Tag: consolidation

Industry News

Union Comments on Audacy’s WCBS-AM, New York Decision

By TALKERS | by TALKERS

The radio industry was in shock yesterday after Audacy announced it will shut down the all-news format on New York’s legendary WCBS-AM and lease the signal to Good Karma Brands for its “ESPN New York” sports talk format. The Writers Guild of America East represents news staffers at the station, and it had theim following response to the company’s decision: “The Writers Guild of America East is devastated that Audacy, the second largest radio company in America, today announced that they are shutting down WCBS Newsradio 880, a trusted news source for New Yorkers since 1924. There were 23 WGA East members laid off by Audacy, and we expect the company to comply with the applicable provisions in our collective bargaining agreement, including guaranteed severance. Audacy is the owner of more than 200 radio stations in nearly 50 markets. The closure of WCBS Newsradio 880 is another example of consolidation by a major media conglomerate, which ultimately deprives the public of critical local news stories with different perspectives. Audacy’s decision is even more egregious given that this is a critical election year. This is a giant loss for New York City and the news industry at large.”

Industry Views

The Problems Facing Radio Were Not Caused by Consolidation

By TALKERS | by TALKERS

By Walter Sabo
Consultant, Sabo Media Implementers
A.K.A. Walter Sterling
Radio Host, “Sterling On Sunday”
Talk Media Network

imAs your friends get fired and on-air hosts are replaced with WideOrbit and Profitable Software, the mournful refrain is to unfairly blame consolidation. Consolidation has, in fact, made the medium financially viable and brought hundreds of individual stations from a river of red ink to the glow of black ink. Prior to consolidation, over half the radio stations in the U.S. lost money – year after year. Not a secret stat, those numbers were revealed annually by the NAB.

The flaw in the deregulation law was the elimination of the rules regarding financing of station acquisitions. Previous regulations required a licensee to prove it had the financial resources to cover expenses through the term of the license. Licenses could not be purchased with debt. Licensees could not sell the license until it expired. Radio stations could not be used for speculatory financial gain. When those rules were tossed, the industry hit a financial tailspin from which it has not recovered. That’s the problem.

That is not a “problem” with radio. In talks with publisher Michael Harrison about his exciting role in the United Nations as executive advisor to World Radio Day 2024, we shared a key observation: The world’s radio industry is overwhelmingly enthusiastic. Working with clients in London, Toronto, Montreal, Amsterdam, Athens and Sydney, the passion for the medium continues to grow and is supported by audience engagement and response.

Internationally, there is a robust radio set design and manufacturing industry. European listeners seek clothing featuring radio set themes and artwork. Believe me, the food at the NAB Europe is much better than that crap served here.

Follow the money. Radio is not legacy media. Radio is proven media – proven for over 100 years. Local retail advertisers are a practical lot. They buy advertising that works for this weekend. If it doesn’t bring feet to the floor and dollars to the door, sponsors just don’t repeat-buy.

I was the in-house programming guru at SiriusXM Satellite Radio for eight years starting pre-launch. The reason Sirius exists is test after test revealed that Americans liked radio so much, used radio so much, they wanted more stations. More choice. More.

Consolidation, with considerable credit to Randy Michaels, allowed radio to convert from a frequency media buy to a reach media buy. That puts radio in budgets with TV. The opportunity right now is to actually monetize radio’s clout as a reach medium. Create scarcity. More spots mean cheaper spots, smaller budgets and higher expense. More spots mean much less efficiency for media buyers. Media buyers have to spend their budgets. They would prefer to spend that money with one or two outlets before lunch rather than having to “make the buy” by purchasing dozens and dozens of stations acquiring spots that are cheap, bonused, thrown in, flanked, and here are some tickets.  The fix starts with raising the price to meet the public’s perception and usage levels of radio.

Walter Sabo has grown audience share for a roster of clients that has included SiriusXM Satellite Radio, RKO, ABC, Apollo Advisors, Hearst, Wall Street Journal Radio and many others. Reach him at walter@sabomedia.com. Learn about his unique radio show at www.waltersterlingshow.com

Industry Views

Sabo Sez: Consolidation Has Been Radio’s Savior

By TALKERS | by TALKERS

By Walter Sabo
Consultant, Sabo Media
A.K.A. Walter Sterling
Radio Host, Sterling On Sunday
Talk Media Network

imHALF of all radio stations in the United States lose money – at least they did back in 1991. The NAB used to put out an annual report revealing how many radio stations were profitable. Usually half the stations in America lost money. Since consolidation, the NAB stopped putting out that report. It is reasonable to believe that far, far fewer stations lose money today.  Shared costs, real estate, technical economies due to digital equipment versus analog all indicate that there must be fewer money-losing properties.

The business of radio is very strong and appealing to investors. Apollo Advisers was the first money-in Sirius. The Apollo fund recently bought Cox radio. Marc Rowan, Apollo’s CEO is the smartest guy in any room. Rowan doesn’t invest in hunches; he buys businesses that grow return on investment.

In 1970, 7% of all ad dollars went to radio. Today, 7% of all ad dollars go to radio.  In 1970, Procter & Gamble spent almost zero dollars in radio. Thanks to consolidation and the vision of Randy Michaels, radio has shifted from a “frequency” ad buy to a “reach”  buy. Reach commands higher rates and more sophisticated advertisers. The RAB’s Erica Farber and Sound Mind’s Kraig Kitchin focused on winning P&G dollars. Today, Procter & Gamble is a top-five radio advertiser.

Are you sick and tired of “experts” saying that radio is slow to digital?  Radio is not slow, radio was first-in. Mark Cuban put thousands of stations on Broadcast.com in the 1990s. Today radio leads the list of most downloaded podcasts. NPR has been the leader in podcasting since Alex Bennett started the industry. Under Bob Pittman and Jarl Mohn, iHeart and NPR dominate downloads.

Why the pessimism and anxiety in the hallways?  It started with the management of consolidation. There are major consulting firms to help employees go through mergers. Consolidating an industry and its workforce is both an art and science. No radio company sought or engaged experienced expertise to manage consolidation. Instead, when a quarter’s revenue was missed, people were fired. Your friends in the next office were suddenly out of work. Layoffs should have happened all at once, based on a strategic plan. There is no plan. Firings are executed on random dates, with no notice; a horrible practice that continues. That’s why you’re miserable. No plan.

Radio stations in Canada, Europe, Australia and the UK are having excellent years. Canadian Music Week conventions, Commercial Broadcasters of Australia and European conferences are bursting with optimism and good news about radio. Why? Consider this possibility: Most radio companies outside the US are owned and managed by executives with a programming background. To do their jobs, programmers must be optimistic about the future. A salesperson’s job requires them to spend their days listening to media buyers’ objections to advertising on radio – negotiators! It sucks.

Consumers like or love radio. The reason SiriusXM Satellite Radio has 34 million listeners PAYING for radio is that listeners want MORE stations. Much, perhaps most, “music discovery” comes from radio listening. 53% of Americans will listen to radio today. In 1970, 53% of Americans listened to radio daily.

Walter Sabo was the youngest executive vice president in the history of NBC. The youngest VP in the history of ABC. He was a consultant to RKO General longer than Bill Drake. Walter was the in-house consultant to Sirius for eight years. He has never written a resume. Contact him at walter@sabomedia.com. or mobile 646-678-1110. Hear Walter Sterling at www.waltersterlingshow.com.

Industry Views

Better Than a Tornado – What You Can Control

By TALKERS | by TALKERS

By Walter Sabo
Consultant, Sabo Media
A.K.A. Walter Sterling
Radio Host, Sterling on Sunday

The whining is non-stop. Many in radio mourn the advent of consolidation, corporate dictates, staff cuts. They miss the way the industry was – before.

A few reminders about – before. Half the radio stations in the U.S. lost money. Voice tracking? Yes, it was called automation, analog automation and it was a technical nightmare. The meta forces that control our industry today were not created by your current boss. They were created by irresponsible venture capitalists who only looked at the fifth-year projections. A budget projected to the fifth year is at best a guess, but it is most probably a lie.

What can you control? If you are a host, you can control your next show. If you are a program director, you can control your next promo, next break, next collection of shows. You control the product and that makes you the most powerful person in the radio ecosystem. You control the product. Let’s improve the product right now. Listeners know or believe that all radio is live. Live means surprises, the unexpected, the urgent!

— Prep the surprises. Rather than sourcing the New York Post, Daily Mail and your local newspaper, try throwing them away for just a day and tap brand new, unexpected sources. Search “Siberia news” and “Alaska news.”  You will be stunned at the unique menu of stories and fresh material. Surprise! Did you know the biggest challenge in Siberia is rampant forest fires? How about the fact that melting permafrost has given up well preserved woolly mammoths and new breeds of humanoids? Live means surprise.

— Build the stage. Your station or network has a vast, digital production library that you don’t use. Take the time to sit with that library for a whole day and let your creativity explore the sounds and SFX. You will discover new beds, sounders and dramatic effects to build your show’s image and present the unexpected. Already use production? Scrap it and start fresh.

— Water in the basement is the most urgent news in a listener’s life. Not the debt ceiling or January 6. Water in the basement! Other urgent news is: The moving van is two days late. The mother in-law is speaking. Logan died on “Succession.” Give yourself permission to talk about what happened to you over the weekend rather than what happened in Washington, DC.

Your current list of topics is old news, no surprises, nothing urgent. Stop, it’s not working. The typical talk radio topics reach people who typically cannot stand up to change the dial. Surprises, the unexpected and the urgent could boost the survival probability of the AM band — better than a tornado.

Walter Sabo was the youngest Executive Vice President in the history of NBC. The youngest VP in the history of ABC. He was a consultant to RKO General longer than Bill Drake. Walter was the in house consultant to Sirius for eight years. He has never written a resume. Contact him at walter@sabomedia.com. or mobile 646-678-1110. Hear Walter Sterling at www.waltersterlingshow.com. Meet Walter Sabo at TALKERS 2023 on Friday, June 2.