Saturday, February 7, 2009

Radio: Austere Channel

Did someone say that the Clear Channel budgetary crisis is even worse than anticipated?

Did someone at Bain Capital and Thomas H. Lee tell Mark Mays and his fun lovin’ chiselers, “We’re in a hurry…Chop, chop?

If you are a Clear Channel employee are you at risk of losing your job? Do you work in billing or traffic? If the answer to the latter is yes, the answer to the former is also yes – depending on your market size.

With Bain Capital and Thomas H. Lee deep in the throes of buyer’s remorse over their Clear Channel acquisition, reliable sources say that they will announce their new regionalized traffic and billing hub-and-spoke network on Friday, February 20.

In this new scenario, larger market clusters will oversee those departments for smaller markets, thus eliminating those positions in the latter markets.

Spywitnesses at Clear Channel corporate also maintain that an analogous 100-mile radius hub-and-spoke management plan will also be announced shortly; possibly in tandem with their traffic and billing announcement. This plan would purge market managers and assistants within a 100-mile radius of a larger market.

I’m only guessing here – but I’d save those whack-eroos for the next go-round. March? April?

Here’s the dark humor joke making the rounds at the Clear Channel clusters on that one: What will save our manager from getting fired is that the new Bain-Lee Clear Channel wants to look at itself as family. And our manager is a member of that family - the family dog.

There’s also the most obvious of imminent job cuts – program directors and air talent – though no date has been confirmed for that carnage other than it being inexorable and sooner than later. *

It’s a problem not exclusive to Clear Channel. We’ll see a few radio chains filing for financial bankruptcy this year. Their moral bankruptcy occurred some time prior.


Anonymous said...

This makes a lot of sense. Lately our traffic department is getting a lot of once over looks and we are being asked more questions about certain details. Just pay me my nine months. I will be glad to go. The unlucky ones here will be kept on until Clear Channel is not obligated to pay severance under their SEC agreement. The way Clear Channel runs its business is like the no rules sweat shops my grandfather told me existed in the '30s.

Anonymous said...

Clear Channel Radio has:

Formats that come from San Antonio.

Managers that oversee markets that they do not live in.

Air staff that is either syndicated or voice tracked by not local.

Billing and traffic done by larget markets in a few hundred mile radius.

"Local" news that is delivered by markets hundreds or miles away.

I think this calls for a review by the next F.C.C. Commissioner.

Anonymous said...

G-man, I worked for you. Today I am working for the evil empire. It is day and night. You used to stress to us that we are a people business and that the connection is the most vital element. Clear channel is just the opposite. I cannot see this model surviving especially when they continue to cut needed positions and swing toward nearly all syndication and voice tracking. Clear Channel does not believe in teamwork. It is a strict top/down mentality that plays on fear. They will fail and I do not plan to be around when they do. I will want to be around when the fire sales begin.

Anonymous said...

"It’s a problem not exclusive to Clear Channel. We’ll see a few radio chains filing for financial bankruptcy this year."

Bob "The Scammer Booble" Struble - are you getting this?

Anonymous said...

Clear Channel was founded with moral bankruptcy. It earned the name Cheap Channel long before Randy Michaels injected his evil into the empire. That crew deserves one another. Clear Channel and Bain Capital deserve each other. Mitt Romney and Lowry Mays. Different in many ways; still two peas in the pod when it comes to their lack of class and compassion.

deeper throater said...

john you are rght about the date, wrong about the firings. some firings will occur. youre right about traffic, billing. market managers not for a while. on air may happen before that. i think you will see some marquee names fired in some cities. cc mgrs are also being told to build a case against some employees to avoid full severence. deeper throater.

Anonymous said...

I agree with the person who worked for G-man and now works for the Evil is day and night, or more accurately, like heaven and hell. The ones who were let go on Inauguration Day are the lucky ones. I'm praying they let me go before the anniversary. I could use a nice payoff for all the crap and extra work/stress I've put up with for years. I refuse to work under their management tactic of fear, however. I've heard that people have been "spoken to" regarding discussing CC events with co-workers. Last time I checked, we still live in America, and freedom of speech is still a Constitutional right. Or did Clear Channel lobby to change that, too?

Yes, the FCC needs to review this whole mess. The premise that radio "serves the public" has certainly been long forgotten by these corporations.

Anonymous said...

and who might these "marquee names" be, deeper throater? jocks, PDs?

Chris Carmichael said...

The folks that will hurt the worse, besides the dedicated workers: Listeners. Well, then again, it could be the "Lack of Listeners" when this is over. Here is San Diego the chess pieces are lining up. LA just up the road, so is the IE. Then there is Phoenix to the east .... A lot of names will be on the beach by January 2010.

Anonymous said...

economy is one thing. bain and lee blindly bought into clear channel,overpaid for an underperforming company & is now trying to figure out the radio biz w/dumb sobs & hogan & his heroes. predict that bain-lee is about to chop up cc & put stations on the market. a bad investment on their part & a terrible misreading of the worst management team in radio next to citadel.

Transistor Radio said...

Radio-info hinted at February 20th for D-Day. It's really hard to believe radio is showing even more talented people the door.

Many smart people predicted satellite radio would never survive simply because of their debt. Looks terrestrial radio
might not make too.

B.C. Forbes said:

The man who has won millions at the cost of his conscience is a failure".

"It is only the farmer who faithfully plants seeds in the Spring, who reaps a harvest in the Autumn."

Anonymous said...

The moves CC is making would be opportunity for other chains to launch an attack at their many weakened points. The problem is that CBS Radio is just as bad if not worse. Dan Mason is smarter than Mays/Hogan. He quietly fires people almost daily though he did get in trouble in Boston when he fired a popular talk show host and was forced to rehire him. Citadel is so deep in debt they don't have the wherewithall to compete with a suburban daytimer. Salem is trying to sell off properties quietly. I see all the other chains following in the footsteps of Mays/Hogan and Mason and will continue to downsize and double and triple up duties leaving their stations a shell of their former selves. Unless those fire sales happen the radio industry will be dead and buried by the 2012.

Anonymous said...

Are you surprised what more would you expect from Gordon Gekko? The big egos look for a deal, then tell some hotshot young associate to work his spreadsheet magic to figure out some sort of "financial engineering" that will cut costs for the company after it is acquired. This means layoffs, less re-investment in the company and more debt. Think Bluestar airlines.

These companies have no interest in radio or improving the industry. It's about short term profits, bucks..

Clear Channel, Citadel, Cox and the rest of the clones are all made from the same stuff.

Anonymous said...

John, Cumulus did their own firings on Friday and did it well under the radar going as far as to tell those let go not to talk to the press or rival stations. One Cumulus GM even mentioned you. They did it with precision unlike Clear Channel which bungled the move. No one saw it coming. Another area that fell under the radar was Citadel in Buffalo. They cut salaries up to 20% from jocks to PDs. This is Lew Dickey who a few months ago bragged that he was ready to buy up other properties. He can't even run what he has. The Toledo terror strikes again.

Anonymous said...

Funny - in the most recent Radio World Fumbles was quoted saying how radio blogs have turned from negative to positive. Fumbles is still pushing HD Radio, despite the industry's meltdown - I guess that Fumble's bed is too big without Struble. Maybe, the HD Radio hardware will be the last man standing.

Anonymous said...

Lew Dickey enjoys telling you how smart he is. The problem is that truly smart people are not insecure and that is something Lew Dickey is. A few weeks back he pontificated how the solution to radio's ills was more consolidation and hinted how he would be in the forefront of expansion while other chains collapsed around him. The only collapse Dickey is seeing is right under his own nose. He quietly downsized his company on Friday in mostly markets that will not garner national attention. Dickey like the Mays family lives in an alternate reality and cannot bring himself to see that it will be the lack of content that will bring his company and others down over the next few months.

deeper throater said...

at my cluster they are going over contracts of morning / afternoon drive hosts. there will be a salary cap on shows carried only in one market. there is also an age limit which is not on the thumb drive. its a need to know. at least one 'name' pd is being terminated. there will be some surprise am drive shows that are doing okay that will still get cut.
employees are being evaluated on loyalty. the billing / traffic in our cluster is going elsewhere save for one person who will be the point person / liason.

Anonymous said...

We are not even thinking about billing. Collections are a HUGE problem. We have a record number of clients who we cannot collect from. It is dead serious and frightening. This could be one of the reasons why we are not waiting until later on the billing and traffic changes. Not only are collections bad with the smaller clients. The big ones names you know are late too. It is not good business to take them off the air either. If I had to guess I would say that at least one major department store in this market will close a number of stores or close up entirely. Have you been do a Kohl's lately? It's undercutting TJ Maxx with new merchandise!

Anonymous said...

Well, John, I'm a believer.

For a long time I bought the line that Bain/Lee was aware that they couldn't afford any more cuts and expect to hold listeners and so they would not cut. I can tell you with dead certainty that they do, in fact, believe that.

They also know that the hub and spoke system is small change. The efficiencies that they will gain will be just a minor blip on the bottom line. The real savings will be coming from deeper cuts. Apparently the cash crunch is so intense that they have no option but to take steps that they fully understand will further undermine their business.

If you've ever run a business, you've probably been in that position at least once or twice where you're pinched so hard you have to make penny wise and pound foolish decisions. I can tell you from experience that those are the decisions you remember and regret the most. We all make enough bad decisions by mistake, but when you are forced to make a bad strategic decision by forces beyond your control, that really burns you. Good luck to you all. Hopefully this depression will be less painful than it looks today.

Anonymous said...

As someone who has also had to make regretable business decisions over the years I agree with the previous poster.

I cannot recall any time that a quick fix worked for the long run.

Gorman pointed out that during good times Bain Capital is a typical private equity firm. They buy up properties, carve them up and sell them off in a configuration to turn a profit.

The Clear Channel deal is different. If someone wants to consider Lowry and Mark Mays geniuses for pawning off their company on a greater fool, fine.

It was not a good deal. The banks and Bain and Lee tried to back out only to have a Texas court force the deal to close.

It turned out to be a deal where they were buying something that was already and rapidly devaluating. Each day those stations are worth less than the day before.

Adding to radio woes is that you have imitators like Harvard U Lew Dickey and Deadly Dan Mason who will follow Clear Channel/Bain Capital's lead and use downsizing as the only means to stay afloat. What they are really doing is eliminating the product they sell.

I do not forsee a happy ending. Radio will implode and fade away or (hopefully) chains will bite the bullet and save their asses with a fire sale which will bring more owners and smarter spending budgets into the business.

Those that choose to hold on and believe the propaganda they are trying to sell will fail. It is happening already.

Anonymous said...

Radio will NOT implode and fade away. Some public COMPANIES will implode and fade away and in the end we will all be better off for this. But it's just inane to make it seem like radio is going to die. Radio is going to change, radio will not make the profits it used to, radio will get new ownership once these public companies collapse, and radio will survive.

Anonymous said...

C.C. added a non-compete clause to all that were let go in Jan. They are paying the severance Bi-weekly, so if you get another broadcasting job or if you say something against them they stop your pay...

Anonymous said...

"Radio will NOT implode and fade away. Some public COMPANIES will implode and fade away and in the end we will all be better off for this. But it's just inane to make it seem like radio is going to die. Radio is going to change, radio will not make the profits it used to, radio will get new ownership once these public companies collapse, and radio will survive."

Yes, radio will change all right. But in what form is anybody's guess.

Anonymous said...

I was one of those let go on Jan. 20th. and I DO consider myself one of the lucky ones. After all the crap they put me through, I almost resigned a few months back. Thank God I managed to hang on long enough to get my 9 month severance. They wouldn't let me out of my 6 month non-compete though. (They don't want me, but they don't want anyone else to have me...That's "Cheap Channel" for ya!) I agree with the poster who made a reference to age. If you're a PD/Air-Talent over 40 working for CC in a non Top 50 Market, start updating your resume' now. Some of the folks that managed to survive those Jan. 2oth cuts have already taken paycuts. Morale at "Clearance Channel" is at an all time low. The Company Koolaid has tasted lousy for a long time, and even the biggest "Clean Out My Desk Channel" office cheerleaders are starting to read the writing on the wall. Good Luck to all those when the next wave of CC cuts come down. However, being cut isn't neccesarily the worst thing ESPECIALLY with the way "Cheat Channel" is running things.

Anonymous said...

Why can't the company we work for ever give us a hint concerning layoffs? Why must we always find out from an outside source? And why can't they do it before you go home instead of waiting until you've already come to work? I hope this time it's me. Eventually it will be so let's get it over with already.

Anonymous said...

"Radio will NOT implode and fade away."

Little boy running scared - radio will just be a shell of what it is today, because Gen Y doesn't give a shit about radio, or you!

Anonymous said...

This is nothing new for CC as far as how they treat their employees. Things have gotten worse with the Bain acquisition and so the cuts are getting worse. They have been cheap from the beginning and have cut every year forcing their employees to work that much harder to earn the same money. Their traffic, production and promotional departments have been running on overworked, skeleton crews for years. I wonder how the ones that are "lucky" to keep their job will feel when they find out that they now get to input orders from other smaller markets on top of their already ridiculous workload? Yay me! I worked for CC and they SUCKED years ago. Hearing all of this only makes me snile knowing that I made the right decision to leave that hell hole years ago. I'm happy working for a small privately owned company that is focused on the clients and customer service. CC's moves have made it easy to compete and land money simply because clients don't like dealing with them because of the way they have operated over the years. These recent and upcoming changes are ultimately going to land more money in my pocket. They are removing the personal aspects of the sale and the ability to serve their local clients with this type of move. I personally can't wait until they are split up and there are radio station shortsales for their stations. I hate to see people suffer through the changes and transitions but they have to happen to lead to the ultimate demise of the evil, radio industry killing empire. This is why accountants shouldn't run radio stations. They are so concerned about the bottom line that they are going to kill the medium and billing to accomplish their "goals". Should be interesting to watch from the sidelines..I for one, am going to grab some popcorn and enjoy watching the show.

Anonymous said...

Just wanted to express my staggering sadness that someone who consults radio talent could write a blog about the industry and use a guillotine to augment the verbiage. As if it the layoffs aren't bad enough, those of us who are left standing but wondering about our futures are further demoralized by blogs such as this. Not much actual facts just a lot of pontificating and guessing about what may or may not be coming next.

I am HEARTBROKEN to be rendered irrelevant/redundant. This was my B plan and with so c plan what do I do now?

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Anonymous said...

You forgot Andrew Jackson’s Big Block of Cheese with nary a macaroni in sight.