Radio -- Bankrupt in 6 to 12 Months

There's a reason radio executives are talking gibberish and not making any sense even as their industry fights for survival.

Come on.

Sales shortfalls can be solved.

Programming inadequacies can be fixed.

New media and mobile content can be our fast friend -- not that complicated.

If we know this, why don't the radio CEOs know it?

And the answer is -- they do, but their problems are much bigger than increasing sales or getting ratings.

Radio is over -- not because sales and programming can't be fixed -- but because the station's can't service the debt consolidators gleefully took on to put their groups together.

Now they're panicked -- I've used the word "panic" before and some may think it was for dramatic effect. But I mean it -- they are terrified, in a cold sweat, in a flap, in a fluster, in a tizzy.

Maybe you can even find it in your hearts to forgive Clear Channel's John Slogan Hogan for defending the firing of 1,850 employees recently. Then, less than a week later Hogan says that they also may be hiring.

What's that all about?

When Hogan tells Inside Radio “We’re going out and hiring real revenue and yield management expertise”, he's not fooling anybody?

Hogan's scared out of his mind. I don't know about you, but he's starting to scare me.

What do good radio people know about hiring revenue and yield management expertise? Hell, many don't even know what it means. They don't need to. They know how to make radio profitable. Don't go asking Bain Media consultants what to do.

Radio has always been a simple business -- and that's its beauty -- screw yield management. Stick to your rates. Stop selling cheap ads. Triple your sales force, don't cut it. Put a killer sales manager in who knows how to sell local radio. I believe even Hogan knows this.

So why, you ask, would he start talking "Bain babble" -- named after Bain Media -- Clear Channel's co-owner and apparent management savior?

Hogan has a five-year contract and if he has been paying attention to the "long-term" contracts Lee & Bain have been offering "key" executives, it's not worth the paper it's printed on.

When a radio guy spits out the company line that Clear Channel is looking for a more "methodological and mathematical" way to determine rates and commissions, you know Hogan has gone off the ranch.

When he says, “I can’t tell you if the reductions are done, because frankly I don’t know", I believe him. No one is asking radio people how to run their own business these days. Hogan answers to a higher power -- private equity -- and gets his instructions from them.

When Hogan talks about re-engineering the company, he's full of horseradish to put it nicely.

Look, let's put it out there -- real.

Consolidated radio groups are facing bankruptcy because some will not be able to restructure their massive debt -- the debt they acquired in the first place when they paid too much for overvalued radio stations.

No one worried about it then.

But now, it's time to pay the piper.

Why else do you think radio people who know better are hunkering down for what they know is coming -- default.

One reader, a radio executive, claims New York money types are not just talking about the possibility of radio groups defaulting, but the probability.

Some think it can happen within six months to a year.

Radio groups like Cumulus, Univision, Clear Channel, Entercom -- in fact, most of them -- have structures that make it difficult to survive if debt cannot be restructured. And in case you haven't noticed, money is hard to come by these days.

Viacom CEO Sumner Redstone's "short pants" make life precarious at CBS where I'll bet Les Moonves would sell the entire radio group if he could get a decent price. Hell, he can't sell most of the CBS Radio stations he previously put on the block. No one wants them -- at least -- not anywhere near the price CBS paid for them.

Radio groups are more susceptible because they are leveraged to such a high degree. That's the reason that the stock prices are so low. Shareholder equity is zero as every single penny of cash flow currently goes to servicing debt. Soon, they won't be able to service the debt and/or they will be in violation of covenants with the banks and/or equity lenders who will seek to take the stations back.

And if you're seeing blue skies in all of this -- like, the stations will be more affordable and groups of former radio people who know how to run them can now become buyers -- wait. Consolidation has run the radio business down and competing in this environment could jeopardize even these re-purchases.

The erratic behavior you are witnessing when bad things happen to usually good radio people is the realization that their gig may soon be up.

That's why you're seeing outlandish deals crafted to bonus CEOs as an enticement for signing an employment contract renewal when no bonus would be necessary. I mean who is going to steal Lew Dickey away from Cumulus? Does he need an $8 million pot sweetener? Let him leave for $7 million. Betcha he wouldn't and couldn't.

How about Farid Suleman's tax-free $11 million salary in 2007 (we're anxiously awaiting 2008 figures and expect his compensation to be just as outlandish). Is he just taking the money, the plane, the benefits while he can because even a bean counter knows what an 18 cent stock is going to get you, eventually?

Fired.

Employees who have lost jobs are scratching their heads wondering how did so many group execs forget how to put billing on a station.

Or, forget that radio works best when it is local.

The reason Clear Channel is gutting the company like my favorite fish monger in Toms River, New Jersey guts a fluke is because they know something their employees don't know (or don't want to know).

Consolidators put too much on their credit cards and you know what happens when you owe more than you can pay back. Consolidators have been doing it with mirrors for years now -- refinancing debt. The average person doesn't concern themselves with it. Wall Street-types are obsessed.

Radio was a business that never had "consolidation" in its future. It was a small, family-owned service that made a nice living for some and losses for others. But there was a prestige in owning radio stations. That's one reason why mom and pop -- or even Jefferson Standard Insurance and Nationwide -- wanted stations in their portfolio.

When the big deals were getting done in the mid-90's, I asked a friend of mine on Wall Street how these companies could manage the massive debt they were taking on. He told me then -- and reminds me now -- that they can't.

So, my friends, if it helps get all of us who care about this industry closer to acceptance of what is happening, the nonsensical decisions that are being made by not-ready-for-prime time radio CEOs are just holding off the inevitable.

And that is -- stations in default.

My GM, sales and programming friends always say they know how to fix the problems at local radio stations.

But the reality is that no one can fix the mess that consolidators and eager investment bank lenders got the industry in when they propped up a business that looked good for a while to investors but never had a chance because of unmanageable debt.

And, to borrow a phrase from the great Paul Harvey -- now you know "the rest of the story".

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Losing the Music Royalty Battle

There's a fight going on right now -- and about escalate -- over music royalties.

I hope the lawyers are making a lot of money because no one wins this battle.

The NAB is claiming victory in the second round of Greedy Record Labels vs. Clueless Radio Operators.

The NAB says it has enough votes to prevent repeal -- at least 219 co-sponsors for the Local Radio Freedom Act which opposes requiring AM and FM stations to pay any performance fee to record companies and artists.

Nice name, eh?

Local Radio Freedom Act.

What b.s.!

Local radio is rapidly morphing into national radio thanks to Clear Channel's "leadership" -- this is a cute name like the "Patriot Act" which isn't what it seems to be, either. Fortunate for them our elected representatives are no smarter than the NAB.

First, the big news is not that the NAB barely eked out a victory over the record labels in their attempt to win repeal of the music tax exemption.

It's that the labels are only a few votes away from winning.

The question is: what is winning?

The disingenuous Local Radio Freedom Act has nothing to do with local radio and I predict this will blow up in the face of broadcasters trying to wave the "local" flag in front of lawmakers. Wait until they understand what Clear Channel, Citadel and the other consolidators are up to.

I've proposed exempting true local radio stations that are part of a reasonably small group from the added music taxes if they can certify that local decisions are being made about the playlists. Of course, thanks to consolidation -- the boring music you hear on-air is because labels don't find new artists and radio stations don't play new music.

This tax would be a hardship for small group owners and it is fair to exempt them from the burden of more taxes.

On the other hand, letting big consolidators dodge the performance tax benefits no one -- but the consolidators.

The labels aren't going to get local exposure for their acts. Royalties will go to a select group of artists that make it onto the consolidators Repeater Radio stations thus making the original intent of exempting radio from the performance tax passe.

I don't think Congress ever intended that the music industry, as clueless as it is, should help bolster Lee & Bain's bank account in today's private equity world.

Luckily it all doesn't matter.

Music royalties are a thing of the past.

Traditional radio is a thing of the past.

I know, no one is going to give them up. But the system of calculating royalties in a digital world is insane and will not hold up.

If you're an artist -- and I have many young artists write to me about their careers -- record labels are not in your future.

In fact, radio airplay, as they well know, is not in their future.

Neither are making CDs for mass consumption or touring for Live Nation.

See what I mean? We're living in a world of denial.

We wanted to believe that the Dow was really at 13,000, but reality tells the market it's closer to 8,000 and maybe even lower.

We want to believe that everyone has a right to own a home, but we forgot to add -- that right is revoked when times get tough and easy loans were issued to benefit banks not some people who could not afford them.

That radio consolidators could grow the industry when in the end they wound up looting it.

That there is a God given right to charge 99 cents for a song even if it doesn't come on vinyl or CD in spite of the fact that the market price for a song is zero (thanks to illegal downloading).

That suing music pirates would arrest a generational change.

So here we are -- fearful of the future, only willing to use the guidelines and metrics of our familiar past and willing to waste millions of dollars to defend the status quo.

But a funny thing happened.

In today's world, the status quo only lasts a second -- and then you either engage the future or get left behind.

But, we never learn.

The present ASCAP, BMI fee agreement expires at the end of this year. Negotiations will commence as radio is experiencing deep revenue declines. Obviously station owners want the fees tied to their revenues -- why not, they're going down. You can understand why the licensing groups want the ability to jack up radio rates. And the present flat rate model could be history making radio licensing rates as unpredictable as Internet rates.

Speaking of that, Internet rates are too high, too unpredictable.

Where is reality when you charge Internet streamers a higher rate than radio?

Both the labels and the radio industry are in denial on that, too.

Radio isn't what it used to be and cannot afford to pay increased license fees and the labels somehow think radio is in a position to be bullied into making up for its revenue shortfalls.

Reality says with the price of music near zero and digital rights protection a thing of the past, the two sides should do a quick deal that is fair to both and get on with it.

The next time their agreement ends, many radio stations will have gone silent. A handful of consolidated radio groups will have had some of their stations repossessed.

When you tell the labels they need to sell music for five or ten cents a song, they argue that their publishing agreements cost more than that alone.

Good point, but not a good excuse.

When the vast majority of music that changes hands does so at no cost -- your market value is zero.

The model is broken.

Of course, the digital age waits for no one.

While the labels and radio groups fight it out, they both grow increasingly irrelevant.

The next generation will not covet towers and transmitters, but formatic brands that seek new technology for delivery systems.

The music industry hasn't done anything in months -- maybe years -- to find their place in the digital future.

In that way, radio and records deserve each other.

I respectfully submit that you can't determine the royalty percentage until you determine the value of the product.

At best, the real feel is five cents per tune.

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Radio's Toilet Bowl XIII

Clear Channel President John Hogan says radio as we know it is in the toilet.

Quoted in Inside Radio, Hogan is conceding failure for today's radio industry.

“The business as we knew it is not coming back,” says Hogan who insisted they had to fire the latest 1,850 employees last week to pave the way for re-engineering the company.

Hogan's assessment is that after years of declining revenue and the current recession, they were left with no other choice.

Radio is in the toilet, no doubt.

Who helped put it there is beyond question -- Clear Channel, the largest broadcast group.

On the eve of Sunday's Super Bowl XLIII in which Pittsburgh will play Arizona, it appears radio is now getting ready for Toilet Bowl XIII -- thirteen years after the ill-fated attempt at monopoly -- I mean, consolidation.

Hogan coming out and saying the radio business is not coming back is like either the Cardinals or Steelers coaches saying, we can't win Sunday -- unless we change the game.

Here's Coach Hogan: “While I think there has been a tendency to hope things improve and get better, it’s just a fundamental belief we have that radio as we knew it is gone.”

Game over.

If I said that, I'd be called an idiot

If you said it, you might be thought of as disloyal to radio.

But when Hogan says it, he thinks he's Vince Lombardi.

Forget the competition which would have to be CBS Radio, the much smaller but next largest radio group.

I don't see CBS Coach Dan Mason doing the patented Clear Channel Repeater Radio game even in hard times and a bad economy. Coach Mason has lots of problems but many of them come from ownership where Sumner Redstone is in financial peril. This affects radio as much as it would if Dallas Cowboys owner Jerry Jones had to cut the money spigot for "America's Team".

Over on the other side of the field, Coach Hogan is skipping the pep talk this year and explaining why he doesn't need to field a full team of players anymore.

Screw the game.

Hogan is making up his own rules from now on.

Coach Hogan claims “We can’t afford to have mediocre talent on any station at any time of the day.” Boy, if this doesn't sound like a set-up for Repeater Radio syndication, I don't know what is.

So Clear Channel's team is playing with a shorter deck -- I mean -- bench and before he plays in the "game of his life", coach is attacking his own players.

That's like Steelers Coach Mike Tomlin and Cardinals Coach Ken Whisenhunt cutting the maximum allowed player personnel on field to save money and then calling them less than the best talent on the way to the locker room.

Coach Hogan thinks it's "delusional" to believe that things are going to get better. Delusional is a great word to describe him.

So much for aspiring to Vince Lombardi.

In football, players are judged by their talent and their ability to come through in the clutch.

But Coach Hogan has redefined what talent is needed to win the game. In fact, he's even torn down the goalposts and rearranged the field to suit his company's shortcomings.

For example, in sales Hogan told Inside Radio "Bain and Clear Channel crafted a sophisticated algorithm that rates all its account executives on metrics such as billing, rates, amount of new business and online billings. AEs with the highest scores were kept".

Huh?

Whatever happened to scoring points -- I mean, sales figures?

(Can you imagine the fees involved when the private equity company that buys you becomes your consultant and you pay them for "research"? That's right, more fees!)

Clear Channel also redefined how to play the programming game when it used a "sophisticated mathematical formula" similar to the one they used to judge salespeople for measuring on-air personalities.

Let the coach tell you.

“We are in a position now to objectively, consistently and in a highly quantifiable way be able to gauge performance.” The secret formula heavily weighs ratings but also compares a personality against other stations.

Get that?

In other words, if you score the winning touchdown at the Super Bowl but don't compare to another player from another team, you're cut nonetheless.

Makes sense to me -- especially since Clear Channel has now gone public with the demise of radio as we know it.

We knew they were killing the radio business all along. Now they're admitting it and taking "credit" for it. You've got to wonder if Hogan would have trash talked radio if Clear Channel was still a public company.

What's more ridiculous is that Clear Channel came up with these secret formulas and algorithms as a "gotcha" to justify its 1,850 firings last week. Otherwise, you usually give the rules of the game to the players before the game starts.

Not at Clear Channel, apparently, where sales and programming benchmarks were installed after the fact.

And I think I've gotten into Coach Hogan's head about the foolishness of "Less Is More". So now he has come up with a new slogan (see how he got his nickname?) "Better Is More". I'm not making this up. "Better is More" makes absolutely no sense. But least he's consistent.

"Better Is More" is where Ryan Seacrest and a handful of other syndicated personalities get to make more money by allowing Clear Channel to spend less on local radio talent. After all, you heard the coach -- we can’t afford to have mediocre talent on any station at any time of the day.

Again, the football analogy is that Rothlisberger gets to play on both teams because it saves money and he is considered the better quarterback (substitute Kurt Warner if you're a Card's fan -- just being politically correct).

Short of ethnic cleansing, it's talent cleansing.

Use the secret formula.

Fire the personality.

Pay one person to play several positions.

Hey, I thought Eagles linebacker "Concrete Charlie" Chuck Bednarik was the last of the two-way players on both offense and defense.

Coach Hogan wants his "talent" playing in every situation, every game, every station in the format.

“We shouldn't focus on where programming originates. What we should be focused on is how do we create the most compelling, resonant, interesting programming as possible and get it to as many consumers as we can in as many ways as we can find to do it.”

That's about the most idiotic statement I've heard from him and Hogan has made a lot of them.

Of course we should care about where the programming originates. Radio is local if it is anything.

So, as we anticipate Super Bowl XLIII it's hard to forget radio's Toilet Bowl XIII in which the biggest and richest team has declared the radio game dead and announced their unilateral intention to reinvent it.

Meanwhile poor Coach Mason of CBS is playing under a tight salary cap. He can't field the more expensive talent any longer, but he's still playing all positions (except managerial where he's often doubling up).

This would be a riot if it weren't so pathetic.

And while Coach Hogan is trying to change the rules of the game, there are others on the sidelines hoping to be playing in radio's Toilet Bowl next year.

I see Fagreed Suleman sitting over there in the luxury boxes and dreaming of a chance to play his star, Don Imus. Imus may be Citadel's team of one with few clones to support him and he may even need oxygen every once in a while -- but he's the face of Citadel.

There's always Paul Harvey. He's only 90.

Oh, never mind.

And there's Lew Dickey for Team Cumulus who just flew in on a private jet being approached by his board of directors to please take an $8 million signing bonus to coach the team for the next few years. I wonder what he will say? (Same thing happened in real life when Dickey was somehow convinced to sign a new contract for the bonus of $8 million large).

Saga's Ed Christian always wanted to play in radio's Toilet Bowl but it may be up to Daniel Tisch now who is buying up Saga stock like it actually has a future -- at $1.05 a share. Will Tisch take over the team or rebuild?

And right there in the Super Box is David Field who thinks he can make it to next year's radio Toilet Bowl by freezing player personnel salaries. That's a real motivator.

I'm an Eagles fan and as we Philly fans have painfully come to know there's always tomorrow.

But I'm also a radio fan.

And Coach John Slogan Hogan is now telling us there is no tomorrow.

He ought to know because his Clear Channel doomsday playbook has failed to adequately compete and it threatens to take all the others down with him.

No wonder Clear Channel is changing the rules.

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Radio Is the New Macy's

Turnabout is fair play.

Consolidators have screwed employees out of their jobs.

Now, advertisers are screwing radio stations out of previously agreed upon rates.

What do you expect when there is only one rep firm for the entire radio business?

And that rep firm is owned by Clear Channel, the largest radio group.

And Clear Channel is owned by a group of clueless private equity companies named Lee & Bain.

What you get is radio advertising anarchy.

And that's what is happening -- chaos, disorder. Perhaps you've seen or heard.

GEICO, one of the largest radio advertisers, negotiates its lowest possible rate with Katz for station buys across the country.

Then, after the deal is done, the buying service -- Horizon Media -- bullies Katz into giving up an extra 5% discount on top of the agreed upon price to complete the deal. It's like a boxer throwing a left upper cut after the opponent is knocked out on the floor.

What's worse, that squeaky clean Warren Buffett's Berkshire Hathaway owns GEICO and should know better. If anyone would tell him.

Or that Katz should have slammed the door and said, "no further discounts".

Perhaps it has something to do with Clear Channel's own interests. They are operated by a PE group that thinks long-term is as soon as possible. And perhaps by the fact that GEICO/Horizon chose Clear Channel for its Cause Marketing campaign last summer.

Four flights of 10 and 15 second radio spots donated by GEICO that ran in the top 25 markets with an online component and some public service ads thrown in by Clear Channel.

No matter what money, if any, changed hands, Clear Channel obviously has a previous separate relationship with GEICO and again, its rep firm, Katz is radio's only rep now.

Boar's Head tried the same tactic -- except they wanted 10% off radio's best price. That's a lot of baloney.

The RAB swallowed its tongue -- you know, radio's advertising bureau.

Katz has turned a deaf ear to radio executives and group heads who didn't cotton to having their rates beaten up after they were agreed upon. But you don't see any of the victim stations saying or doing anything about it.

This is a seminal moment for radio.

Now that the big cat, Clear Channel/Katz, has allowed its stations to accept double discounting, there may be no turning back.

And there is no getting around the fact that the speed of the leader determines the speed of the pack.

The number one consolidator is deciding for everyone else that discounts after the sale are now on the table. They have less to lose because PE firms are not long-term players.

This is what the demise of competition gets you.

Zero -- that's spelled "0" -- group heads have taken a public stand against double discounting.

We've already told you the RAB sees no evil, hears no evil and does nothing to help the integrity of radio rates.

Now, the law of unintended consequences has kicked in.

No competition.

One rep firm.

No radio CEOs with balls.

Advertisers and their illegitimate cousins, media buying services, sense a dying business and a weak resolve in radio.

Add to that potential conflict of interest by Katz parent Clear Channel and you can see double discounting is the new rate negotiation.

First, take a beating on the price.

Then, take an additional 5% or 10% off that beating.

Bastardizing radio's rate structure is going to hasten the industry's demise.

From now on, how can you charge full rate for any advertiser?

And any advertiser that henceforth pays full rate is a damn fool. Just send your buying service in to negotiate with Katz. Make your best deal. Then, take another discount at the checkout counter. Just like GEICO.

What has radio become, anyway? Macy's.

Consolidators have been looting radio for 12 years now.

But everyone has been comfortable with looking the other way. Well, congratulations -- you've now established a new paradigm for radio advertising.

Less Is More Radio Rate Reductions.

If any of the sorry consolidators who piss and moan all day long had any guts, they would run an ad in the Wall Street Journal and Ad Age -- an open letter to Warren Buffett.

By all accounts Buffett is a decent guy. He probably would respond and make it right. The bad publicity alone is not worth 5% off previously agreed to rates. And that would stop double discounting dead in its tracks.

Hold the RAB accountable -- the problem is if you don't like the way the RAB is handling things don't look in the mirror because just about everybody is on the RAB board. Not exactly an exclusive club. Translation: everybody is the problem.

Never in my wildest imagination did I see the radio industry becoming the mean-spirited employer of as little talent as they can get away with.

Or the unwitting fool that allowed Katz to swallow the buy.

Which leads me to this rhyme based on "There Was An Old Woman". Let's substitute "consolidator" for "old woman". Go ahead, use your imagination.

There was a consolidator who swallowed a 5% lower buy,
I don't know why it swallowed a buy,
Perhaps it will die.

There was a consolidator who swallowed a Katz,
Imagine that! to swallow a Katz,
It swallowed Katz to catch the 5% lower buy.

There was a consolidator who changed the course,
It's dead—of course!

If the radio industry thinks it got away with screwing its longtime employees to cut costs, wait until you see the screwing they're in for when advertisers can cut their advertising rates after the deal.

It's what happens when an industry is run by people without ethics.

Groucho Marx must have foreseen radio consolidators when he said:

"Those are my principles, and if you don't like them... well, I have others."

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Seven Ways To Get Your Next Media Job

A few weeks back I referred to a strategy that I used to teach my students at USC when they had their first big job interview in the media business.

It's a little different than conventional wisdom but the approach has an almost 100% track record for getting people hired when used as outlined below.

When I first mentioned it, many of you asked me to explain more.

So let's take time out from the 1,850 Clear Channel firings just last week and the never-ending Citadel dismissals and think about your future.

As many of you know I believe the radio and record industries have seen its better days. The future is new media and related fields. I know from my email that many of you who were sacrificed by consolidators are now thinking of getting out of the media business. Some are interested in retiring. Others want to hang in there -- or look for radio jobs with good radio companies, the few that remain on the national level.

Eclipsed last week by the massive Clear Channel firings was the major firings by Universal Music, the nation's largest record label. These firings won't be the last for the record industry where strategic thinking has been nonexistent since the days when Napster knocked the music industry for a loop.

What I recommended to my students was for them to assemble a list of three to five jobs they would like to have. This doesn't mean that they are qualified for that position, but it gives them a needed insight into what they'd like to do with their careers. Unfortunately when you're fired from a radio or records job you liked, you don't have a lot of time to think about what you really want to do. But you must.

Failing to consider all options leaves you bouncing around like bumper cars at the amusement park hitting obstacle after obstacle before you get tired of being pushed around.

Once you have the list -- prioritize it. There may be two things that you want to do real badly so it would be impossible to name one. This at least allows you to focus on where to spend your time and effort looking for employment.

On a personal note, I faced the same thing when Clear Channel bought my company, Inside Radio. I was used to being my own boss. Taking responsibility for sales and profits. Suddenly I had my money off the table wondering what I wanted to do next.

I was prohibited from working in lots of radio-related fields as part of the four-year non-compete and ultimately I decided to try teaching as part of a sabbatical from radio and the media. It was enjoyable and valuable in helping me understand why media companies fail -- inability to understand the various generations of consumers.

Now, I am continuing to work that same list I am asking you to make up. Part of me wants to grow this website into a larger venture encompassing generational media. You'll see the results of my planning in the near future. Another part of me likes to speak and write so I am writing a book about success, happiness and dealing with difficult people and doing seminars.

But for those of you who want to work for another company -- and have decided the effort is worth it -- consider this approach that my students used to beat other candidates out of getting the position they wanted.

1. Once you get the interview, learn about the company, its leaders and, if possible, the person who is interviewing you. Google search is your friend here. It may surprise you how many job candidates don't even do basic research into the opening.

2. Ascertain a detailed description of the position if possible. Understand what the employer is asking for when you are called for an interview.

3. Prepare a one-sheet (no longer) on which you will list seven (not more) ways you can specifically be an asset to the company that is interviewing you. Keep in mind that most hirings are based on a combination of the right price, the right resume, the right looks (sorry to say) or the right time and place. Not comforting. But to stack the deck in your favor, you'll be putting together a list of Seven Ways you can help the company.

4. If you're planning to just replicate your resume and generalize seven of your best assets, all bets are off. That's not what I'm talking about here. Some of my students would call me before their interviews and say, "I can't come up with seven ways to help the prospective employer". That either means you shouldn't be interviewing for that position or you have short-changed your skills and abilities. Sometimes asking others helps. (By the way, I insist on seven ways because seven is a lucky number and it reminds me of Rick Sklar, the WABC Music Radio 77 legend who had 7's all over his life -- successfully, I might add).

5. As the list of seven develops rearrange them in order of importance. Say, you're applying for a general sales manager's job in a medium market. Number one on your list might look like this: a) Have 25 advertiser contacts who have purchased $950,000 worth of ads through my personal efforts. Maybe another one would be b) I have a proven system for helping existing salespeople increase their productivity by 27% in one year after taking leadership. Yet another might be c) Skilled at effective human relations.

6. Once you have seven in order of importance, go back and add one line to each skill to provide evidence. So, using the examples above from a to c, you might add: a) My employer WXXX broke even when other stations had major declines. For b) It was implemented last on March 23, 2006 at KXXX and started showing results within 90 days. And for c) Took the Dale Carnegie course in 2001 and had very little turnover in my department. This is pure dynamite because you're backing up the specifics with concise evidence.

7. Print it on a piece of nice paper -- make two copies. Also print a one-page basic resume. Now you're ready.

8. On the day of the interview, walk up to the interviewer and firmly shake hands, then sit down.

9. Hand them your resume but not you're Seven Ways list.

10. You ask the first question -- but not about the specifics of the job. Make it a person centered question about the person or company. One question. Then, no talk. The interview is on.

11. As the interviewer conducts the interview, answer any questions honestly always looking into his or her eyes. At some point where it makes sense, say "I have taken the liberty of preparing a few specific ways that I might be able to help the company (or station) as I understand this position. May I share some of them with you?"

12. If the interviewer says yes, make sure you pull out only one copy of the Seven Ways and resist giving it to your interviewer. You don't want them reading while you're talking. You want to put in your own words the advantages. Do not spend more than three minutes communicating the basis of your ideas. Do not read them. Do not memorize. If the interviewer asks if they can have a copy of your Seven Ways, you are off and running. Say, "I will make sure I leave this for you before I go". If they don't, offer it anyway before you leave. (Oh, if they don't grant you permission to share your specific ideas, find another interview. This is not the employer for you).

13. Be prepared for specific questions about the Seven Ways and answer in short sentences. Long answers are not necessary.

14. At the end of the interview, hand the copy of your Seven Ways that you were using as a prompt to the interviewer.

15. Shake his or her hand and say "thank you for your time". Avoid, "I'd really like to work for you" type comments or other groveling that basically doesn't work. Keep it real.

16. Walk to the door. Don't look back.

17. Write a "snail mail" thank you which says -- I know you are very busy. Thanks for considering me for the available position. That note should be in your hands when you leave the interview and dropped into the nearest mailbox. A thank you note only works if it is received pronto.

18. Never call to inquire about whether you're still in the running -- if you're not, you'll know it soon enough. That call won't get you into the running.

The reason my students were so successful in using this approach is because they were always the only candidate to show up with the magical tool to separate them from the other applicants -- a sheet of seven compelling, specific-to-the-job ways they would be the right hire.

Others will rely on being a good interview, but they're not always the best person for the job.

Or wearing the right clothes.

Or having the best looking resume.

Or simply being interviewed at the right time.

So, try it if you think you'd like to join the ranks of my students who trounced the others for their first big jobs. Starting out, they have less experience than you likely have but they were smart enough to learn that everything in life is about perceived benefits.

In fact, it is usually the candidate that can specifically show what benefit they can bring to the job that has the inside track.

Tomorrow, the music and media industry will no doubt be back to amputating its most important parts again. Back to firing people. The process will continue for at least the rest of this year.

But I wanted to take time and pass this along to you.

If you've been fired, are threatened in your present position or simply want to take your many talents elsewhere, I hope these strategies will help you succeed.

If you think these approaches can help a friend, please pass them along with my best wishes.

Fagreed Suleman is coming off an $11 million salary year at Citadel. Mark and Randall Mays just got a raise disguised as a salary cut at Clear Channel. Lew Dickey was paid $8 million just to sign a Cumulus contract extension.

Lucky they have a lot of money.

Using the system I just described, I'll bet they couldn't come up with Seven Ways to help a prospective employer.

But you can.

Good luck.

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Marky Mark's Clear Channel Pay Cut

There's a new Marky Mark and the Funky Bunch -- it's not Mark Wahlberg.

It's Mark Mays and the private equity firm of Lee Capital Partners and Bain Media.

Forget the Obama inauguration. Closing Gitmo pales in comparison. By now you've heard the real "breaking news".

Marky Mark is taking a bullet for his employees -- a 40% pay cut.

Isn't that impressive?

Even his brother, Randall, is going along with it. Founding Father Lowry Mays' best work -- Randy and Mark -- are voluntarily giving up (and I'm tearing up right now) $875,000 and $895,000 respectively.

For one year.

Then, they go back to getting a pay raise.

Up to $1 million per son -- in other words, they make some of the short fall back and emerge from this year of financial sacrifice earning an even higher salary.

That's called A Marky Mark Mays Pay Cut -- less is more. Go offer that deal to the employees you just fired and see them jump at it.

And no more guaranteed bonuses for the two boys, either.

See, they're really going to suffer in 2009.

Unless...

Unless they meet certain performance guidelines and then rest assured that their bonuses will be capped at only $4 million -- a piece. (The way Marky Mark is going, I'm wondering if the bonus isn't tied to how many employees they fire -- you know, at least in terms of cost cutting).

One of my Clear Channel executive readers thought I was not being fair by ignoring the Mays pay cuts so I want to go on the record here and commend them for attempting to pull off another heist on their employees.

This isn't a pay cut -- it's a raise that Marky Mark is calling a pay cut.

How dumb does he think his employees are?

Thousands fired -- with 1,850 of them pink slipped just days ago -- and the two most useless parts of Clear Channel are getting rich again.

And forgive me for thinking -- in the back of my mind -- that Marky Mark and his Funky Bunch is getting ready to ask the surviving Clear Channel employees to --

Let's say it out loud all together --

Take a pay cut.

Without the raises a year later and with no bonuses.

The Mays family and their selfish view of a grand industry is not above lining their pockets even as they conduct the most massive extermination of radio talent in the history of the industry.

Don't forget the millions they made in stock -- when Clear Channel stock was worth something.

And, the over compensation that was paid during the good years.

And, oh yes -- the bail out profit when the Funky Bunch at Lee & Bain overpaid for a declining asset to take the Mays family out.

Pay cut, indeed.

In effect, the Mays family has looted the place.

It's hard to know if the Funky Bunch at Lee & Bain is delegating decision making to Marky Mark and his brother as well as to their minion, John Slogan Hogan. This group is clueless. You'd think they'd be embarrassed, but they know no shame.

What's tragic is what could have been.

No one really predicted these Texans walking away with the prize of 1,100 radio stations thanks to consolidation. They had a history of being an unremarkable company under patriarch Lowry Mays. They were known as "Cheap Channel" in the days well before consolidation.

Who would have guessed?

But someone else might have made it work using a different approach.

They have severely damaged the radio industry -- and that will be their legacy.

It was an accident of fate -- Lowry's health problems -- that jettisoned these two sons into major positions at the one company that was big enough and influential enough to set the tone for radio consolidation. Under normal circumstances, because of their age and lack of experience, they would be lucky to get a middle management job at a bank or accounting firm.

And if their father wasn't who he was, they would have been canned if for no other reason than they were suckered into buying Bob Sillerman's concert company -- a company they couldn't run and had to sell (now Live Nation).

Sillerman has a way of walking away from the disasters -- after someone else buys them.

Sillerman was among the first who figured out the money he could make selling to naive guys with their hands on lots of money to spend. They were ready to buy anything with easy money that the Wall Street bunch could give them -- for a fee.

The Mays kids and a handful of other dupes have inadvertently enriched smarter guys like Sillerman who has taken the money and run.

Now, while Marky Mark is asserting his "leadership" on a hobbled radio industry that was harmed the most by Clear Channel's presence, the sector dies a slow death.

More Clear Channel employees will follow the 1,850 from Tuesday's massacre.

The bottom feeder consolidators like Citadel with their penny stocks and lack of vision will just use Clear Channel's game plan as cover for their own cutbacks.

Again -- and together, please -- a growth industry does not cutback.

I'd like to say that now that the Clear Channel bloodbath is over, the worst is behind for the radio industry. But I can't.

Downsizing will continue.

Nationalization will be so impressive Hugo Chavez would be impressed.

What will emerge is a company that plans to use transmitters and towers as repeaters. Sell advertising across that platform through small cluster, regional and/or national teams. Don't be surprised if Clear Channel becomes big in remnant advertising.

No, not selling spots to the Ajax Carpet Company on Main Street U.S.A.

But selling cheap air time -- for bid to the lowest bidder -- a commodity like everything else Wall Street values.

Peopleless.

Sales less.

Fate has played a cruel game on the radio industry.

If Susquehanna, Nationwide or Jefferson-Pilot/Lincoln Financial had become the lead consolidator instead of the greedy Mays family, I truly believe radio would have survived to enter the digital age -- not just in the terrestrial radio business -- but as an Internet stream of different content, podcasting, mobile content and all the things necessary to keep the next generation listening albeit using different devices and concepts.

You see, Clear Channel got it all wrong.

Full of itself, it took the next generation of radio listeners for granted.

Clear Channel thought the next generation was the Mays children.

Not the 76 million people born between 1978 and 2000 that could have made all the difference.

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Where Is Radio's Captain Sully?

By Jerry Del Colliano

In a time of crisis, who would you want in command?

Mark Mays?

John Slogan Hogan?

Or Chesley B. "Sully" Sullenberger, the heroic U.S. Airways pilot who safely landed his A-320 aircraft last week on the Hudson River in New York after a double bird strike crippled the plane's two engines.

Certainly you don't want Mays or Hogan flying an aircraft human beings are on.

And you don't want Captain Sully running the largest radio group in the world even if it is headed for a crash landing.

Or do you?

Yesterday when Clear Channel eliminated 9% of its work force across all its businesses but predominantly focused on radio, the sadness and anger was palpable.

But anger is not going to return 1,850 people fired in just one day -- or those who preceded them -- to the radio jobs they love.

Yesterday was truly a sad day at Clear Channel stations as the victims were rounded up in the morning for slaughter by noon. In the afternoon, meetings occurred where survivors were offered new Kool-Aid to drink.

Sales staffs were devastated.

Whatever downsizing of programming and talent hadn't been completed previously was done in one dramatic eight hour period.

The weasels at Clear Channel picked the historic inauguration of a new president to be the day they did their dirty work. I don't know if the longtime Republican Mays family picked Inauguration Day on purpose but at this point I wonder.

The Internet is full of accounts of what happened yesterday. But the most pressing question is what will happen going forward? What will radio's consolidation leader do next? What should other companies do in response?

And, who will be radio's Captain Sully?

Just one thing that is gnawing at me before we look ahead.

Did you see the way Mark Mays handled this massacre yesterday?

Perhaps you are not privy to his dreaded employee emails, but allow me to share the "best of" or should I say, the "worst of" Mark Mays as he spun 1,850 firings to the survivors.

Keep in mind when you fire one person, you really cut out the hearts of their associates.

Mark's comments are in italics.

"Today, we had the unpleasant task of bringing our Outdoor and Radio businesses’ staffing in line with these challenging economic conditions. In doing so, we enter 2009 as a solid company and in the most competitive position possible".

Unpleasant? He's kidding, right? What an insensitive way to put it. Who cares about how Mark Mays feels. And I don't know who he hangs around with but bringing staffing in line with challenging economic decisions doesn't impress me because Mays owns a monopoly. That's Park Place. Go. He even controls Jail and collects the $200. And he was the one who could not make his business competitive enough to avoid the bailout he sought and won from two cold hearted private equity firms.

"While a significant portion of these positions represent a realignment in our sales departments, the positions span all departments and represent approximately 9% of the total Clear Channel Communications workforce".

Somehow do you get the feeling that he's trying to sell people on the idea that the firings weren't as bad as they could have been because Clear Channel fired people in all departments? I wonder if he knows what it's like to be fired? I withdraw the question.

"Please know that these have been difficult decisions – yet necessary ones. We will miss those who are departing – even as we renew our shared commitment to success among all of us who will stay".

One paragraph of disingenuous sympathy. That's it. One.

"We need to remain highly entrepreneurial and innovative. We also need to remain focused and compassionate".

He's messing with us, right? Remain entrepreneurial and innovative? Feeding satellite programs to their many stations to save money was done by Randy Michaels, a predecessor who forgot more than Mark Mays knows about radio. And, did I see Mays use the word compassionate? He must be talking about his employees being compassionate toward Clear Channel. Yeah, that's it.

"Starting now, it is our ability to bring creative thinking to the current business climate - to focus on the benefits we deliver for customers - to show extreme focus and commitment – that will create results".

What gobbledygook. Wasn't this a memo for the survivors of his purge? Clear Channel delivers fewer benefits because of today's firings and the cutbacks that have made it less of a radio group.

John Slogan Hogan, the Less Is More President of Clear Channel Radio also wrote a memo to the staff, but there is nothing noteworthy in it so the less we say about it the more you'll understand.

These pretenders are not leaders.

They can't see the problems radio faces let alone solve them.

As one of my readers said "Reading the CC news I had this thought of a captain trying to make the emergency landing at Teterboro Airport by lightening the load tossing passengers out the door".

Captain Sully decided the plane was expendable and he with the passengers lived to fly again. But Clear Channel decided the people (their assets) were expendable and private equity lived to see another day.

As many of you know I have frequently warned about what culminated in radio's worst day ever so now I'm going to look ahead to the future and address some of these questions. Of course, I could be wrong. I'm betting that what you read here is pretty close to what you can expect in the future.

What will radio's consolidation leader do next?

1. More cutbacks at Clear Channel. Nine percent of the work force is just the beginning. Once these economies of scale are digested, then more savings will be applied. Today, Clear Channel saved an estimated $400 million in annual expenses. For private equity firms this type of thing is like crack cocaine.

2. Citadel's Fagreed Suleman and the other clueless radio heads will step up their efforts to make large savings by more massive firings. Clear Channel just gave Fagreed the cover he needs. To borrow a line from "When Harry Met Sally" -- the greedy Clear Channel followers will now say, "I want what he's having".

3. Amazingly, the assault is now on to shrink sales departments across radio groups nationwide. If Clear Channel, the largest, can cut deeply enough into sales and survive, so can the others -- so they will think. In fact they need more salespeople, better-trained and on the street during a recession.

4. Few, if any, groups will hire the Clear Channel salespeople who were fired yesterday. Some will find work in radio. Many will not. Everyone let go yesterday should be employed at a radio station somewhere by Monday if declining radio revenue needs more billing. Wait until you see the billing with smaller sales staffs. Let's think -- will they say, blame the recession?

5. The Ryan Seacrestization of radio is underway and will transfer to other formats and all dayparts. Then infect other group owners. Local radio is a thing of the past.

6. A one or two person station will be increasingly prevalent in the future as PE firms decide to cut costs and damn the repercussions.

What should other companies do in response?

1. Hire Clear Channels salespeople right now. Have them take their personal relationships to your station and bring some Clear Channel money over in personal trade. Make them a good deal. Experienced salespeople can work for a fair commission as long as there is no fooling around with client lists and commission rates.

2. Go live and local 24/7 -- make a concerted effort to make sure your listeners can tell you are the ones broadcasting from the city, about the city, reflecting city news, tastes in music and sense of community. Then send Mark Mays and Slogan Hogan a thank you note. If you do this in a cursory way (as radio usually does), it won't matter to listeners. Make it meaningful and appealing and you've got a gift from the radio gods.

3. Blitz the Big Boys. Send your talent in after the other team's quarterback. Hit the competitor with things they cannot duplicate while they are broadcasting pap from Ryan Seacrest in LA et al. Put on a local contest. Pay down mortgages, car payments. Air contests that offer to make the rest of a winner's mortgage payments for the year in return for 10,000 documented converts to your station. I can show you how to document it. Then, send one of your newly hired Clear Channel salespeople out to make calls with the evidence of 10,000 more listeners. (Hey, you and I know enough program directors who could cut Clear Channel's guts out on the air with innovative programming elements to make them wish they never heard the name Seacrest).

Who will be radio's Captain Sully?

I've said this before -- it would only take one fresh face -- to turn a radio group into a content company which they should actually be.

Radio alone is not going to make a comeback -- most of us know this even if we hate to accept it.

Radio, podcasting, streaming, social networking and mobile audio and video content -- that's the "radio" company of the future.

The industry presently has no one available to navigate through uncertain waters and they will need their Captain Sully to save the people and save the medium.

Look at the bench.

Hogan and Mays -- come on!

Cox's Bob Neil -- smart, but thinks too small. Sometimes petty. Good guy but a throwback to 20 years ago.

Fagreed Suleman -- I describe him as "Mays on the second day". Mays burps and Fagreed -- well, you know. This is an accountant who hitched his fortune to Mel Karmazin and flying solo has been a disaster.

Mel Karmazin? Now that I mentioned it, he's good, but Mel's a basic radio sales guy. He could help there. But remember, he's also the one who wouldn't let CBS stations stream their content because he didn't want to give away the intellectual property. Today, who wants the intellectual property?

Saga's Ed Christian -- Pre-historic but excellent at seeing the "small picture". However, radio needs a big picture person.

David Field -- again, based on what?

Dan Mason -- I think he could be an improvement over every radio president out there, but he'd have to be turned loose without interference. There is no doubt Mason is further ahead tracking new media than any other radio executive.

Randy Michaels -- He's got his faults. You've got yours and I've got mine, but I think it's fair to say Michaels could run Clear Channel radio a hell of a lot better than John Slogan Hogan. Weak spot: the Internet, mobile and social networking.

Add your own. You see the problem.

Now that we've seen the consolidator's game plan, it's time to strategize.

As I said yesterday in the most viewed piece I have written, there are three ways to fight evil empires (advertiser boycotts of stations that insist on piping in national programming to local stations, massive political assault on Congress and lobbying for the passage of the record industry's performance tax exemption especially for stations not programming 100% local content). Web viewers scroll down to see the full plan in "How To Fire Clear Channel".

The future is in new media. Time to migrate on over.

Clear Channel crashed an industry precisely because there was not one brave, competent, caring Captain Sully in sight.

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Repeal the Music Tax Exemption for Repeater Radio

The Clear Channel firings are over and what we're hearing is that another 500 or so positions will be eliminated as the private equity firms of Lee Capital Partners and Bain Media have their way with the radio industry.

Tuesday was a tough day for anyone who loves radio and its people. I received hundreds of emails -- many of them touching -- about the disrespectful way the dynamic duo of Lee & Bain and Mark Mays has handled the firings.

Reports that even loyal respected veterans were given the bad word the way everyone else got it and told not to return to their desks.

I mean, was that really necessary?

Is that the way to discharge a dedicated worker?

These Clear Channel people have a way of making bad worse because they are uncaring and unqualified to be running the largest radio group in the world.

I mention all of this -- not to cause more pain -- but to emphasize that the justifiable anger we are all feeling right now is not going to save the radio industry.

In fact, nothing can save the radio industry -- from itself.

I still plan to call out and expose the hypocrisy of these third-rate operators where warranted -- they seem to provide no shortage of opportunities. But my goal is also to offer ways in which radio people can comeback again and suggest strategies to save what's left of the industry.

Because of the founders of consolidation radio is not the future. New media is. But there is no reason to gut an industry that has more resources than all of new media put together for providing content and managing marketing in the digital world.

The personal game plan will follow -- as promised -- within a couple of days. Ways individuals can get a leg up on securing their next media job.

But today, I'd like to float a strategy for responding to the bad decisions being made by consolidators.

One excellent opportunity is to use the fight between the record industry and radio to act as a deterrent to radio consolidators to continue to ravage local radio.

Congress is the focus -- and there is increasing support for the record labels on this issue. The NAB has its hands full trying to fend off the music industry on this issue. It's only a matter of time.

I used to think that the labels had no business asking for repeal of the radio performance tax exemption. After all, radio made the hits that made all the money for record labels.

Radio owes records nothing.

If anything, it's the other way around.

But not so if consolidators are going to try to have their cake and eat it too. The nationalization of radio by Clear Channel will not help prevent repeal of the music tax.

If Clear Channel and its partners want to redefine broadcasting from local in nature to Repeater Radio, then I am proposing a way to use the exemption tax battle to hit Clear Channel and other national consolidators where they live.

And this plan is good for smaller, local operators. That would win a lot of support in Congress.

Basically, Clear Channel should be careful what they wish for -- especially making local radio a national repeater of syndicated programs on a larger scale than ever imagined.

With that in mind let me outline the basis of a proposed agreement with the record industry on repeal of the radio performance tax.

Only Large Groups Pay the Tax

Look, the weakness in radio's argument to avoid the levy is that radio has become so corporate, so big, so profit driven.

It's no longer about the little group of stations broadcasting locally and choosing music that appeals to local listeners. Of course, radio stopped allowing local program directors to pick the music after consolidation began.

Remember the scam that consolidators tried to pull on the labels where the labels would pay millions to find out which records were added to station's playlists each week -- an insignificant few hours before the music trades reported it for free? For this, consolidators gave the labels access to the consolidators program directors.

I don't think exempting radio from the performance tax was designed for Clear Channel's large number of stations or for that matter to help any of the other major consolidators save on expenses.

Now that Clear Channel is leading the trend away from locally operated stations, there is no need to give them the performance tax break.

After all, Ryan Seacrest can play only about 30 hits over and over again. The titles won't vary by local market because Seacrest's show will be beamed by satellite to Clear Channel stations in an effort to save money.

Keep in mind that Clear Channel will build other national shows for local distribution around baby Ryan Seacrest's for every format.

Why does Clear Channel, then, need an exemption from the music tax?

This is the best way to let Clear Channel feel what will be great pain going forward for abandoning the local radio model that has worked so well for decades. But it's more than just revenge which gets you nothing. It's shrewd politicking.

Tie in local with a tax break -- that's All American.

In essence, end the performance tax exemption for consolidators who own large numbers of stations.

But...

Retain the Music Tax Exemption for Local Operators

Radio can work to the advantage of the record labels and music industry if its playlists reflect local popularity and musical diversity. That train left the station a long time ago in radio -- much to its detriment.

But a compelling case can be made to legislators who might be willing to vote for repeal of radio's exemption if local stations use playlists comprising 90% of its music chosen by local program directors and certified by local management.

Additionally, any radio station that employs local talent 90% of the listening week would be exempt.

Again, consolidators would not be eligible because they have moved toward nationalization of radio. Decisions are being made for their satellite delivered programs by one person and no local djs will play the music.

Consolidators do not deserve the music tax break.

Smaller groups of locally operated and staffed stations need the break.

This is an argument that could resonate loudly with Congress.

Tie Music Tax Exemption Into Re-regulation

Radio has the best chance of seeing some re-regulation in the Obama administration. This is not a slam dunk by any means and may not happen at all. But, on January 20th the potential for revisiting big behemoths monopolizing local radio stations is at least up for discussion.

So, I would propose that owners who operate 28 FM stations or fewer should not be charged the tax in the event that re-regulation is enacted.

You can make an argument for helping smaller stations save money if they are committed to local communities.

It's a harder sell to reward Clear Channel and other consolidators who are not local and plan to have less local input into programming.

Include a Provision for Internet Radio

Since terrestrial radio has an ever decreasing viability as a growth medium, protecting radio broadcasters who want to start Internet streams should be examined.

It makes sense to encourage broadcasters to grow their music brands on the Internet and for those who do so -- with local sites -- the exemption would apply to that endeavor as well.

I believe by the end of, say, eight years of an Obama administration, radio will be non-existent as a viable medium. Now is the time to help local broadcasters or national groups of locally operated and staffed stations start making the transition to the digital future.

This is fair.

Smart business.

And important.

In the past, I've never approved of the copyright rates that are charged Internet broadcasters. They are grossly unfair. They discourage entrepreneurs from helping to grow the digital music space. And, they are a blatant attempt by the record labels to stifle a medium that they desperately need to be strong.

I'd consider some relief to Internet broadcasters who do not own radio stations as they are also the future of what we formerly called music radio.

It's going to be important from now on to fight the premature decline of radio and the extermination of thousands of careers by outsmarting the PE-backed money partners.

One way is to make every move that destroys local radio have a significant consequence.

While Clear Channel and the others believe the system exists to help them turn one dollar into many dollars, federal regulations do not have to support such lunacy.

In fact, targeting the music industry's initiative to get Congress to repeal the performance tax exemption for radio is an excellent place to start.

If Clear Channel does not want to be locally operated...

If they don't want to have local PDs pick the music and local djs play it...

If they are going to beam national shows to save money rendering the intent of the music tax exemption useless in the era of consolidation...

Then, they should pay the price with higher costs for what little diversity in music they feature.

It's Clear Channel's monopoly board and for a long time they have been allowed to do what they want.

But it doesn't mean that the federal government has to play their game.

Support innovation and entrepreneurship.

Discourage nationalization of radio.

Repeal radio's music tax exemption for Repeater Radio.

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How To Fire Clear Channel

By Jerry Del Colliano

(Shown with family at Sunday's Eagles game)

Today is Invasion of the Body Snatchers day at Clear Channel stations across the country.

Just as in the 1978 remake of the science fiction movie, Clear Channel employees across the nation are screaming, "They're here already! You're next!"

As of late yesterday, Clear Channel employees were telling me of the staff meetings that were being scheduled for today -- during the distraction to the news cycle of a presidential inauguration. The meetings are probably for those who survived the cuts - the cuts could come earlier in the day and they could use the staff meeting to announce the changes for the surviving employees.

Today was supposed to be the day private equity groups Lee Capital Partners and Bain Media were directing their management clones to implement a massive personnel cutback that would help contribute to a $400 million annual savings for the troubled radio group.

That's 7% of its staff -- the latest 7%.

There have been many others over the past 12 years and there will likely be plenty more in the future as this group of crazy PE executives actually thinks they can run a radio company with no experience in this declining medium.

The major cutbacks will be in programming and sales and what is termed "non-essential" workers -- if that isn't a misnomer for you.

Ryan Seacrest and baby Ryans will feed programs by satellite to what used to be local radio stations in many formats and for use in different dayparts. This effectively neuters local entertainment. Boy, would I like to be Clear Channel's local competitors right now, what an opportunity to clean their clocks. But they are just as bad and will likely follow suit in lock step with their American "idle" -- Clear Channel. (I use the term "idle" because it represents putting so many people out of work).

Most of the job cuts will come from sales.

Stations are expecting the newer, less experienced sales people to be fired, but it may be the other way around. Clear Channel could save a lot more money by firing its top performers and giving the accounts to the sales manager. Doesn't make sense to you, but it looks awfully tempting to PE outfits that are looking for the most savings possible.

Before long we'll know all the ugly stories.

But my focus today is what you can do after the Empire Strikes Back.

A host of employees were unceremoniously fired before Christmas -- many shown to the door and not thanked for their service to the Mays family, a group of selfish characters who will gain early entry into the Radio Hall of Shame for single-handedly ruining a perfectly good industry.

By the way, KGO, San Francisco GM Mickey Luckoff knows how to lay people off humanely. When he was forced by his boss Fagreed Suleman to let his assistant of 37 years go, he wrote a beautiful letter to staff, thanked her for her service, reassured everyone that her departure had nothing to do with her performance and said if able he would hire her back again. How classy is that? Read Luckoff's letter for yourself here. You won't see too many of these.

For some, leaving Clear Channel, Citadel or the many other radio groups that are cutting themselves to death is tantamount to relief. They will be happy to find something else to do or retire.

But for those who have outrage or who want to fight back, at least three ways.

1. Organize local advertiser boycotts.

When Bubba "The Original" Love Sponge got into trouble in South Florida on a Clear Channel station for castrating a pig as part of his radio show and putting pictures on the Internet, PETA,
People For The Ethical Treatment of Animals, brought the Evil Empire to their knees.

I love this group. I got to know some of the people and you don't mess with them because they don't just piss and moan about inequity. They piss all over the perpetrator's business to get what they want.

PETA went to advertisers and got one local or national advertiser after another to pull their ads off Bubba's station. They constructed a website to keep track of who was in and who was out. The pressure was immense and Clear Channel's station felt it on their bottom line which is why PETA got what they wanted.

Bubba went on to continue his career but eventually wound up in the Siberia of satellite radio where next to nobody every heard from him again.

This is a strategy for people who want to take back local radio.

What better way than to show this private equity group the power of local -- by pressuring local advertisers to pull their ads off the air until their stations return to hiring local personalities. And add in news and community involvement.

List the advertisers who agree to "Help Save Local Radio Jobs" on the site. Of course, this advice is not just aimed at Clear Channel, but all radio consolidators who think they can wantonly fire people, remove local programming and think they can gain the support of local advertisers in the community.

By the way, McDonald's is a local advertiser -- they have local stores that can see picket lines standing out front.

As I said, this is not for everyone, but if you're a fighter then I thought you'd like to know how PETA got revenge.

2. Lobby Congress

In this day of the Internet, mobile phones and social networks, you can bombard your local Congressman's office with registered voters who are madder than hell and won't take it anymore.

As I have said previously, no one has more to lose by local radio's decline than elected officials -- especially in the House of Representatives. After all, where will they run their election attack ads for a fraction of the already low, low price of a radio commercial?

But they an organized effort to bring pressure.

Important local leaders can join and help lobby Congress. Like, union officials.

A web presence can narrate the effort for all to see.

The talking points are: local radio is good for America and good for employment. At a time of economic uncertainty, eliminating local radio jobs and outsourcing them to Ryan Seacrest's studio in LA is detrimental to the purpose of radio and terms of their FCC license.

Lobby the Obama Administration for re-regulation that would force PE owners and consolidators to sell their stations to small groups of people of various interests, and origins. This is a government that could rethink consolidation.

It's like blitzing the Clear Channel offense with a crushing defense.

Because in the end, the only way Clear Channel and its brethren can get away with this violation of the public trust is because nobody has been home.

The FCC was looking the other way on purpose.

Oversight was out and look what crept back in without some reasonable oversight.

3. Work with the record industry to repeal radio's Performance Tax Exemption.

This is a sore point for radio because when it was local, it deserved to have an exemption from the dreaded music performance tax. After all, local stations in every region of the country were allowing consumers to discover music programmed by local djs.

If choice is limited to what Ryan Seacrest and his handful of national jocks want to play, how can the radio industry fight and win a battle with the record labels to save the performance exemption?

The labels may win anyway.

Previously I have supported radio's efforts to keep the exemption, but now that the industry is moving away from local radio, it may be time to rethink the strategy.

The NAB has dropped the ball. They are not what they once were and there are stories of its decline that parallel the decline of their constituents. But that one -- and the sorry state of the RAB -- is for another day.

No choice.

No local radio.

No exemption from the music performance tax.

You can see the approaches reported here are hardball for those who like to play hardball. After all, that's what the big consolidators are doing.

The radio industry is losing another asset today in the senseless firing of personnel by Clear Channel.

Radio has been reduced to a memory of what it used to be and what will never be again. This group of consolidators, aided by the federal government at the time, ran roughshod over the industry and they did it because they believed no one could stop them.

Today, they did it again.

If you want to change it -- it will take strategy, toughness and political clout. It's probably too late as the next generation has left the building and saving radio has little appeal to them. You might just he playing for pride.

The bloodletting is not over.

There are stations now that barely have a handful of employees. And it will get worse.

For years people have said to me, what you're predicting is so negative -- so depressing.

Now do you believe it?

There is a way to fire Clear Channel and their consolidation buddies. They obviously don't care about people and their families, lives or careers.

But the one thing they do care about is revenue.

Some 90% of radio's income is derived from local advertisers.

Clear Channel has become a national programming company pioneering Repeater Radio.

Local ad dollars.

No local stations.

Sounds like an opportunity to fire Clear Channel as a local radio operator.

On a personal note I want to extend my best wishes to the talented radio managers, programmers, GSMs, salespeople, essential staff, whatever news people are left, engineers and other professionals who have lost or will lose their jobs.

I will deliver that special strategy on how to get the leg up on your next job based on what I used to teach my young USC students. It has a great batting average. Once the Nightmare on Elm Street across the U.S.A. subsides a bit, I'll offer it for you here.

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Lee & Bain's New Blueprint for Clear Channel

Tomorrow is Inauguration Day, an historic day when the nation's first African-American President takes office in the United States.

It could also be the day Clear Channel inaugurates its massive personnel cutback strategy.

Some think Clear Channel may do it on Tuesday under the cover of all the publicity of Barack Obama taking office. After all, who will miss hundreds or even thousands of employees as they get their pink slips on the same day as the inauguration.

One thing is for sure. If Clear Channel chooses Tuesday it won't surprise anyone. No company, in my opinion, has taken the low road as often as they have. It would be fitting.

You've heard a lot about the morphing of Clear Channel into a veritable shoe store -- not a group of radio stations.

I've been reading a book written by Orit Gadiesh and Hugh Mac Arthur -- both of Bain & Company, one of the two principal buyout partners in the Clear Channel acquisition. It is called Lessons From Private Equity Any Company Can Use and it is part of the Harvard Business Press "Memo to the CEO" series.

If you really want a guide to understanding what Clear Channel is up to, it's all right there written as an academic pursuit for Harvard.

The book gives a deeper understanding of how this clueless private equity group thinks and why as I have reluctantly been saying -- it's all over. Forget the fat lady singing. PE firms laid her off a long time ago.

What's in this little handbook is very revealing and helps explain the strategy Lee Capital Partners and Bain & Company are ready to implement at Clear Channel.

• Define the full potential of your company. The target is increased equity value. Getting there requires strategic due diligence and the pursuit of a few core issues. This helps the radio industry to get its head out of the clouds and back to reality. Lee & Bain don't care about anything other than increasing equity value. Not the pie in the sky values you and I hold as standards for good broadcasting. And if you take it straight from their "memo", the pursuit of a few core issues is what we're all going to see shortly.

• Develop a blueprint for change...how to turn your handful of initiatives into results, choreographing actions from a standing start to the finish line. Lee & Bain are so over Less Is More -- that was John Slogan Hogan trying to be a radio group head. What Lee & Bain will be revealing shortly is a well thought out plan that their people are handing down to Hogan to implement. Hogan, you may remember, was retained by the buyout group in a five-year contract. He's participating in the genocide of radio to save his neck.

• Accelerate performance. This step entails molding the organization to the blueprint, implementing a rigorous program, and monitoring a few key metrics. Can you see how Clear Channel's actions over the past six months have cooperated with the PE firms inevitable conclusion? Continuous firings. Combining workload and giving fewer people more responsibilities. Duplicating programs and distributing them to eliminate local on-air talent. The next logical step involves programming and sales and if they don't drop the other shoe by tomorrow, I'll then suggest what I think that accelerated performance might be.

• Harness the talent. This discipline requires creating the right incentives for managers to think and act like owners, and assembling a decisive and efficient board. Translation: get your yes men in place and make sure your board of directors does not have an original thought of its own. The arrogance with which this book is written is consistent with the arrogance we are witnessing in the demise of Clear Channel. Obviously, the Bain authors are using the term "talent" interchangeably with "minions". You may recall that a number of months ago, after the takeover, Lee & Bain signed its "talent", the suck ups who sold out their industry and fellow employees even while these top executives were laying people off -- forgive me, I mean firing them.

• Make equity sweat. The challenge is to embrace LBO economics. This stage calls for managing working capital aggressively, disciplining capital expenditures and working the balance sheet hard. So that's what Lee & Bain were up to. All this time I thought they were trying to make their employees sweat and all they wanted to do was manage the money aggressively. They are saying here that nothing gets in the way of working the balance sheet. Not people. Not history. Not the marketplace. Not advertisers. These PE know-it-alls are going to stick to their "hot clock" and the hell with everything else.

• Foster a results-oriented mind-set. This means making PE disciplines part of a corporation's culture and creating a repeatable formula for achieving results. Talk about format radio -- that's what you're going to see. Cost-cutting. Economies of scale that we never dreamed possible -- one jock per format, per daypart on as many Clear Channel stations as possible rendering the group Repeater Radio.

Now you know more than most folks about what is going to happen over the next few days at the new Clear Channel. It's out there in academia for all to read.

It's not about excellence.

Not about innovation.

Not even about sales superiority -- watch all the salespeople they will cut loose.

It's about a repeatable formula for cleaning up the bottom line of a failed company they couldn't get out of buying in an industry of not ready for primetime players.

Here's what I think is going to happen. Up until now I've called a lot of what is developing at Clear Channel -- and remember as Clear Channel goes, so everyone else goes -- out of business.

My predictions, then:

1. Lee & Bain are going to eat this buyout. You and I know they are destroying the company in order to follow their "brilliant" buyout blueprint. What they can't fathom is what I scream about all day. The next generation has been lost to radio. The digital frontier is where the growth will be -- not terrestrial or satellite radio. Understanding generational media will be more important than understanding how to make equity sweat.

2. Once they realize that their assets will be worth less every six months, you'll see Lee & Bain look to make further cuts while they remain in denial.

3. When the poor numbers kick in -- and even now there are brokers who report that the value of a radio station is at least 25% less than previously -- they'll panic into plan B. By the way, don't you love how brokers who are selling no radio stations (no comps) can project only a 25% decrease in station value? My God, it's as if they make their money by selling stations at a higher price. Wink/wink.

4. This buyout duo will then sell the parts off to try and recoup some of the losses. Even suckers for radio like Sam Zell and Randy Michaels are no longer in a position to buy back in. Zell will be lucky to get out of the newspaper business in one piece. So Lee & Bain in panic means selling stations -- not just under value the way Les Moonves did in Minneapolis recently. No, Lee & Bain will sell for next to nothing. The real estate has some value and they own a lot of it. Also the outdoor business might cover a multitude of strategic financial sins they committed. Think 50% or more off the price for which the stations were originally required by Clear Channel.

So, there -- stations will be made available at reasonable if not cheap prices. Thanks a lot, Lee & Bain. You ruin the business then sell off what you ruined to people who do care about the programming, the audience, the advertisers, the people.

On the eve of destruction I found the insights in Lessons From Private Equity Any Company Can Use both upsetting and reassuring.

You see, I have a hard time dealing with people who would so blatantly damage an industry we love. Maybe this explains some of it -- even if it doesn't make us feel any better.

But wait.

The most telling punch in the gut is on page 49 about Private Equity (PE) and I saved it for last so you can either get sick, laugh or cry.

The emphasis in italics is theirs, not mine.

"...the PE's blueprint is very different from the traditional company's strategic planning binders, which often tend to focus on "what we want to be" at the expense of "how we are going to deliver". The PE's blueprint is only about action. It is about executing on the initiatives and about how one dollar becomes several dollars within a specific time period".

Dollars.

Action.

It is all over.

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