Radio: Say it ain't so, Joe!

Say it ain't so, Joe!

Questions for Joe Biden, RIAA enforcer.

If every downloader is a criminal and all the labels saints, do you feel the RIAA should continue to view innocent people being charged with downloading as collateral damage?

Do you back the RIAA’s proposal to slap a hefty royalty tax on terrestrial radio?

Do you support SoundExchange’s peace offering of “dark payola” to streaming audio broadcasters?

Most importantly, how deep in your hide are the RIAA’s hooks?

RAIN, CNet and other media sites delivered the bad news yesterday.

If you’re in radio or the streaming audio trade you now know that Biden’s in bed with the bad guys.

The difference between Barack Obama and Joe Biden is that the former wants to update and reform copyright laws for the 21st century while the latter wants all to remain status quo.

Obama is an Electronic Frontier Foundation guy. Biden’s content to give the RIAA lobby whatever it wants.

Biden also backs the RIAA’s black bag jobs against unsuspecting citizens accused of illegally downloading music.

It sued 83-year-old Gertrude Walton for illegally downloading music - an amazing feat considering that she was dead when the alleged downloads were done.

Sarah Seabury Ward, a 66-year-old sculptor was also sued for downloading gangster rap until it was proven that she owned no file-sharing devices.

The RIAA’s slogan: What’s mine is mine, and what’s yours is mine too.

It doesn’t believe in democracy. It believes in kleptocracy.

They’re the true paragons of misinformation and greed.

Another question for Senator Biden: Who’s going to police the RIAA?

Artists can’t even get what’s owed to them by the labels through existing royalty regulations.

The RIAA explains it this way. The artists – and even their lawyers – aren’t savvy enough to grasp the complexity of their contracts – nor should they bother.

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The RIAA’s advice to artists about the labels they’re on? Trust us. You already know what those two words mean in legalese.

Record label royalty statements are nearly impossible to decipher. In cases where artists audited their record company, the artist was proven gypped 95 percent of the time.

When radio devolved into an anodyne medium, younger demos, those most in tune with new media, discovered other sources and streaming audio and illegal downloading, along with word-of-mouth supplanted terrestrial radio as sources for new music.

The music buyer forty years ago didn't want records that skipped. Today's music buyer won't settle for second-rate highly compressed versions of their favorite songs.

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A couple of days before the Biden VP announcement, Pandora radio founder Tim Westergren said that he’d consider shutting down the service rather than pay the extortion rate the CRB demands.

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How many Amy Winehouse fans were turned on to Duffy by Pandora and other comparable sites?

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This shows how out of touch the thugaroos at the RIAA and the labels they represent are.

They want to shut down streaming stations that are exposing new music and new artists to the masses.

The entertainment industry has a history of not knowing what’s best for it.

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In the late forties, when radio started playing records – the labels protested, claiming that if their music could be heard for free – no one would buy the records.

When they realized how much product radio could sell with airplay, they invented payola to secure playlist positions.

The entertainment industry fought video recorders and held up their release for nearly a decade. They fought CDs. They fought DVDs. In the end every new technological advancement they fought ended up becoming a profit center.

In late 2007, CNet sent Presidential candidates a Technology Voters Guide, asking where they stood on present technology issues. The candidates that didn’t respond were mostly Republicans: Mitt Romney, Mike Huckabee, Rudy Giuliani, and Fred Thompson. But only two Democrats didn’t respond: Bill Richardson and – you guessed right - Joe Biden.

If the Obama-Biden ticket goes all the way, the radio and streaming audio industries have a mission – inform Joe Biden that he has been misinformed.
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This week in Buzzard Land

Radio: Safety Net Radio

Two things I hate to see wasted. Time and money.
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That brings me to Save Net Radio, the Internet radio group trying to keep the RIAA – the influence peddling wing of the four major label groups - at bay from being given a misguided tribute to the labels for the privilege of providing artists airplay.

I call it a tribute – as opposed to a performance tax or royalty payment the RIAA attempts to paint it as.

In my old neighborhood tribute is defined as “an extorted payment, which allows you to do business.”

The RIAA is the acronym of the Record Industry Association of America. It’s a disingenuous name since only one of the four major labels is American-owned and operated.

The RIAA claims the Digital Millennium Copyright Act (DMCA) gives them the right to go after streaming audio for royalty payments.

It’s based on the false assumption that all digital recordings are a perfect duplication of the master copy. Since streaming audio is digitally delivered – the RIAA wants streaming audio broadcasters to pay its collection agency, SoundExchange, for airplay.
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The reality is that most digitally delivered music and spoken word on the Internet is highly compressed audio. A perfect duplication it is not.

The real money comes in with the ephemeral recording. This is where songs are buffered to your computer before being played. Unbelievable as it may seem, the Copyright Royalty Board rates included a second fee that’s charged, because it considers this buffering as making an additional copy of the song before playing it.

From my vantage point, Save Net Radio can’t buy a clue on how to deal with SoundExchange’s hardball demands.

I’m not even sure what they’re trying to achieve other than to wallow in their own plight and feel self pity.

They are incapable of attacking a problem. Whenever a real, substantial idea or a battle plan is presented, it’s met with lethargic reasons on why it’s impracticable from other members of the group.

Save Net Radio wants to play nice to the record company goon squadron. They can’t come to grips with the fact that this group will take pleasure in cutting out your heart and feeding it to you.

The RIAA considers fairness an antiquated notion at best and corrosive naiveté at worst.

Their recent effort to legitimize their existence by pretending to be a friend to the artist on their labels is nothing more than a smokescreen for their true identity.

And in this corner is Save Net Radio, which presumed that a slogan and safe-as-milk protest would fix all of Internet radio’s woes.

Remember when they did their “Day of Silence” on June 26, 2007. This was the day when all Internet radio stations would go dark for twenty-four hours to protest the RIAA’s strong arming.

What was learned? What was accomplished?
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Absolutely nothing.
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In fact, with the exception of generating some ho-hum publicity, the “Day of Silence” was a bust. The majority of terrestrial stations did not participate - nor did the major streaming audio stations like AOL’s and Last.fm's.

One Internet radio portal, Radio Row, saw an increase of 33 percent of visitors that day. Streaming audio listeners had no problem finding other stations to listen to that day. It was no “day of silence” to them.

Stop and think about the pure brilliance of their remonstration. They tried to get their message across by going silent.

Name me one home run Save Net Radio has hit. OK, how about a single?

Just so you know, whether the end result is win, lose or draw, there’s always someone cashing checks along the way.

Save Net Radio’s Chair is Jon Potter, an attorney from Washington, DC. He’s racking up some nice billable hours.
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Interactive Week magazine called him one of the “25 unsung heroes of the Internet” and The Legal Times’ Tech Counsel magazine named him one of Washington’s “top technology lobbyists.”

What’s Potter’s tactic for Save Net Radio?

Try not to upset anyone.

Another payment goes to whateverPR firms promoted, among other things, the long-forgotten “Day of Silence?” Qorvis Communications LLC is one of the PR groups they’ve used but it’s uncertain if they handled the “Day of Silence” hype.

This lackadaisical attitude from Save Net Radio comes at a time when automobile routers and other portable Wi-Fi options become more accessible and affordable, which will allow in-car listening to streaming audio, and bring Internet radio to the masses and present real competition for Sirius-XM.

Here’s what I don’t get. What’s stopping the labels from doing their own Internet radio stations? Think of the branding. All Sony all the time, We’re all Warner Brothers, Universally yours, and My EMI.
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They could hire top-name air talent, do massive giveaways, and have total control over what is seen and heard on their sites. And, it’s all barely legal.
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The labels could buy full page ads in Rolling Stone and People and Googlize themselves across the web universe promoting their own Internet stations. So why don’t they do it?

Maybe it’s because they know that today’s music fans will see through their hype and malarkey?

The recent Senate Judiciary Committee’s hearing on “Music and Radio in the 21st Century” proved that no one in Washington politics that counts knows what Save Net Radio is trying to accomplish.

It was as if you put a group of people together, each speaking a different language not understood by any one else in the room. An argument can’t be effective if no one is listening to it.

Unless there’s a major attitudinal change at Save Net Radio, I don't think anything they do will sway this committee. Washington know a sinking ship when they see one – and when you're going down for the third time, even a garbage scow looks like the Queen Mary.

Like most legislation that was waltzed through Congress during the final years of the Bill Clinton on-auto-pilot administration, the Digital Millennium Copyright Act is poorly written and easily open for debate.

Let me stop here and remind you that the Washington definition of debate is something that is won by those with the most money and the best lawyers. Justice is often just an illusion. The real world is too gray for justice to play much of a role.

When it was signed into law in 1998, the labels hired lobbyists to work Congress to impose a new standard only with respect to charging Internet radio stations a new sound recording performance royalty system.

In reality, it cripples streaming audio sites by imposing royalties that are cost prohibitive.
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Does any of this make sense? The labels claim that allowing airplay of their product on streaming audio will hurt their music sales? Or that webcasters should be charged per listener – meaning that a streaming audio station is penalized for every new listener?
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So let me see if I’ve got this straight. What the RIAA is asking for is the reverse of free enterprise?
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Chances are Save Net Radio’s not going to be successful in arguing against royalty payments to SoundExchange. Let’s give them that. Then why aren’t royalties based on a percentage of the profits an Internet radio station generates – say six to eight percent. This allows the streaming audio industry to develop, much like the government allowing tax-free Internet commerce. If an Internet station is a love of labor and generates no revenue – they shouldn’t have to pay for play.
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And I’ll say it again – airplay sells product.
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Of course, streaming audio sites already have an option from SoundExchange to cut their own discounted deals directly with the labels rep’d by the RIAA. It’s called “direct licensing” or to be more exact, dark payola – a system that provides the labels access to what you play for a discount of what you pay. It’s a “pay-for-play” scheme that only major labels and acts can afford. And this dark payola discount is barely a discount at all, relative to the original rate.

A few Internet radio stations already bought into it. That’s like being in your own home as a guest after you’ve sold it. It may look the same but now you’ll have to ask if you want to use the bathroom.

And get this - we are to put our trust in SoundExchange to distribute these “royalty payments” to the labels, which, will distribute and provide a fair share of Internet radio royalty dollars to their artists. I’ll pause for a chuckle.

Copyright owners must allocate one-half of the statutory licensing royalties they receive to recording artists. 45 percent of the royalties are allocated to featured artists, 2 ½ percent of the royalties are distributed to the American Federation of Musicians to session musicians and another 2 ½ percent to non-featured (session) vocalists. Here it is in black and white, page ten.
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Oh, almost forgot. SoundExchange takes their “administrative costs” off the top. Among other things, these “administrative costs” include their abundant usage of lobbyists. And their lobbyists are as crazed as NRA’s whenever gun control legislation is introduced in Congress.
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If SoundExchange can’t locate an artist within three years, they keep the money. There are roughly 7,555 artists SoundExchange hasn’t been able to track down. They publish an “unpaid artist” list though it makes you wonder if their list is complete.
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Another problem with this system is that the majority of streaming audio webcasters are not paying fees and have no say in the matter since they are, for all practical purposes, pirate Internet radio stations. When you remove those stations from the total number of on line stations, you’ve cut the united-voice volume by 75 percent.

If a recording artist wants to challenge the authenticity of the royalty statement provided by the labels – they are, by law, permitted an audit. That’s an upfront cost of $25,000 to $50,000 or even more. For that reason few artists can afford to go that route.

Those that can afford to – like the Beatles and Led Zeppelin - took on their labels and found royalty discrepancies in their books – and sued to get what was owed them. But how about all those rock and rhythm and blues artists in the ‘50s and ‘60s that never received a dime in royalties because their dodgy labels knew they couldn’t afford an audit?

Just this past week the Allman Brothers sued Universal Music for $10 million in arrears of royalty payments for the sale of digital recordings. Five Allman band members are named as plaintiffs, claiming they were gypped on royalties for music recorded going back to 1969.

One of the songs owed royalties on is “Ain’t Wastin’ Time No More.” That should be Save Net Radio’s new motto.

And the RIAA should take heed from Jackson Browne: “Nobody owes you nothing.”
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Summer sweeps

Radio: Citadel crumbles

Citadel. Farid Suleman, your fortress is crumbling.

Farid’s the guy everyone in radio loves to pick on and there’s raison d'être for it. He was the last guy in the pyramid scheme. The last one to believe his own hype.

Bravado poured forth from the pack already benefiting from the spoils, as they swapped stories of how much money they made when they went from reg to dereg. He watched his contemporaries buy waterfront properties, load up their garages with vintage cars, and take exotic trips around the world.

And when Wall Street needed stroking, all they had to do was thin the herd.

Farid spent years sitting quietly at the edge of the megawatt radio crowd of Mels and Lowrys, and Jeffs, drinking it all in, and wondering when the time would come to make his own move into the major leagues.

He had to be in awe of Clear Channel. Their ploys were so elaborate and well conceived that the FCC and the DOJ couldn’t crack their layers of illegal lease marketing arrangements and transmitter moves.

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For sixteen long years he was COO of Mel's Infinity/CBS Radio.

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But number two wanted to be number one and shake off his "mini-Mel" moniker.

He lusted for his own New York radio stations. His own L.A. His own radio networks. He visualized his own stable of talk show wingnuts.

So he ended up at Citadel and bought ABC Radio.

But it was all for naught.

He was under the impression he bought a healthy radio chain. But in veracity, he bought a country club.

Now, Citadel is in trouble. It’s a penny stock.

Even worse, he knows the sting he’s feeling now is nothing compared to the things to come – specifically, those other declining revenue land mines yet to be stepped on.

The downward spiral has picked up too much speed and now all he can do is watch his company spin uncontrollably around him on its decent.

Usually, when losing altitude, you lighten the load – just like Clear Channel and CBS have to do. In Farid’s case, he’d hoped that by parting out some stations and putting them on the block he’d might be able to pull out of his free fall.

But, sayeth Farid, “We have several deals we’ve started and then financing could not be found for them.”

And let’s not forget Farid’s misguided infatuation for that talentless clown Don Imus.

Even CBS was late in putting him out to pasture. His numbers skewed old and older and dumb and dumber. Farid blindly bought that milked-out cow. Why would anyone hire a has-been hack like Imus whose only claim to fame as of late is that of an easy magnet for Al Sharpton?

Then there’s Paul Harvey. Harvey’s style is ageless and timeless but his mortal coil is not. Farid, the guy’s 89 years old. He’s suffered personal tragedy. His health is failing. How long did you expect to keep him pumping revenue for you? You projected him for – what - $40 million?

Then you say, says “The good news is he’s come back and done more shows so we would expect some of the revenues to start coming back.” Yeah, for how many weeks?

Read the numbers. ABC Radio Networks - 11% revenue decline. You’re lucky. It could’ve been worse.

You think coming up with new shows with Michael Baisden, Doug Banks, and Big Boi will save the radio net’s sorry ass?

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Stop here for a moment. What’s absent from Farid’s vocabulary? Start with content, creativity, on-line, opportunity….need I say more? That's why he will not survive.

“It was another tough quarter for the company and the industry,” you say? An industry you thought you knew so well?

Citadel revenues declined 9% over last year. Network revenues were off 11% and there was an 8% revenue drop at Citadel stations.

You claim that your $20 million in programming and personnel cuts from, as you put it “a whole bunch of positions” and expense cuts from the last quarter are beginning to show promise – and did you really say that you predict it will ramp up to $15 million in revenue by 2010?

You say you’re probing for “even more opportunities” to make cuts since you don’t know when the ad market will turn around?

You always wanted to be Mel. He makes it look so easy – and still does.

He gets his Sirius-XM merger approved and its déjà vu all over again. He’s promises $400 million of cost synergies to shareholders by slashing programming and marketing budgets.

Farid’s asking himself, “Why does it always work for Mel and never for me?”

Meet the radio industry’s Charlie Brown.

Disney saw him coming. They sold him ABC Radio the same week they bought Pixar. They traded in the past for the future.

One could say that Farid bought radio from Disney but ended up with what we used to call a “Mickey Mouse company.”

Radio: Are gatekeepers necessary?

I am part of a group that randomly e-mails one another.

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Most – but not all – participants have worked or known one another in some manner over the past thirty years or so. Some participants do not have a media background. Discussions range from culture to politics to media.

Recently, the elder statesmen of the group argued that music doesn’t hold the same cultural significance for young adults today as it did back in the late sixties through the mid-nineties – and that there are no existent representatives or superstars for today’s contemporary music listening adults.

He believes today’s rock music is analogous to jazz where you have a large number of artists with each catering to a smaller, specialized audience.

Another, who has never been in the radio or music business, believes that gatekeepers – in this case, the air personality and the radio station – are now, at best, an option.

One of our participants, a former successful program director and nationally-known air personality, has two teenage daughters and a 9-year old daughter, who is just starting to take some cues from her sisters.

Here’s what he said:

“The teens both have iPods, and are as different as night and day in their taste.

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“My 16 year old swings toward mainstream pop, but she does not get it from the radio. She checks out iTunes recommendations, listens to iTunes and Amazon samples, and then gets curious and starts surfing the 'net. She discovered Laura Pausini that way and downloaded several of her songs. Pausini is big overseas, but not widely known in the USA. The 'net world of today makes for interesting side-trips. She got curious about girl groups, and read about The Runaways. Now who the hell is playing The Runaways on-air anymore? Does not matter. She discovered them through the 'net. This lead to The Go Gos, and The Bangles. Now, she checks out YouTube to see what they look/sound like. Had she been a hit radio listener, she would never be exposed to these acts, which now populate her iPod.

“My 14-year old, is a techo freak. She streams the techno services like Jungletrain, where the title and artist is read out on the player. From there, she looks them up on Wikipedia, and finds their official website. She turned me on to Ulrich Schnauss that way.

“As much as I love and still advocate a great and knowledgeable live personality as a host, it is now a value-add more than the necessity that it was in our day. Back when, without us, the audience had no way of connecting the dots. As you can see in my examples, the kids are now connecting the dots all by themselves with all of the text, bio, audio and video...searchable....at their fingertips. And I have not even mentioned Pandora or other sites that find "similar artists" for you (although the 16 year old does not like Pandora, since she thinks some of the links make no sense and would rather look around herself).

“I just took the kids on vacation for a week in our minivan. They took turns playing me their iPod music, patched into the van's audio system. When that ran its course, they borrowed my Palm Treo, tethered it to their laptops to bring in the 'net, and streamed videos from about a dozen different sites. When they took a nap, I reclaimed my Treo, put on my headphones (as not to disturb them) and streamed some music. Then, as a change of pace, I went to a spoken word specialty site and streamed audio of interest to pass the time on the road.

“Notice what's missing? Radio.

"Notice what's NOT missing? The kids' love of music.”

Your thoughts?

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Bruce Springsteen - Thirty Years Ago

Radio: For $ale

It’s been an eventful couple of days here in radio land.

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Mel Karmazin got his way with the Sirius-XM merger and wasted no time in making personal appearances on both Howard Stern and Opie and Anthony to rub National Association of Broadcasters head hen David “Fumbles” Rehr’s face in his inadequacies.

One can only imagine what the record company’s goon squad – the RIAA – plan to do with what’s left of Fumblina.

How many tire tracks are up and down your back now, Fumbles?

The herd is being thinned at the new BainCapital-Thomas H. Lee privatized Clear Channel.

Some are leaving on their own free will with five figure stock options in tow while others are being involuntarily escorted from the premises.

You have to love the sincere sound bite from child of privilege and Clear Channel CEO Mark Mays, “We are deeply grateful to our loyal employees who have remained focused and generated terrific results through their hard work and dedication.”

Question – How many Clear Channel employees does it take to change a light bulb?

Answer – Both of them.

It may be a new company but it looks like it’s still run by the same old tight-fisted, fishy-eyed, cold-hearted thieves that wouldn’t help a blind child across the street unless they got a time buy for it.

No one will ever deny that Clear Channel didn’t have a major impact on radio. It’s just not the one they expected. Everyone turned them off.

Ken Dardis said it best in Audio Graphics yesterday, “Clear Channel is now privately-owned so, from this perch, expectations are that it will continue perfecting its mediocrity online and off.”

I believe the only chance of the new Clear Channel’s survival is to split itself into two divisions, one good and one evil, which will then battle for what’s left of radio domination.

The new Clear Channel is, however, obligated to spin off roughly seventy-five stations into that Aloha Station Trust to fulfill FCC ownership caps.

Markets include Los Angeles (2 stations), Austin (1), New Orleans (7), and San Jose (3).

One station they can’t wait to unload is KCJB in Minot, North Dakota – one of six on the block in that market.

KCJB is forever ingrained in radio history as Clear Channel’s first “Ooooops” station.

Being a dual formatted country music and news-talker, KCJB was the designated emergency station for the market.

Then came that emergency on a cold January morning in 2002.

A freight train went off the rails, puncturing cars carrying anhydrous ammonia fertilizer. It formed into a burning white cloud of toxic chemicals. Wind pushed it toward a populated area.

Hearing the crash and seeing the cloud, residents turned to KCJB for information – but the station was carrying a satellite feed from another market.

Police responding to the accident tried to contact someone at KCJB – but there was no stink of human at the station.

Their negligence resulted in one death and three hundred injuries.

Later, Clear Channel attempted to pin the blame on the local police, accusing them of not understanding their Emergency Alert System (EAS). They also claimed there was someone on-duty after all at the station during the time of the accident.

Their excuses were negated when other markets weighed in. Reports were compiled on Clear Channel news and information shortcomings and bloopers involving blizzards, storms, accidents, and disasters from all over the country.

Those were the days when if you asked Clear Channel the time they would tell you how to break the watch.

But that was yesterday and now all is forgiven.

You should’ve seen the Mays brothers, Hogan, and the BainCapital-Thomas Lee boys sitting around the campfire on South Basse Drive last night singing “Kumbaya.”

When the sell-off deal was put together in 2006, Clear Channel assumed it would get between $1.1 billion and $1.4 billion. But now with properties worth far less than they were two years ago, the Bain-Lee Clear Channel won’t see a number even close to that dream on figure.

It will be a new spectator sport. Watch them claw after every red cent.

Then there was the confirmation of the worst kept secret in the radio industry when CBS announced that it had put approximately “another fifty medium market stations” up for sale. CBS Radio-TV CEO Les Moonves implied that deals could be announced in thirty days.

Thirty days? Or thirty days in the hole?

Does that have anything to do with the NAB convo in Austin?

Maybe CBS Radio wants to go retro and revisit to the go-go days of the late 90s and early 2000 when radio heads would vie for the title of "cat that ate the most canaries;" using that NAB backdrop to announce their latest multiple station acquisition?

Didn’t the "buy now, pray later" era go out of style with Farid and Citadel?

Markets CBS has on the block include Portland (6 stations), Pittsburgh (4), Charlotte (7), Riverside (4), Sacramento (6), Cleveland (4), Vegas (6), and Orlando (3).

Some believe the announcement was tossed out to divert attention from the real story - CBS Radio revs plummeted 10 percent, from $463.4 million to $416.4 million and operating income crashed - down 16 percent from $179.4 million to $150.7 million.

Does CBS plans to peddle the stations off at Filene’s Basement closeout sale?

Of course, there’s that nagging question again on how one values a radio property in 2008.

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King Midas in reverse is my guess.

As one radio executive put it to me this morning:

“First, prospective owners are going to have to find someone willing to loan them a pile of dough. Although the pile needed is shrinking daily. Still, it's tough in the credit market right now, which will both slow Clear Channel and CBS as they try to unload their losers, and, when they do find buyers, will put them at a decided negotiating disadvantage.

“For those of you paying attention, a number of us have been saying this day would inevitably come since the beginning of consolidation. A shame thousands of people had to lose jobs and careers to make a couple of dozen people very, very rich. Oh yeah, and they managed to pretty well eviscerate an entire industry in the process. Neat. A twofer!”

I’ll bet the corner loan shark will offer a more reasonable rate than the vig a legit lender will charge on a radio purchase deal.

I think the best solution for both Clear Channel and CBS in selling off their properties is to bundle them together and create their own country. Then they can declare war on the U.S., lose – and live off the war reparations. They’ll probably get a better deal that way than trying to peddle ‘em off on the open market.

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Your Concert Connection

Radio: Recycled Fumbles

I swear. I should just recycle my old David “Fumbles” Rehr blogs.

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Everyone's telling that "what does the acronym NAB stand for?" joke again.

Don’t pick a war you can’t win, Fumbles.

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Even better, don’t pick a war.

You haven’t, you can’t, and you will never win.

Your 410-day war against satellite radio is over – and you‘re toast.

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Karmazin 4 Fumbles 3. Your own Grand Old Party buds at the FCC, including Boy Kevin Martin voted you out.

You’ll never be in their club.

True, the dim lad FCC Chairman got the gig because of his wife’s Cheney connection. Yes, we know you were a "Bush pioneer,” raising all that money for his last presidential campaign. Maybe you actually believed you were someone - but to those that defined position you were the grunt guy, the ticket-taker, the worker bee hero of that long-forgotten moment.

How many times must you hear it before it sinks in?

You’re a loser. You have no juice. You’re the radio industry’s status woe.

Psychiatrists call it “compartmentalization,” the proficiency of being able to separate feelings, memories and tasks. It’s a practical skill in dealing with complex issues while still leading a useful productive and even successful life. Cops do it. Lawyers do it. But you can’t.

Fumbles, you wasted how many millions on your second-rate lobbyists to work the FCC?

How about all of those cans of Tabs you’ve downed over the past few decades?

The cyclamates must have had a cumulative effect on your brain cells.

You had at least ten firms lobbying on the NAB’s behalf – with the lion’s share going to the Ashcroft Group, headed up by former Attorney General John Ashcroft. What were you thinking?

XM used the Palmetto Group as its lead dog while Sirius signed on with Wiley Rein. XM and Sirius also employed Mehlman Capitol Strategies, run by former GOP National Committee Chairman Ken Mehlman – and just to keep it on an even keel also hired Quinn, Gillespie and Associates, headed by Jack Quinn, the former aide to Bill Clinton and chief of staff to Al Gore and Ed Gillespie, a GOP lobbyist, and current White House counsel to George W. Bush.

Satellite radio got even while you were getting odd.

If you accomplished anything it was to position the NAB as, at worst, the black hats – and, at best, obtuse and out of touch.

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You knew it was a done deal when you were tipped off about that delivery of blank pink slips to the McGraw-Hill building last Friday.

Fumbles, you might’ve lost – but am I the only one calling this decision as good for terrestrial radio? I believe the radio industry actually won one in spite of your infinite incompetence.

Hear me out.

XM has 9.7 million subscribers. Sirius has 8.4. That doesn’t mean the merged company will have 18.1 million subscribers.

It’s no different than a radio station taking out a competitor in the same format. Shares don’t double for the victor. There are many occasions where they don’t even increase.

The same rules apply to a combined XM and Sirius.

A merged XM and Sirius also mean fewer stations in total.

In the interim, the companies will offer a $16.99-a-month bundle called "Best of Both,” available to both XM and Sirius subscribers.

They haven’t released a list of the channels – but how much you want to bet that the package will not include the specialty pro sports channels or Howard and Oprah? That means there may not be a whole lot of takers for the “best of…”

Subscription churn will be a problem. Younger demos aren’t opting into satellite at all – and can you blame them? They’ve already on Internet radio.

A friend who is an XM subscriber is disappointed that Sirius will be the controlling party of the merged company – but he told me he’ll still keep his subscription because of the MLB access.

He’s a displaced Bostonian and bought XM primarily to hear Red Sox games delivered by the hometown radio announcers.

Then I told him he could get the same MLB package on line with Internet radio and listen to it on his brand new 3 G iPhone – and that he’d also have the option to watch live (well, a few seconds delay) video of the game.

He also enjoyed the wide variety of music available on XM.

So, I showed him how to navigate through and receive the hundreds of formats and thousands of Internet radio stations on line.

I didn’t mean to kill a subscription, but I did. It was that easy.

The NAB should leave well enough alone – but it won’t.

Fumbles’ NAB mouthpiece Dennis Wharton whined, “Given such overwhelming opposition, we’re not convinced the final chapter of this book has been written.”

The NAB is threatening to file a petition for reconsideration. Since that’ll hit a brick wall, they will take their complaint to the U.S. Court of Appeals. Fumbles may even try to lobby Congress to reverse the FCC’s decision, which will also go nowhere.

Don’t you hate it when the only friends you have left, Fumbles, are your enemies?

I’ll identify them for you: the two FCC Democratic commissioners that voted against the merger, Michael Copps and Jonathan Adelstein – and the activists groups who have been victorious in blocking further radio deregulation. They’re the only ones on your side. Pathetic.

Fumbles, I think the threat of you writing more twenty-page letters to the FCC, the U.S. Court of Appeals, and everyone in Congress would be taken seriously.

*

That is, it would be taken seriously by environmentalists - but no one else.

Radio: How much?

How does one determine the actual worth of a radio station today?

There is one certainty. Most are worth less – and far less in some cases and markets – than they were a year ago.

If nothing else, the radio industry proved to be an accurate barometer of where the economy was headed.

Does that P.T. Barnum quote immediately come to mind when you think of those who invested heavily in radio?

Let’s travel back twelve years and six months ago when Bill Clinton got this party started by signing the Telecommunications Act of 1996.

Remember the rallying cries of getting more than ten cents of every ad dollar?

Or the one about “owning” a “captive audience” that has to listen to radio in their car?

How about all that non-traditional revenue that would add so much added value to radio?

In one month – close to $2 billion in radio deals were announced. In just one week, five of the largest radio chains bought eighty-two stations.

To paraphrase Paul Harvey, you already know the rest of the story.

All radio had to do was resist some of the greed when the blue skies began clouding up at the turn of the century.

When it didn’t – and radio entered its Dark Ages – it became an industry of schemes and scams.

Instead of hiring qualified account executives, managers were ordered to hire sales people right off the street. Instead of respected radio station a.e.'s, accounts were getting called on by glorified Tin Men that received no training and knew nothing about selling time.

We’re how many shopping days from July 30 – the day Bain Capital and Thomas H. Lee are scheduled to absorb Clear Channel?

This deal was announced several hundred-thousand Chivases ago – or in a time frame we’re more accustomed to – twenty months ago.
*
Come on, you had to laugh when a couple of the banks that weren’t caught in the web of Bain-Lee’s Black Widow Clear Channel deal – used that very reason to illustrate their solvency – unlike, let’s say, Wachovia, which can't.

Think about it. Those banks were sagging into their cream-cheese based foundations even before they blindly entered into this Clear Channel deal with Bain and Lee. Why didn’t someone tell them the party was over a long, long time ago?

So, let me see if I get this straight. These banks are now trying to find suckers…er…investors to help finance the $17.9 billion leveraged debt buyout. Deutsche Bank AG and Citigroup have been offering $3 bil of that debt to potential investors for low-to-mid 80 cents on the dollar – and that’s down from the 90 cents on the dollar they were peddling back in late March.

Don’t feel bad for the smarmy brothers, Masters Mark and Randall Mays. They’re not headed for the poor house anytime soon.

Sure, they’ve wrecked the old man’s company – but give ‘em a break. According to an SEC filing, CEO Mark and President/CFO Randall will each roll over $10 million – and will each receive - oh, just $20 million of restricted stock when the deal’s wrapped – plus stock options equal to 2.5 percent of the fully diluted shares of the new company.

Even after I read Alec Foege’s Right of the Dial Clear Channel book, I still get the Mays brothers confused. Is Mark bad and Randall evil – or is it the other way around?
*
That’s like the slogan, “Together we can,” which is used by the Institute for Educational Leadership. It’s not to be confused with the Mays family slogan, “Together we con.”

Whatever the case, the obits will be posted and requiems will be sung for the next round of layoffs to be announced from the San Antonio Kremlin headquarters of Clear Channel in another month. You need not shed a tear for the Mays family and their obedient servant John Hogan. They will continue to live long and prosper.

But back to the question at hand: How does one determine the worth of a radio station license?

Cash flow? Projections? Physical plant? Management? Staff – if you have any? Does it have a pulse?

The days of clustering-up a market and putting a price tag on the whole shebang are over.

The original definition of a successful merger is when one and one equals three. Can you name a single radio merger that produced those results?

Don’t you hate it when you’re talking to a group of radio people about Citadel – and one says, “How much life is left in that company?” True story. Worth every penny of its eighty five cents.

We have to get a twenty-first century radio pricing guide readied.

Radio lives in a world where nothing is for sale and everything is for sale. That is, if no one’s buying – is there really anything to sell?

If no one is listening to radio – is anyone really hearing it? For those of us who still believe the radio industry can be salvaged, let’s hope that’s not the case – but we’ll know for certain fairly soon.

New York, L.A., and Chicago – the top three radio markets are switching from Arbitron diaries to go exclusively with the people meter, which reports real-time radio listening. That means whatever radio station you happen to hear – whether it be at home, at work, in the car, at a store, in a waiting room – will be recorded.

Will it show that having a favorite radio station is now just a nostalgic memory?

Will it show that morning drive is losing both the TSL it once did to command premium rate?

And how does one equate the worth of radio when major league radio accounts like A-B, GM, and Coke are pulling their dollars out of radio. Some, like GM, are doing cuts across-the-board. Others, like A-B are redistributing the wealth to other media - including Internet.

What does one do when a radio station’s worth less than what is owed on it?

We already know what that means in the housing and automotive market.
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Buzzard Jeans & J.P. Snodgrass 1975