Wednesday, December 16, 2015
They have cut the staff down to the bone--there's nothing more to cut. They have made every synergistic move they can make within clusters and clusters of clusters. They have renamed and rebranded the company. They have cut rates to get bigger percentages of the local media buys, and in so doing, have cut the number of dollars going into radio at all. That is bringing down (or at the very least damaging) other companies too.
But they haven't made a dent into the debt. It currently stands at $21 billion. That's billion with a B.
How bad is it? Even the New York Post (Page Six, no less) is reporting on it. Specifically, they take shots at CEO Bob Pittman's extravagant spending, and his complete inability to effectively change course.
"$everance" ten years ago. At that time, the industry was crumbling and I could see the writing on the wall. That novel was a cry for help for the business as a whole. I wanted to point out to everyone (in the most ridiculous--and hopefully funny way) how bad it really was, and the ridiculous direction it was heading. I'm afraid to say the media business has exceeded my every expectation...and gotten even worse than I ever imagined.
It has no hope of getting better as long as these huge conglomerates run it. Despite being huge, they don't have the resources to fix what needs to be fixed because of the debt. They can't invest in the future.
I really believed that one day they would just cut bait and run. That's what you do with real estate that turns out to be a bad investment. You suck it up, and take a loss. Then you write off the loss. I thought for sure it would happen with radio. I figured that, eventually, local broadcasters would buy these stations for a song, and would create what needed to be created: a local medium that serves the local audience.
Obviously, I was wrong. A decision has been made that stations cannot be sold for a huge loss, which simply means they cannot be sold at all because they were bought at ridiculously inflated prices that will never ever return.
So...they just wait for the end. Each of the executives who created this problem will walk away with their millions (many already have), and they will play their fiddles as Rome burns.