Radio - Clear Channel's firing squad

As Barack Obama is sworn in as the 44th President of the United States on Tuesday, Clear Channel ‘s market managers will be terminating an estimated one-thousand radio division employees as ordered by its politburo, the private equity firms of Bain Capital and Thomas H. Lee.

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Reason for termination? Being on the payroll.

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These trigger-happy Clear Channel chicken you-know-whats intentionally planned their massacre to occur while media are occupied with Obama’s inauguration.

After numerous setbacks and disputes, Clear Channel was acquired and privatized on July 30, 2008 for $17.9 billion. Bain and Lee - held up without a gun.

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It’s now evident that the Clear Channel carnage will extend well beyond their U.S. radio division.

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Last Friday, the New York Post reported that Clear Channel was eliminating a total $400 million in costs and their butchery would expand to other divisions worldwide.

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Today, Clear Channel has 30,000 global employees. After Tuesday? A whole lot less.

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In advance of the massacre, Clear Channel filled some open programming positions by doubling-up existing program directors’ duties and its Katz Media Group, now the sole national radio rep in the U.S., thinned their herd by 122.

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Though they never denied budget cuts, Bain and Lee claim the moribund economy forced them to expedite the kill.

"Nothing about our plans have changed except for the speed and timing of them," a Clear Channel spinmeister source told the Post. "There's no doubt we are in a horrible advertising environment, and we can't just sit there and take it."

Clear Channel management rule #73 – Always blame something else for your own blunders.

Why would anyone ever even insinuate the likelihood of Pater Lowry Mays and his sons of privilege, masters Mark and Randall, turning in their private jets to fly – ugh – commercial?

Even by the post-deregulation standards, Clear Channel is setting the pace for other chains to follow - or not, as the case may be.

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I’ll be curious to see if Clear Channel's severance lives up to their promises to the Security and Exchange Commission.

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If you’re a Clear Channel employee, you should know that the SEC filing from May 21, 2007 says that anyone who is “…actively employed at the time the merger is completed, and involuntary terminated without cause during the following one-year period is eligible for the benefits..” For the record, they are “Less than 6 months - 1 month of Base pay; At least 6 months but less than one year - 3 months of Base pay; One to less than three years - 6 months of Base pay, and Three years or more -- 9 months of Base pay.

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“Base pay’ means, in the case of a full time employee, the employee’s applicable base benefit rate in effect at the time of termination or, in the case of a part time employee, the employee’s average base wages over the immediately preceding twelve week period.”

It also means that if you’re a Clear Channel employee that survives Tuesday’s purge but get fired on or after July 30, 2009, “nobody’ll owe you nothin’.”

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Clear Channel maintains a “Know the Facts” page on its corporate website. It reads, “Clear Channel Radio is not operated according to any political agenda or ideology. Local managers make their own decisions about programming and community events. Clear Channel Radio employs approximately 250 local General Managers, 750 local Sales Managers, and 900 local Program Directors. Managers are measured on their ability to drive listenership by intimately understanding what audiences want to hear and delivering that.”

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Will that page be revised by Wednesday morning? Just asking.

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I’ll be hearing from many of you on Tuesday and Wednesday.

Here are some words of caution. Please don’t send or forward any e-mails from your workplace. They can easily be traced. Expect the Clear Channel cybercops to be on red alert this week. Though Clear Channel management are ordered not to put anything in writing or e-mail regarding separation deals, there’s always a manager or two that’ll screw up. If you have something you wish to share, cut and paste and send from a private account.

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If you hide a recording device or wear a wire – again – forward audio files from personal accounts.

Anything I receive, print, audio, or photo, for that matter, will remain confidential unless you indicate otherwise.

Instead of putting their employees through a week and a day of irresolution, they should’ve done their dirty deeds done dirt cheap a week ago.

They'll be plenty of ex-employees dropping dimes incognito. Inaugural or not, Bain, Lee, and C.C. will not be able to squelch this one.

I combed the net but couldn’t find an accurate tally of how many Clear Channel employees have been terminated over the past decade but you can bet it’s into the thousands.

There is, of course, one inevitable consequence, which Clear Channel refuses to recognize. Clear Channel is the perfect example of imperial overstretch and it’s foreordained to collapse.

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The Bain and Lee predators must realize by now that Lowry, Mark and Randall Mays formed the quicksand beneath their feet.

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C.C. = Clear Channel and Circuit City. What’s the dif?

You see, Clear Channel has no problem with the word fired if the word you’re is in front of it. They will have a problem when the word fire is followed by sale.

Radio - Clear Channel: Skinned in the game

The Clear Channel managers returned from last week’s Dallas meetings with their procedural dictates for their market as ordered by BainCapital and Thomas H. Lee.

Evidently, Bain and Lee are more skilled at reading the room than the Mark Mays’ slash and burn management contingent and didn’t want their Clear Channel’s radio division to be on the radar when it went into massacre maneuvers.

So leave it to Bain-Lee and their newly acquired fiendish family to jointly tweak the privation.

The firings, which were expected to occur yesterday, will actually come to pass next Tuesday, the 20th.

So not only the employees but the families that depend on them will have to deal with this sadistic countdown to irresolute joblessness for a few more days.

Tom Petty said it well. The waiting is the hardest part.

The drawn out week-and-a-day delay of execution was caused by an inopportune scheduling glitch.

Clear Channel couldn’t do its customary pink slip mass firing Friday because the date, the 16th, falls between Martin Luther King’s actual birthday - the day before - and the official holiday the following Monday.

Martin Luther King may have said “I have a dream” but Mark Mays is best known for “I have a scheme.”

But here’s the godsend for Clear Channel. Tuesday is Barack Obama’s inauguration.

The media coverage of the inaugural ceremony and surrounding events are expected to exceed November 4th’s media blitz of President-elect Obama’s victory. Barring a major contingency – the Obama inauguration will be only news story on Tuesday – and the following day.

To paraphrase Billy Idol, it’s a nice day for a mass firing.

So as Barack Obama gets sworn in as the 44th President of the United States, Clear Channel managers will be sacking an estimated one-thousand employees throughout the chain.

The first vision that came to my mind was the baptism scene in The Godfather. You know the one.

Michael Corleone is the Godfather at the christening of his nephew and namesake. The scene continuously crosscuts from the church to the set-up and execution of five murders of gang leaders. While the murders occur, Michael remains solemn at the church while listening to the holy recitations of the priest during the baptism.

Think about it. The only variation is that Clear Channel is using the backdrop of the Obama inauguration as its opportunity to make a clean kill.

Clear Channel used to be called “Cheap Channel.” Now it’s known as the “Characteristically Cruel.”

Remember that scene later on in The Godfather when Sal Tessio realizing that his betrayal of the Corleone family was evident attempts a futile mea culpa and begs for his life to be spared?

He says that memorable line to Coleone family consigliore Tom Hagan, “It was only business.”

That one became the s.o.p. close for Clear Channel managers to use when terminating an employee.

In the old days mobsters would pony up and take care of incidentals for the widows and family of those they whacked so they were never left to want – or squeal to the cops.

Proving that they have a heart, black as it may be, Clear Channel is rumored to be offering its terminated non-contract employees who had worked full-time and steadily for three years or longer nine months of severance provided they sign a don’t squeal to the media non-disclosure form.

John Hogan’s picked up on the buzzword “re-engineering” to describe the Brave - I mean - Bain New World of Clear Channel.

I have to clarify this. The Clear Channel version is less of the “re-engineering” as defined by Edward de Bono and Robert Heller and more like the “re-engineering” of the Soviet Union’s military after World War II.

Clear Channel’s “re-engineering” is a national centralization and dictate of policy, top-to-bottom, for programming and sales. That means national formats, national decisions, and less localism.

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Does this present an opportunity for rival chains to make a move against Clear Channel’s weakened state? Doubtful. Most expect the other major radio chains to fall in line like waddling penguins all-in-a-row, mimicking Clear Channel’s every move.

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Radio isn’t dying as much as it’s disappearing. Instead of finding new ways and means of being essential and engaging, it takes the opposite tack, which will result in further alienation with the declining radio audience.

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As the great convergence to the Internet moves forward, the modern world will leave terrestrial radio behind. The second decade of the 21st century will hold little promise for terrestrial radio unless there is massive change in leadership, attitude, and direction.

Hints of a massive downsizing at Clear Channel had been circulating since before Thanksgiving – but that didn’t stop Mark Mays from firing off a first-of-year-memo. He said, Beginnings are a gift. They are an opportunity to put past disappointments behind us. They are a chance to tap new resolve. They allow us the prospect for renewal. He predicted a recession that would be broad, deep, and sustained.

He asked for focus, which he defined as the ability to get the job done amidst the uncertainty and distraction that a recession can bring. And ultimately, focus gives us the opportunity to succeed when others fail.

He asked for resilience and to see the glass half full.

He asked for determination, claiming that Clear Channel has always been the company that leads our industries out of the difficulties – and ended his memo by telling his surviving workaholics that they have the best resources in the industry at their disposal and You have the confidence and the support of everyone in this organization.

Now, could you imagine an honestly-written memo that says: We screwed up. We just couldn’t resist all of these greedy opportunities put in front of us. We put ourselves under a convenient cloak of invisibility so we could blame others for our shortcomings. Our only business was monkey business.

You may lose your job because we couldn’t keep ourselves from dropping our draws to keep the clients we had on the air.

There are those that take and those who can’t hold. There are givers and there are takers. We thought we were one thing when we were actually the other.

We refused to acknowledge our mistakes and recognize the facts about our industry. We’ve allowed our blinded greed to metastasize. Now, it’s feeding on itself and we just can’t comprehend why.

And now the Mays family will bequeath its legacy to a band of brigands known as a BainCapital and Thomas H. Lee and laugh all the way to the bank.

Radio: Sing-a-long to Lyin’ Diane’s HD Radio swan song

Memo to Lyin’ Diane Warren, the new president of that Archdiocese of Ruse - the HD Digital Radio Alliance: Give me a break and give it a rest. No one’s buying your deceptive HD Radio campaign. Capishe?

I’m talking about the headline in one of the on-line trades just before Christmas: HD Alliance Continues Aggressive Marketing Campaign.

I ask – you’re continuing what aggressive marketing campaign? Did I miss something? If so, why?

I liked the line you used in one of the trades about taking advantage of improving the chances of your radio campaign being heard during lighter spot loads. Are you claiming that your message was lost because it was wedged in with all those other spots? I’m sure that one’ll go over well with clients that bought time on radio over the past couple of months.

So what is it that you’re trying to sell, Lyin’ Diane?

HD Radio’s workability? Its signal quality? Its HD-2, HD-3 audio?

Even your previous employer, Clear Channel, has backed off from supporting HD Radio except for that brief press release about its poorly named Real Time traffic service on HD Radio. Let’s see. How many cars are HD radio equipped? Thought so.

Just a few weeks earlier they threw in the towel on their what-were-they-smoking-when-they-came-up-with-this HD Radio format lab.

Maybe the HD Radio Alliance fooled some of radio chains some of the time but evidently Bain-Lee’s not among those easily conned.

I hope you’re prepared for those smaller chains that wised up and will not renew their licensing deal. It’s easier for them to cut their losses now and rework external broadcasting toward streaming audio on line.

In due course, one of the major chains will concede and your con game will end.

The Alliance makes one realize that there is something intrinsically childish about con artists. They just can’t get past a kid’s level of ethical development.

It didn’t help HD Radio’s dubious reputation when consultant and paid iBiquity shill Fred Jacobs did his stab of betrayal and was outted for his questionable and quickly-yanked research study.

There was that 41-question survey about HD Radio from Jacobs for iBiquity mentioned in a Radio-info.com forum on October 31 that was hastily replaced by a sanitized 16-question version. Some believe the original study was designed to set up the former – ahem – leadership at the Alliance.

Christmas was a bust, Lyin’ Diane – was it not?

Let me rephrase that. All of 2008 was a bust.

Now, look us in the eyes and tell us how many HD Radios have you really sold this year?

You’re lyin’, Diane, if you blame the economy for poor sales. Your sales were pitiable when the economy was hot.

How about this tally? For the second year in a row the HD Digital Radio Alliance ran more radio spots than any other marketer. That adds up to 1,697,082 spots, up 250,000 from a year ago.

You beat Walmart’s 1.64 million; Geico’s 1.56 million; Verizon’s 1.24 million, and Home Depot’s 1.22 million.

You still didn’t answer the question, Lyin’ Diane. Could you please look us directly in the eyes and tell us how many HD Radio units you really sold this year?

A few months back All Access carried an interview with Joel Salkowicz of Pulse 87.7. He had this to say about the Alliance’s radio campaigns:

In the current economic climate, it’s hard to imagine today’s typical radio company making the necessary investment in Programming for HD because they can’t realize an IMMEDIATE return on investment. A half billion dollars worth of air time has been thrown at promoting HD Radio! The most generous estimates put the number of HD radios out there at somewhere around 500,000. That’s about $1000 in airtime to sell each new radio. Kinda makes the $100 (or so) per subscriber in acquisition costs the satellite companies have been spending look pretty reasonable.

Here are the cold hard facts, Lyin’ Diane. If I were selling against radio I’d use your campaign as the perfect paradigm of how radio cannot sell products.

Now between us we know two facts: 1. HD Radio is something no one wants or needs. 2. Your creative can’t save it. It’s the equivalent of audio wallpaper.

Enter the huckster, iBiquity President and CEO Bob “Booble” Struble.

Let’s read his 2008 in review: "Despite the economic downturn, HD Radio technology made significant strides in 2008 with broadcasters, automotive OEMs and receiver manufacturers. With the backing of almost every major electronics manufacturer, HD Radio receivers will be at the forefront of the digital transition in 2009."

iBiquity deserves blame – I mean acclaim - for conning –I mean convincing – the major radio chains to invest millions in HD Radio conversions as well as paying those hefty license fees. Whoever sold that bill of goods should be up for the Bernie Madoff Integrity Award of the year.

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Their campaign made other carpetbaggers blush.

I’ll credit iBiquity for their obdurate campaign to market a product no one would be interested in at a time when post-deregulation radio was badly in need of hook to push its product as “new and improved.”

Instead of exploiting a multi-platformed Internet presence, the NAB endorsed HD Radio. Think of where radio would be today had it gone full tilt boogie on the Internet?

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Your problem was not just getting HD Radios under the Christmas tree. It was trying to get them to work.

Now you’re saying that for the side channels to work efficiently, you need a power increase, right?

You’re telling me that the product you claimed worked yesterday is not working today?

Here are the facts as plain as I can make them. If the FCC approves that ten-fold power increase you’re lobbying for, it will junk up the analog band with enough interference to render listening to analog FM impractical.

Don’t believe it? Ask any engineer who’s not on your, ahem, “payroll.”

Now, let’s get back to your latest “new radio campaign,” Lyin’ Diane.

You’re making still another attempt to push a product that the public has already told you through lack of sales it has no interest in?

Please don’t confuse yourself with the fact that the Great Recession – or whatever we end up calling this meltdown –turned U.S. shoppers frugal.

You see an abrupt turnaround in the economy?

Do you really believe consumers will spend $100 for an HD Radio? How about $50? $25? Even $10?

You know that the CES opens in Vegas on Thursday, Lyin’ Diane?

So far, the big buzz is about old media connectivity to new media. Let me explain.

For video, its televisions with built-in Internet connection for downloading or streaming video and ordering films on-demand from Netflix.

For audio, its portable Internet radio for both home and car.

HD Radio? Lyin’ Diane, I’ve got just the promotion for you. Take a page from “Where’s Waldo?” Ask “Where’s HD Radio?” One difference. You’ll have a better chance of finding someone named Waldo at the CES than spotting a display of HD Radios.

Here’s another fact, Lyin’ Diane.

In three months, we’ll begin hearing about a few over leveraged broadcast chains going belly-up. *

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How about the roughly $200,000 it cost the average station to go HD Radio?

How many jobs have your folly cost the radio industry, Lyin’ Diane?

Maybe in your world it makes sense to replace working air talent and support staff with a frequency no one listens to and doesn’t generate a penny of revenue?

HD Radio - it’s not the gift that keeps on giving; it’s the mistake they keep on making over and over and over.

iBiquity, if it had a sliver of integrity, would kill HD Radio now. End it cold.

If a TV show doesn’t get its requisite audience, it’s cancelled.

If a movie doesn’t fill seats, it’s not booked for a following week’s run.

If a product doesn’t sell, you stop marketing it.

If a product doesn’t sell, you pull it off the shelves.

Unless it’s HD Radio.

Well, maybe they’re not removed from the shelves. In many case, Lyin’ Diane, they weren’t even stocked in the first place – right? Right.

Radio: Das Klear Khannel

Please explain to me the difference between the U.S.S.R.’s politburo summoning its union republic leaders to the Kremlin in Moscow for procedural dictates and Clear Channel summoning its 250 general managers to Dallas tomorrow and Wednesday for the same.

Hear me out. The likenesses are worthy of note. The Soviet Union was a federation made up of Soviet Socialist Republics. The earliest Republics were established after the 1917 October Revolution by Vladimir Lenin and the first Congress of Soviets. Between 1922 and 1940, the number of Republics increased to sixteen, created from territories acquired, or reacquired by the Soviet Union. Others were created by re-designating existing Republics into several parts. It’s akin to moving your city of license around while the F.C.C. Chairman is wearing the blindfold you provided.

Following the last major territorial annexations of the Baltic states, eastern Poland, Bessarabia, and other territories during World War II, it became the model for Communist states, like Clear Channel did for radio deregulation. The Soviet Union and the U.S. became the two world superpowers dominating world military operations, foreign affairs, economic policy, and scientific advancements until the former’s collapse in the mid to late eighties.

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Clear Channel, a U.S. media conglomerate, was founded in 1972 by Lowry Mays and Red McCombs. By 1995, Clear Channel owned 43 U.S. radio stations and 16 television stations. In 1996, following the signing of the Telecommunications Act, Clear Channel acquired over 70 other media companies, as well as picking and choosing a number of stand-alone properties. It also bought billboard/outdoor companies, a national concert promotion company, SFX and the Cleveland-based Belkin Productions.

Even after selling its concert division and 161 radio stations, Clear Channel remains a dominant media influence with billboard/outdoor advertising in twenty-five countries, and is still largest owner of AM, FM, and shortwave radio stations . It also controls twelve channels on XM Satellite Radio and has financial interest in radio stations in Mexico, New Zealand, Australia, and Norway. Those Mexican Clear Channel licenses? You may want to click here to get the real story on those. Clear Channel sold its TV properties in 2008. The publicly-traded Clear Channel was privatized on July 24, 2008 when bought out by two Boston-based private equity firms, BainCapital and Thomas H. Lee.

Look it up. For years I’ve been calling the fallout of radio deregulation privatized socialism.

For what it’s worth, Vladimir Lenin banned rival political parties, while Clear Channel banned several songs written by John Lennon.

We’re now less than 24 hours from learning of the new world order BainCapital and Thomas H. Lee structured for the newly privatized Clear Channel.

In business, as in world affairs, what’s obvious usually turns out to be true.

Bain-Lee’s desperately trying to cover its Clear Channel assets with both hands.

Like the politburo, there is no agenda at Bain-Capital’s new world order Clear Channel. General Managers will be handed their budgets and marching orders. It’s their version of Democratic Centralism.

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In another cost-cutting measure, the GMs will be limited to one overnight stay. I couldn’t verify the rumor that the one complementary meal the managers will be treated to will be a bowl of borscht soup with a side of unbuttered rye bread.

Rumors emanating from the dime-droppers and snitches at the Clear Channel San Antonio headquarters persist that the futures of air talent and account executives have been predetermined and it will be up to the general managers to carry out terminations swiftly and completely upon their return.

This latest bloodletting is expected claim some marquee names.

It’ll be easy to spot the Clear Channel GMs at DFW. Look for anyone resembling a beaten pound dog.

I’m inclined to accept that the majority of rumors – the 15 nationally-programmed formats; further staff reductions, and a discernible increase in voice tracking and syndicated personalities – are true.

It’s also likely that all but the top ten markets one programmer will be accountable to facilitate corporate commands for each multi-station market operation.

Since going private under Bain-Lee, Clear Channel budgets are now defined as “sucking the marrow out of the bone and macerating the remains.”

Why would Clear Channel need local announcers when it has a stable of nationally syndicated talk show wackjobs; pretty boy hit radio announcers, and album rock shock jocks? Serving the city of license? Why? Come on, get serious!

Don’t confuse them with the fact that by not having a farm team to develop talent for the future will be their demise when some of their national hosts inevitably fall from grace.

Make sense, doesn’t it? Purge talent and creativity and replace with top-down decrees.

They also refuse to acknowledge that several non-Clear Channel stations are probing the present and future value of long-in-the-tooth hate-monger acts like Rush Limbaugh and Glenn Beck and pop psych from Dr. Laura. They aren’t drawing younger demos and Limbaugh’s contract is proving to be unprofitable for several non-Clear Channel stations carrying the show.

The Clear Channel politburo never learns from their mistakes. They don’t have to. Their subordinates do and that’s tough.

What Clear Channel has never been able to discern is that it’s in the entertainment business. Here’s the straightforward definition: You put on a show, promise people something transcendent, and make money doing it. If you’re a movie, a sporting event or a concert, you sell tickets; if you’re a radio or TV station, you sell time. You’ll make money if you provide the fulfillment.

I’ve been asked at book signings why I haven’t followed up with a book about Clear Channel. In addition to recommending Alec Foege’s Right Side of the Dial, I feel if there is another book to be written about Bain-Lee’s privatization of the company it should be done by Stephen King – because this one will be truly frightening. I don’t want to give away the plot but it ends with Clear Channel so out of touch with what the radio audience wants that everyone stops listening to their stations; clients stop advertising, and to survive they must feed on themselves.

I anticipate that Bain-Lee and Clear Channel will follow the same pattern of a doomed romance. First discovery, then infatuation, then familiarity and, finally, contempt.

When you give one the power to save you, you give them the power to destroy you as well. So far, the Mays family still feels lucky. But luck, in due course, runs out. Just like the Soviet Union’s.