New Westwood One CEO Rod Sherwood held a conference call Monday to address the new organizational structure. Also speaking on the call were Gary Schonfeld, president of the network side; and Steve Kalin, president of the traffic side. Here are some excerpts from the call:
Rod Sherwood: “The new organization creates clear accountability for each business (Network & Metro Traffic). Corporate ad sales will continue to leverage both traffic and network businesses across the company.”
Five general areas of focus:
(1) Network revenue initiatives going forward: increase CBS clearance; take advantage of copy-splitting technology; gain share of wallet.
He believes the business has “significant momentum” heading “into the right direction” – Year-over-year mostly constant in network revenues.
(2) Metro Traffic revenue initiatives going forward: 15-second spots to add to the current 10-second spots, introducing pre-recorded ads (important to Geico, Aflac, and others who only do pre-recorded commercials); compliance & clearance monitoring focus; market share gain plans (more important in traffic than network); winning back customers.
(3) Cost Savings: Metro is re-engineering initiatives and cost reductions. It gives EBITDA cushion. Cost savings should be $20M+ for next year (very important to the company).
(4) Content partnerships on the traffic side – but will have a “rub-off effect” on the whole company.
(5) Clear accountability and focus by line of business. Sherwood lauded Gary Schonfeld and Steve Kalin’s abilities.
Gary Schonfeld: "I used to be at WON in 1985-1987, VP of Eastern Sales. I left to start MediaAmerica. “I love this business and am really, really pleased to be a part of this team. My role: guide the network into the future, focus on programming, business opportunities, partnership opportunities. Most important role is to “help you – every single person on this phone,” and in order to do that, “I need to hear from every single one of you.”
The Operative words are “Accountability and Focus”
5 primary areas of focus:
(1) Driving ad sales.
(2) Re-engineering, continue to communicate clearly around this process.
(3) Product – partnership and internal development plans to enhance product.
(4) Inventory management (company-wide topic) – how to optimize inventory.
(5) Operational excellence – in all areas (i.e. delivery of product, compliance, etc.).
There was then a Question & Answer session:
1. In light of falling stock prices and your new position, where does the process of reorganization stand?
“We will remain on track with the reorganization, maintaining current momentum.”
Stock price: “We think stock is undervalued” but will operate the business and the stock price will take care of itself.
2. What will network programming priorities be going forward?
“All of the above: develop new programs, maintaining existing partnerships, current rights fees negotiations, solidifying sales on existing programs. We will upgrade and advance aviation and other equipment for Metro Traffic division when necessary. Overall footprint – delivering a valuable product to customers, new digital content, etc.”
3. Will WW1 be continuing its platform-agnostic direction?
“There are two focused sales forces. Together with the corporate ad sales team, it will ensure a coordinated effort. TV and digital are an important part of the traffic strategy. The aim is to grow digital business over time.”
4. Will new compensation plans still roll out tomorrow?
“New executives will need to weigh in on the plan, so it will not roll out tomorrow, but soon.”
RBR/TVBR observation: The call, from what we heard, didn’t address the $100 million in debt that they have to refinance in February. They didn’t address NFL rights fees for 2009. They didn’t address the traffic situation—they lost $100 million YOY in traffic—how are they going to fix that?
Tom Beusse is out, but the rest of the Rodale crew will stay. In addition, they brought in two new people in addition to Gary Schonfeld–Cathy Csukas and Susan Love. We didn’t hear anything about any of these new hires.