On The Radio Columns: February 2008 Archives

By: Mike Austerman

On The RadioIt used to be that reporting on radio was all about covering the things heard over the air. Now Art Vuolo and I spend as much time being business and legal reporters as we do covering the actual entertainment. This week is no exception. Clear Channel, owner of WMXD-FM (92.3), WKQI-FM (95.5), WJLB-FM (97.9), WNIC-FM (100.3), WDTW-FM (106.7), WDFN-AM (1130) and WDTW-AM (1310) locally, has clamped down on first-quarter spending for marketing and music research and halted nearly all hiring. A memo from CEO John Hogan was leaked on the Internet in which Hogan reportedly claims, “We are generating less revenue for Q1 than we budgeted and less than what actually ran last year. At the same time, our budgeted expenses for Q1 are up 4 percent.”

Some of the reason for the financial clamp-down is that the publicly traded company has agreed to be reconfigured as a private entity by essentially being acquired by a number of capital investment firms for $19.5 billion, $39.20 a share. The bad budgetary news sparked a sell-off of Clear Channel stock, which last week was trading at more than $10 less per share than the deal price.

The mega-deal received approval from the Federal Communications Commission late last month, with the requirement that the company sell off some of its stations in 42 markets around the country. While none of the Detroit-area stations were on the list of stations identified to be sold off, it’s pretty clear that with the kind of financial pressure Clear Channel is under there are very few properties that should be considered safe if they are losing money. Already we’ve seen just how brutal a time this is with the numerous personnel cutbacks that were made by the company late last year, here in Detroit and nationally.

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Given all of that, it’s no wonder Rich Homberg decided to get out of commercial radio by leaving his job as vice president and general manager of news WWJ-AM (950) in favor of joining Detroit Public TV, which owns and operates Channel 56 as well as programming classical/jazz WRCJ-FM (90.9). Homberg had been with WWJ and CBS radio since 1996 and was a major part of bringing the sports format to WXYT-AM (1270) along with the broadcast rights for the Detroit Tigers and Red Wings.

“Rich Homberg has certainly demonstrated a deep commitment to southeast Michigan and he has a clear understanding of the important role a broadcaster can play in helping our community achieve its goals,” said Steven Strome, chairman of the Detroit Public TV Board of Trustees. “We consider him the ideal leader as we expand our services in a rapidly changing media environment.”

“This is an exciting time to join Detroit Public TV,” Homberg said. “The station shares my commitment to creating local content that can strengthen our region by uniting viewers, listeners, and businesses along with cultural and educational institutions to address vital issues.”

 

By: Art Vuolo

On The RadioThe former publisher of Inside Radio, Jerry Del Colliano, feels that what’s killing radio is constant denial. The “big guys” who run the mega radio companies are saying things that scare me. Radio-Info’s Tom Taylor reported that Clear Channel Vice President John Hogan said: “Performance and capability is not our problem. Our problem is one of perception.”

No, it’s not. Look what they’re doing. They try to grow a business by cutting back. They embrace the wrong technology (HD instead of mobile/Internet). They have driven off the next generation — have no clue what they want — and think the problem is about perception. No one cares about perception — they care about content and how it is delivered.

Dan Mason, president of CBS Radio, said, “The Arbitron People Meter will revolutionize the industry,” probably because actual radio listening has been underreported using the old system. Mason said, “For this industry to have to defend itself against the iPod is not only ridiculous, it’s wrong.”

Repeatedly, I’ve preached about the iPod, but it’s not the only thing radio has to defend itself against. The enemy has been redefined as Internet radio, mobile phone competition for listening time (texting, phoning, etc.) and social networks. To beat the “bad guys,” you need to know who they are.

Radio may be just the ticket for baby boomers, but it’s not even on the radar screen among most 18-to- 24-year-olds. Del Colliano said, “Radio people seem to deny that they need to attract this audience, and they get nasty when you tell them that radio may have to deliver content in ways other than terrestrial signals.”

As a baby boomer, I see my generation is approaching the checkout lane and Gen Y (young people) are just starting to live, spend and buy goods. As much as radio groups say they understand the Internet, they don’t. It is a delivery system and it needs content. One would think they would want to be in that business. Thanks, Jerry, for letting me borrow some of your thoughts.

 

By: Mike Austerman

On The RadioIs radio dead? Last week, when Wall Street personality Jim Cramer declared the death of the medium — at least as the stock market is concerned — during an interview not only was he biting a hand that had at one time fed him, but he was just adding his voice to a chorus of others that think the future of radio is now in the past.

How did we get to this precarious point? For me, all of this madness started locally back in the mid’90s when up and down the dial stations were changing their owners faster than most of us change our furnace filters. Then there were two events locally that signaled the beginning of what has now become the most trying time in radio history.

On Nov. 21, 1997, WQRS-FM (105.1) ended over 37 years as Detroit’s Classical Music Station and segued from a “Madame Butterfly” aria into “Closer” by Nine Inch Nails. It was documented that the plug was pulled because new owner Greater Media just wasn’t making money fast enough to justify what it spent to get WQRS, which is currently soft rock WMGC-FM (Magic 105.1).

Looking back, it’s clear where the pressure came from. In 1996, Marlin Broadcasting sold WQRS for $18.5 million. A short time later, the station was sold again by American Radio Systems to Secret Communications for $27 million — a whopping increase in value of almost 50 percent! Still in 1996, Secret sold WQRS and sister stations WMXD-FM (Mix 92.3) and WJLB-FM (97.9), along with stations in other markets, to Evergreen Communications for $227 million. Evergreen at the time owned WKQI-FM (now Channel 95.5) and WQRS was spun off, due to federal ownership limits, to Greater Media in exchange for a radio station in Washington, D.C., and $9.5 million.

In the span of less than a year, WQRS changed hands five times, and with each exchange, the station likely increased in its cost to the new purchaser.

 

By: Art Vuolo

On The RadioLately, regular readers of this column may have noticed that Mike and I have been somewhat critical of the radio industry and what has happened to “the good ol’ days.” We have quoted a number of other columnists and former programmers who have spoken the truth about the business, but most of the people running stations these days simply don’t want to hear it.

People like Jerry del Colliano and John Gorman are thought to be eccentric prophets of doom who are burning bridges and alienating today’s broadcasters. Not so. Gorman, who tried, with limited means, to make WKRK-FM (97.1) a successful rock station after years at Cleveland’s legendary WMMS, said the radio business needs to remember the three little words, originally delivered in a keynote by National Association of Broadcasters president David Rehr: “Reignite the passion.” But he adds a fourth: how?

“You will not reignite anything by gutting established morning shows,” Gorman said. “You will not do it with voicetracking (automated) shifts when most people listen. And you will not reignite the passion by having managers and programmers accountable for multiple stations and, in some cases, in multiple cities.”

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The local radio community was stunned this past week when it was announced that Kevin Murphy, who was just promoted to market manager of all of the CBS radio stations in the Detroit area, was “reassigned” to California. Murphy will be overseeing stations in what is known as “The Inland Empire” — Riverside/San Bernardino extending out to Palm Springs. Murphy was not overly popular in The Motor City. Personally, I tried to be his friend and found it difficult to do. He was excellent at adjusting the “bottom line,” but did so at the expense of dozens of jobs lost and many very talented people losing their positions at various CBS stations in Detroit. It was thought that Kevin Murphy did — in less than two years — to CBS Radio in this town what it took former Mayor Coleman A. Young 20 years to do to the city of Detroit. I wish Kevin well in his next venture, but locally no tears (that I know of) are being shed.

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Smooth Jazz WVMV-FM (V 98.7) grabs syndicated host Dave Koz for afternoons while former p.m. driver Sandy Kovach shifts to middays, pushing Janet G out the door. Another case of cutting as the body count increases.

 

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About this Archive

This page is a archive of entries in the On The Radio Columns category from February 2008.

On The Radio Columns: January 2008 is the previous archive.

On The Radio Columns: March 2008 is the next archive.

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