Now as the owner of radio’s largest radio company not in bankruptcy, Entercom CEO David Field is once again speaking out to defend the entire industry. This is not something new for Field. He’s been one of radio’s biggest, loudest cheerleaders for years. With the CBS radio deal in the books, he has a bigger platform to state his case and he’s taking full advantage of that. In addition, Entercom is the only company that has spent serious money advertising and promoting the power of radio in national publications that the big brands read.
Field’s latest memo to employees praised the fact that iHeart and Cumulus are making serious moves to clear up their balance sheets. These are big debt loads that current management did not create, they inherited. He also calls out many of the national print publications, that reported on the two chapter 11 filings, for slamming the entire radio industry while reporting on the recent iHeart filing. And, we found several examples of what he’s referring to:
The New York Times wrote on March 15, “It is also the latest and most high-profile shift in the tumultuous radio business, which has struggled to retain advertising dollars and compete with streaming services like Spotify and Pandora.”
Variety wrote on March 14, “The radio business has struggled with flat advertising revenues over the last decade, as ad dollars have migrated to Google and Facebook.
USA Today reported on March 15, “Like other media companies, iHeartMedia has struggled with declining advertising revenue. At the same time, the radio operator has faced growing competition from music streaming services such as Spotify and Pandora. Revenue growth has been anemic.”
In his memo Field says those national media organizations could not be more wrong about radio. “The fact is that Radio is a healthy business that generates large amounts of earnings and operating cash flow. And as you know, Radio has recently emerged as the #1 Reach medium in the United States touching over 270 million Americans weekly.”
Here’s Field’s entire memo to Entercom employees..
“As most of you already know, iHeartMedia declared bankruptcy last week. The story received prominent news coverage across the country. Coming on the heels of a similar announcement from Cumulus Media, the iHeart news has spawned discussion on the implications for the Radio industry and its future. Since there seems to be a considerable amount of misinformation and inaccurate speculation floating around, I thought it would be constructive to share some facts and thoughts to help clarify the situation. You should feel free to share any of this with friends, colleagues, partners, and customers.
“First, iHeart and Cumulus went bankrupt because years ago prior management teams made ill-advised decisions to place too much debt on their companies. Period, full stop. The bankruptcies have nothing to do with Radio. In fact, any company in any industry that takes on too much debt will suffer a similar fate.
“Unfortunately, some reporters and observers have created an erroneous and misleading narrative that the bankruptcies are a result of challenges within the radio industry. They could not be more wrong. The fact is that Radio is a healthy business that generates large amounts of earnings and operating cash flow. And as you know, Radio has recently emerged as the #1 Reach medium in the United States touching over 270 million Americans weekly. It also generates superior ROI for customers and is the #1 medium in the country from 5am to 5pm daily. While other media have been highly disrupted by changing consumer habits and suffered severe audience erosion, Radio has more listeners than ever before. In fact, even in the latest cars with the newest technology, Americans listen to 13x more Radio than all streaming services combined (source: Edison Media Research – Share of Ear study).
“If Radio has an issue, it isn’t the size of our audiences or the value of our product or the health of our business model. No, our issue is that we are highly undervalued and receive far less than our fair share of total ad spending. With Entercom’s newly enhanced scale, advocacy efforts, marketing capabilities and customer outreach, we intend to change that. And with iHeart and Cumulus emerging from bankruptcy, the industry will be even healthier going forward and that’s good news for all of us.
“On a final note, in the wake of these announcements, it is a good time to reflect on how well positioned Entercom is to compete effectively, grow and thrive in the years ahead. We did not make the mistake of overleveraging ourselves and yet we still emerged as one of Radio’s two largest companies with the scale, brands and capabilities to compete to win. We are a leading media and entertainment company, reaching over 100 million people each week through our robust collection of highly rated radio stations, digital platforms and live events. We are also the #1 creator of live, original, local audio content and the nation’s unrivaled leader in news and sports radio. And even after our competitors come out of bankruptcy, we will still have the industry’s strongest balance sheet, providing us with the financial strength to build and grow and invest and play offense for the years ahead.
“Let’s make sure we get the word out so that our advertisers, partners, and other key influencers understand the facts and don’t come away with any false perceptions.
Read Radio Ink Publisher Deborah Parenti’s recent column on this very issue HERE