Monday, May 4, 2009

Radio: Cat Litter Channel

Say what you want about John Hogan but at least credit him for the honesty he delivered amid all the swirl of misinformation and panic Clear Channel forced on its employees last week.

Come on. Admit it. Don’tcha just love it? Premium Choice.

Hogan named his “not local but still vocal” voice-tracking and syndication sector after a brand of cat litter.

It’s true that Hogan’s having a rough start launching some of the new Premium Choice shows. Cats keep covering them up.

Insert your own joke here.

In Greater Cleveland, where in some parts of the market three separate Clear Channel KISS branded stations can be heard – all were playing the same music and using the same voice-tracking.

How desperate is Clear Channel?

They’ll consider themselves lucky if not in bankruptcy by year’s end.

The New York Times, itself a victim of trustafarian inexperience and greed, said, “it’s too soon to say who will be the biggest loser among media companies in this recession. But Clear Channel Communications is vying for the title.”

The accolades are coming in. They’re been pegged as the Terri Schiavo of media.

This is the end result of a decade and a third of reckless spending to buy up radio stations, regardless of size, market, or price – just fo
r the bragging rights of owning the most of them. Today, they’re in two categories: worth less or worthless.

Let’s take a gander at Ohio. The downturn in the economy has devastated that state. Clear Channel owns a total of 72 radio stations of all shapes and sizes there – and overpaid for every one of them. There’s that radio business plan again: Buy ‘em now and figure out what to do with ‘em later. One problem. Later is now.

They proved Bob Sillerman’s greater fool theory when they bought SFX Concerts, renamed it Clear Channel Concerts, which they later sold at a loss.
You know of the greater fool theory, right? It’s knowing that someone will pay even more than you did for something you paid too much for.

This is the end result of a decade and a third of Clear Channel buying up radio publications, rep firms, and manufacturers.

I always wondered wh
y Hogan, who likes to put names and labels on everything, didn’t try to come up with a new one for Prophet, the voice-tracking automation system Clear Channel bought from Prophet Systems of Ogallala, Nebraska.

See, I said they should’ve renamed it the Terminator – because that’s exactly what it did to most of Clear Channel’s live air talent.

Even after their original architect of doom, Randy Michaels, who was provided the blank checks to buy anything, buy everything, was unceremoniously removed from the premises for impersonating the expense account of a Mays family member, Clear Channel continued on with half-baked, unthought-out projects like bland social networks and format labs, which went nowhere fast.

Last week Clear Channel employees got to read one of two Orwellian statements.

For the 590 no longer under its employ, it was: “Clear Channel is reducing the number of people it empl
oys due to economy and the strategic direction of the company. We have decided to end your
employment as of today.”

For those surviving the latest purge, it was a personal message from Napoleonic CEO Mark Mays, which read in part: “While we can’t predict the future, we now believe we have determined the right structure and staffing levels for the current economic environment,” which is a reworking of a previous personal message he released after the January purge, which claimed 1,850 jobs.

And the trades were sent a statement issued by Lisa Dollinger, the Minister of Propaganda for the San A
ntonio silver spoon brothers, which read: “Like all media companies, Clear Channel has to adjust its business to the realities of the current economy.”

Clear Channel doesn’t cut to the chase. They just cut.

Since current is defined as the “here and now” you can expect more herd thinning, most likely after July 30 when Clear Channel will no longer be under obligation to the Security and Exchange Commission to provide a specific severance pac
kage. That was a pact they were forced to make with the SEC in order to win their approval of the private equity firms of Bain Capital and Thomas H. Lee’s privatization of Clear Channel, which will go down in history as both the biggest and dumbest leveraged buyout in the media business.

Warren Buffett
was right when he put private equity firms front and center with mortgage issuers, accusing them of committing “a series of life-threatening problems within many of the world’s great financial institutions.”

Clear Channel also added that it would be suspending its 401(k) match for all employees for the rest of the year; adding that if the company hits 90 percent of the budget goals at year’s end, the matches will be retroactively restored. Can we agree that neither will occur considering that Clear Channel’s revenue plunged by 23 percent in Q1 and cash flow fell by 47 percent?

Buying time on radio is like the story of a man who approaches a woman and asks, “Would you spend the night with me for $1,000?”

She paus
es, then tells him, “Yes.”

“How about $100?” he asks.

Incensed, she replies, “What the hell do you think I am?”

“We’ve already established what you are,” he says. “Now, we’re just negotiating your price.”

Why are people worried about the Swine Flu? I’m more concerned about the Clear Channel ethical cirrhosis that’ll spread to the other monkey-see, monkey-do chains.

And, no, I can’t tell you why those other chains haven’t figured out that following Clear Channel’s lead is akin to suicide.

And as Bain and Lee are learning the hard way, suicide’s not painless.


Anonymous said...

Has anyone noticed that the cat in the first Premium Choice photo has the same face as John Hogan? Was that doctored or a coincidence?

Anonymous said...

We are off to a good start with Premium Choice. I can hardly wait to see the numbers. Not the shares but the actual numbers of people still listening to the radio. This really is bottom of the line.

Anonymous said...

"Premium Choice"? Who's "choice"? I believe this is what Clear Channel envisioned at the very beginning of deregulation...a network of national radio stations, one net for each format operating the same way many religious stations do with local stations only a transmitter site and a satellite dish with computer-inserted local spots as needed all fed and monitored from a central headquarters.

The really sad part is they're not even springing for outstanding big-name talent to work these shows. Imagine if this tech and enviornment existed in the heyday of radio...everyone could have listened to Cousin Brucie, Kid Leo, "Machine Gun" Kelly, Gerry House, Lynn Tolliver, Jim Ladd, true greats from all around the country.

But, no, Clear Channel will give us bland and blander, "talent" that isn't even as good as the old generation of syndicated formats like The Oldies Channel, Z-Rock, Brother Love or Music of Your Life.

And as we keep telling them, people won't listen. They will IPod, Internet, hum to themselves or text and talk on cellphones. Wake up, radio...we don't need you anymore. Make us want you again!

Anonymous said...

Nice blog. However, you're wrong about being able to hear three different KISS stations in Greater Cleveland at once though. You're talking about WAKS (of course), WVKS/Toledo and WAKZ/Youngstown I assume? You have to be.

Only the furthest reaches of the western portion of Cleveland could be able to hear KISS/Toledo - and that's even a stretch, they don't really come in until Sandusky. Anyway, there's zero chance of KISS/Ytown coming in over there. London, Ontario's FM96 blasts in on 95.9 over most of Cleveland's northern region. In fact, the only part of "Greater Cleveland" that can hear KISS/Ytown are people traveling I-76 near Kent. No KISS/Toledo coming in down there, it's all Q92.5/Canton.

Make it two at once MAX - but that's even a maybe with WVKS. Sandusky isn't "Greater Cleveland."

Not possible John. Just sayin'...

Anonymous said...

Clear Channel specializes in double talk. I bet you are right. CC's next mass firing will take place after July 30. They are so damn transparent. They probably realize that and just don't care. Bankruptcy would be the best thing for CC. They may wiggle out of some contracts and obligations but in the long run we could get better owners, operators, and programming once the stations are put up for fire sale.

Anonymous said...

Given that the Wikipedia definition of Greater Cleveland includes Youngstown, OH, it's conceivable that WAKZ Youngstown, WVKF Wheeling, WV / Steubenville, OH and WKST-FM Pittsburgh, PA could all be heard there. Don't reside in the area, never tried it, but it certainly seems possible.

Anonymous said...

I think John may be referring to parts of southern Medina county where I have been able to pick up all three with a little help from propagation. There are other parts of Greater Cleveland (if Gorman's definition of it includes Summit county) where you can often pick up both Ytown and Toledo stations as well as Cleveland. Rare but there are those locations. Weather and propagation play into it somewhat of course.

Anonymous said...

I used to listen to FM 95.9 from London (there was another one from Chatham that changed format). That station along with the River 93.9 from Windsor-Detroit do better adult rock radio than any station in Cleveland (there is the Summit in Akron but their signal does not reach Cleveland). Over the last 3-4 years I can no longer get London. I get Clear Channel's KISS instead and even if I drive into downtown Cleveland and lose Y-town I still cannot pick up 95.9 anymore. It is a shame for those of us who would like a good quality rock station in Cleveland the likes of which we have not heard since WENZ's alternative rock format and especilally. WMMS THe Next Generation format was replaced.

Anonymous said...

Guess that whole "localism" thing means the stations get to keep their own call-letters. None of this is surprising. CC started out in the billboard business, in which there is no content, only advertising. They have always been mystified as to why they can't run stations with commercials 24/7. Why should they have to pay "talent" to interrupt their clients' spots? Doesn't seem fair, somehow. Remember, this is a company which has always preached that their most important audience is the advertiser. The listeners are just a way to justify advertiser spending. They have no intrinsic value.

Anonymous said...

The clients will not be fooled. A voice-tracked morning show from a distant market versus a local one? I want a deep, deep discount. Better still, why bother? Tried and true traded in for a gamble? Not me.

I would like to see Clear Channel fold and its stations put up for auction or fire sale. Maybe then we will get real broadcasters back in business that will put product on the air that I will buy time on knowing I will get results because its live, local and functional.

Anonymous said...

I see where Randy Michaels is trying to distance himself from his own creation in Radio-info. He wants to be in the line when the fire sales begin but who would trust him as an owner/operator given his past performance (original Jacor, Clear Channel, Zell-Tribune). So he will hire publicists and spinners to reinvent his image. Randy, it will not work. You have done too much damage to this industry. The "leak" to Radio-info that Clear Channel's hub and spoke is not your hub and spoke is laughable. I still have all the clippings from your Jacor days, Clear Channel days, and Zell hell days and I'll be more than happy to create a web site and put them on line should you dare reenter the broadcasting business. Have fun in here Chicago while it lasts. You have already worn out your welcome.

Anonymous said...

Randy Michaels is lying low these days and if you were him, you would be too. All his blustery talk of "innovation" and "reinvention" for the newspaper business is proving to be just more empty bellowing. Oh, wait a minute ... forgot his bold move of putting the Bob & Tom Show Radio Show on TV for WGN America.

BTW, headcount on the recent CC layoffs looks more like 960 than the reported 580. So much for true transparency in San Antonio.

Dave Newton said...

Everybody's anonymous. This suggests that you have something left to lose. In radio?

Anonymous said...

Whatever Clear Channel does those other chains cut from the same cloth do a few days later. Lew Dickey is the master "me too, me too".

Anonymous said...

I fully understand the financial constraints businesses are faced with. However, as you have pointed out, John, radio was in trouble when the economy was doing well.

What the radio industry does not understand is that its downturn times like these that help launch new ideas. Creativity should be encouraged not discouraged as is being done at Clear Channel, CBS, Citadel, Cumulus, Entercom, Greater Media and Radio One.

Radio should "own" on-line and not in the way Clear Channel is doing with its soft porn web sites for its rock and teen stations. I also agree that radio chains should be challenging the royalty rates for streaming on line. The fact that they are not convinces me, too that the current owners do not plan to own these stations for the long term. They do not understand that their stations will continue to devalue the longer they hold on to them.

I understand the banks will not take them back and the credit crunch is preventing the bargain hunters from taking advantage of some great discounts. Should prospective buyers be readying themselves for the eventual fire sales? The answer is a resounding Y-E-S!

Anonymous said...

You are soooo very right that the next mass head-chopping will be after July 30th. I believe they would have waited until then for THIS round of layoffs if they could.

I am so glad I was in the first round of cuts...and I get to keep on collecting from them and not go into work (fortunately, I can do other things besides radio). I would not want to be anywhere close to that building right now--being worked to death on stations that ultimately will not matter.

Anonymous said...

The cat does have the same cross eyed clueless look as John Hogan. Separated at birth - straight out of the old Spy Magazine.

The cat is smarter than John Hogan. He knows Premium Choice is for s#!t.

Anonymous said...

The quality keeps dropping. That in turn causes more defection from radio to other medium. It is the downward spiral that radio has been suffering since deregulation and the Randy Michaels/Clear Channelization of radio.

Do they really believe this will do anything for their bottom line? Consider that this has been their game plan for the past decade or more. Each time they downsize they lose more listeners and time spent listening. This is the obvious trend that they overlook.

Had quality and improvement in product and the sharing of great ideas come out of deregulation we would be ahead of the game and as Gorman puts it "marrying old media with new". Instead of that we are faced with automation, national formats, NO LOCALISM, Mr. Hogan and Mr. Hogan - DECLINING REVENUE.

We can blame Randy Michaels for creating the problem but all John Hogan and Mark Mays have done is escalate it.

Clear Channel has become a disgrace. I hope the Mays kids are happy with what they did to their father's once somewhat respected company.

Anonymous said...

Radio has thrown away morning drive. According to PPM figures afternoon drive has more listeners though far fewer than listened five to ten years ago. Why doesn't radio get it. It's decline, decline, decline. There is no upside. There is no glimmer of hope. Instead of fighting to win back listeners radio sabotages itself further and repels even more listeners. It is a vicious cycle that has to be reversed. Are these trust fund Mays and Dickey kids that far removed from reality that they cannot see the obvious? You are right. This is suicide and it is even painful to watch.

Anonymous said...

The cat litter works. Clear Channel's programming doesn't. In fact, it stinks.

Anonymous said...

I am in the radio business and I believe this business is as good as dead. I don't blame the medium itself. I blame those that destroyed it with artificial flavoring, coloring and blandness. I cannot sell what radio is delivering. The clients are wise to the real reach and frequency and the attempt to sell interactive are futile at best.

I already have another job lined up. I am reluctant to leave because I remember a better industry. With the politics and deception of Clear Channel and other radio chains I do not want to tarnish my own reputation because radio can no longer deliver.

John, I wish you were right about radio coming back. I think by the time the fire sales do happen there will be little to no interest in the medium.

Anonymous said...

It’s a sad sign of the times when Clear Channel employees openly discuss the company’s ultimate demise in bankruptcy court as being the only viable path to salvation.

Investment bankers have never understood the radio business. The sooner they lose their collective asses and get out of radio, the better off we will all be. Radio can be salvaged, but it will take real radio people to do it. The only question is, will there be any real radio people left to pick up the pieces when the fire sales commence?

Anonymous said...

you all got your wish...........David Rehr is apparently out at NAB. John here's your big chance to be Big Man On Campus and put your money where your mouth is

Anonymous said...

Rehr just resigned. Here comes over-the-air RIAA royalties. Bye, Bye HD Radio!

Anonymous said...

We can only hope!

Anonymous said...

npr's the only thing on public airwaves worth listening to anymore, and has been for some time. Now if they could just get rid of Matt Patrick!