Radio: CBS Radio's thirty percent solution

Aw, come on. Stop your whining!

So you work for a major to medium size market newspaper. Your owners instituted optional buyouts, mandatory pay cuts – on average between 10 to 12 percent – and week-to-ten day unpaid furloughs to non-union employees.

It could be worse. You could be working for CBS Radio in Cleveland.

Maybe you’re in television, where buy outs are strongly suggested and the alternatives not very pleasing. There, you’re looking at pay cuts hovering around 4 to 8 percent, and unpaid week-to-two-week furloughs.

It could be worse. You could be working for CBS Radio in Cleveland.

And radio? The marrow’s already been sucked out of the bone in that industry. The pilots are automatic and voice-tracking’s the norm. There’s no need to endure the foul breath of those plebeians.

Say you’re that rare real live flesh and blood human still working in local radio and not playing a significant role in the top morning drive show in the market. You now know how an endangered species feels when learns that it’s endangered.

It could be worse. You could be working for CBS Radio in Cleveland.

Here's the CBS Radio backstory.

Akin to most publicly traded radio chains; it's had downsizing disasters, demotions in motion, and survivors doubling to quadrupling up on duties.

I’m not sure if this goes for other markets but in Cleveland CBS Radio recently imposed a 30 percent pay cut for selected employees in a take it or leave deal.

I never would've known about it if it weren't for some local agency people that tipped me off - and asked me for my take on it. This was a well kept secret. For a day or two. When will they learn? This is the Naked City. Secrets don't stay that way for long. I should've known something was up when one of their former account executives posted his resume on every media site around town, including mine.

You read that right. Thirty percent. That’s almost a third of one’s salary.

It’s bad enough when one must scale household budgets back five, ten, fifteen percent – but thirty? Making ends meet just got tougher for the selected servitude of CBS Radio Cleveland.

I wonder how many CBS Radio employees were able to convince their bank to discount their mortgage by 30 percent?

This is what we call deflation. And in its truest form it’s deadly.

This marks the first time since the Great Depression that companies are cutting jobs and existing wages simultaneously.

It’s supply and demand. If there’s no money left after paying off the essentials like food and shelter –goods stack up at retail, which force prices down.

I wonder how many CBS Radio employees were able to convince their local supermarket to give them a 30 percent discount on their food bill?

Thirty percent also means that anything left over will not be spent on anything less than an absolute necessity. Consumers that can afford to will save whatever they can for an uncertain future.

And the only certainty at CBS Radio is that it’s not going to change.

Though CBS Radio told the Wall Street Journal it’s projecting an uptick in revenue in the third and fourth quarters of this year, facts are facts. CBS Radio revenues were down 29 percent in the first quarter and 23 percent in the second. Maybe “Cash for Clunkers” brought a few auto dealers back to radio – but now that it’s over do you really believe they’re going to continue buying time at a clunker’s clip?

And consistency is not one of CBS Radio’s stronger points. 20 percent of its stations have changed format over the last two years.

Let’s read between the lines of their claim that their format flips in New York, L.A., and Chicago boosted revenue. The stations replaced their higher-priced full-time talent.

What’s the translation? Downsized positions at CBS Radio aren’t coming back. If you agreed to the 30 percent pay cut in Cleveland you’ve lived to see another day.

CBS Radio would certainly like to sell some of their stations, Cleveland included, but who’s got that kind of money and willing to risk it on radio?

Lenders aren’t lending. The only radio station buyers are those like Larry Wilson who have the liquidity to do so with their own dough.

Even a massive fire sale doesn’t do much good if no one has money to buy radio in these deflationary times.

The radio industry could learn something from Bill Veeck, the last owner to bring a World Series championship in 1948 to the Cleveland Indians. He said, it wasn’t the high cost of talent killing the game; it was the high cost of mediocrity.

The same could be said about the radio industry, post-1996.

CBS Radio, where one manager insisted that company policy was "Don't be creative!"

CBS. The acronym for Cut Budgets Severely.

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