Change Central, Winds From Naples Blowing
We are not talking Groundhog Day but there are weather financial fronts moving in and the forecast predicts a lot of cold weather. RBR reported (3/3/08 RBR #43), Talk is over Time to Walk, that CEO Farid Suleman for Citadel Broadcasting was looking to the future as 2007 ended badly.
RBR/TVBR observation: When it comes to talking about losing your job for underperformance, we have to wonder how secure Suleman is in his own job. How long can this under performing by CEO’s go on before one of them is shown the door?
Checking the bloggers to read their forecast:
Blogger Jerry DelColliano says Citadel’s Farid Suleman Must Go. This isn’t personal. I don’t even know the man. I know he has had an excellent career as a bean counter for Mel Karmazin, but something needs to be said.
I am tired of reading news accounts of the implosion at Citadel without anyone standing up and saying what’s on everyone’s mind.
Citadel CEO Farid Suleman must be fired.
He has earned the right to get a pink slip for many, many reasons. Among them:
1. Presiding over a company that is virtually worthless to its shareholders. Over $10 a share a year or so ago and $1.10 a share when it closed Friday. I mention shareholder value first since it is the Holy Grail of consolidators. The shareholders should call for his head based on that alone. But, there’s more.
2. Farid has presided over the destruction of the once proud and profitable ABC radio stations and network. He lusted after them like a true dealmaker with eyes larger than his stomach, but in the end his actions or inactions ran ABC into the ground, too. Cutbacks may be the magic of bean counters but they are not what success is made of for operators. John Hare was pretty good in comparison, wasn’t he — when we look in retrospect.
3. Gutting the treasury of a troubled company. My old friend and RBR publisher Jim Carnegie reminds me that Farid was compensated to the tune of $17 million last year — excessive even if he succeeded and that the company has taken care of his capital gains situation. If you do that for a failed CEO, what do you do for one who delivers, say — a $2.00 share price for a radio stock? $34 million — Double! Insane.
4. Farid’s first response to each financial crisis at Citadel is to fire the staff. The Chicago Tribune reported what staffers were calling a "bloodbath" at Citadel–owned WLS in Chicago. But wait, The Trib got it wrong. It reported Citadel, "fired a number of staffers, including several news veterans, as owner Citadel Broadcasting slashed costs nationwide during one of the biggest advertising downturns in radio history." What? No the media is drinking the Kool-Aid of these desperate consolidators. What about the several year trend downward in share price — before the economic downturn? There are cutbacks at other ABC stations. Washington. Atlanta. New York. The "leader" is assuring his shareholders that he’s in charge. Here’s how he’s quoted by Frank Saxe in Inside Radio, "Suleman says ‘The time for talk is over and it is now time for the walk.’ Suleman says the biggest "disappointment" has been the big markets where national revenues have been "a complete disaster." It’s those former ABC Radio stations which Citadel bought from Disney last year." Farid has had plenty of time to walk the walk. Instead he stumbles.
5. A total lack of understanding on how to create and market content. That’s why he’s shown little sensitivity to the fact that Paul Harvey is his biggest star at 90 years old. The bean counter will try to slash that expense when his contract is up soon. Unable to grasp the business he is in — programming and marketing content — Farid does the only thing he knows — playing with his — numbers.
Growth companies invest in their product and or service.
They don’t divest.
That seems to be the only thing radio consolidators can do these days — divest themselves of talent and assets. They’ve never done real well playing Wall Street’s game and it’s interesting that all of them are still around while the people who made radio worth the high prices it got from investors are gone.
Incompetence. And there are more where Farid came from. I’m afraid I’ll be writing more of these epitaphs for radio during the difficult year ahead.
Do you think for one minute — even with a recession — that, say — Jimmy de Castro would have driven the Citadel price to $1 a share? Do you think he would have been stupid enough to buy the ABC stations in the first place? (Notice Emmis CEO Jeff Smulyan walked away after a brief flirtation). No, de Castro would be building a new-age cross platform "radio" company. I can name a lot of other qualified CEOs who could get Citadel up to $2 a share again (I’m being sarcastic).
How about my old buddy Randy Michaels? Yes, he could?
How about if they talked John Hare into staying and let Farid go? Just asking.
How about a few of blasts from the past who are sitting on the sidelines right now forgetting more than Farid knows about radio content and marketing?
The Citadel shareholders deserve what they’re getting — no return on their investment. To paraphrase Hillary Clinton, "Shame on you, Farid Suleman".
If shareholders insist on propping this guy up, they’ll continue to lose money.
It’s obvious that he doesn’t know what to do.
Someone start an intervention for Farid before he hurts someone (He can’t hurt himself financially thanks to the Citadel board’s generous compensation package).
The speed of the leader determines the speed of the team. Farid is the "leader". He has a record of consistent failure if you use share price as a benchmark. He’s fired talented people and watered down some pretty strong radio brands. And he’s already firing more.
In sports, when you lose, they fire the manager.
In radio, when you lose, they fire the team.
To borrow some Donald Trump imagery, "Farid, you’re fired".