What is the difference between a Big 3 radio CEO and God?
God doesn't think he's a Big 3 radio CEO!
This week after announcing their second quarter of negative growth Entercom CEO David Field's message to investors is that the company is “turning the corner” and is “well positioned for sustainable revenue growth” in the second half of the year. Really? I thought this was the business slam dunk of the century last year. In a memo to staff on November 17, 2017 in Inside Radio after the Entercom - CBS merger was finalized, Field expressed his bullish stance on the future of the terrestrial radio format in America’s media landscape. “We will play to win. We are done playing defense; it is time to play offense.”
Well if this is playing offense they must be using the 0-16 2017 Cleveland Browns playbook! But wait a minute, I have heard this at least once before, but where and when?
"We’ll have the national scope and financial strength necessary to make critical investments in content and technology necessary to compete in today’s rapidly evolving media landscape,” said Lewis W. Dickey Jr. Cumulus Media CEO. This was published in the New York Times on March 10, 2011 after Cumulus Media acquired Citadel Broadcasting Corp for $2.5 Billion.
Just over 6 years later Reuters reported that Cumulus Media filed for bankruptcy with declining sales and crushing debt. "The debt overhang left by previous years of underperformance remains a significant financial challenge that we must overcome for our operational turnaround to proceed,” Cumulus Media Chief Executive Mary Berner said.
Wait, now this wasn't the first time I heard this, yes, I know I heard it another time but where and when? Oh yes, five years earlier on November 16, 2006, Market Watch New York reported that Clear Channel Communications Inc., the largest U.S. radio-station owner, on Thursday said it agreed to be acquired by an investor group led by private-equity firms Thomas H. Lee Partners and Bain Capital Partners for $18.7 billion in cash. RBC Capital's Bank doesn't expect a major overhaul of Clear Channel. "It hasn't been a poorly run company from an expense perspective," he said. "It'll be more a paring down of assets that aren't core to the operations and aren't as profitable."
Then on March 15, 2018 CNN reported that iHeartMedia, the operator of 850 stations across the United States, submitted the paperwork on Thursday. Its rival Cumulus, the operator of 445 stations, did the same thing a few months ago. "The agreement we announced today ... allows us to definitively address the more than $20 billion in debt that has burdened our capital structure," iHeartMedia CEO Bob Pittman said in a statement. What?!! The debt went up $1.7 Billion during the last 12 years since the buyout!
We have heard this before as these giant radio CEOs talk on and on about "synergies" and "assets" and "cost reductions" and "unlocking the hidden value for shareholders" but you NEVER hear them talk about the most important things? The employees! The clients! The communities! Meanwhile they turn this great business into a commodity while Google becomes the second Trillion-dollar company and Facebook grows from nothing to $40 Billion a year in sales with an 87% margin!
The Big 3 radio companies talk about their support of our industry, but their actions show they have NO regard for anyone but their stock holders and their own personal checkbook! This reckless behavior is the reason why The Media Store has a message for the BIG 3 Radio companies. If you are a radio exec and you work for the BIG 3 don't EVEN think about calling us, we won't even take YOUR call because we won't work with you! We only work with INDEPENDENT local broadcasters who have dedicated employees doing amazing things in their communities sponsored by great local businesses!