In a “Publisher’s Perspective – Implications of Clear Channel’s new deal,” on May 25 we wrote: When this is all done I hope that Clear Channel will not just change, but I hope to see improvement to this media company. And it all begins with honesty as we can hope for the best.
I was being gentle, but many that have been in the hierarchy of Clear Channel have stronger views and have wanted to state some of the details that many of us on the outside did not know. A long time personal colleague who was on the inside explains what truly happened to get Clear Channel in the position it is in today. The executive’s identity is being protected.
I enjoyed your observations on the future of Clear Channel post sale…having been in the CC organization for 9 years (pre, during & post Randy Michaels) I have a few observations as well from the position of how they must reshape operations to deliver the expected performance. By the way, if you haven’t read "Right of the Dial" by Alec Foege, do so, it is a chronicle of broadcast and other business horrors that leaves you with a clear picture of what happened to CC…arrogant incompetence.
Your list of 15 things the new CC must embrace is spot on and culled from your experience, but it broad strokes the operation part. My observations come from the position of an experienced inside operating manager who realizes that the "devil is in the detail" and the road to recovery must be followed patiently with a solid set of logical proven radio principals.
I watched for 9 years (1997-2005) as CC senior Management made one mistake after another, year after year, confusing the stations by changing their position on important operating issues and ignoring experienced management to the point they finally shut up for fear of loosing their jobs.
Do you really think local operating management endorsed LIM? Hell no, they tried (and I was one of them) to show Sr. Management that there were other easier ways to cut the clutter, but they ignored it, I still have my email. We tried to get them to realize that the 60-second spot was an advantage radio held over TV, but they ignored it. The end result was the biggest financial failure in Broadcast history and it was hardly even reported by the media as such.
Consider this…In 2005, CC net radio revenue went backwards by 300 million (thanks to LIM) while the radio industry increased by 3-5%, if CC did nothing (didn’t institute LIM) it would have increased its revenue by 3-5% like the industry. Instead, it added another 100-200 million to the backslide, total it up and you have over a half billion dollar negative consequence of LIM…and no one lost their job…incredible.
Meanwhile, it crippled CC sales departments for years to come, struggling with more 30s than the local advertising appetite could handle, fighting with the largest advertiser category – car dealers who only wanted 60s. The revenue consequence in the following years added up conservatively to another 100+ million…I could go on with other examples of Sr. Management ignoring experienced local Management.
My point is this, the new CC cannot have this kind of "my way or the highway" type of thinking, the new CC must pay attention, within reason of course, to what the local station management tells them it needs to be doing to succeed in their market and then hold them accountable. The old CC dictated programming, marketing and sales strategy while holding local management accountable for operations that in many cases they disagreed with…that approach must change.
Don’t stop me I’m on a roll here…as another example of operating arrogance, in 2003 while CC was having a huge revenue year and after the GM compensation deals were set in March of that year, Radio President John Hogan announced in August that the GM compensation plan would be changed…huh? That’s right, 6 months after they set up compensation plans for the year, after they saw that some were going to be getting larger than normal payouts, they changed the whole plan. Did you ever hear anything about this? Probably not, but it is another example of corporate dictatorial arrogance that destroys morale. This kind of thing cannot happen in the new CC.
My point in all this is an expansion of your # 12…To invest in new management, but taking it a step further this new leadership must have the knowledge, sensitivity and experience to know what’s right and the guts to see it through to fruition. It must give its local management the freedom to succeed, but not shackle it with the cookie cutter principals that, in my opinion, brought down the old Clear Channel Radio.
Unfortunately, as you write about this you are already giving a peek into what’s to come…i.e. # 4, they "have sent teams of so called know-it-alls to go over every inch of CC operations in an attempt to find a better operating plan" and that they "don’t know anything about running radio." Uh oh…I see problems ahead. Not the kind of morale building that is needed for the largest group of radio stations on the planet. They will need to set the tone for performance futures real soon or risk an exodus when the deal closes and the option checks are mailed.
Kind of makes an old radio exec, think of coming out of retirement…no not really, I don’t qualify and even if I did I wouldn’t want that job, it will be a nightmare juggling investor expectations with operating realities. Continued success to RBR.
(By, former Clear Channel high level executive in semi-retirement)
Publisher’s note: Click to review the “Publisher’s Perspective – Implications of Clear Channel’s new deal,” May 25