(By Deborah Parenti) Many years ago, I worked for a very small radio group that struggled to keep the on-air — and office — lights on.
As the business manager, it was my responsibility to see that the bills were paid, payroll was met, and in the end, that some tiny profit was returned to the owner. It wasn’t always easy. Many were the months when I sat on the floor of my family room with two boxes on either side of me, one with a crudely drawn happy face, the other wearing a frown, and in front of me a stack of bills. Station bills. I would pick each one up and review when it had last been paid and how vital that vendor’s service to the upcoming month’s station operation might be. Oh, and what our projected bank balance would be in the near term. I would then assign it to one of the boxes — one for payment this month, the other to be deferred until, well, as long as possible. You can guess which one was the “happy” box. And before I go on, I would like to finally confess and apologize to the music licensing companies who never made it in the “first round” to the happy place in our payment processing. Please know it was not personal. It had one focus – those darn lights that kept the station on the air. Thank you for your patience as we worked to catch up.
Payroll was another thing. More than once I walked into the manager’s office to advise him that if he and I held our checks until the Monday after payday, provided the anticipated receivables came in on time, we could pay the staff on Friday and cash our checks on Monday. And none would be the wiser.
Of course, we did have a safety net if things really went south. In my filing cabinet were pre-signed personal checks that belonged to the owner. In case of emergency, we could fill one out and deposit it. Pride was a great deterrent from using them more than once during my tenure but it was always assuring to know that the option was there.
There are a ton of radio stations, especially small operators and/or those in Nielsen 75+ ranked markets that experience a similar pain every day of the week. And while today’s added competition for revenue from other platforms and services is probably not as significant as in larger markets, owing to the fact that smaller market dollars are driven primarily by local business, any distraction is not helpful.
So, I get it. More so, I love radio and want to see it grow and flourish until the end of time. But when “economy of scale” and “diversity in programming” are poised together in the same thought chain as though one will beget the other, it gives me pause for a moment.
History has taught us that “economy of scale” does not necessarily enhance programming, community service, and all those other little things that occur between music or talk and (often interminable) spot sets. That, even as virtually everyone agrees, radio’s “live and local” ability to connect with listeners up close and personal is its biggest competitive advantage. And one on which radio can and should capitalize.
Over the past several months, broadcasters have debated and discussed, some on our pages, what form a proposal to the FCC regarding license caps should take and the suggested relief for broadcasters it should strive to provide. The result of some of their discussions is a proposal that the NAB has sent to the FCC for consideration. Some believe this proposal could open a window of fresh, added opportunity and relief from radio owners.
The real proof of its success, however, would not become apparent until after the ink is dry on future mergers, acquisitions and the like, especially in smaller markets. Will better programming that helps elevate those stations involved, as well as the industry as a whole, emerge? Or will a “greed is good” mentality foster capitulation to more voice tracking and syndication once the deals are done?
There are lessons to be learned from Telecom 1996. Those need to be examined so the same mistakes aren’t made twice. As the saying goes, “Be careful what you ask for lest you get it.” And the time to start thinking about all of that might be now.
Deborah Parenti is Publisher of Radio Ink. She can be reached at [email protected]
I’ve been a GM with the “two bill boxes” Deborah mentions. And I once was PD at a 100kw FM that limited us to 50kw to save money on power bill. We actually went off-air one morning due to the power bill being left unpaid. And our paychecks bounced so often, I found another station startup and moved most of the air staff cross country in U-Hauls.
I’m with Mike on rolling things back to ’96. Limit ownership to one AM and one FM per market. Do you think the quality of Radio programming would improve? I do. No more voice tracking or syndication. And then maybe stations would actually teach their salespeople about business and how Radio can impact advertiser sales and ROI. Instead of relying on agency and national.
They’re not going to roll caps back to 1996, so forget it. It’s not on the table and it’s not going to happen no matter how many people post on message boards. In the 20 years since then, there have been no serious discussions in Congress or the FCC about rolling back those rules to pre-96 levels. You’re certainly not going to get more regulations and more big government from Republicans. Just listen to your conservative radio talk show hosts. They’ll tell you how that will go. They’ll give you the Drain The Swamp chant.
I think that this issue as two distinct concerns that cannot be solved simultaneously. One is programming/content and the other is sales/business. Further Jeff Warshaw mentioned, if a marketing has 2 country, 2 AC, 2 Rock, and 2 Top 40 stations, one owner would provide more diversity of format. However how they implement those formats is another story. In the past, further dereg meant more voice tracking and content cut backs because of financial burdens of the company. It spawn some very bad radio. However I also agree with Jeff on the business side. In order to compete in the marketing world, companies need to become champions in the market. One of the lifetime objections to using radio is that it is too cumbersome to buy. You have to call too many people and deal with too many rates etc. I grew up in a radio station in an unrated market, and have been in radio most of my life. I know exactly what Deborah is talking about. However, it is now a different time, and a completely different playing field. Radio is not changing with technology fast enough. We are falling behind as a medium, and need to get the customer what they want, when and how they want it. Radio has the opportunity to make gains in the current market, but are we poised to take advantage? This is a very difficult head/heart issue, and will never go quietly in the night.
Deborah, I had a very parallel experience as the General Manger of a distressed stand-alone AM daytimer, hired to turn it aound–with virtually no resources. I had to run to the Post Office, grab whatever checks came in, run to the bank and then run to the local Rite-Aid drugstore to pay the elecetric bill so our power didn’t get turned off. If anything, we need more regulation, not deregulation. In January of 2000, I wrote an unpublished article predicting the break-up of the big super groups. I reiterated that prediciton at a Mid-Year Radio Symposium panel in 2005 (quoted in Radio Busienss Report). Sure enough, a few short years later, the biggest players began spinning off properties to “rightsize.” Neither the public nor the advertiser is served by allowing owners to buy more stations–stations they can’t afford to maintain, which violates oen of the provisions of their license. Further consoldiation just results in mroe control over opinion, more control over (anti-competitive) advertising rates–and cchasing people away from the medium by raising rates to pay the deb service on the overzealous acquistions.
As the GM of a small market station I agree wholeheartedly. Giant operators don’t need to have more stations to run. If anything I’d say roll back to Pre-1996. I don’t get the mentality of people who want more of what pretty much ruined our business; sucked out the creativity, and created a bunch of drone stations. Monopolistic practices in radio broadcasting will only hasten its demise, and we’re already hanging onto relevance by a thread as more and more of our advertisers dollars go to Facebook and Google. I am writing my Senator and Congressman and urging them to vote against any further deregulation of radio ownership.