Local Radio: No Longer A Sustainable Model

The calls and emails and social media direct messages began about 11 o’clock yesterday morning, from pals who wanted to know if I could confirm that my friend Mitch Henck had been fired by WIBA-AM.  Very early in the afternoon I knew it was true. The ax was falling at Clear Channel stations all around the nation – again.

It’s a wonder Clear Channel has anyone left to fire, except sales people.  More on that in a moment.

Hearing the news about Mitch Henck was not surprising in any way, but it was still tough to take. You can’t spend four decades working in broadcasting, as I did, and not be dismayed at how it’s really no longer a sustainable model.  People can get music anywhere today. New songs aren’t “broken” by radio stations any more – they’re first heard on social media sites. A local, live DJ after 9 AM has become rare. Newscasts, if a radio station even has them any more, are rare after 9AM and even then may originate in a city far away.

Mitch was upbeat when he talked to the Wisconsin State Journal late yesterday. (The article is here.) He knew it was coming; it was not a matter of “if”, but a matter of “when”, and for Mitch – and a bunch of other people at the Madison Clear Channel cluster, and at Clear Channel clusters all around the nation, the “when” was yesterday.

Mitch had a very good career in broadcasting, spending the last dozen years at WIBA-AM after a long stint in TV news. His “Outside the Box” show had excellent ratings; his demise had nothing to do with that. Mitch was never a partisan hack, like so many of the talk show hosts you hear today, either whining the left-wing agenda or screeching the right-wing agenda.  Sure, Mitch talked politics – but he also talked basketball, music, and above all, Mitch talked about LOCAL stuff.

He even shared his struggles trying to get his golf score down.

That’s the puzzling thing: about the only thing radio has left going for it is the “live and local” aspect, but shortsighted broadcast managers for the past seven years have steadily gotten rid of the only thing they really had going for them: local talent who talked about local stuff, whether they were doing a music-based show or a talk-based show.  That’s why they’ve made the model unsustainable. They’re getting rid of the only thing they really have going for them any more.

Mitch let us right into his personal life. He turned his struggles with weight (that’s Mitch’s official Plan Z By Zola "before and after" photo above) into a part of his daily show. A little over a year ago Mitch suffered a mild stroke that took him off the air for nearly four months, and we followed his progress as he came back and finished his re-hab on the air.  He said “I sound like I’ve had a couple of stiff blasts of Scotch on the rocks, but I haven’t!” in explaining his slurred speech as he battled back from the stroke.

We heard him constantly plug his “moonlighting job”, doing a Vegas-style review involving Sinatra songs and stand-up comedy which he calls “The Big Show”. 

That’s the thing about local personalities: even though we may not actually know them, or maybe briefly met them at a remote broadcast once or twice, we feel we know them – they become part of our lives, part of our daily routine. We know their hobbies, their pet peeves, their personalities.  Like the rest of us shown the door by shortsighted radio management, Mitch will land on his feet.  He’s smart, has a great personality, knows how to talk with people (as opposed to yell at them), and he’ll find the right fit for him and do well at whatever he chooses to do.

Now, a word about the company that fired Mitch, Clear Channel.  It’s the largest owner of radio stations in the nation, with 800+; it has absolutely unsustainable debt, and is slowly but surely drowning. While the Clear Channel top execs enjoy a lavish lifestyle with huge salaries and perks beyond your wildest imagination, their ship is sinking, and with it, radio everywhere is going down.

The debt is courtesy of Mitt Romney and his pal Bill Bain, who formed a company called Bain Capital in Boston in 1984 that set up the highly leveraged deal that allowed Clear Channel to become the biggest radio operator in the country, but saddled it with debt and management fees that no sane person would ever have agreed to.  Now, the model has reached the tipping point. In order to refinance its latest round of borrowing to stay afloat, Clear Channel has to (again) cut operating costs, which they translate to “programming and news salaries”.

Mitch knew it was coming, and it arrived for him yesterday.

Be well, my friend – life is better and brighter on the other side. Living well truly is the best revenge.

Inside The Radio Nooz Beast

If you’ve been following along for the last five years, the largest radio group owner in the known universe, Clear Channel, has been steadily firing hordes of people.  The number is well into the thousands by now.  The company owns, give or take, 850 radio stations (about 10% of the stations in the U.S.) and is kept afloat – tenuously – by a deal largely engineered by Bain Capital.

It is impossible for Clear Channel, which is also has the largest revenue of any radio company in the nation and reaches about 110 million people a week, to meet its debt service on the Bain Capital deal. Ever since the deal was struck, Clear Channel – CC for short – has been reducing operating costs by firing people and not replacing them.  They just keep rolling the debt, generating the fees that outfits like Bain Capital thrive on.

To outfits like Bain, it’s not whether the company is financially healthy; it’s whether it can continue to pay the fees, interest, and “consulting costs”.

Here in Madison, there are really only two radio news departments: the staff at Public Radio, and the staff at the CC Madison stations (WIBA-AM/FM, et.al.). Don't confuse "sidekicks" who read a couple minutes of "news" in the morning with news reporters, who actually go out and gather news. CC’s main competitor in Madison is the MidWest Family Broadcast Group (Magic 98, Q-106, et.al).  According to the latest ratings, CC has a 28.4% market share, and MidWest’s share is 23.3%.  Just before Thanksgiving last year, MidWest gave up and pulled the plug on WTDY-AM and its existing news staff.

Not that long ago, Madison had four active radio news operations: the WIBA stations (before they were bought out by CC), the MidWest stations, the Mid-Continent stations (WTSO-AM et.al., but now WTSO is part of the CC group), and Public Radio. Readers of this blog don’t need me to lecture them about the implications of cutting in half the local radio newsgathering operation.

Generally, when a group operator like CC comes into the market, the first thing they do is pare down the news operation.  You’ve heard the numerous horror stories about local stations, now owned by CC, blithely playing music and commercials while a tornado or other natural disaster bears down on a community and causes widespread damage and loss of life.  The days of a warm body actually pushing buttons to create radio programming (to say nothing of the REALLY old days when an actual, trained, live announcer created programming) are long gone, and now, the vast majority of radio stations after sundown are run by a computerized automation program.

One way Clear Channel has pared its local operations down is by establishing regional “news hubs”, which is why the traffic reports you hear on the Madison CC stations originate in Milwaukee, and many of the afternoon newscasts you hear on WIBA-AM originate in Grand Rapids, MI.  CC has done the same thing with on-air talent: more and more programming is originating at one of these “hubs” and fed regionally to the CC local stations. Vicki McKenna is one of the many CC employees who now do double duty: she does a talk show on a Milwaukee CC station (WISN-AM) from 10AM to noon, and a talk show on a Madison CC station (WIBA-AM) from 3 to 6 in the afternoon.  Vicki’s arch-conservative politics aside, it’s no walk in the park to do five hours of talk radio every weekday.

A few days ago, Clear Channel threw the News Director of its Miami, FL radio cluster – a woman with more than 20 years with the station – under the bus.  My friend Dusty Weis has insider insight into that situation. Dusty, one of the brightest and most capable young reporters I ever had the pleasure or working with, was a colleague of mine in Madison five years ago, until MidWest threw me under the bus.  Dusty made a big career move up, and was hired at that Miami station a couple years ago. But he resigned several months ago - essentially gettin’ out while the gettin’ is good.  Dusty moved back to Wisconsin for a great job with the City of Milwaukee.  He told me CC will not hire a News Director to replace his former boss at CC in Miami, which means an outfit that used to be the premier news-gathering operation in south Florida a few years ago will be headless and directionless. Or, as Dusty says, “just a news beast that gobbles up information and spits out 20-second stories”.  

Ten years ago, that station (WIOD-AM) had double the staff and covered only metro Miami; now, it’s one of those “hub” stations that feeds tiny bites of news to CC stations all over Florida, with half the staff and no real boss . No one with, as Dusty puts it, “with editorial authority or clout with management”.

It’s a doubly sad situation: another veteran news manager is unceremoniously dumped after 20 years of service, and another bright young radio news reporter (Dusty) has left the ranks.

I have seen the future of local radio, and it is not bright.

How People Like George W. Bush Get Elected

The short answer, and the obvious one, is that people liked W.  He was more likeable than his opponent.  He was the guy you wanted to sit down with and have a beer.  He had no credentials for the job he sought, leading the free world.  But people ‘liked’ him, kind of like “liking” a friend’s post or picture on Facebook.

That’s how Mitt Romney and Paul Ryan are going to get a bunch of votes.  They’re handsome.  They smile a lot.  And, should they get elected, it will be due in no small part to people “liking” them.

 Mitt made his choice for VP official this weekend, standing in front of the U.S. S. Wisconsin (BB-64) at its permanent berth in Norfolk.  (Sidebar: I’ve been aboard the Wisconsin, and it’s an impressive ship, like all the WW2 battlewagons.  The Wisconsin was being refurbished at the Avondale Shipyards in New Orleans when I lived in the big easy in 1986, and I managed to snag an “invite” to board and tour the ship through my part-time job at WWL-AM.  The folks at Avondale couldn’t say no to a Wisconsin boy, I guess.)

Saturday afternoon, I was somewhat surprised by the Facebook posts concerning Paul Ryan.  One in particular stood out.  It was a post about how this woman, who lived for many years in Janesville, knew Paul Ryan, knew his family, and proclaimed that he always seemed like an honest and sincere person, and she had now decided that she’d vote for Romney/Ryan.

The irony is so abundant in her post I don’t know where to begin.  Like many of my social media friends, this woman is a broadcaster.  She lost her job at a Clear Channel station when the huge purges began in earnest in 2009.  For those who don’t follow the game too closely, shortly after Bain Capital took the helm at Clear Channel, the world’s largest broadcast group began shedding personnel like crazy, to make the impossible cash flow requirements of their new loan package.  She was one of the thousands of victims of the second round of Clear Channel personnel cuts.

This woman was fortunate to land another broadcasting job, but it’s part-time, and she augments her income by bartending.  She has no benefits at either job, and is on Badger Care for her “health insurance”.

That this woman has now decided to vote for Romney/Ryan because Paul Ryan seems like such a nice guy perfectly illustrates the theme of this blog-post.  Bain Capital put her out of work, and Ryan’s budget plan would make it even more difficult for her to get health care at an age when she’ll begin to need it the most.

She will be voting against her own personal best interests, and not even with the “higher motive” of philosophically agreeing with the Romney/Ryan platform - at least, that part of the platform which is self-evident at this point.

But she likes Paul Ryan.  He’s always seemed like such a nice guy.