“Bullish on the Stick”

I was relieved to hear Cumulus Media president/CEO Lew Dickey describe himself that way in his Canadian Music Week Q&A with Talkers/RadioInfo publisher Michael Harrison.

It takes a rare, courageous individual to manage the multiple challenges of financing, buying and owning radio today.

Being a successful entrepreneur has never been easy since it typically requires mortgaging everything you own, placing yourself in a position where failure is simply not an option.

In today's radio deal market where millions of investment dollars sit on the sidelines with a business sense that in the economy of the next few years AM-FM clusters that are for sale are "prudently" worth perhaps four to six times cash flow and yet the companies with the desirable stations "everyone" is attempting to buy are demanding as much as double that.

Complicating the problem:  recent deal makers such as Digity, Alpha and Townsquare, among others, are choosing to add very small markets as they pursue medium market opportunities.

The margin for error in small marker radio is much narrower than it is in higher revenue situations. 

There is next to no national business.  Power, legal fees, equipment, the best people and other fixed costs don't cost much less in small markets than they do in medium and large cities where it's possible to bring 40-50% to the bottom line and still compete aggressively.

The percentages are very different in small markets as consolidators.

Yet - as the thousands of very successful small town mom and pop owner-operators all across North America know - the payoff to being a big fish in a small pond can be fabulous when you do it absolutely right.

Dean Goodman, Larry Wilson, Steven Price and the others who are jumping into the radio fray today appear to be deeply aware of these facts.  They all possess the strength of will, experience and smarts to understand what is at stake.

Let's hope, for the sake of the people who work for the newly-acquired radio stations and the communities depending on them, they pull it off.

The Solution To Every Problem

• Dropbox wants "to be your always-on hard drive" and so they're scheduling a developers conference.
• YouSendIt responded to the assault by announcing yesterday that they plan to change their name.

That will certainly make a big difference your users will appreciate.  Ya think?

Makes about as much sense as worrying about which media try to stake their claim on the word "radio."

RadioInfo publisher Michael Harrison nailed it yesterday, “AM and FM broadcasting have never held a monopoly on the word ‘radio.’  I do not recall reading anything in history about Marconi playing records, dropping in jingles, doing the news, taking calls, interviewing guests, doing promotions, scaring people about a Martian invasion, selling advertising, or being involved in the community.  It never occurred to me that a taxi driver calling in to the dispatcher was doing a ‘show.’  I do know, however, that the definition of the term ‘radio’ as it applies to our industry has come to take on a very distinct meaning similar to the way such terms as ‘the theater’ or ‘the movies’ can also be applied to a specific art form and industry.  To me ‘radio’ as we use it in this business is not necessarily limited to AM and FM – but rather to the essence of its purpose and perception.  I define ‘radio’ as being audio-based media utilized for the conveyance of information and entertainment that creates a product significantly greater than the sum of its parts.”

People don't listen to "radio."  They listen to YOU.

Bad Timing

The Mays family's decision to sell Clear Channel in 2005 following the family patriarch Lowry's stroke might have been termed "great timing," since it took multiple lawsuits to force the buyers to actually do the deal after the financial collapse of 2007-2008, which put him at #1062 on the year's list of the world's wealthiest billionaires.

Bad timing, of course, for Bain Capitol and its investment bankers, who have been helped at least a bit by the low interest rate environment even as they have been wacked and wacked again by the years-long no-growth economy.

One trade publication last week, as the axe fell again just before yet another year's Holidays, estimated that 10,000 people have lost their jobs since Clear Channel and the other post-deregulation consolidators starting enlarging their holdings in the mid-1990's.

Bad timing for so many people to hit the ranks of radio's unemployed all at the same time, making it even less hopeful that many of will land on their feet until well into the coming year.

Radio Info/Talkers editor Michael Harrison put it bluntly last week in an interview with The San Antonio Business Journal:  “I think Clear Channel is run by extremely intelligent people.  They have tremendous muscle and collective powers, including economies of scale. They are doing the best they can with a difficult situation. The jury is still out. A lot of this has to do with the economy,”

He was even more blunt in his own pages, calling it "iHeartless radio."

It's hard to disagree with him.

Bad timing all around.

As usual, A&O&B is currently looking for experienced people for a number of our client stations, so many other radio companies are expanding and hiring. 

Those folks are going to have a lot more people to choose from than they would have expected at this time of year, but - knowing that there are far fewer opportunities than there are newly-employed - it's hard to call it a good time right now for anybody involved.