The "Fix The Perception Issue by Changing Reality Issue" Issue

Good Morning!

I am pleased to offer the new edition of the FigFamily Newsletter. (those from Citadel receiving this know what this is.). To everyone else, welcome! The FigFamily Newsletter is a confidential chance for us to communicate with a few well-chosen clients and friends about observations, opinions and issues we face in the day-to-day operation of our professional lives. it is NOT based on any one company or person. By design it's not fancy or pretty. There is no set schedule, this is a "call it as I see it" publication. When the mood strikes, you'll get it.

If you DO NOT want to receive these informal e-mails, please let me know, I will remove your name from the list. No questions asked!

Hang on, this one is gonna get deep!

One of the first rules of starting a new business is "Don't alienate potential clients" by being critical of anything related to them.

I may be breaking this rule right from the start.

And after spending 24+ years in corporate radio, I believe I'm qualified to hold the mirror up and tell companies their baby is getting ugly. (those of you who know me, understand my frankness. It's only because I really care. ) And it would be easy for them to dismiss me as another disgruntled "ex" corporate guy with an ax to grind. Nothing could be further from the truth. I know most of today's radio Presidents, and CEO's and they know me. They are all really great people.

I believe radio company CEO's and other assorted company leaders are really smart, hard working, well intentioned individuals. They are under constant pressure to perform. They can't work any harder. It's time for them/us to work a little smarter.

I believe we are now in for the battle of our career. Part of it is a perception battle, the other part is real. With all the press on satellite radio, I-Pods, broadband, and the general state of changing technology, you would think these technology changes have rendered commercial radio obsolete. Satellite radio is getting so much positive press, you would think they have more listeners than we do! (hint, they don't, not by a long shot.) This is the perception. Do you think listeners believe satellite radio has more listeners than they have? I do!

Corporate radio is getting so much negative press, I believe it is starting to sink into the public psyche.

We are making a few MAJOR mistakes. And here is where the reality comes in. We are all being made out to be the greedy Gordon Gecko's of the media business. Good solid everyday radio broadcasters are now being painted (by Wall Street, the press, and in some cases, OURSELVES!) with the same brush.

And our competition is LOVING it! We are acting like the stupid competitor across the street that is making it WORSE every time they try to make it better. In short, we are playing defense - not offense. We suck at defense. And our offense is weak.

Over the air radio has a bright future! No kidding, it really does. But we better start making the changes necessary to operate in the future, or we will struggle for years to come.

There are exceptions, but.....(here I speak in generalities. Not EVERY station, cluster & company is like this. It just seems like it!)

It's difficult to buy national spot radio. And expensive. National rep firms are still doing business the same way they did 10-15 years ago. Except we are paying them HALF. No wonder they are not investing in resources. National spot radio will continue to shrink if we don't streamline the paper, and ease of buying. It can be done. but we are going to have to spend money to fix it. Many national people are overworked with the amount of paper piled on by handling way too many stations. Some can handle it. Many cannot. They have been through so many cuts, they are scared to say anything about it. Many are dismayed at what the business has become. They are overworked, and beat up. I'll bet 50% of the national sellers would re-locate to another career if they could. This business needs a complete re-think. If we don't, someone else will. (yes, I have specific solutions. If you want to know them, call me.)

We must address the 18-34 issue RIGHT NOW! We are not attracting young listeners to radio. There is little for them here. We have cut research, marketing, and a conduit into the minds of these people. Quick! (with the exception of ethnic formats) Name ONE new successful format developed for young people in the USA. (don't say Jack, it came from Canada. and it's not 18-34.) There is little if any R&D going on in the corporate halls of radio. (especially the research part.) There is little talent development for this demographic. Where are the next generation of morning show's, talk hosts, and yes, dare I say, DJ's? We have cut out the incubator. No overnight, weekend, 7p to midnight shows are being developed because we have NO LIVE PEOPLE ON THE AIR. I'll bet (with a few exceptions) there are no more than 2 live people on the air in major markets on Saturday night. None in smaller markets. And the pay is just above the 3d shift at Burger King. Many PD's know this. GM's do too! Some can handle it. Many cannot. They have been through so many cuts, they are scared to say anything about it. Many are dismayed at what the business has become. They are overworked, and beat up. I'll bet 50% of the GM's & PD's (given the choice) would re-locate to another career if they could.

Speaking of 18-34, we are NOT educating our young managers. GM's, PD's & Sales Managers are NOT being trained in the skills necessary to compete in the new media world. We have cut research, sales training, music testing, and GM development. First time managers are being given 2-3-5 even 8 stations to run. Are they Qualified? Trained? No. They are buried in paper. (part of the blame is Sarbanes-Oxley) GM's, PD's & GSM's are spending their day running from meeting to meeting, trying to administrate the massive amount of accountability required of them from corporate. They have no "thinking" time. Remember, this is a creative business. It's NOT Wal-Mart.

Today's managers are being told what to do from above. They are NOT being trained to think for themselves. They are simply managing the expenses and pushing for every dollar they can find. We are paying managers less money for more responsibility. 10 years ago, in most major cities there were 1 or 2 station managers (PD's GM's & GSM's) per station. Now there are 1 or 2 managers per 3 to 8 stations. Some can handle it. Many cannot. They have been through so many cuts, they are scared to say anything about it. Many are dismayed at what the business has become. They are overworked, and beat up. I'll bet 50% of the big company GM's (given the choice) would re-locate to another career if they could.

Today's Regional managers are also overworked. Charged with "getting the money" they must coax every dollar out of every station. They don't have time to address the subtleties of each individual station or situation. Just "bottom line me". They are getting 150 to 200+ e-mails per day. They are the gatekeepers of the expenses. They live in airports going from conference room to conference room. What would be the average time spent per station issue in a given week? Hmmm, lets see, 80 stations times 40 hours per week = 30 minutes per station. Add in corporate responsibility at 3 hours per day = 55 hours per week. Stir in a dash of legal, HR & travel and bada bing! You got one busy person. With too many calls to return and not enough day to do it. Some can handle it. Many cannot. They have been through so many cuts, they are scared to say anything about it. Many are dismayed at what the business has become. They are overworked, and beat up. They want to do the right things for the station. They know what to do. They are very smart. They don't have the money to give the GM's to support the product. They know not to ask upstairs. The answer is mostly "no". They stop asking.

Now to the CEO/President job. Radio leaders must re-think what they are doing. It's not working.

Wall Street is leaving. No use sucking up to them. The stock options are under water anyway. We can't please them anymore. We have to get the growth back to get them back. We can't cut our way to growth anymore. We must invest in these clusters right away. They (Wall Street) won't like that. But, we have no choice.

There are too many layers between CEO's, the listeners, advertisers and everyday employees. The CEO's are not going down to the front. They are NOT approachable. they are too busy defending their actions. Many are hard working, well intentioned professionals. But the world is changing. And they are not listening to the listeners. They fail to see the personal relationship between the audience and the station. "Less is more" is fine, BUT WHO GAVE THEM MORE (spots) and LESS (music) in the first place? We did. We were wrong. We screwed up.

Leaders are NOT listening to their own GM's, Regional & department heads. They don't want to hear it. "No excuses, just get the money" they cry! If you tell Wall Street the radio stations are going to grow 4%, and the budget for the stations is 12% (BCF) while the local market advertising growth rate is +1%, there is eventually going to be a problem. (hint, some stations are going to get a new competitor, they won't grow no matter what you say. If there is no money to defend your attack, you may lose the brand forever. CEO's know this. They are not stupid. They just can't afford to defend every attack. They must pick the battles. but they need local input to make the decisions. They are not always getting it. Or don't want to hear it.)

Each station should have a soul if it is to succeed. Each must strike a chord with listeners, advertisers, & employees. We can't keep assuming that whatever we do, the "people" out there will like it. Just because we want the stations to bill a certain amount, it doesn't mean it will. Advertisers are getting picky. They now have choices. And the new marketplace will dictate the results. Not us, try as we may.

I am not suggesting we throw money at every problem. Clearly, there are reasons NOT to spend money on inferior products, bad employees, or lackluster marketing. I am suggesting that Station Managers, Regional VP's, and people in the corporate office must re-think the way we are doing commercial radio in 2005/2006.

We must start putting money back into many of these great brands, and the people who make them work.

We must realize the limits of local staff vs. work load. If the FCC would let us own 20 stations in a market, would we have the head count per station that we have now?

Me must put many decisions back into the local community. We must trust our local managers to do it right. (or get rid of them)

We must market our local content to a public that believes we are in some ways inferior. (perception here too.) This means spend money on well programmed brands.

Many CEO's and company Presidents, Regionals, & GM's are doing things RIGHT everyday! They are just NOT getting the credit for it. Perhaps it's time for a dialogue. It's time to play offense. It's time to address the cost, talent, future, and competitive issues in a frank, logical, and even cost effective way. Are we doing it now? If so, it's not working. We aren't landing any punches. We are running for election. And the words are NOT resonating with the voters. The competition's message is! (for the most part).

Are many of our stations sounding good? You bet your ass they are! I would put many of them up against any satellite, I-Podcast, Internet, future whatever, any day of the week.

But,

Our share of market is down, our TSL is down, our 18-34 is down, our cash flow is down, our morale is down, our stock price is down, our rates are down, our national is down, our confidence is down, our "will to win" is down, the audience perception of us is down, the press is down on us, our expenses are down, but our revenue is down too!. (yes, I know there are exceptions.) So, let's just be honest with ourselves. At least it's a start.

Have I just screwed my chances of working with major companies? Perhaps. But if I have said anything that is untrue, I'll admit I was wrong and take my medicine.

Then I'll find a way to make other companies better. One station, advertiser, and employee at a time.

Your input is always welcome. Have a good day!

Fig