Friday, June 22, 2012


  • “Quarter hour ratings are compressed, advertisers and agencies are setting cost-per-points and a lot of companies are responding to those avail requests at lower cost-per-points.  It’s a dive to the bottom of the barrel market right now and it won’t  stop until you see more consolidation and stronger balance sheets.”  - Cumulus Media COO John Dickey at this week's Morning Show Boot Camp

  • "I think ESPN is a fine product. I think we can put a very competitive product on the field. There is choice now. I think for the first time, there is going to be real choice for not only updates, but a 24-hour network, expert analysis, and features. There is going to be a legitimate competitive offering out there, to offer real choice. I think choice makes everybody better. I think the broadcasters will benefit from this. We have a lot of respect for ESPN and what they've done. I think they have sort of had it to themselves, and this is a real opportunity to offer real choice to both the broadcasters and the advertisers." - Cumulus Media Chairman/CEO Lew Dickey in Radio Ink

  • "The Department of Justice still sees its role as a way to promote competition and editorial diversity.  The DOJ remains focused on practices that lessen competition, raise price, or reduce quality of service.  A practice that reduces competition in a media market can dull incentives for participants to develop and bring to market new information or new and creative content,"  - Antitrust Division’s chief counsel on competition policy Gene Kimmelman at the American Antitrust Institute conference also this week in Washington
For what it's worth, I agree with the senior Dickey brother and Kimmelman, while scratching my head over why the younger Dickey brother and company programming chief feels that allowing Cumulus - or any company - to own more than their fair share of radio markets will improve anything in terms of top line growth for all of radio combined.

If owning one third of the radio stations can't keep a company from holding rate, I don't think letting them own more will suddenly give them pricing power or the courage to ask for better rates.

My hope is that the emerging "frenemies" relationship between CBS Radio and Cumulus ultimately results in a new national rep firm to give Clear Channel-owned Katz Radio and its subsidiaries some aggressive competition in presenting local radio  companies of all sizes to national advertisers, which would greatly help increase confidence of being repped fairly, not just getting leftover dollars in line behind Clear Channel stations who just might possibly get presented first.

The more competition the better for all of us who want to be sure radio's prices in the coming years represent the medium's proven ability to drive results for advertisers, based on our equitable share of the total media day.


John Lodge said...

I think what John Dickey was trying to say was that they could better control the price of admission if they could control more outlets. Rate cuts, just to stay alive, don't help. They just lower the tide for all boats.

Cumulus GM said...

Having been around John Dickey for 10 years, I think he is saying the dive to the bottom is going to cause more consolidation because operators will get out leaving those with more signals the ability to leverage that power for balance sheet improvement.

There is always somebody pricing for share and ruining the competitive advantage especially when stations are just a commodity and groups don't have enough direct business working so they have to accept certain offers to have a chance at making a revenue budget.