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The Gamblers: Anatomy Of An Implosion, Kenny Rogers' Style
On Tuesday, Clear Channel is expected to begin firing roughly 1500 employees as part of an effort to trim 400 million dollars of "costs" from the budget. Corporate 'costs' are what broadcasters themselves refer to as 'content'. Before the axe starts to swing, let's take a step back and revisit how the company reached this point.
Clear Channel built an empire by forcing sales of countless radio stations and entire radio companies. Simply put: they forced owners to sell by drastically overpaying.
Let's say you own a car that's worth roughly $27,000. It's an SUV, actually. A 2003 Lexus Gx 470. Regardless of how much you like your Lexus, if someone comes along and offers you a quarter of a million dollars for it... hell yes you're selling.
Let's say you've got a junker sitting on blocks on your front lawn. A 1972 Cevy Nova that's worth maybe 200 bucks if the right buyer came along and stripped it for parts... but the same guy who just paid $250,000 for your Lexus sees it and says "I'll give you $5,000 for that one too if you'll sell it to me by the end of the day."
So... the mystery buyer now has a piece of junk but he's also got a damn good vehicle too, just as Clear Channel bought some out of market signals along with some pretty sweet grandfathered-in 100,000 watt boomers. Regardless of the prices paid, that's what they own.
One could argue that the only reason Clear Channel is still in the game is because they overpaid for the signals they bought. I worked for Secret Communications the day Frank Wood sold the company to SFX, who then sold to somebody who then sold to somebody, blah blah Capstar, blah blah Chancellor, hello Clear Channel.
Yes Clear Channel built a mountain of debt, but they managed to stay in the game whereas countless other owners folded their hands and walked away.
As Kenny Rogers once said:
You got to know when to hold em,
know when to fold em,
Know when to walk away and know when to run.
Ahh, but he also said "every gambler knows that the secret to surviving is knowing what to throw away and knowing what to keep. Every hand's a winner and every hand's a loser (and the best that you can hope for is to die in your sleep)."
Let's address that bit about winners and losers.
Have you ever walked into a new gig and kicked the reigning market leader to the curb? Have you ever worked at a winner past its prime when a new competitor signs on and kicks YOUR ass to the curb? I've done both and I wouldn't be surprised if you have too. We've all seen stations rise and fall, with some fortunate enough to rise again.
Every station's a winner and every station's a loser.
The issue isn't so much what Clear Channel bought or even how much they paid. It's what they did with the stations they got.
They started flanking radio stations, sometimes throwing away entire signals in order to take out a competitor. The infamous Wall Of Men or Wall Of Women strategies where they'd line up the formats of three rock stations in a single market even if there was only enough audience for two. Or they'd sign on a no-budget AC to try and hurt the competition's Hot/AC in order for their own CHR to thrive.
The philosophy of programming to harm a competitor rather than programming to entertain an audience resulted in a lot of dull radio for listeners.
And how about those 7 minute stopsets in the late 90s. Remember those? Adding more units than the clock (or the audience) could handle. Yeah, that was brilliant.
One might think driving down the rate card while building massive debt would be the most ignorant of ignorant decisions... but Clear Channel saw the ignorant hand they'd dealt themselves and raised the entire industry a stupid.
Commercial radio is nothing more than selling an audience to advertisers. As long as Clear Channel was going to damage itself, sales wise, they must have figured "why not damage audience loyalty as well."
And multi-market promotions.
And multi-station PDs.
And multiple layers of corporate oversight.
And slashing of research budgets.
And slashing all of the other budgets too, frankly.
And so much other garbage.
Sadly, it's the staffs and the audience that are reaping the seeds of arrogance and stupidity Clear Channel and others have sown. As Clear Channel crumbles, so do all of the other corporations who followed in their wake.