Let's All Beat Up on Clear Channel

Close to 2000 Clear Channel employees were laid off yesterday and everybody wants to beat up on Clear Channel. Clearly we all have a right to be ticked because no one wants to see jobs lost, no one wants to see these good people out of work. So, let's sling some mud about Clear Channel's decision years ago to pay high multiples. Lets spew some anger over their reduction of localism, lack of personality, voice tracking, creating national network day parts and a need to return to the good old days when radio was king. How about we shout obscenities over the management decisions they've made, which the entire industry followed.

Maybe I should be angry and spewing venom. But, I'm not. I'm in mourning.

This is not the time to be angry at Clear Channel or anyone. Though they (and others) have made their own bed by decisions made over the last 10 years, we can't look back. They did what they thought was the best thing for their business. The problems Clear Channel is experiencing are driven by the economy and the advertising depression. You can blame a lot of things on Clear Channel but in this case I don't see that they had any choice.

I mourn the loss of almost 2,000 jobs and I mourn for the good women and men who had to go home last night and tell their family. I cannot imagine their fear about how they will feed their families, how they will find work and how they will survive. I also mourn for our industry, which is suffering a major setback by this decision because radio needs more feet on the street, not fewer. Or so it would seem.

I also mourn for the executives at Clear Channel. Before you start throwing rocks, my guess is that this was the hardest decision Mark Mayes and John Hogan have ever made in their life. Perhaps you can be critical of them for many reasons, perhaps you can argue that they still have food on the table and money in the bank. No doubt. But I know these guys and I doubt that these decisions were taken lightly. My guess is that they suffered  sleepless nights and tried numerous alternatives before implementing this strategy. Perhaps you think there is an evil group at Lee Capital Partners and Bain and Company who see economy as a chance to reduce expenses unnecessarily and increase margins, but my guess is that even these guys would have chosen any other alternative if they had a choice. These are the times when being a CEO is most difficult. No one wants to lay off 2,000 people. If this was their character they would have done this five years ago all at once.

As an employee of any company you rarely see the agony that company owners go through over decisions like layoffs. I agonize over every single person and I always put it off longer than I should, hoping something will change. But is it worse to put the entire company and all jobs at risk by not making necessary cuts? Doing so would be irresponsible and that would be good reason to be critical or angry.

It's popular to beat on Clear Channel. This isn't the time.

Radio is at a cross road. Like it or not, most of the highly leveraged companies cannot survive without dramatic change in how they do business. Some will make poor decisions, which will result in more layoffs or bankruptcy while others will try something new and radical, which will change our industry forever. Clear Channel is betting that they can restructure the way they sell while reducing the number of needed sellers. I applaud them for trying something, in spite of feeling bad for the people who lost their jobs. Expect others to follow.

During the great depression people survived extreme hardship because others were willing to help. We as an industry owe it to our colleagues to do what we can to help. Help with job leads, help with encouragement, and anything else we can do, we should do.

Meanwhile anger at Clear Channel will buy nothing. Bad mouthing Clear Channel or your former employer to your friends and advertisers does not help radio. We need to build-up radio in the eyes of advertisers during these times when people are willing to try something new. Therefore we need unity as an industry, we need innovation to find new ways to help struggling local clients and our own radio stations, and we need open minds that understand that good things can and will come out of this tragedy.

We the people of radio have tremendous strength. We've weathered many difficult economies and challenges to our business. We've reinvented time and time again. We are resourceful, creative, and because we love what we do, we will strive for keeping this industry great.

So lets move away from our anger and start the process of reinvention. One of those 2,000 men or women laid off from Clear Channel may have an idea, which will change the industry forever and from this difficulty they will emerge better off than before. Meanwhile, lets all do our part to help.

Comments

[Bob Wynne]

I believe everyone has missed the point. It was Clear Channel who wouldn't hold rates and develop value for their stations or radio in general. By consistantly cutting rates to "buy" advertising dollars they have totally undermined radio's value in the eyes of media buyers and local mom and pop advertisers as well.

The vast majority of the other groups have since followed their lead and cut their prices to the bone to compete. Since neither Clear Channel or any of the other large groups have the courage or the desire to raise rates again, our only hope is that the majority of them leave the business one way or another. When local or regional operators are back in charge and have the guts to hold their rates and develop value in their products again we may finally get media buyers to pay attention. With perceived value back in place we will also increase radios share of the advertising pie.

Don't beat up on Clear Channel? You have got to be kidding me.

[Steve Clark]

Come on guys quit whining and complaining about the layoffs. I am told by a Clear Channel DOS, who is one of dozens of radio clients of mine, that the 12 AEs she had to fire were in the bottom 50% percent of performers on her team. She also told me that CCs data showed that 90% of their revenue was generated by 50% percent of the sales team. Want to know which 50%? You guessed it - the top 50%.

So quit your crying over the firing of non performers. For far too long companies have subsidized and tolerated mediocrity from its sales team by providing what amounts to corporate welfare. The current economic climate only forces companies to do what they should have done long ago.

The reality is that only 25% of humans walking the face of the planet have the psychological hard wiring it takes to be a top performer in sales. As we go forward you will see companies in every industry cutting their sales teams and only employing and retaining top sales talent. The money they used to spend on hiring incompetent sales people will be spent on more effective marketing that will bring qualified buyers to the salespeople who can close.

The old model of having feet on the street cold calling as a marketing strategy is dead. It is time every sales team in every industry truly learn the art of direct response marketing and only spend their time talking with prospects who have raised their hand and indicated an interest in their product or service.

[Anonymous]

Wow...

When has Radio Ink really ever been critical of Clear Channel? You make it sound like this was some sort of surprise.

The latest installment of Clear Channel's dismantling of the radio industry is simply the next logical step in what CC used to refer to as the hub and spoke model. The largest cluster in a region would feed programming to smaller market. Now the hub is Premiere and the spokes are the large markets.

Clear Channel never cared about local markets, only squeezing every dollar out of them they could, then selling them at two to three times what they were worth prior to going private.

You say you are sure that the Mays family agonized over this decision, and that you know them. Well, I'm sure they are nice guys to have an overpriced scotch with, but you have never worked for them. And you've not had to watch them systematically dismantle your radio stations and kill whatever local relationship your stations had in the community.

The Mays never were broadcasters and they still aren't. They just happen to own stations.

I've got a better idea...Let's DO beat up Clear Channel.

I'm sure there are quite a few ex-employees that will agree.

[Anonymous]

Wow...

When has Radio Ink really ever been critical of Clear Channel? You make it sound like this was some sort of surprise.

The latest installment of Clear Channel's dismantling of the radio industry is simply the next logical step in what CC used to refer to as the hub and spoke model. The largest cluster in a region would feed programming to smaller market. Now the hub is Premiere and the spokes are the large markets.

Clear Channel never cared about local markets, only squeezing every dollar out of them they could, then selling them at two to three times what they were worth prior to going private.

You say you are sure that the Mays family agonized over this decision, and that you know them. Well, I'm sure they are nice guys to have an overpriced scotch with, but you have never worked for them. And you've not had to watch them systematically dismantle your radio stations and kill whatever local relationship your stations had in the community.

The Mays never were broadcasters and they still aren't. They just happen to own stations.

I've got a better idea...Let's DO beat up Clear Channel.

I'm sure there are quite a few ex-employees that will agree.

[Joseph Stalin]

I have always said "the capitalist will sell you the rope to hang him with." Clear channel burned down the house that we all live in. They took decent communities and filled the air waves with hate and contention, not because they beleive in hate and contention, but because it made them a buck, Perhaps it is time to think about whether ahat we do is moral, instead of just legal.

Is it right to spew half-truths and corporate lies while we destroy the very economy that supported us? Should we have supported a war in Iraq, an unfunded war that helped to destroy America's reputation abroad. Well comrades you've certainly made it easy to see that the American peoples will listen to any crap as long as it has a nice heaping helping of religion and jingoism. You are a great american, dittos...

[Brian]

It's just a shame that the rest of our industry followed the path that CC took. Could it be possible that we save ourselves by reinvesting in the product?

[Voice in the Wilderness]

The comments I've read here are symptomatic of the problems within the industry.

It doesn't matter that technology has substantially changed the media permanently, that old business models are no longer valid, and that "local" is now defined in terms of a global village. Nope, it's all Clear Channel's fault for killing radio as we knew it from 1950 to 2000.

Nor do these comments offer any solutions - with forward looking thinkers like these, I'm sure the future of local radio is secure in block-formatted infomercials and local church programming.

[Bill Grady]

Kind of hard to feel sorry for the "truck that ran you over" which is pretty much how CC operated as they started up their business in our communities. I guess "driving down the rates in the market just so you get the budget" strategy at the expense of your fellow broadcasters has some payback and here it is. It's not beating up on CC, it's more like comeuppance.

[Alan Goldsmith]

Not in the radio business, but am a radio junkie and this is the chickens coming home to roost. Buying up stations, gutting the staff and programing, and then failing with the money supply dries up. Most of us have moved on to XM/Sirus (radio junkies), who are in a mess of their own. But with a few exceptions, "local' radio isn't that at all and, the only solution is a fire sale of properties and local business folks snapping them up, without dreams of 40% profit margins.

[Jeff Petersen]

Somehow, I can't see the Mays brothers and the bosses at Bain pausing for even one second to consider the impact of their mid-winter layoffs on the effected employees.
They could prove me wrong. Let's see them promise for the next year to accept compensation no more than what they would give a board operator in their smallest market. No other compensation tricks allowed, either.
And then make that same offer to Limbaugh and Hannity. It was the policies they touted that got us into this economic situation. They should take responsibility for it.

[Rpu Fredriks]

While i agree with almost everything previously said, and surely feel the pain of those not currently working in an industry they no doubt love (I know, I'm one of them), taking the blame off CC and the other big radio syndicates is a bit hasty.

First, in my opinion, in the area of talk, which is my bag, syndication was the worst thing to happen. Because now only a handful of talent are heard throughout the country, think of all the jobs that have been lost. What might have been a good Idea at first to help struggling stations, has become, in most cases, just as costly. The rights to broadcast Rush have gone through the roof. Where's the savings. PD's can be paid much less, because there really is no programming creativity. Hearing shows that are already hours old is no way to run a radio station. Further where is the farm club that should be preparing good talk talent.

It's a shame, there will always be politics in the industry, but working local radio can't be beat. I hope it is not too late to go back.

I also wonder, and probably some of the people let go from CC, why them? Last hired, earn too much, personal reasons, the thing is, in my opinion, they were not downsized, part of a layoff, but. let's call it what it is, Fired. It's harsh, but it is denial, pure and simple.

I can only speak for talk radio. Let's go local again. Give many, many others a chance to speak. Give the listeners what they really want, local topics and local news.

[Pure Love of Broadcasting]

As always, Eric is classy, elegant and saying the right things at the right time. But, for now... it is wrong!

Clear Channel has created this environment with an essence of arrogance and manipulation that we had not seen in this industry ever, regardless of deregulation or not. Just because the Government loosen restrictions on gun laws does not mean that you have the right to wave the gun in others faces and threaten them with it. We have to use common sense which this debacle is a clear example of.

Although I mourn the loss of jobs, because of common disregards for others properties, rights, trademarks, patents and other protected material that this company has infringed on consistently, I have a hard time believing that Mr Hogan had a hard time releasing others before he would ever admit being at fault for creating and leading such a subversive culture.

Maybe ( the jury is still out ) they will embrace and value of becoming an entity that true radio should be: A dependent resource for advertisers and consumers that is a reflection of its respected communities.

Yes. It is possible to be against the war and still support the troops.

[Jackson Dell Weaver]

Eric is right. The clients I work with are in a survival mode. Batten the hatches...is not just a phrase. It's true. We MUST survive to do anything and CCU is in survival mode. They do no favors to their investors, their remaining employees and their audience by doing otherwise.

[Bob Kassi]

You summarized quite succinctly the problems with our industry.....starting with Clear Channel's decision (and others also) years ago to pay high multiples.....their reduction of localism, lack of personality, voice tracking, creating national network day parts and the management decisions they've made which the entire industry followed (but not all of us)........but it all started with the deregulation act that allowed companies like Clear Channel to grow without using any common sense.....it turns out that our industry is one that was not helped by deregulation...it's like we found the big candy jar but could not control how much we ate and therefore we made ouselves sick......followed by the rush for the big Wall Street payoffs.....and that's where the industry sold its soul.....worried about the quarterly Wall Street guidance report much more than running GOOD radio.....followed by all the things listed above.....our industry's recovery will eventually happen......and it could be speeded up with the break-up of companies like Clear Channel (not by government involvement but by making good business decisions to reduce their size).....big is not always better.....unfortunately now is not a good time to sell stations. Yes, as an industry we need to feel compassion for all those who are now without a job.....and we all know that it's just a matter of time before most of the other BIG groups follow suit and then there will be even more without jobs.....one can hope that Clear Channel has a plan that will work.....but unless you are trying to just save on the benefits, I can not figure how you help your stations by reducing your sales staff....almost all of them work on commission....our industry needs more GOOD sales calls being made.....not less.....and topping all of this off, with the economy in the dumps and ad revenues down, the industry has now created a feeding frenzy with both agencies and local clients as to who can sell the cheapest....nobody even cares any more what is good and what works for the client.....the entire emphasis is now on how cheap is it.....it will be years and years before our industry will ever regain any semblance of the rates that were realized before the frenzy began.....