Monday, June 30, 2008

Radio: Heroes are hard to find

We know of one Clear Channel exec that won’t be shuttling to Chicago to enter the Gates of Zell any time soon.

It’s been officially confirmed that John Hogan will be on board with the newly privatized Clear Channel as President and CEO of its radio division.

He signed up for five years. Bet on two.

Give him credit for managing to hang on to the position he’s held since the sudden departure of private plane enthusiast Randy Michaels back in August, 2002.

Sulk Hogan’s been working without a contract as Clear Channel's fixture tyrant since January 31, 2006.

Sure, there were rumors of BainCapital and Thomas H. Lee being less-not-more than thrilled with Hogan’s performance – but apparently they like the way he lets them rewrite his memos so he’s good to go.

That – and who else would’ve taken the thankless job anyway?

So now he’s in the position of knowing that the more employees Sam and Randy hire away from Clear Channel, the more enemies he'll get.

When Hogan was interviewed in the trade Radio Ink in 2003 he said, “Over the past few years, it became very fashionable to take a shot at Clear Channel. We became a target for a lot of people who think that big is bad. We became the target of a number of special-interest groups who were opposed to deregulation, not just of Radio but of media in general, and we were painted with a very broad brush by some of those groups. The momentum of the negative spin surprised us, and we have worked very hard to get caught up and replace inaccurate gossip with real information.”

Some things never change.

Last year Hogan made $2,166,308. His base is $775,000. The rest came from performance bonuses and stock and options.

How does it feel to be a Clear Channel parvenu?

Privileged number one son and Clear Channel CEO Mark Mays said in memo, “This management team will be on point to compete successfully against newspapers, cable, television, and all of our other competitors.

Did he really utter the word “newspapers?”

As in Tribune’s Sam Zell? As in Randy Michaels?

See? Clear Channel hasn’t changed. They still need a villain to blame their mistakes on.

Remember a couple of weeks back when number two son and CFO Randall said Clear Channel would go back to its “normal procedures” once it closed the deal with Bain and Lee?

He didn’t lie.

"Normal" at Clear Channel is Russian roulette.

Hogan’s first order of business will be to unveil a new management structure – and, as Hogie likes to say, “Less is more.”

Expect more of the same. They’ll keep floating their ludicrous trial balloons, only to shoot them down later.

Insiders claim the top 30 radio markets will report to one EVP and RVPs will be pay-cut wide and deep and busted down to market managers and paid appropriately.

Like I said. Some things never change.

Question: What’s Hogan’s job description? Answer: Disfiguring radio properties.

Barring contingencies, Bain and Lee will take over Clear Channel on July 30.

Let me toss one in. Is it true that BainCapital and Thomas H. Lee are kicking the dishes at XM? Does that mean the Sirius merge is about to purge? Just asking.

It’s amazing what you read that’s texted from the private cells inside Clear Channel’s San Antonio Kremlin.

There’s probably a lesson here somewhere, but I don’t even want to think about what it might be.

Wednesday, June 25, 2008

Radio: Beware of Con artists

First, the good news.

The radio industry recognizes that its stations need a presence on the Internet.

Now, the bad news. It doesn’t understand the presence its radio stations need.

Lately, we’ve been reading some bass-ackwards commentary from supposed radio “experts” comparing the web pages of newspapers to radio stations.

What they fail to comprehend is that most users aren’t won over by the jargon, imagery, photo ops, and streams from most radio web sites.

Comparing newspaper and radio sites is just plain stupid. Newspaper sites generate revenue by attracting and holding viewers. And it's done by assigning compelling content to a second medium.
There’s that word again. Content. C-O-N-T-E-N-T.

It’s something that too many in this industry undervalue.

Garbage in, garbage out.

Stream a lackluster voice-tracked station whose playlist is chosen by two buttons – one, schedule and two, print - on line and it’ll sound just as dreadful as it does on terrestrial radio.

Radio used to be the “last great illusion” until the Internet became an essential part of our culture.

Radio, as a medium, still has an edge, since it can provide a soundtrack, information, and, done correctly, play upon one’s imagination with creative narrative and production. It can be active, passive, or both.

Even the TV networks know that they can’t depend on traditional viewers. They’ve realized the need to attract people with a number of different platforms, and the need to survey and rate those viewers.

Eventually, all TV shows will be hybrids and dependent on a web presence that digs deeper into a plot and provide opportunities for audience involvement – even in determining the direction of a show’s storyline.

But it starts with the show. If the show on television doesn’t have the goods – viewers aren’t going to go on-line for more.

Some of you will be in Minneapolis for the Conclave this weekend. Have fun. It’s one of my favorite cities.

Judging from the mood of those attending last year’s Conclave, being in radio station management has joined ice road truckers, crab fishing in the Bering Sea, and personal assistant to Naomi Campbell as the world's deadliest professions.

I’m passing on the Con this year. With budgets being what they are most of the industry people I know are passing on it, too.

You are correct, sir, in your hypothesis that you’ll hear many an “expert.” spend too much time being officious about building a successful radio web presence. You know the drill: a little cut-and-paste text here, a few photos of the jocks and station promotions there, a jock blog or two, a stream or two…. Need I continue?

Their repertoire is a bad as a Jack station’s playlist.

After they scratch out all the logical solutions to radio’s problems they go after the illogical.

You wonder why radio managers fall for these con artists until you realize that Caesar considered Brutus a good friend and loyal advisor.

What these self-proclaimed specialists won’t tell you is that net surfers view thousands of sites daily and have learned to tune most of them out.
Even if your site is the web equivalent of a Lexus – if your stream is the equivalent of a Pinto, do you think anyone’s going to spend at-work or at-home time on it?
Surely, another hot topic at the Con will be about getting radio streams on mobile devices. The same rule applies. Crap is crap no matter what mode of delivery you choose to use.

The irony of these radio “experts’” squalid descent into obscurity is that it’s usually during dark economic times that con artists thrive.

In reality, it’s Occam’s Razor: The simplest explanation that covers the facts is probably the right one.

Profitable sites deliver – not promise. Most radio web sites promise – but can’t deliver. It’s not what a radio station says it is that determines whether it’s successful. It’s what it does that counts.

I hate to keep bringing his name up – but look at Steve Jobs and Apple. He created a brand that went from a cult to mass appeal. Apple has evolved from a handful of graphic artists that proudly announced that their creations were “Made on a Mac” to mass millions that proudly boaster their iMacs, iPods and iPhones.

Here’s what you won’t hear from those chicken you-know-whats at the Con.

Radio is failing because of the poor relationship it fashioned with younger demos.

The rise of hyperconnectivity and interactivity must be recognized by radio. To endure, it will have to deliver a standout quality product to create excitement to translate into time spent listening.

Programming functionality is the only component that can bring listeners back to radio. But the longer it takes for terrestrial radio to improve, the less likely consumers will return and trust the medium.
Spare me the “things have changed” line about radio listening allegiance. Tell that to the millions that pay to hear radio by subscribing to XM or Sirius.

Because of proliferating social networks, chat rooms, and blogs, it’s easy for radio listeners find alternatives. Illegally downloading music along with Internet and satellite radio listening is supplanting terrestrial radio as a source for new music.

Radio doesn’t need re-branding. The product needs re-inventing. Start there.

And don’t get conned at the Con.

Monday, June 23, 2008

Radio: Arbitron's Portable People Eater

Here we go again!

What can one say about an industry that embraces a failed technology (HD Radio) while battling another (Arbitron’s portable people meter) that could help it?

We’re in a time of classic movie remakes.

I propose a new twenty-first century version of Rebel without a Cause.

The original had James Dean playing the role of a rebellious teenager named Jim Stark, who had to prove himself a worthy gang member by drag racing stolen cars toward a cliff. The first one to jump before the car when over the edge was labeled a “chicken.”

I’m going to call the remake Rebels without a Cause.

Meet the rebels: John Hogan, CEO of Clear Channel radio; Lew Dickey, CEO of Cumulus Media; Alfred Liggins, CEO of Radio One; Bob Neil, the CEO of Cox Radio, and Charles Warfield, president of Inner City Broadcasting.

In this version they’re rebelling against new technology by choosing to drive their radio stations into an abyss rather than accept – and improve upon - change. Read the script here.

We are talking about Arbitron’s portable people meter.

Show me a survey or poll that’s perfect. You can’t.

Show me anything that is one hundred percent accurate. You can’t.

The People Meter has imperfections – I won’t argue with that. However, it’s an obvious improvement over the Arbitron diary.

Prove me wrong? You can’t.

The diary is over, terminated, finito. Say goodbye.

When I got my first full-time do-or-die program director position in 1973, some of the radio old timers I’d come in contact with were still grieving over the good old days of the Pulse and Hooper ratings services.

My future radio career was dependent on three four-week surveys. They were called A-R-B’s – an acronym for American Research Bureau, which conducted the surveys. ARB was renamed Arbitron a couple of years later. A small number of selected respondents kept a daily diary of their radio listening habits for one week out of the four week survey. The listening habits of those few diary holders represented all radio users.

Each Arbitron ratings period surveyed the last two weeks of the first month and the first two weeks of the second. They were known as the January-February, April-May, July-August, and October-November “books.”

Our promotion and marketing had to be geared for those four-week surveys. Forget about the other forty weeks. Sure, we had what we called “roll up,” which was radio’s version of pre-season games – and many stations bought into expensive – and often unnecessary - research to predict their Arbitron results.

Billboards for radio stations went up all over town; TV was saturated with radio spots, and newspapers were packed with mostly kitschy radio print ads.

Some stations would try and buy its audience with giveaways of houses, cars, and cash. Those that didn’t have the budget for big buck promotions had to compete by being the best they could be.

The results of those surveys – which were clearly called “estimates” – determined whose heads would roll and whose formats would change. Most importantly, the results of those “estimates” determined a station’s rate card. You lived and died by those numbers.

A few years later Arbitron extended their surveys. This year, for example, markets with four survey periods are in continuous measurement for 48 weeks, which started January 10 and will end on December 10.

And what did radio do with this new improved continuous survey? You guessed it. They rebelled against it. Stations could no longer crowd their promotional and marketing campaigns into four week periods – and programming had to maintain its attributes perennially.

Now, we are faced with the first real technological improvement that will appreciably reduce error. I repeat – reduce error – not necessarily eliminate it.

I fail to see a raison d'ĂȘtre why a system that records actual listening habits would be wrong for radio – unless the truth hurts. And it probably does.

There’s good reason why Arbitron’s people meters are making some radio executives nervous.

Diaries provided occasion for respondents to falsify or forget what they listened to. The personal people meter corrects those inaccuracies.

There is trepidation among radio groups that people meters, which record actual radio listening, will show serious decline in morning drive listening with some formats and demos. What if more former radio listeners now prefer television morning shows to radio, for example?

Twenty years ago most kitchens had radios. Today, most have televisions.

What about at-work, in-store, and in-car listening where, in some situations, terrestrial radio has been replaced by satellite radio and iPod docking stations?

There’s good reason why someone will pay to listen to radio. Think about it.

What about those who listen at work or at home on line? What if they are listening to streams of stations from other markets – or Internet-only stations? What if they're not even listening to radio?

What about a people meter respondent working or being in an environment for a significant period who has to listen to a radio whose station of choice is controlled by another?
Non-English speaking radio stations may also show an increase in some markets.

Rock stations may - or should I say - will learn that future growth will not come from mollycoddling lewd dudes and appealing to knucklehead nation.

Sure, they’ll have to be fine-tuning with the people meter. Show me any product that provides use and measurement statistics that isn’t continually upgraded as technology necessitates.

Radio strategies with programming, promotion, and marketing will change – maybe for the better – and, for certain, the industry will have to adapt to a new learning curve.

Radio isn’t alone. Nielsen is adding people meters for television viewing. By 2011, Nielsen people meters will be in all top fifty television markets.

It’s believed that with television, Nielsen’s people meters will show increase in UHF and cable viewing and that “sweeps weeks” will become meaningless since the Nielsen people meters will be able to provide continuous weekly surveys.

Of the major radio chains only CBS Radio has chosen not to be part of the radio rebel gang challenging Arbitron. They’re preparing for radio’s impending extreme makeover. Maybe CBS does have a grip on radio’s future.

For the rest of you, stop looking for villains to blame radio’s ills on. Just stop your whining and learn to live with it. It may even be good for some of you. If it isn’t, well….what’s the old saying? The elevator’s at the end of the hall.
Fleetwood Mac Attack

Monday, June 16, 2008

Radio: Merge and Purge

It was getting pretty torpid around here.

We were delimited by the stagnant cesspools of two distressed broadcasting deals is stasis.

It took a fleet of Roto-Rooters to snake through the sullage ….but now these deals are on their way to fruition.

This one’s been up and down, back and forth, on and off for over a year and a half. Now, it’s almost certain that it’ll be wrapped in less than seven weeks, well ahead of the previously scheduled end-of-September date.

This time, we’re assured, it’s really, really, really going to happen. Really.

Barring contingencies, it should be relatively effortless to keep the stock close to its magical $36/share price.
Read between the lines here. Unless you’re among the ill-fated majority of employees not holding on to stock certificates, this deal is perfecto.

Expect a mass exodus of key players once the deal is done.
Reservations for seats on the Chicago shuttle are filling rapidly.
And Bain and Lee will begin parceling out their write off Clear Channel properties at fire sale prices.

There are those who are confident that Sam Zell’s Tribune Corp. will bite off a chunk of Clear Channel stations to call their own and reunite fixture tyrant Randy Michaels and his sidekicks with some of the stations they used to run.

Others aren’t so sure since their fingerprints are all over the failure of Clear Channel’s futile world domination when talent and creativity were purged.
Then there’s FCC Chairman Boy Kevin Martin showing his hand on the proposed XM-Sirius merger. His endorsement is based on concessions the satcasters agreed to, including the turnover of twenty-four channels for noncommercial and minority programming, along with a three-year price freeze, and a la carte pricing options.
Do you suspect this is more of a political move than a practical one? Just asking.

XM and Sirius also agreed to an open radio standard to create competition among manufacturers of satellite radios.

The Department of Justice approved the merger in March.

FCC approval requires a yes vote from at least two other commissioners.
XM has an estimated 9 million subscribers; Sirius has a little over 8.million.
If you’re keeping score, it’s Mel Karmazin 2 David “Fumbles” Rehr o.
I’ve asked it before and I’ll ask it again. Fumbles, how does it feel to be known as the guy who always pulls defeat out of the jaws of victory?
This time he got caught funding a questionable advocacy group, the Consumer Coalition for Competition in Satellite Radio. Tsk! Tsk!

Fumbles, it’s a good time to cut your losses, Resign and take a job with John McCain’s presidential campaign. And when that fails, you can segue into his wife Cindy’s Budweiser distribution business. You’re used to dealing with bland brews from your prior life as a beer industry shill and lobbyist.

Don't expect the XM-Sirius merger to be a smooth one.
For one, the technology to serve stations a la carte hasn’t been perfected.

XM also brings tremendous debt to the table, starting with their troubled deal with Major League Baseball. A recent regulatory filing shows that XM is fraught by a required $120 million escrow account for the benefit of MLB.
But why the sudden flurry of activity to get these deals wrapped, you ask?

Try Obama.
Now does it make sense?

Wednesday, June 11, 2008

Radio: HD Radio's Booble and Bilk-o crank it up!

That horse has been beaten dead. You know it and I know it.

HD Radio. If you bought into it, forget it. You’ve been swindled. You were robbed. It was one of the biggest, most expensive con jobs in radio history. Take solace in knowing that you were far from the only victim in this fraud.

HD Radio - a waste of time, money, engineering, on-air time….need I continue?

Let’s switch subjects for a moment.

Have you bought your Blu-ray DVD player yet? Probably not.

Blu-ray DVDs feature high definition-quality digital video and can only be played on Blue-ray DVD players.

A Harris Interactive Poll showed that only 9 percent of respondents (87 percent of whom own a DVD player) planned on buying a Blu-ray player in 2009.

A study by the NPD Group on Blu-ray found that most respondents were satisfied with their current DVD player and had no plans to upgrade.

These studies were conducted prior to gas jumping over $4/gallon.

An editorial in this week’s Home Media Magazine admitted, “DVD is still the lifeblood of home entertainment, and most likely it will be for years to come.”

Then there’s this piece from Tuesday’s New York Times. Briefly, it explicates the growing pains of High Definition Television “side channels” and how a couple of programming service providers had already gone under due to those pesky financial limitations.

Translation: There was no money in it.

Just because you can have a HD TV side channels doesn’t mean they’ll do anything positive for your bottom line.

This brings us to the scam of all scams – the misleadingly named HD Radio, which is not high definition – and offers side channels of lesser-quality fidelity than an unprocessed analog FM.

Think about it. Most of those surveyed do not plan to upgrade their DVD player and the television industry hasn’t figured out how to monetize their side channels.
And we're lead to believe there is a demand for this no-thing called HD Radio?
In this parallel universe where wrong is the new right, the Capo di tutti capi of HD Radio developer iBiquity is Bob Struble or “Booble” as those he believes are his best friends call him behind his back. His supporting dumbbell is Peter “Sgt. Bilk-o” Ferrara. Credit them for knowing everyone’s price of protection to keep their HD Radio scheme alive.

I’m not saying Booble and Bilk-o are in the same league as gangsters, extortionists, cash-skimmers, witness and embezzlers. I am saying that anyone that fell for the HD Radio hype was robbed. Of course they’ll deny that. Will they settle for voluntarily robbed?

They’ll tell you that households will give up their gas budget to buy an HD Radio for all its wonderful and diverse choices.

They’ll also tell you that as consumers are forced to upgrade to High Definition television sets they’ll also upgrade their radio audio, too. Yeah, right.

They’ll even tell you that they would like me to perform an impossible act.

Face facts. There are too many terrestrial radio stations.

Some will go dark over the next 12 to 18 months.

Boobles’ latest scheme was to con a few pols and pals into buying into his proposal that, should the XM-Sirius merger get FCC approval, there would be a covenant for all manufacturers to make units AM/FM/HD Radio compatible.

Then Pioneer, one of the manufacturers of satellite radio units shot it down. They contend that that “the iBiquity conditions would limit the breadth of radio product offerings to consumers, limit which radio component supplier’s products be designed into radio, have the effect of decreasing AM/FM tuning performance, unnecessarily increase costs to consumers uninterested in HD Radio, and interfere with the useful and healthy free-market mechanisms extant in radio electronics purchases.”

Translation: It’s a dumb-as-they-come proposition.

Other manufacturers didn't even bother to respond.

It gets better. Steve Jobs announced his latest 3G iPhone. HD Radio not included. Reason? The chip for HD Radio is too large to fit in the new model iPhone.

Sorry, HD. You’re technologically inferior.

For that matter, the new iPhone has no AM/FM either. I mean…why would you?

Jobs will eventually add radio to the iPhone. Free standing Internet radio.

There’s more.

The HD Digital Radio Alliance now comes clean on problems with their product.

They’re conceding that HD Radio owners are upset with its antenna, which has to be manually moved around like an old fashioned rabbit ears antenna to pull in HD radio channels – and that the side channels frequently drop out. External antenna systems do little to improve the problem.
What’s their solution? Crank it up, of course.

They’re asking the FCC to allow HD radio stations to increase their power tenfold. Chances are Chairman Boy Kevin Martin will rubber stamp his approval. His bed’s too big without them.

To increase power will require radio stations to squander more contingency dollars for the privilege of purchasing new transmitters and antennas to accommodate the power increase for radio stations that no one is listening to or ever will on that digital frequency.

And just like these stations’ original conversion to digital – it’s strictly voluntary – except for the exorbitant licensing fees paid to iBiquity for the permission of broadcasting digitally on their faulty technology.

Though most chains are waist – or is it waste – deep in the muddled HD Radio scam, CBS Radio in its new alliance with AOL’s Internet radio portal found may have found their out.

Though streaming is still not profitable Viacom Chairman Sumner Redstone has seen the future and knows it will be.

“The merger of CBS Radio and AOL Radio stations into one asset has instantly doubled our daily audience of listeners, and advertisers are signing up every day, clearly recognizing the benefits of being able to target such a highly interactive group of listeners,” says CBS Radio head Dan Mason. “Our stations are gaining access to millions of impressions by being integrated into content throughout AOL’s site. Promotion like that, you can’t put a price on.”

And not a word was said about HD Radio. Things to come?

Its Father’s Day this Sunday. Did you expect the HD Radio Alliance to ensure the shelves are stocked with a variety of HD Radios at all the retail outlets they claim their product is sold in?

I did my monthly walk-through. I’ve been doing this once a month for the past year. Wal-Mart? Best Buy? Radio Shack? Costco? – Nothing!

That HD Radio delivery guy is still AWOL?

Even worse. Three of the four stores even had Blue-ray DVD players in stock.

Then I got this press release about the National Association of Broadcasters announcing their HD Multicast Award, which will be held at their annual convention in Austin. The award is given based on an HD Radio station that – in their words - is “at the forefront of creating unique, innovative or groundbreaking programming.”

My question. If an HD Radio station is programming unique, innovative or groundbreaking programming but no one hears it – did it really make a sound?

Saturday, June 7, 2008

Radio: Clear Channel – Smells like team spirit!

How will Clear Channel operate under its privatized BainCapital and Thomas H. Lee brave new world version?

We don’t know. But we do know how Clear Channel will be run prior to the takeover.
Let’s check out number two son and Clear Channel CFO Randall Mays’ latest memo to his managers.
I’m surprised BainCapital and Thomas H. Lee didn’t summon their memo rewriters to San Antonio for this one.
Trustafarian Randall would’ve been better off composing this in sycophancy instead of baring his chipped and weakened fangs.

From: Randall Mays

As all of you know we have now signed up the new Merger Agreement and we hope to close sometime during the third quarter.

I think as most of you also know by now, there are certain provisions in the Merger Agreement that make it extremely important for us to be as judicious with cash as we possibly can between now and closing. First, as part of the deal, Clear Channel shareholders will potentially be forced to roll a portion of their shares into the new transaction. It is the preference of our board that no one be forced to roll (everyone has the option to roll and the board would prefer that this remain an option rather than a requirement). There is a certain level of cash which we will need to have at closing in order to insure that no one has to do anything that is not of their choosing.

Additionally, the debt provided by the banks to fund the transaction was fixed at the time of signing the amendment to the merger agreement. Thus, any additional cash outlays between now and the deal closing, have to be funded 100% with equity. For those of you that have run levered return models, it is very difficult to make deals attractive when you have to fund them with 100% equity. Post closing this will not be the case and we will go back to our normal procedures so don’t infer anything in this other than there are timing issues with respect to capital before closing.

What does all that mean? As we look forward between now and closing this means that we will be extremely judicious in any capital spend of any type. We also are going to be very closely monitoring cash generation and balances.
That MBA from the Harvard Business School didn't do much for his memo-writing. That's for sure.

At least he warned the Clear Channel managers in advance.

We know of many Clear Channel employees were busted from full to part-time, while others were forced to take on additional duties with either no additional – or even less compensation.

But let’s be fair and show sympathy toward the Mays family. They’ve made their sacrifices, too, according to a recent SEC filing.

Let’s start with Randall, the no-fun number two son and CFO. From 2006 to 2007, the poor boy went from annual earnings of $9,282,382 to $8,705,760. That’s $576,662 less take home.

Have mercy on poor number one son and CEO Mark Mays, the most revered of all feckless crapweasels. He took a somber hit. In 2006, he made $9,311,996. In 2007, took home only $8,705,760. That’s a $606,236 loss.

The kids are no Lowry Mini-Me’s.

Pater Lowry addressed problems. Sons of privilege Mark and Randall just water them daily.
You could also say that Clear Channel radio division CEO John Hogan’s had a taste of his own down-pricing medicine. Hogan blew a $1 million bonus for failure to achieve certain undefined goals. He did get kissed a bonus $157,500 for his “achieved performance of the management objectives,” which, when translated, means “metza metza coat holder.” In 2006 he pulled $3,039,285. Last year, he was down to a paltry $2,166,308. That’s a loss of $873,000. But as the saying goes, less is more!
Clear Channel also informed the Security and Exchange Commission that its board “engaged an outside security consultant to assess security risks to the physical plant and operations, as well as its employees, including executive management.”
The consultant’s report led to Clear Channel implementing – and here’s how they call it - “numerous security measures for our operations and employees, including a general security program covering selected senior executives.”

Drastic times call for drastic measures. Call for the Gulfstream jet.

“For security purposes and at the direction of the board, Mark Mays, Randall Mays and Lowry Mays utilize Clear Channel’s airplane for all business and personal air travel.”

Translation: We don’t like taking off our shoes and being told where to sit.

Most of us wouldn’t call a private jet an “airplane,” but I digress.

Let’s look at the line item marked “personal air travel.” For 2007, Mark Mays took the one of the company “airplanes” for $55,012 in personal use. Co-founder Lowry Mays hopped the Gulfstream for $92,980, and young Randall logged his at $172,934.

Of course, these figures don’t take in the costs of junkets for key Capitol Hill decision makers supplied by Clear Channel lobbyists. Those are buried in a separate line item.

To those Clear Channel employees that had their travel budgets slashed or eliminated, please remember that it’s all relative. The Mays family shares your pain.

This proves that Clear Channel is a bilingual company. B.S. is second language to them.

Tuesday, June 3, 2008

Radio: Of schadenfreude and obsolescence

And so it comes to pass.

The radio industry as we’ve known it for the past decade is a bloated mess. Wall Street doesn’t want it. No one wants it – at least in its current state.

The word is schadenfreude. It’s the art of taking pleasure in the downfall of others, especially when they’re sanctimonious carpetbaggers who have it coming to them.

Is it my imagination or is there a marked increase in schadenfreude ostensibly directed at the radio industry these days?

By the way, did I mention that I’m reading Alec Foege’s book on Clear Channel, Right of the Dial. I recommend it.

There was a good piece in Sunday’s New York Times Business section on Disney and Pixar and how well that merger is playing out.

In the same time frame that Disney CEO Robert Iger acquired Pixar, he also unloaded its ABC Radio chain to Citadel. Disney successfully rid itself of the old at the same time he was bringing in the new.
Pixar is Steve Jobs. Farid Suleman is Citadel. Whose wagon would you prefer being hitched up to?

It’s safe to say that Citadel’s acquisition of ABC Radio is, at least for the foreseeable future, radio’s last bad, bad, incredibly bad deal.

Disney, under Iger, couldn’t hide his disgust at the mess ABC Radio had become.
A country club disguised as a radio chain.

We hear a lot about supply and demand.

There’s a glut of radio stations on the block – but who’s buying?

If everyone’s selling and no one’s buying, prices drop.

The Clear Channel owned Inside Radio referred to the radio business on Monday as being on a “death spiral.”

And some of you were upset with me for using the words fire sale?

And some of you were upset with me for putting the word devalue in print?

Believe me. Lenders are already bundling and reselling their radio debt at Filene’s Basement closeout prices. 50% off.
And that’s before the automatic markdowns come into play.

As more owners default on their loans, more stations will go on the block and as more stations go on the block…you know the drill.

Clear Channel’s latest 8-K form filing to the SEC mentions that 173 of their stations are “no longer being marketed for sale.” Crisis over? Hardly.

Now, for their next trick. Dig deeper and you learn of another 275 “non-core stations” (a fancy way of saying “we don’t want them anymore”) that they’re trying to dump. When Clear Channel didn’t go private as planned, it was forced to reclassify dozens of stations as “continuing operations” instead of “discontinued operations.” (I don’t make this stuff up) Translation: those formerly put-up-for-adoption stations are now back in the family fold – for now.

Eventually, some of their stations will fall into the ownership of those that actually know how to run a radio station in the twenty-first century.

Remember when Clear Channel was one big happy family?

That is, if you were part of the family. The Mays family.

Now, that family’s as dysfunctional as their stations.

The father, the sons, and their holy roast.