|Radio’s double-digit job losses
Number of radio jobs is down 25% since 2001.
You’ve probably felt it – and seen it – and the federal Bureau of Labor Statistics document the month-by-month story. The really heavy damage began with the Great Recession, and the number of positions has kept falling since then. An industry that employed about 113,533 people in January 2001 is now down to about 86,800 (in September 2016). The number even sank to 84,717 last April before recovering somewhat. The BLS stats about the newspaper industry earn the headlines, as they should. But radio employment in this century shows the toll of the recession. Radio’s topline revenue fell 9% in 2008 and an even more painful 18% in 2009, per the RAB. Check the effect on payrolls – the Bureau of Labor Statistics says January 2008 employment was 108,566. Just a year later, it stood at 100,914, and in February 2009 it fell below 100,000. The January 2010 number was about 92,500. Four years later, it was south of 90,000, and last September, 86,800. What happened? Take your pick of a combination of factors like ownership consolidation, technology, public companies trying to make their quarters and service the debt, private companies trying to maintain their own profit margins and – fill in the blank (or email NOW) with your own theory. The BLS also keeps a figure for “average annual pay in selected information industries.” For radio, in 2015 it was $56,332.
The “number of business establishments” in radio is down 6.5% since 2001.
Just as with the number of radio jobs, the mass shrinkage in station owners since 2001 began with the Great Recession, in 2008. (Of course radio experienced a dramatic shrinkage of owners in the years just after the 1996 Telecom Act.) But the fact that in the last 15 years, jobs vanished at nearly four times the rate as employers suggests how much leaner stations are running nowadays. What the federal Bureau of Labor Statistics reports in its quarterly numbers is a drop in “number of business establishments” from 5,939 in January 2001 to a preliminary 5,531 in last year’s third quarter. That’s a 6.5% clip. The pain was felt during the recession. By the second quarter of 2009, the previously steady number of owners had fallen to 5,679. It stuck around that level until about two years ago, and now we’re at about 5,531. Remember that while the number of business establishments/owners has dropped, the FCC has continued to license more stations - so there are fewer owners holding more stations. Meanwhile the number of “business establishments” in television increased between 2001 and last year, from 2,352 to nearly 2,800. While the number of newspaper publishers fell from 9,310 to about 7,625. Read the BLS charts (convert to “chart data” for actual numbers) here. The BLS’ own headline is that across that 15-year stretch, “the newspaper publishers industry lost over half of its employment, from 412,000 to 174,000.”
No takers for iHeart’s offer to exchange some short-term debt.
Literally, “no existing notes tendered” during the three weeks following the March 15 announcement. That’s probably never happened to iHeart when it previously tried this tactic, and it’s not an auspicious beginning for what it calls a “global re-structuring of indebtedness.” So the company does the logical thing – it extends the deadline for holders of five series of “P.G.” (priority guarantee) to exchange them. The carrot is new securities of parent iHeartMedia, its subsidiary iHeart Communications, and CC Outdoor Holdings. And the original tender deadline of April 14 is extended by a week. However, iHeart’s not sweetening the terms. The bid is so complicated that iHeart illustrated three “Participation scenarios.” They clearly haven’t reached “high participation,” which might let iHeart separate itself from majority-owned Clear Channel Outdoor. It’s the publicly-traded company iHeart owns about 89% of. The point of this is to deal with maturities coming due shortly, by enticing note-holders to accept notes that are due further into the future. They’d pay more money. But the lack of interest – “no notes tendered” - suggests hesitation about the future by at least some note-holders. That’s worrisome.
iHeart also aims to amend two of its loans.
That attempt was also announced March 15 and we don’t know where things stand. The company’s pushing back the deadline to amend its Term Loan D and E facilities to next Friday, April 14, and says the extension gives those Priority Guarantee note-holders in the first story time to “consider the results of the private offers to lenders” for the two term loans. Private equity firms Bain Capital and Thomas H. Lee Partners took then-Clear Channel private in 2008, at the pit of the Great Recession – lousy timing. The enterprise is shadowed by $20.4 billion in debt.
Talent changes at USA Radio Network – Rusty Humphries departs, Wayne Allyn Root joins up.
To be clear - Wayne’s not replacing Rusty, who hosted his last show for USA earlier this week. Rusty told the syndicator “I have loved being a part of the team, but due to unforeseen circumstances, I must change directions.” He says “I wish everyone at USA Radio and [parent] Liftable all the best.” And USA’s Fred Weinberg tells NOW that “We wish Rusty well in his future endeavors.” Talk talent Rusty joined USA Radio as Senior VP of Programming a year and a half ago (October 16, 2015 NOW), when Liftable was assembling its team. Rusty started in music radio, eventually jocking at KEGL Dallas. He transitioned to talk and then syndication via Talk Radio Network. The new voice at USA Radio is “WAR Now” host Wayne Allyn Root, who starts Monday hosting the 6pm-9pm Eastern time shift. He began at Las Vegas talker KBET/790 a year ago. USA calls him “a fiery, dynamic, high-energy conservative warrior and capitalist evangelist.” Liftable CEO Floyd Brown says Root “will be a clear voice defending the President, no matter what.”
iHeart adds a new weekend Enrique Santos show on more than 100 stations.
You can do that, if you’re iHeart – allocate two hours across your CHR spectrum to a brand-new show featuring cross-over English-Spanish star Enrique Santos. Last year iHeart gave Enrique Santos his own syndicated Spanish-language morning show, plus the prime spot on its Spanish contemporary “Tu 94.9” WMGE in Miami, and the expansive title of “Chairman and Chief Creative Officer of iHeartLatino” (September 12, 2016 NOW). Bob Pittman’s been high on Santos since they signed him from Univision, praising him as “a one-of-a-kind talent” with “unparalleled relationships with the Latino and advertising communities.” Now Enrique adds another syndicated show – but this one’s in English. Charter affiliates are in New York (WKTU/103.5), L.A. (KIIS/102.7), Chicago (“Kiss 103.5” WKSC), San Francisco (“Wild 94.9” KYLD), Dallas (“Kiss 106” KHKS), Washington DC (“Hot 99.5” WIHT), Atlanta (“Power 96.1” WWPW), and Philly (“Q102” WIOQ). And that’s just in the top ten markets. There’s also Boston (“Kiss 108” WXKS-FM) and of course Miami (“Y100” WHYI). The affiliate list of iHeart-owned stations for “On The Move with Enrique Santos” runs over 100 stations. Debut weekend is April 15. iHeart says its combined assets “reach more than 91% of the U.S. Hispanic population on a monthly basis – more Hispanics than any other media company.”
Canada’s Corus Radio reports strong PPM ratings in western markets like Vancouver, but...
“Continued soft economic conditions” in the West put a lid on ad sales. Corus also mentions “ratings challenges in Winnipeg” as one reason for declining revenues. For its fiscal second quarter of December-January-February, Corus says radio revenues slipped 6% to $32.3 million Canadian, or about $24.1 million U.S. Despite the 6% shrinkage in topline revenue, radio’s “segment profit” grew 22% - partly from what sounds like even more synergy in selling between Corus radio and broadcast TV. Along with its many other divisions, Corus Entertainment owns 39 radio stations. Including last year’s fold-in of Shaw Media, pro forma revenues for all of Corus (comparing like-to-like) were down 5% for the quarter. Corus singles out one event in radio – its participation in the newly-launched “Radioplayer Canada” streaming app, modeled on the UK version. It offers over 400 Canadian stations, as you can see here.
Spring NAB Show keeps up its reputation as a place for innovation.
A couple of years ago the Voltair booth was jammed with traffic, and here are just a couple of previews of the NAB that opens in two weeks in Las Vegas – A “simulation of the synchronous AM booster system” from Kintronics. A station owner in Puerto Rico’s been happily using synchronous boosters to fill in coverage under years of Special Temporary Authority from the Commission. Some AM proponents think the technology could be part of AM revitalization – if the FCC would actually recognize and authorize such boosters. You can watch the Kintronics demonstration at its North Hall booth, N8720. President/CEO Tom King promises “Three separate recorded audio sources, all on the same frequency, feeding three separate HP signal generators, one of which will serve as the reference.” How about a “solar-powered FM re-transmitter?” WorldCast Systems is showing its hybrid-power “SOLAR FM,” which it claims can “broadcast for up to ten hours over 10 kilometers, on solar power alone.” And always these days, you can expect the latest in drones. What began several years ago with a “drone pavilion” in one of the three mammoth exhibit halls has become a drone takeover.
A Texas Hill Country feud between two equal partners is resolved, though it apparently took a while. Charles Leslie Jordan III and Tim Walker actually signed their “settlement agreement” back in November 2015 – but are just now filing it at the Commission, regarding a couple of FMs in Mason, Texas. Here are the first three “Whereas” clauses – #1, “Jordan alleges that Walker has embezzled funds from Jordan’s wholly-owned limited liability company, III & W Broadcasting LLC.” #2, “Walker denies the allegation of embezzlement and further claims an ownership interest in the company.” And #3, “Bona fide disputes and controversies exist between the parties.” The settlement is that Tim Walker “assigns any and all interest he might have in the company and its assets to Jordan.” While Jordan “releases Walker from any claim for reimbursement in the disputed funds.” The FCC Form 316 shows Walker’s 50% interest going to Jordan. “III & W Broadcasting” bought then-silent Class C2 KHLB/102.5 and silent Class C3 KZZM/101.7 from Munbilla Broadcasting in 2013, paying $80,000 for the stations plus an additional amount for the tower they share. Looks like KHLB is now doing country as “Lonestar 102.5.”
Score another settlement (probably a win) for Long Island attorney Richard Liebowitz. He files notice that his copyright infringement suit against iHeart for its alleged use of a copyrighted photo has been “voluntarily dismissed with prejudice against the defendant, iHeartMedia.” NOW picks up the settlement over iHeart’s use of a candid pic of rapper “Desiigner” that professional photographer Theodore Parisienne sold to the New York Daily News. iHeart allegedly used it on its websites and settled – just as Townsquare did (April 5 NOW).
The great outdoors is big enough for both “Outside Magazine” and New Hampshire Public Radio and “Outside Magazine.” Followup to the February 14 NOW story about the pubcaster suing “Outside,” after receiving cease-and-desist letters from publisher Mariah Media Network about NHPR’s name for its podcasts – “Outside/In.” Current.org reports that the pubcaster has “negotiated a trademark coexistence agreement with Mariah,” allowing for continued used of “Outside/In.” The public radio operation says it started using that name in November 2015, while Outside Magazine introduced an “Outside” podcast in March 2016. In fact – the magazine actually named New Hampshire Public Radio’s product the “Best Podcast of 2016.”
“Third year in a row for ASCAP hitting the $1 billion milestone for revenue collections,” says Billboard. The not-for-profit PRO (performing rights organization) did $1.02 billion in collections for 2014, $1.014 billion in 2015 and now $1.059 billion for last year. It paid out $918 million of that to members. The lion’s share of that ($759 million) was generated in the U.S. The American business was up nearly 6%, while a stronger dollar kept foreign collections essentially flat at $300 million. Expenses ran about 12% of total revenue at ASCAP, whose CEO is Elizabeth Matthews. Get ready to hear about ASCAP in the consumer press next week, with the three-day “I Create Music Expo” in L.A. They’ll honor Stevie Wonder with the first “Key of Life” award.
Spotify might bypass an Initial Public Offering and go for a “direct listing” on a stock exchange, says the Wall Street Journal. It has new confidence from its agreement with Universal Music Group, and urgency to somehow create a public stock due to the terms of last year’s issuance of $1 billion in debt. A direct listing would mean the Spotify streaming service wouldn’t be selling new shares to raise money, says Billboard - while still giving it the option of creating and selling new shares later.
Rep. Darrell Issa’s new “PROMOTE Act” doesn’t actually give artists “the right to decide whether or not their music is played by radio stations,” explains David Oxenford. The attorney who’s long followed music issues writes that the House Subcommittee Chair’s bill would “merely set up a royalty system similar to that in place for Internet radio operators, allowing broadcasters to play music only if they pay royalties on ‘identical’ rates and terms as do webcasters.” Oxenford notes that the California Republican’s proposal tries to “limit opposition to the bill” by exempting stations that play “a sound recording of religious services.” Also excluded would be “educational terrestrial radio stations” (though that’s vague) and Low Power FMs. “PROMOTE” – the acronym’s for “Performance Royalty Owners of Music Opportunity to Earn Act of 2017” – is Congress’ second stab at exposing AM/FM radio to paying a performance royalty this year. More from Oxenford here.
“New study of virtual assistants shows streaming is the most-used function,” says the RAIN Newsletter’s Brad Hill. You may automatically think the in-home “Amazon Alexa,” but the 2,200-person study conducted by Morning Consult also includes on-the-go services like Apple’s Siri and the Google Assistant in Android phones. There are differences between in-home and “in-phone,” says Brad – but “the headline result of the study is that music streaming is the top use of virtual assistants.” Read more here.
Dan Shelley is queued up to succeed Mike Cavender as executive director of the RTDNA (Radio Television Digital News Association) Foundation, starting in September. Dan’s an Edward R. Murrow Award-winning journalist who’s worked at iHeart, Radio One, Journal Broadcast Group and the CBS Television Stations group. He got his start in Springfield, Missouri at then-Journal-owned KTTS-AM/FM. Shelley’s been active around the RTDNA, and will occupy himself until Fall with organizing the “Voice of the First Amendment Task Force” that was the subject of a recent NOW leader story – working to energize journalists. He’ll officially take over the RTDNA Foundation at its September Excellence in Journalism conference in Anaheim, CA.
Heath Garlutzo is the next general manager at a key market for Salem – Colorado Springs. It may be Nielsen-ranked market #90, but it’s the home to many influential Christian ministries that Salem does business with. It’s also a relatively rare small market where Salem subscribes to Nielsen. Salem Broadcast Media President Dave Santrella moves Garlutzo back to his native Colorado from Phoenix. (He’s been the six-year GSM in Phoenix.) The Salem group in Colorado Springs is contemporary Christian “Q102.7” KBIQ and Christian teaching “100.7 the Word” KGFT and conservative talk “1460 the Answer” KZNT.
Take 2 on two previous “On the Block” sale stories – The Cherry Creek Radio/Montana Radio Company swaps in Helena and other markets were brokered by Jody McCoy, as we said. He’s now operating under the banner of his own McCoy Media Enterprises. And in the March 29 story about three FMs and a translator in Arizona’s “K-Jazz Radio Network” sold to Cedar Cove, the broker is Clifton Gardiner & Company.
“The GM I’ll never forget” – A reader says “It was the last day of the quarter, and I was an AE in my first real sales job at a good station. I had made my quarter and was looking forward to my bonus, when I got the dreaded Friday afternoon call from – a cancellation. It was enough money to drop me below the bonus amount, and I just sat there like I’d been run over by a truck. Everybody else had left for the weekend, and the GM came back and asked what was wrong. I told him, and he shook his head, like ‘Sorry, son.’ Then he pulled out his wallet, peeled off a hundred-dollar bill, and said ‘Why don’t you take your girlfriend somewhere for the weekend and have a good time.’ (He said it much more colorfully, but you get the idea. And $100, in those days, would pay for a weekend.) He said ‘Come back Monday morning with your head on straight, ready to get down to business’ – and I did. I’ll never forget that guy, as I became a sales manager and then a GM myself.” Got a favorite story about a mentor of yours? Email “You Can’t Make This Up” – Tom@RTK-Media.com.
“I like seeing ‘NOW’ in my in-box every morning,” says a reader who offered a news tip for today’s issue. Thanks to him, and thanks to you for spending some time with this daily management newsletter. Got a news tip about something you’ve seen? Drop a confidential email to Tom@RTK-Media.com.
Want to put your company’s advertising message or classified ad in front of this slightly-addicted audience of regular readers? Contact our Kristy Scott - Kristy@RTK-media.com or phone 818-591-6815. She’ll be in Las Vegas for the NAB Show, if that’s convenient for you. Enjoy your Spring weekend - Tom