Friday, March 17, 2017

The Case Against Further Deregulation

As the two biggest radio companies wallow in red ink and financial difficulties, the powers that be are urging further deregulation to allow others to join them. That seems a foregone conclusion based on the comments of the new F.C.C. Chairman.

Why would he seriously consider this? He merely needs to look at the decade-long struggle of iHeart (formerly Clear Channel), which has realized they will never emerge from their staggering debts. Or look at Cumulus, which is about to be de-listed by NASDAQ, and whose stock price is about fifty cents a share now. That's the future of further deregulation in radio.

Entercom and CBS are about to merge to form another gigantic radio company. They will try to install the same efficencies, streamlining and synergy, and they will fail too. Why? Because the radio stations are not worth what they are paying, they are incurring huge amount to debt to buy them, and they are only going to be worth less and less--not more.

I wrote a whole book about this. Check out my satirical novel "$everance", which is starting to read more and more like a textbook.

And yet, I read the radio trade magazines every day, and they are unanimous in their calls for further deregulation. The people running radio companies see a way of getting personally rich (that's what happened to the executives last time), and they don't really care if it brings down the industry they claim to love.

Glad to finally read a differing view this morning at Radio Ink. It's written by someone who has retired from the business (like me), so he has the advantage of not fearing speaking out.