off a dying industry. Farid just happens to be getting a bigger share of what's left.

My advice to anyone in radio is that if you haven't managed to secure yourself a fat salary already, then get the hell out. At this point, the big money is all spoken for. All that will come to those who hang on will be crumbs.

Anonymous said...

I do not for the life of me understand the bitterness by some of the people commenting on this site. Yes, radio was ruined by a handful of con artists and yes, the party is over. How about being positive about the latter? These chains have to sell of properties. Some, not all, some will end up with broadcasters/reliable knowledgable managers and programmers that understand what it takes to create a successful station. Radio is not over. The lack of content is what killed it. Combine quality radio programming with the internet and streaming and you will see some new winners emerge. Beyond that it is true that companies like Clear Channel are creating full syndication for CHR and other young formats. Train them to listen to national like the Disney Channel and they will never miss local radio because they never had it in the first place. Wrong! Put a compelling local show up against a national show and it will kill every time. The only time the national shows win is when the local shows fall short. There is also so much marketing and promotion and personal appearances you can tie in with local radio. It is time for radio to be done right. It has not been done that way for a number of years but it can and probably will happen again.

Anonymous said...

Radio will rise again? Let's be realistic.

Unlike most posters here, I don't think radio's problem is that its content has gotten worse. News, weather, music, information? All as good as ever, at least in my market. The technology? Never better. I can remember the days when the static on my car radio would buzz when I revved the engine. And in my office, I have a radio whose tubes have to warm up before it begins working. Nothing like that happens today. The content and listener experience is as good or better than ever.

So why is radio going to die? The alternatives have moved beyond the limitations of radio's ability to compete.

Why wait for traffic and weather on the 10s? I can have it right now. Why curse because I missed a score or headline because my kid needed me for a minute? I can click back and get it. Why listen to news about surrounding towns as well as my own when I can choose just the news I need? Why listen to a DJ play 3 of 4 songs that I like when I can listen to 4 of 4 songs that I like? Why listen to commentary and humor delivered via radio when I can listen to podcasts and read blogs on the topics that I truly relate to wherever and whenever I want?

Radio isn't bad. It's just that it's been overtaken by better delivery technologies. I'm sorry for those of you who love the experience of the working in the radio business. It's tough to lose a profession you love. It's definitely a buzz to drive the public's awareness of music and news and opinion from behind a microphone. But it's also never going to happen again. The only choice you have is do you want to take what you can from the experience while the business slowly dies around you, or do you want to move on on your own terms. Trying to restore radio to prominence is simply going to be a fruitless and painful mission.

Anonymous said...

Why does this clown get paid millions every year- for what?