The Rise & Fall of Radio's Third Reich

[radiofan]

Thursday, January 15, 2009
The Rise & Fall of Radio's Third Reich
By Jerry Del Colliano

While we're all waiting around for the mass firing of many Clear Channel employees (expected any time now), don't think that Citadel's Farid "Fagreed" Suleman and his wife, Judy Ellis, aren't doing a little nip and tuck.

A snip here at KGO. More firings -- the first in years under arguably the best general manager in radio, Mickey Luckoff. I'm told it was done with the usual class he has shown over his long career. KGO has benefits as part of a union contract negotiated with ABC before Fagreed which is why Luckoff's employees are fortunate. Luckoff obviously was pressured to do the layoffs by you know who.

Even Luckoff's longtime assistant, Sue Ostrom, elected to take retirement after 41 years together. I'm told it was her choice. Wow, that's the first time I've been able to use that term when talking about radio.

Right now Clear Channel is offering cover for the other spineless radio operators who are no better than Clear Channel when it comes to respecting, handling or firing their loyal employees.

This is all beginning to give me the feeling of a radio holocaust (and I say that with all due respect to the victims and their families who suffered in the more important one). And when I refer to Radio's Third Reich I mean all oppressive consolidators.

Yet, there are some striking similarities:

• An increasing number of radio employees are interned -- they can't escape and they aren't being nurtured. Their well being is not a factor because they are only being held for elimination. Account after account describes what now amounts to no more than a radio labor camp. Its not fun. Not productive. It's by all accounts hell.

• We've seen the systematic elimination of radio jobs right from the very beginning of consolidation some 12 years ago. Because the radio CEOs have now been discovered, they seem to be rushing to get more firings in as soon as possible.

• But not without torture first -- making their victims wait with the axe hanging over their heads.

• Secret meetings to determine who survives and whose career dies in the middle of the worst economy since the Great Depression. The mass elimination of jobs has become their goal.

• Rumors that Clear Channel is going to give each employee a number conjures up images that are chilling. Could they be that inhumane? Some folks there think that the "system" will actually grade employees -- you know, like I did to college students -- "A" for the best, "F" for failing. Even at the college level, students get to grade their professors after each semester. I wonder if Clear Channel employees get to grade their leaders?

• Plus, the radio generals' obsession with creating the perfect radio race -- those big city, Hollywood-type, strong voiced "superior jocks" who will eventually replace the weak and untalented in the eyes of Clear Channel management. After all, in the Third Reich of Radio small and medium market talent (on and off the air) is not worthy of survival.

• Then there's the sinister experimentation's being carried out to develop a new breed of "perfect" syndication host where a handful of clones are created in the image of Ryan Seacrest.

• Where a handful of managers clinging to life are forced to salute their furher -- "Heil Hogan". You know, I may be unfair to poor John. He's no doubt to blame for what happened to Clear Channel before Lee and Bain overspent for the company, but now I get the feeling that even Hogan is getting his marching orders.

It's downright depressing -- demoralizing, embarrassing, but the end is near.

The Allies could be ready to march in and liberate an industry of hard working, talented people and save the medium for its listeners and advertisers.

There is a new government now taking hold in Washington around the Obama Administration that apparently has sympathizers with local radio and less, shall we say, nationalism. I don't believe the rumors that the Blitzkrieg against local radio is set to happen around Inauguration Day, January 20th. Even Clear Channel couldn't be that foolish. But the firings are in the works.

These consolidators are sure arrogant if they are anything.

Still, sentiment against them is rising which is one of the reasons they are amping up their plans to reduce the population of radio once and for all through any means available to them.

There is a palpable sense that the end is coming and the consolidators must do whatever evil deeds they must to gain every advantage before they are stopped.

What I'm saying is that the consolidation of radio will be over -- but there will be rubble strewn everywhere in terms of careers, lost programming and missed opportunities. These are the last acts of desperation for powerful dictators who sense that change is coming -- and they may be going.

After all, you can't get away with producing penny stocks before someone wises up.

This can't happen soon enough for anyone directly affected by mismanagement at the hands of radio's field generals and top staff -- or for any of us who worked in this industry and love it -- and still care for its people.

These despicable acts of incompetence and insensitivity are increasingly being exposed for what they are. Soon more people will know. Then, federal regulators will be forced to step in.

There will be no Nuremberg-type trials. Expulsion will be enough.

But the damage has been done to an industry that has been pillaged by a sort of radio nationalism that has destroyed everything in its path.

Often readers will write to me and say how depressing these times are for radio. I agree and remind them that we didn't start the fire.

Our job is to hang in there, help where we can, be good to each other and have the courage to shed light on the many inequities that have caused the radio business to fail.

But there is hope -- and let's not forget it.

Radio people and radio stations have popular brands, still have advertisers, have audiences (at least among older adults) and production skills that can act as a gateway to the digital future.

Terrestrial radio's future is in the digital space -- ignored too long by consolidators, distracted by waging war on the wrong battlefield.

Radio's future isn't transferring terrestrial broadcasting to the Internet (that's just a tactic). It is in creating new programming -- some, new media versions of established and well liked brands.

There is still time for this if we act now as an industry because the economy has also slowed down new media companies. New media will need resources eventually.

But there is little time to waste.

Discarded radio people can and will discover that they have exactly the talents to work in new media when royalty, marketing, monetization problems and other issues are finally resolved.

In the meantime, here's something for our friends at Clear Channel who have either faced or may soon face elimination of their jobs.

The following is from the SEC Filing By Clear Channel dated May 21st 2007 in an attempt to win federal approval of the Lee & Bain bailout -- I mean, buy out -- of the Mays family.

These are their promises to regulators in another time and another place.

Hopefully you can use their words in an attempt to get fair and adequate financial renumeration for your hard work. Some may sue to get what was promised to federal regulators and others may take these words to the new government and attempt to get traction.

Oh, by the way, keep a barf bag handy especially when you read the part about how Clear Channel doesn't expect any merger-related significant reductions in their workforce.

All I can do is share it. The rest is up to you.

5. There are rumors that the consortium will now require Clear Channel to engage in layoffs and other cost-cutting. Is this true?

We do not expect the merger transaction to result in any significant reductions to our core workforce. While future employment is never guaranteed, reductions in force are typically associated with so-called strategic mergers in which two companies and their employees are combined, rather than with transactions that are more properly characterized as financial investments such as this one. The private equity group is making a very large investment in our company, and it is in their best interest for the company to continue having the right people with the right tools to grow and prosper.

6. What if there are layoffs? Is there a severance plan?

We believe we have the highest-performing employees in our industries, and the new investors and our current Board want our employees to stay focused and committed. Although no layoffs are contemplated currently as a result of the merger, Clear Channel has approved a severance plan for any employee whose job may be eliminated as a result of this transaction.

Again, we do not expect the merger to result in workforce reductions, and we do not want employees to experience undue anxiety. However, in the unlikely event some reductions are required during the one year period following the closing of the merger, we have developed a severance plan to assure that you will not be left without protection.

Any full time or part time employee of Clear Channel (or any of its subsidiaries) who is actively employed at the time the merger is completed, and who is involuntary terminated without cause during the following one-year period is eligible for the benefits described below. These benefits are also available to any full time or part time employee of a divested entity (such as a smaller market radio or television station), who is involuntarily terminated without cause, and who is not offered comparable employment with the new owner. However, any employee who is collectively bargained, party to an employment agreement or other agreement with Clear Channel or any subsidiary that provides for severance, or who is a temporary employee is not an eligible employee under this severance policy.

Years of Service at Termination -- Amount of Severance
Less than 6 months -- 1 month of Base pay
At least 6 months but less than one year -- 3 months of Base pay
One to less than three years -- 6 months of Base pay
Three years or more -- 9 months of Base pay

“Base pay” means, in the case of a full time employee, the employee’s applicable base benefit rate in effect at the time of termination or, in the case of a part time employee, the employee’s average base wages over the immediately preceding twelve week period.

“Cause” means (i) intentional failure to perform reasonably assigned duties, (ii) dishonesty or willful misconduct in the performance of duties, (iii) involvement in a transaction in connection with the performance of duties to Clear Channel or any of its subsidiaries which transaction is adverse to the interests of Clear Channel or any of its subsidiaries and which is engaged in for personal profit or (iv) willful violation of any law, rule or regulation in connection with the performance of duties (other than traffic violations or similar offenses).

“Comparable employment” means a position which is offered to an employee where there is no reduction in base salary or scheduled hours, and where the employee is not required to commute more than 30 miles further than the employee’s present commute.

Zofran is an excellent anti-nausea drug. Use only as directed.

The merger was completed July 30th of last year so the one-year window referred to above in their SEC promise must still be operable -- after all, it's their word, right?

Do you get the feeling Lee & Bain should have bailed out of this merger -- I know, they tried, but they will likely never get their money out of this failed deal.

I truly believe that the fall of consolidation was in the works for years as consolidated radio never lived up to its promise of shareholder value.

Now with the desperate moves of the last surviving radio group CEOs, you can rest assured that consolidation as we have come to know and detest it is falling.

To borrow a phrase from my good friend Barry O'Brien -- be strong.

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