Tuesday, May 27, 2008

Radio: Shuttlin' off to Chicago

I was wondering when Clear Channel would try to shut down the recently inaugurated transport service that’s been shuttling their former employees from the 200 East Basse Road funplex in San Antonio to their new Tribune Corp. home at 435 North Michigan Avenue in that toddlin’ town – Chicago.

Since his master Sam took control of the troubled Trib, shepherd Benjamin Homel, known to most by his stage name Randy Michaels, has been summoning his sheeple to the gates of Zell.

Imagine how the Mays family feels. The guys that busted their company are still bustin’ their chops.

It was inevitable that the jilted Mays family would launch a counterattack.

I’ll bet it was triggered by that press release Michaels and Zell sent out that read, in part: “Tribune announces executive appointments and, amazingly, only one is connected to Clear Channel Communications.”

Clear Channel took a break from writing $750,000 in checks for lobbyists to influence peddle Congress to sue; accusing Tribune Corp. of unfair competition and misappropriating trade secrets.

Stop right there. Clear Channel claiming “unfair competition?” I’ll pause for a chuckle.

It would’ve been more convincing to claim that Zell and Michaels have a secret cabal conspiring to destroy Clear Channel Communications.

Clear Channel alleges that when its interactive director Andrew Friedman accepted the position of vice president of Tribune’s interactive division, he took sensitive trade secrets with him.

Now, San Antonio’s seething and played the “if we can’t have you no one can” card by evoking an exclusivity clause and seeking a temporary injunction to keep Friedman from working for Tribune until the end of the year.

“Clear Channel will not tolerate the Tribune’s interference with valuable business contracts belonging to our company and intends to pursue all legal remedies available to put a stop to it,” stated Andy Levin - his title of importance being executive vice-president and chief legal officer at Clear Channel.

Come on, now. Isn’t it a little implausible to believe that any former Clear Channel executive – still loyal to Randy Michaels after all these years – would willingly steal trade secrets from Clear Channel? I’ll pause for another chuckle.

Trade secrets? Maybe Michaels and Zell want to know what Clear Channel has doing for the past couple of years to make sure they never make the same mistakes.

Naw, that can’t be it. Most of the blunders made by Clear Channel were initially architected by Michaels.

Hub and spoke. Buy it now and figure out what to do with it later. Need I continue?

In fact, Michaels is recycling and remodeling his old and dated Clear Channel slogans, including “the TV you can’t ignore” (for Clear Channel radio it was “noise”) on Tribune’s recently renamed “superstation” WGN (now called WGN/America).

How about that new WGN logo? Original, huh? Total Recall 2070 anyone?

He should've called it Power Pig.

Let’s be pragmatic here. Trade secrets from Clear Channel aren’t even in the same universe as a single smuggled Whole Foods shopping list from Steve Jobs.

There was that epigrammatic Randy Michaels phase when Clear Channel seemed to be a very big and a very happy family, until the real family, which spells its name with four letters, reviewed expenses and, among other things, learned that Michaels had charged back the company for his excessive use of a private plane charter. Even better, Michaels chartered the plane from his own leasing company, Radioactive. You can’t beat paying yourself for a free ride.

Flying from one Rolling Stones concert to another to hold court? Of course that was business.

It wasn’t long after that revelation that the Mays family banished Michaels to the bowels of the Clear Channel until his deal was terminated.

Then Clear Channel relocated the radio division headquarters from Covington, Kentucky, where Michaels convinced them radio’s home should be, to the death star mothership in San Antonio.

That’s when it the fun stopped.

Now, the flock is bolting for the little reasons that mean so much.

They miss the good old days when the press releases and staff memos were laced with Animal House double entendre missives – not to mention receiving those never-ending in-house dirty joke e-mails blasts from Michaels.

After Michaels was tossed, John Hogan’s prose took over. It was so bad that that when Clear Channel put together their privatization plan, BainCapital and Thomas H. Lee sent a team to San Antonio to redraft his memos.

Don’t believe me? Ever read the “less is more” memo and the memo defending it that followed?

Actually, uniquely composed memos have already made a comeback under Michaels and Zell.

The continual batch Tribune innovation director Lee Abrams is churning out to the staff has already earned him his own page in Gawker.com. Abrams personifies where the Trib is headed. You guessed it. Just like AOR.

Let’s be fair. Those Clear Channel meetings just aren’t as mean spirited as the used to be, The good ol’ Michaels boys used to have fun visiting recently acquired properties to size up who’d survive the purge based on what jokes they laughed at.

The sheeple missed those meeting in Covington where they’d hire strippers to liven them up. And Randy knew how to always crack ‘em up by wearing that the rubber penis around his neck.

Now, I’m no prude, mind you. I would’ve laughed at it, too, when I was 12 years old.

Randy’s rebels can’t wait for the next Newspaper Association of America conference when the staff of the Chicago Tribune will carry Michaels like a Pharaoh into the room – or when he walks into a meeting in his underwear, and soaks Arthur Ochs Sulzberger Jr. with his high-powered Speed Shark motorized water gun.

I think it would make for great entertainment to lock Mark Mays and Randy Michaels together in a conference room and see who comes out alive.

People migrate. There’s been a similar, far more publicized exodus of former Google execs to Facebook. Those in control at the Googleplex aren’t fluttering around like cat-scared birds.

And unlike Clear Channel and Tribune, Google and Facebook are inventive and flourishing companies.

I don’t see what the big deal is with Clear Channel’s concern over losing a few more employees.

If they want to go, let ‘em. And wish them well on their “future endeavors.”

Clear Channel’s already fired hundreds of creative and talented employees. Those still under their employ – and holding what’s left of the joint together - are being treated as slave labor by San Antonio.

Eventually, Clear Channel will end up flushing everything but their toilets. That way, when it’s all over they can look back on their broadcasting history to see what they accomplished.

We can all agree on one thing. Randy Michaels at Tribune will do for newspapers and TV what he did for radio at Clear Channel.

Thursday, May 22, 2008

Radio: The dreaded three-day weekend

Today’s the day when everyone in radio will say to their comrades, “Hope to see you next week…”

It’s another dreaded three-day weekend – the ideal time for chains to chop staff and flip formats.

Shock deadens when you learn that the downsizing occurred days ago. That’s the benefit of long weekends.

By the time Tuesday rolls around, the carnage and chaos will be old news.
Humans are creatures of habit and given the choice will invariably go to what is most familiar.

When familiarity disappears, so does loyalty.

When loyalty disappears so do ratings.

I liken perpetual format changes to restaurants that go out of business only to be replaced by other restaurants that go out of business a couple of years later.

People who love food and cooking believe they’d find bliss in opening a restaurant and managing it the way they should feel it should be managed.

The trouble is that a love of food and cooking doesn’t assure the success of a restaurant any more than a love a books assures a successful book store.

Doing it right takes a skillful business mind, unimaginable hard word, and a hell of lot of luck.

Here’s the problem. Radio doesn’t want skill and hard work. It wants cheap and part time, no benefits.

You’d think it’s bad enough that the majority of radio stations will keep their studios free of the stink of human with voice-tracked countdowns and syndicated specials.

They’ll be a handful of stations that will do it right – and actually encourage time spent listening. But handful means few.

I know, I know. We’d all like to go back to the time when radio took seriously these long three-day weekends – and in the pre-FM (find me) days when top 40 radio would battle-to-the-death to lock in listeners to their stations for the summer season.

It would take something super-special like Drake-Chenault’s History of Rock & Roll, to trigger a station to deviate from its regular format over the long holiday weekend.

The decline of three-day weekend programming started when it became so much easier to just slot part-timers or pre-record the A-team to run down a station’s top 500 as a play on the Indie 500. It worked best for formats like oldies, which had the tonnage of titles and AOR, which, by the late 70s was already top-heavy in classic rock.

Today, stations not a countdown weekend or syndication just go on automatic pilot.

Schedule and print. Sometimes days in advance. It’ll be the same music, the same pre-recorded voice tracking whether it’s a sunny day or pouring rain.

If you’re doing the barbeque/party circuit this weekend, I predict that the music you’ll hear will not be coming from a radio.

Most of what I learned about programming a radio station I picked up listening to top 40 radio in the sixties.

Radio was run by radio people. They understood the true ownership rule – and it’s wasn’t just own mornings, own the day.

It’ was all about owning the soundtrack.

Own Memorial Day and you’ll own up to July 4th. Own July 4th and you’ll own up to Labor Day. Own Labor Day weekend – and you’ll be in perfect pole position to own the fall book.

Prove me wrong. Hope to see you Tuesday.

Monday, May 19, 2008

Radio: Are you a Celtic or a Cav?

I don’t do sports and leave that to those who know how to cover it best.

But I did get caught up in the frenzy of the Boston Celtics-Cleveland Cavaliers playoff series. How could one not? And as a citizen of both cities, it was my civic duty.

Of course, with my warped mind, it wasn’t long before I came up with a radio analogy.

The Cleveland Cavaliers are like a radio station with the best morning drive personality – and nothing for the rest of the day. Think of the slogans that have dominated radio for years. Let me offer a blast from the past: “Howard Stern all morning, the best rock all day.”

Isn’t that an alternative to “....mediocrity the rest of the day?”

LeBron couldn’t do it alone. By surrounding him with mediocre players – they were fated to run out of steam and let him down. And they did.

Stations may get anywhere from 35 to well over 50 percent of its total revenue from morning drive – and it is the must-own daypart.

Here’s the problem. “Own mornings, own the day” was, is, and will always be falsehood. In case you haven’t noticed, we’re living in a 24/7 world. And you wonder why kids aren’t listening to the radio? You’ve already answered the question.

The Boston Celtics have the three-headed beast: Allen, Garnett, and Pierce. True, LeBron is in a class by himself - but he can’t carry the Cavs by himself.

Seven games – and right up to the last minutes it could’ve gone either way. The Celtics are a team. The Cavs had a superstar lead surrounded by mediocrity and for that reason they won’t be on the hardwood until the ’08-’09 season.

How many games did the Cavs win this year without LeBron?

Remember what happened to CBS stations like WBCN, WYSP, and others when Howard Stern vacated terrestrial for satellite. Even to this day - WBCN has the Patriots, for Chrissakes, as well as Opie & Anthony, who have Boston roots – and they still can’t convert those numbers to other dayparts.

How many stations have morning shows followed by generic voice-tracking all day? Must you ask why listening is down and TSL is becoming an endangered species?

That’s why so many in radio have that feeling of vague but imminent doom. It’s real. Embracing that old school way of doing radio is terminal.

To those not in the know, managing a radio station has now joined King Crab fishing, coal mining, rattlesnake wrestling, and being a personal assistant to Mark Mays as the world’s most deadly professions.

The Celtics can tell you more about programming a successful radio station than the Cavs can.

Thursday, May 15, 2008

Radio: Clear Channel - Business as usual?

Abhorrence gave way to logic when the parties caught up in the Clear Channel-BainCapital-Thomas H. Lee buyout realized that only the lawyers and vultures would get rich and its stock would eventually slide into spare change territory if this deal continued to get dragged through the courts. Sure, Texas justice might’ve prevailed – but at what cost to Clear Channel? Lately, the Mays family called in enough chits to owe some significant payback.

$39.20 was obscene. $36 is only slightly less obscene.

According to Heidi N. Moore’s Wall Street Journal blog: “At one point, the hatred between the parties was so intense that the emotion was palpable. “The companies and lenders hated each other so intensely that if it were in person, we would have needed an armed guard,” quipped one person close to the situation. And the developments since — with a settlement reached and a new deal well on the way — show the power of what can happen in a negotiation when the people involved decide to step back, tamp down the egos a bit, and take a more clinical look at the problem of the financing. “We had to wipe away the emotional issues and come to a pain-sharing agreement,” said one person involved”.

Forget the propaganda. This deal’s not done. There are strings attached.

This is one of those be-careful-what-you-wish-for situations.

Clear Channel shareholders still have to be sold. The new drop dead date for the deal is December 31, 2008. The stock could do some amazing feats of daring and disaster between now and then.

The banks involved in the deal have a mere 13 days (hear that tick-tick-tick?) to fund the escrow piece of the new privatization sale $36 a share agreement or find themselves at the mercy of New York Judge Helen Freedman’s court.

And don’t underestimate the greed of the investors.

If for some odd chance Clear Channel’s stock remains in its current inflated $36 price, expect its investors, most notably Highfields Capital, to demand it to be goosed back to the $39.20.

If reality sets in and the stock price tumbles, the banks could threaten to turn off the tap and it’ll be back to the fun and games we’ve grown familiar with over the past few months.
Like arbitrageurs, banditos are lurking all over this deal of the damned.

Regardless, those on the losing end in this deal will be the company’s managers whose piece of the action will be trimmed down considerably and, of course, the Clear Channel rank and file. More positions will be deleted or busted down to part-time/no benefits. I'm sure, like Marie Antoinette, the Mays family feels your pain.

“For all of us at Clear Channel, it’s still business as usual,” sayeth CEO Mark Mays, who’s been resurrected from the dead, revived and refreshed and ready for your obsessive-compulsive enjoyment, “As our merger transaction developments move forward, we’ll all continue to stay focused on doing our jobs — and creating value for our customers, serving our communities and growing our businesses.”

Business as usual? That’s what got you into trouble in the first place.

Tuesday, May 13, 2008

Radio: No bull

Were you the least bit surprised? I hope not.

The Cumulus-Merrill Lynch deal-gone-dead news was secondary to the Clear Channel soap opera, but it shouldn’t have been. There are lessons to be learned.

Even $26 a share is unrealistic for Clear Channel.

I’ll credit CC Outdoor with the success of their new digital billboards, which I read about in this study.

But I do have a question. What happens when gas climbs past $4-plus a gallon and the civilians revise their driving habits. Fewer eyeballs, less often.

What’s left in CC radio to do except suck marrow from the bone?

At least someone had the superior intellect and business sagacity to realize that the Cumulus deal was doomed.

One question. What took so long? This one should’ve been quashed back in mid-February when the gelded bulls at Merrill-Lynch owned up to the largest loss in the company’s history - $8.6 billion.

When Cumulus struck that absurd go- private deal with Merrill Lynch Global Private Equity its stock was trading at $11.75. By mid-February, Cumulus was closing around six bucks and change and those on the Merrill-Lynch side that did the deal with Cumulus were no longer in the building.

I said it then and I’ll say it now. Never write a deal on a cocktail napkin after the fourth martooni.

Thursday, May 8, 2008

Radio: You got screwed!

What part of “you got screwed” don’t you understand?

Was it when the just-named COO of the Tribune Corp. Randy Michaels ran that full-page ad in the L.A. Times with a headline that read, Sorry Radio, but the numbers send a clear signal and referencing that the paper has a bigger reach than the top 20 radio stations in Los Angeles?

You were under the impression that the one formerly known as Benjamin Homel, was….one of us?

You really believed he still gave a rat’s hind about radio?

Those newspaper nitpickers claim that the numbers Michaels used misled badly and have no basis in fact.

So what? He misled radio into the state of decay it’s mired in today – and most of the post-deregulation radio leaders would welcome him back into the radio fold in a nanosecond.

But Michaels isn’t going back. He looks at the radio industry as sheep in sheep’s clothing.

Michaels’ fuzzy math in that ad omitted every L.A. Spanish language station in his radio to newspaper comparison. That’s a glaring omission, right? Not really. He’s talking about the Los Angeles Times – not the Tiempos De Los Ángeles. He left off KRTH, too. They have more cume listeners than the Times have readers, right? Right, but so what.

Facts get in the way.

Randy Michaels had a mission. It was to make Mary Beth Garber, the president of the Southern California Broadcasting Association mad enough to go on defense and he succeeded.
She shot back this too wordy click-here-to-read open letter, in which she called herself, “…angry and appalled that one of the nation's largest newspapers would attack another medium based on such loosely gathered and poorly put together facts.”

Wah Wah Wah!

Beth, learn from Michaels. You never complain and you never explain.

Michaels played her well. No one that matters will read her retort.

Randy Michaels is a mercenary. He was as loyal to the Mays family for as long as they were to him.

And there’s a big difference between Clear Channel and the Trib.

He was a hired gun working for the Mays family. This time he’s a hired gun working with Sam Zell. Big difference.

Zell and Michaels are Ramirez and MacLeod.

My guess is that he’s smart enough to be the new King Herod. At night, he probably looks up at the stars wondering if a new king – the next Randy Michaels – has been born, and can he kill him yet.

Someone called to ask, “What made Randy flip?” Flip? He never flipped.

He’s the guy Bob Dylan sings about in “Positively Fourth Street.” He wants to be on the side that’s winning.
I take that back. He’s closer to that character in John Cale’s “Ready for War.”

Zell’s hired him as his boy. If that means he wants Michaels to slam his old medium, so be it.
Michaels has no qualms on attacking his former industry. He knows where all the bodies are buried. He arranged the plots.

He’s not out to save radio as some assumed. He’s out to exterminate it.

Just wait for his interactive versus radio d&p show.

Maybe the radio industry will show more restraint before it misguidedly crowns its next savior.
You’d think radio would’ve figured that one out the last time around.

Remember Mel?

You know the saying. (Beep) them before they (beep) you.

Monday, May 5, 2008

Radio: Inbreds

I can’t stand those inbred radio types.

You know the kind.

They work in radio, talk about nothing except radio, know nothing except how to talk about radio, and they’re always ready and eager to carry the torch for an industry, which is in dire need of reinvention.

They’re so caught up in believing their own outlandish hype that they fail to see beyond the industry’s passé political correctness.

No one will ever doubt their impact on radio. It’s just not the one they expected. They got the masses to turn radio off.

The radio end of NAB 2008 resembled a village blacksmith’s convention in the early 1900s.

Back then, those blacksmiths convinced themselves that the horse would never be replaced as the primary means of transportation.

And those newfangled horseless carriages would never catch on. They were loud, dirty, and slow.

A few years later those same village blacksmiths were trying - unsuccessfully - to shoot out the tires of those horseless carriages as they rode by.

You can’t delay the inevitable. It’s time for the sleazeballs and reprobates to take a hike. Their problem with running radio was not that they kept shooting themselves in the foot. Their problem was that they had too many feet.

Radio needs to be reinvented – now!

The faster you let radio naturally hit rock bottom, the sooner it will recover.

Artificially inflating its value just delays the inevitable.

I feel for those who lost it through their gallant game plans.

One was to put together a company, buy up stray radio stations, and do an IPO. That strategy came to an abrupt halt when those planes crashed into the World Trade Center.

Then you had Clear Channel, which couldn’t pull itself away from the table and gorged on all things media, believing it could control popular culture.

Sumner Redstone felt the same way.

Maybe it looked do-able on paper…but that’s life. Flying high in April; shot down in May.

If their kids didn’t have coupons to clip they’d be asking if you want fries with that shake.
It’s true that some radical deals do make sense.

Ted Turner pulled it off better than most in 1986 when he went on his spending spree. He found himself with a $1.3 billion debt after his company purchased MGM’s film library.

The acquisition was more than he could manage so he called the fledging cable TV companies he had deals with and told them he had no choice but to shut down CNN and Superstation WTBS.

Cable needed CNN and TBS – so they rescued Ted by paying him more per subscriber so they could continue broadcasting his channels.
Today, through his Turner Enterprises, he owns 15 ranches in Kansas, Montana, Nebraska, New Mexico, Oklahoma, and South Dakota - a total of 1,910,000 acres, which makes him the largest individual landowner in North America.

Turner’s a deal maker. He played old media against then-new media and won.

Radio turned into a deal breaker. It played old media against new and lost.

Stations are not worth their current asking price. Clear Channel and a couple of other chains that are in dire need to divest figure they’ll get better deal by waiting it out? Hah!

It doesn’t work like that. Times have changed. Who’s going to lend money to the usual suspects for a risky venture like radio?

Have you noticed that many of the decision makers in the world of finance are the very people the radio industry chose to disenfranchise. Those 18-24s of ten years ago are the 25-34s of today. Don’t ask them about a favorite station. They don’t listen to radio.

Radio used to be entertainment. Ask someone under 40. To them, radio is enterdrainment.

A friend I’ve known for over thirty years who is still in radio today summed it up this way, “The corporate culture and Wall Street killed radio. The unrealistic promises of the consolidators and investors taking them at their word have been a deadly combination. There were not nearly enough "savings" and "growth" (and I use quotes, since savings translates to slashing workforce and growth means muscling for market share, undercutting competitors and generally doing anything to grow revenue that doesn't involve improving the product or the skills of employees) to counterbalance the enormous amount of debt added to the industry. Add in declining ratings---there's that pesky product issue again!--and a recession and you have a recipe for disaster.”

How many $10 million salaries were paid to those with a ten cent brain?

Here’s what you want to believe.

When radio is valued rationally you’ll see stations trading – and its buyers will be real broadcasters – those that realize that radio’s illusion, immediacy, and localism are its greatest strengths.

They’ll be a combination of radio veterans and new blood that’ll know how to transfuse a troubled industry.

There will be more companies owning fewer radio stations.

It’s time to get the spectators off the field.

Get out of the way so the real radio people can play with the grown-ups again.

Thursday, May 1, 2008

Radio: Boy Kevin, Federal Communications Crook

Boy Kevin Martin, Chairman of the Federal Communications Commissioncome on down!

You’re Boy Kevin Martin and as Chairman of the Federal Communications Commission you’ve been running the joint like it’s your own Private Idaho.

You’ve transformed it into your own personal hackapalooza where the best deals get done under the table.

You’re Boy Kevin Martin and you’ve got a price.

Sam Zell knows it.

Rupert Murdoch knows it.

Mark Mays knows it.

And if someone who wants something doesn’t meet it the deal doesn’t get done. Right?

Could that be the raison d'être for the curious delay in your pronouncement on the XM-Sirius satellite radio merger?

Just asking.

You’re Boy Kevin Martin and you should’ve known the end was near when the General Accounting Office uncovered those less than fortuitous leaks to certain media companies and trade groups that originated from your office.

I know. Your only motive for passing along confidential information to those that benefitted from the inside information was strictly a courtesy. All you did was give them a timeline on when to prepare their lobbyists and other assorted influence peddlers to descend on Congress.
When Rep. John Dingell (D-MI), who chairs the House Committee on Energy and Commerce, threatened to investigate the improprieties uncovered by the GAO, you had that irritating professional speech-deliverer, yes man, and CEO of the National Association of Broadcasters, David “Fumbles” Rehr prepare an officially sanctioned “Defend Boy Kevin” campaign.
You really believed in running the FCC on the down low. Above the law, below the radar.

You’re Kevin Martin and I had your number back in October and November, last year, when I pegged you the top bag man for big media.

I also predicted you and wifey will go back to where you came from – in this case, North Carolina to corrupt politics there. Maybe I ought to join the Psychic Radio Network?

You’re Boy Kevin Martin and you’ve made one huge mistake.
You should’ve never forgotten the one rule that applies to how business is done whether you’re a politician, a crook, or both: Never write if you can speak; never speak if you can nod; never nod if you can wink.

You learned that the hard way in March when the committee sent you a letter requesting e-mails, memos, handwritten notes, and meeting schedules for the last three years. It said their investigation was linked "to management practices that may adversely affect the commission's ability both to discharge effectively its statutory duties and to guard against waste, fraud and abuse."

You tried to squash it, claiming that an investigation could violate the commission’s trade secrets until you were reminded that you're not supposed to have any.
You’re Boy Kevin Martin and you don’t know much about public opinion.

When almost three-quarters of the U.S. population disapprove of the way the guy that hired you is running the country that means both your Commander in-chief George W. Bush and his string puller and your wife’s employer, Vice President Dick Cheney are losing juice on the Hill.

They’ve been too busy covering their own asses to be worried about yours. Sorry.

You’re Boy Kevin and you have the same motto as Jerry McGuire – Show me the money.

When the House Commerce Committee began asking around about the way you do business over thirty of your own staff members, past and present, told how you’d been pushing your own agenda to deregulate and eliminate more media ownership rules. They also brought up your way of dragging out meetings that don’t go your way and how you suppress agency studies when they don’t support your viewpoint.

It continues. The committee also grilled a number of telecommunication representatives and companies that had dealings with your office.

The results are in and you are a winner.

You have the best office money can buy.

In your world, wrong is the new right.
You’re Boy Kevin and you look like someone dropped a punch line on you and you were the joke.
How about that House Commerce Committee memo written on April 28 and sent to Rep. Dingell and Rep. Bart Stupak (D-MI), the chairman on the subcommittee on oversight and investigations, and leaked to the Washington Post?

It reads in part, "The bottom line is that the FCC process appears broken and most of the blame appears to rest with Chairman Martin."
You’re Kevin Martin and if your office seems a little smaller; the walls a little closer, the ceiling a bit lower, the floor a bit higher, you shouldn't be alarmed. That’s just your world closing in on you.