More broadcasters may cancel satellite-friendly syndication
It's not just Saga that's thinking about it: Ed Christian, Saga CEO, tells RBR that behind the scenes, other terrestrial radio managers are contemplating throwing some 90-day cancellation notices at the syndicators as well: "Gabe Hobbs [Clear Channel Radio VP/News/Talk programming] and I have had some discussions as to what Clear Channel's position is going to be on this. It kind of mirrors ours. What happened is I'm on the AP Broadcast Board. We just had an APB meeting in Chicago. I will tell you that Dan Halyburton [SVP/GM] at Susquehanna, who was there, is thinking about this. We've had long discussions. And Ken Beck at Entercom [VP/News/Talk/Sports], who is in charge of their News/talk programming in Seattle,"
Rick Feinblatt from Greater Media was also there, Clark Brown from Jeff-Pilot, Dick Ferguson from Cox Radio and Jim Farley from Bonneville.
Continued Christian, "We sat around talking about taking a stance. I think this is the message we need to send to the syndicators. Remember, satellite is not a business model for the syndicators, because where their money is made is through the inventory they gain through terrestrial broadcasters. So if syndicators want to develop a business plan on how to get rich through their inventory on satellite radio, knock yourself out, but you can't have it both ways."
He added, "I think what this really gets down to is that content is something that's precious to terrestrial broadcasters. And I'm certainly not trying to run the syndicators' business, but if they want their program to be aired on any of our radio stations, I have to insist on market exclusivity. If I were a station in a market running Rush Limbaugh on my AM and suddenly I heard it on an FM station in town, and I called the syndicator and they said, 'Oh don't worry about it, it's only FM,' I would probably go nuclear. But for them to say the same thing about satellite, the same rules hold true. And that is if you want your programming to appear in my signal area and you want me to market and promote it on my terrestrial radio station, then I must insist on having exclusivity of that product in my market. XM and Sirius, between them, have anywhere up to like 19 PR firms, whose sole job is to trash terrestrial radio. Well, damn it, we're not going to take this s*&% anymore."
What has been done so far is that Christian last week sent out 90-day cancellation letters to the Satellite Sisters, Bob Brinker and Alan Colmes. "Because what we have to do is get the matrix of all of our talk stations and look at it and find substantive programming that makes a commitment not to be on satellite radio, to replace that. So [today] I have a conference call where I'm going to be talking with several of our talk managers and getting more programming and deciding what letters are going out- - all I need is 90 days' notice."
Maybe this strategy should have been adopted from the get-go...?
"Well, absolutely," Christian explained. "Basically, we were just kind of late on this. And a lot of this programming just kind of snuck on, because the syndicators don't really come out and tell you. Now we did cancel Dr. Laura. That was weekday programming, and that was because when she went out on her own they made the announcement that they were going out on satellite."
Hobbs tells RBR: "Certainly, I have very similar feelings to Ed, although Ed runs his company, I don't run this one. It won't be my decision, but certainly I'm going to talk to some folks in this company and see what their feelings are about it. Hopefully they'll feel the same way, and if they don't, I'm sure they will have a business reason and explain it to me. So it's just something that I think we have to do. You know, we talk all the time about allowing talent to migrate to satellite - - whether it's Howard Stern, Opie and Anthony, or whatever. Well, this is kind of part of that. We can't complain about our talent migrating over there and then just turn around and give them stuff. I know when XM first came around, nobody quite understood what it was or the impact might be. We were all sort of in a rush to get in on the action, if you will. And certainly, talent gets a big, big thrill out of being on satellite, even if there are only three people listening at any one channel at a given time. So it's one thing for a company to take the programs off, but it's another thing to go break that to the talent, sometimes."
And it's also an issue that Ed doesn't have an equity stake in XM, like Clear Channel...
"Right, so it's a little bit more of a sticky wicket, but I am going to broach that subject with the powers that be above my head, certainly, and see what their feelings are," says Hobbs. "At the AP Board meeting there were representatives present from both large and small groups alike. And there just seemed to be a general consensus among folks that were there that we really need to take a hard look at this...I guess my only fear from my level is I don't want the mainstream press - - XM and Sirius have such terrific PR machines - - to spin this, that we're running scared and that we're doing this out of fear of our impending demise or anything stupid like that. It's just that we have to make smart business decisions whichever way they go and that's really what this is."
You do know that if enough broadcasters get together on this, the critical mass will cause syndicators to pull programming from satellite faster than you can shake a stick at them.
"Right, absolutely," said Hobbs.
Halyburton is looking at the possible impacts, but hasn't presented the pros and cons yet to his superiors: "First of all, I congratulate Ed for his stance. I don't know yet the nature or the extent to which that could impact our company, and it wouldn't be my decision. I haven't talked to Nancy Vaeth-Dubroff about it yet, so I think that anything that I would say would be premature, except to say that I admire his stance and it will be interesting to see what kind of impact that would have on their company, our company or any other company. Clearly, all broadcasters have to continue to be very vigilant about the activity of the folks who are certainly spending a lot of other people's money. Everybody's got to fight hard. I know they're playing hard and radio's got to fight back equally."
Says Beck: "I understand the concern. I think it's something that needs to be looked at. Obviously, I'm not the CEO of our company. David is pretty outspoken about satellite radio. I think it's a development that is resulting from the increased competition from satellite that we need to take a look at. I know what Ed is doing and I think some other people are taking a look at this as well. Our relationships with our syndication partners are pretty important to us, and the exclusivity in our individual markets is important to us too from a competitive point of view. I think there is a general realization of that on the syndication side and I think they've got some decision-making to do as these competitive pressures build up."
