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We are so proud to see Corporate FM in the 2021 list of the top 100 corporate crime movies compiled by the Corporate Crime Report. Out of 100 movies, only 39 of us are documentaries which makes this especially exciting to be in such good company. You can see the full list here. Some other notables: “Network”, “Enron: the smartest guys in the room”, “Thank You For Smoking”.
When radio is challenged over its legitimacy, broadcasters can always refer back to a natural disaster when the community needed them and radio delivered. In Kansas City, old radio guys still talk about the great flood of 1951 or the Joplin tornado of 2011. Both were instances when radio doubled down to help the community. But as of 2020, Entercom is tossing its public service aside. Lavish CEO David Field ($3,491,375 compensation for himself in 2018) has told his employees in a memo (3/2/2020) that many will be furloughed or the pay will be cut for some who remain by 10-20% according to RadioInsight. I believe Mr. Field is using this crisis for ulterior motives.
Across the nation, radio will offer less public service because there will be fewer people to offer it. In case Mr. Field doesn’t know, amidst the Covid-19 pandemic, media has been deemed an “essential business”. Some of his listeners are over 70, don’t have smart-phones, don’t surf the internet or don’t actively seek out new information. They are also most at risk from the virus.
I’ve heard this for years about Entercom. When the city is snowed in, instead of getting DJs to urge listeners to check on their elderly neighbors or shovel their sidewalks or bring pets in, Entercom sends the staff home. Let the people hear pre-recorded chatter. That’s exactly what a “non-essential” business should do. Wake up Mr. Field!
There are many businesses that will actually do better because of Covid-19 (think grocery stores). Those who are deemed “essential businesses” are essentially working their asses off now. So Mr. Field’s move to furlough and cut staff pay appears as a chess move for private gain and has nothing to do with Covid-19. At the end of his memo he reveals: “Our future is further protected by our strong financial position with substantial cash reserves and virtually no debt due before 2024”. If that’s the case then why is he making all the cuts? Mr. Field is saving money under the guise of the pandemic. The other radio groups, Cumulus and “I Heart Media” are doing the same.
The danger of Covid-19 has always been people’s ignorance of its transmission and repercussions. This has been exacerbated by the corporate greed that has downplayed the warning signs (to boost the stock market) and now is attempting to cash in on the hysteria and use the crisis as an excuse to cut pay and staff. The FCC should require that radio stations prove that they are serving the public interest because the likes of Mr. Field don’t give a shit about it.
The next time the big mergers try to legitimize their “functional” monopoly on Capitol hill, let’s look back at where they stood when the nation needed them.
A time of tragedy is also a time to reevaluate our priorities. Radio is worth more as a diverse group of local entrepreneurs who live in the communities where they serve. It’s worth more to the local communities’ health, the local economy, local bands and even to investors. Nowadays, radio mergers play a shell game with debt that pays the aristocracy like Mr. Field first, while necessitating the firing of those who make the business run. Let’s use this quiet time to lay the groundwork for a media that is alive. Break up the majors and let unfettered local voices return. We need them now.
(Originally Published in Radio INK, Nov 13 2018)
(By Kevin McKinney) The notion that Facebook and Google are stealing ad revenue from radio is completely false. Radio is giving revenue to Google and Facebook. Nobody is stealing. So why do consolidators claim this? They use the Internet as an excuse to convince legislators to allow them to gobble up more stations. The horrible irony is that the more they consolidate, the more they push revenue to Facebook and Google.
If radio is to compete, it has to be unique to each region. However, consolidation stamps out local flavor when companies downsize to show profit. That’s the only way they know how to profit: to buy, gut, and sell. It’s bankers and high finance elites who are pushing for consolidation because they are the only ones who benefit. The winners make money off of the financial agreements and management strategies. The quality of the product is irrelevant so long as they can collect their management fees and interest.
Twenty-two years ago consolidators went to Congress with an urgent message. They said they had to consolidate radio because cable TV was threatening their industry. The notion is laughable. Cable TV never did threaten radio, nor did color TV, black & white TV or…the latest boogie man, the Internet. The medium of radio is only threatened when radio pretends to be live with phoney voice-tracking and absentee programming. No human would choose to play the endless loop of corporate music and commercial marathons that listeners are served.
Consolidators are also wrong to refer to the Internet as broadcasting. Broadcasting implies it is cast for a broad audience. The Internet is a packed menu of narrowcasting. There is no regulation to ensure that the content is family friendly or any market pressure to give the best content per hour. It’s just a library with social media attached to it. Radio, on the other hand, could have the advantage of being local and thoughtfully curated for the maximum relevance for the largest regional audience. Only people in Cleveland want to hear about Cleveland charities, and small Cleveland bands that they might see at small local clubs. Sadly, Cleveland will have to go to Google and Facebook because radio is not serving them anymore.
I remember when rampant consolidation made radio stop playing local bands in rotation. I looked everywhere for an option to replace what I’d lost. Eventually, the Internet came along to provide some solace. What I miss, though, is finding that content at the same time as everyone else. I miss being able to sing new songs with strangers. We can all still sing Queen together but there’s no critical mass discovering the same song at the same time for podcast listeners.
The loss of that critical mass is a loss for our economy. Shame on consolidators for robbing communities of their ability to hear themselves en masse. Consolidators are begging for competition to go away. Which is confusing because they got rid of competition 22 years ago with the Telecom Act of 1996. What they really want, is an excuse to fire even more staff and claim those savings as a short-term profit. They know they’re lying to us about their motives. But are we awake enough to see through this?
Competition makes great businesses thrive. Competing radio stations try to outdo, one-up, outperform, out-cool, and be more connected to the listener than their rivals. Once upon a time, the world culture was the beneficiary of the competition in hundreds of American cities as local DJs became ambassadors for local music movements, cultural developments, and local businesses and charities. The thirst to be #1 is what spurred stations to introduce the best bands to audiences.
There is still a glimmer of hope for radio. Let’s start by asking what is good for the consumer rather than what is good for radio. It’s by serving the customer that radio can be relevant again.
The consumer is not asking for more cookie-cutter format-copied radio. They are not asking for radio to pretend that it’s Twitter or anything on the Internet. Radio is an analog technology in a world full of people trying to escape a digital world. The future of radio would be bright if there were live DJs who were allowed to play the music they wanted to and speak about what they wanted to. Radio would shine as the most powerful communications medium on the planet if there were locally run, live, spontaneous communications occurring over it. But that’s not the case. And so we may pass the time on Spotify or doing one of the zillion things that social media is urging us to do or react to. I don’t know about you, but I want my local radio back for my sanity as well as the health of my city. It’s time for media policy to be taken back from Wall Street and given back to the citizens of this country.
-Kevin McKinney is the Producer and Director of the documentary “Corporate FM” which you can watch on Amazon Prime HERE
When consolidation first began, there was much talk about how the synergies would benefit everyone. The narrow ownership would create something greater. Small stations would suddenly have the resources of huge conglomerates. The sum would be greater than the individual parts.
There are two problems with this argument. For synergy to occur, the parts have to be different, so they add something unique to each other. However, consolidation makes all of the parts the same. They save money by creating a boilerplate and then applying that to all of the stations.
Secondly, they cared more about downsizing staff than synergy. So any benefit of synergistic resources was instantly lost because those resources were fired. Consolidation took many vibrant radio stations across the country and gutted them. The benefit of being purchased by a large company became a liability.
In my kitchen I have a spice rack of unique spices. If I were to combine them, I’d get synergy between the various tastes. I use some spice mixes but I also keep the diversity of spices so I may make dishes that are unique. If I got rid of those individual spices, my food would become predictable, much like radio. Synergy can bring opportunities to make something new and unique; but to corporate radio the word now means the opposite.
We’re at a point, where high finance is trying to convince the Trump FCC to allow it to gobble up more stations. To them, radio is worth more as a consolidated asset. But the truth is that radio would be worth much more it were smashed into hundreds of different companies.
I’m constantly hearing about former radio people who want to buy radio stations. These aren’t the high-finance types. They’re the former DJs, music directors and sales staff. The inmates want to run the asylum as they see fit and make local radio into a small business again. Small businesses have something that large corporations envy. Soul. The thrill of competition and the will to survive create more synergy than corporate radio ever dreamed of.
I think Forbes magazine is wrong. An opinion piece by big sell-off. I WISH he was right.wrongly predicts that bankrupt corporate radio is heading for a
Bankruptcies for corporations are legally different than for individuals. For you or me, in bankruptcy we either lose everything or receive a payment plan. For corporations, however, they can renegotiate the terms of contracts with unions and creditors. In some ways, it’s a win for them. “[Corporate] bankruptcy is effectively a financial incubator… the same way you keep the baby in the incubator until he’s ready to breathe on his own” says Boyce Watkins, professor of finance at Syracuse University. This is why they call it “bankruptcy protection”.
The problem I have with this, is that the government is protecting a company that screwed its employees, created an inferior product, and then tried to blame its failure on not being allowed to consolidate more. The court should be liquidating corporate radio into bite-sized chunks for young local entrepreneurs to revitalize. These bankruptcies reveal that consolidated radio is unviable and fiscally irresponsible. Huge companies with few local employees are by nature, out of touch with local listeners.
The CEOs of bankrupt radio are going to do everything they can to keep as many stations as possible. Creditors, however, would be wise to push for a sell-off. That move would create real cash and get them out of an industry that has lied to them (and us) about their viability since rampant consolidation began.
Radio INK magazine called him “One of radio’s best managers.” Click for Dick Taylor’s review of Corporate FM for the Amazon release.
This is a particular honor for us because Taylor has the vantage of a long time professional. Thanks for the thoughtful review.
Our hard look at what is causing the bankruptcy of IHeartMedia Inc. and Cumulus got us on this edition of the Economic Warrior. It was an economic card-trick that caused this whole mess in the first place.
The titans in corporate radio are finally going bankrupt (like we predicted). Here’s why.
- They failed to bring new relevant content. They pushed listeners to the internet in search of the new music that radio abandoned. If radio does play new music now, it’s from corporate playlists.
- They failed to feature their local communities. Corporate radio can’t promote a local community when nobody is live in the studio to interact with the locals. Furthermore, DJs are restricted to endorsing the corporate script, which leaves little time for local music, local charities or local businesses.
- They succeeded in fooling the financial press. Consolidators bought healthy stations at such high prices that firing the staff was inevitable.
- Private Equity (PE). When a holding company (PE) puts debt on an industry but is not responsible for that financial burden, bad management can be expected. To be fair, PE does not own all of radio, but they own enough of it to have artificially inflated the prices of radio stations across the market.
- They increased commercials. This doesn’t mean radio increased revenues because they also made those commercials cheaper. More repeat commercials per hour now grate on our nerves. Thanks.
- They fired all the DJs. Ok, there are still some DJs but they’re overworked and they can’t pick music. Live DJ’s were the heart and soul of local radio.
- They elected to buyout the competition rather than be better than it. This is actually a paraphrase of something that DJ/host Mancow told me. “When you buyout the competition there is no incentive to be the best”.
- They divided listeners instead of uniting them. They stopped broadcasting and started narrowcasting. The corporate owners divided us into narrow demographics to advertise to. Most people are more complex and nuanced than this. Dividing us up has also had a damaging effect on our nation’s politics.
- They gutted news departments. Imagine a time when rock stations had their own reporters and you will get a picture of a much more informed and civil society. Cutting the news department also made it harder for the station sales staffs to sell station ad time. They can’t brag about the stories that they broke or the audiences that they mobilized.
- The telecom act of 1996. What? Yeah something that congress did in 1996 ultimately is behind all of these reasons. This is what changed radio from a locally owned business into a high finance trading chip. Thanks Bill Clinton / Newt Gingrich Congress of 1996.
Cumulus / Clear Channel / “I Heart Media INC” want their killing of radio to be swept under the rug. We can’t let that happen, or they will repeat the cycle. They’ve done this before. This is why we put Corporate FM on Amazon Prime.
As of last week broadcasters no longer have to maintain local studios thanks to a new ruling by the FCC. Chairman Ajit Pai, himself a former Verizon counsel, pushed to abolish the “Main Studio Rule” that was meant to maintain the local presence of radio. He countered that it would benefit minority broadcasters because they would not have to pay for an expensive studio or staff. You see in Mr. Pai’s world of conglomerate media, a studio is a piece of corporate real estate. But minority broadcasters and small town broadcasters gladly maintain humble studios in some of the most impoverished (and low rent) parts of our country. These studios serve as a gathering place for programming in communities that corporate radio has abandoned. Locally owned radio will continue to have studios long after this rule, but the consolidators who wish to buy them out, now have added cash with which to make their acquisitions.
This gift will also allow Cumulus to cost cut and may help keep the bankrupt giant from having to sell off stations. It also allows the private equity firms that own Clear-Channel or “I Heart” to fire more staff and tighten their status quo of remote control radio.
The corporate giants want to blame the downfall of radio on anything but themselves. We just can’t stand by and let that happen or they will keep ownership after bankruptcy. This is why we’re sending them (and you) a little gift. Corporate FM is now on Amazon and Amazon Prime.
Help set the record straight on how radio was killed from the inside. Please share the film and add it to your watchlist.
These excuses are important because owners have used them before to retain possession after bankruptcy like they did with Citadel Broadcasting. The excuses are also used by any owner who wants to avoid scrutiny for skimping on the staff.
- The internet made me do it. The notion that a service that people pay for (the internet) could threaten a service that is free (radio) shows us just how bad radio has become. The last time I checked, new cars still have radios in them, and it is easier to access than the internet. They will try to blame services like Spotify while ignoring the fact that radio only plays predictable corporate playlists. Radio motivated us to search the internet when they started ignoring us. They could have integrated the internet into their local stations to strengthen the bond with us, but instead they just spent money on acquiring more stations.
- It’s the millennial’s fault. Blaming the audience is the same as blaming the victim. Radio continues to lose every new generation because the content is no longer curated by the new generation. Radio dictates content to us instead of playing our requests. Today “requests” have to fall within the pre-established corporate playlist. It’s an illusion of choice.
- The great recession of 2008. The recession only hurt radio because they had been firing the staff in order to pay their debts. In 2008, even the bankers wised up that radio couldn’t cut any more costs without cutting too deep into bone.
- The iPhone did it. Since the dawn of television, every new technology has been heralded as the death of radio. On a surface level it seems logical that you’d rather watch TV than listen to the radio because TV is like radio with pictures. But the real question is: what can you use radio for? Radio is supposed to be a passive medium of local expression. In other words, you can do an engaging activity (like driving) with radio. Cable TV, and Facebook do not change that. What does change that is when corporate radio owners fire all the DJs who made the station worth listening to.
- It’s the Debt (That they agreed to pay). This excuse it legit. What is not OK, is pretending like this is something that they did not already know. The numbers were there in black and white in the mortgage papers. They chose to buy-out the maximum number of stations rather than to responsibly own fewer stations. They also used something called private equity to foist debt on an industry while shielding themselves from the risk. Private Equity makes the stations responsible for debt while the owners collect fees. I find this outrageous. This is revealed further in the film on Amazon.
ClearChannel/”I Heart” banned this song when it first came out because they said it was “anti-radio”.
You can’t turn him into a whore
And the boys upstairs just don’t understand a
Well the top brass don’t like him talking so much,
And he won’t play what they say to play
And he don’t want to change what don’t need to change
Who plays what he wants to play
And says what he wants to say, hey hey hey
Cumulus stock has been sooooo low that they are being threatened with delisting from the exchange. Enter the “reverse stock split” (10/12/16). Here Cumulus takes all their shares and converts each 8 shares into one.
So lets say shares are worth 32¢ a share. ? Multiply that times 8 and they should get $2.56 per share which doesn’t sound as meager. The problem is that traders know that this is a desperate move. Today Cumulus traded at $1.05 which means that had they not split, they would be under 14¢ per share. Will they have to do this maneuver twice…three times? How low can they go?
“Reverse splits usually signal trouble and do nothing to correct what’s ailing the company,” says Frank Fernandez, the manager of equity trading at J.P. Turner & Company in Atlanta. “It’s a maneuver used to get the stock price over a dollar so the stock doesn’t get delisted, though statistics show that probably three quarters of recently reversed-split stocks trade lower following the split.”
So how did we get here?
Greedy consolidation produces monstrous debt which causes the firing of talented DJs and staff. It was the local staff that made radio worth more than $1.05 per share.
Steve Bell passed away this week in the news room at KCUR, the very same place where we interviewed him for this clip from the film. He was known for his resonant voice, but he brought a far-reaching wisdom with his years. There were things that young reporters missed that he would bring to a story just because he lived through the history of many stories.
He lamented that as only one man, he could only work on a limited number of stories. He said corporate radio stations that have 2 or fewer reporters are confined to reporting on only crime and traffic. They skip government. This bothered Steve because he felt that listeners needed more information in order to vote intelligently.
Steve was formerly a program director on the music side. Program directors have to endure complaints (and occasional praise) from the community. This is why they are so cool. The experience opens them up to the true diversity of the radio audience. Steve understood his audience in a way that few in radio do today. Love for that audience is what motivated him. It is also what I will remember about him.
When Corporate FM won the AMC Documentary feature award, I was very proud and shocked at the same time. I didn’t feel like the film was completely done. One of the judges (Rudd Simmons, The Life Aquatic, High Fidelity) gave me this advice: “Tour with this film for a year, and sit with every audience who sees your film. Then you can re-edit it.” I’m so thankful that I took his advice. Along the way, it won an Audience Favorite Award and I had Q & A sessions with very diverse crowds. I took a year off to let things settle; then rented an edit suite in the stock yards of Kansas City. The film was completely disassembled here. Some characters were added, some deleted. Entire scenes fell to the cutting room floor (you can see them in the DVD extras). Even a song by the Capsules made it in. During this time I fell in love with film-making all over again. If I felt like the film needed a shot from the mountains, I’d go to the mountains and shoot it. I rediscovered the process of deliberate story construction guided by the creative inquiry within.
With my 2 cork boards of note cards showing plot points (Walter Munch style), I cut the film we have today.
A nice thing about feeling “done” is that I can now pursue things like TV and VOD (Video on Demand). It’s been a long road to get here, but I find that the film and I are better for it. -KM
From: Justin Wittmayer
Sent: Thursday, March 31, 2016 10:40 AM
Subject: A new direction for KGO and KFOG “new direction” = loss of jobs
Today, we have set in motion new programming strategies for both KGO and KFOG that will help us better meet the needs and demands of our listeners, advertisers and community. Step 1: Blame the listener. By blaming them, the advertiser and community it shifts the discussion away from the rapacious greed of the Cumulus consolidators that caused this mess. Our goal is to reposition these two stations for future growth and strength through new and enhanced programming, and new additions to the KGO and KFOG teams, including programming veteran Bryan Schock, whom we announced this morning as the new OM/PD of KFOG and KSAN. Step 2: Shift the focus onto a well liked staff member. It’s no longer Atlanta dictating programming, It’s our pal Bryan Shock trying not to lose his job as he does everything Atlanta tells him to. Oh, and by the way, he’ll have plenty of time to do a good job since we fired all his helpers. We believe the new programming direction will put KGO and KFOG on the best paths to growth and success. Step 3: Make a belief statement. These are excellent because nobody can persecute you later for saying that you believe something.
Unfortunately, to achieve that goal, we had the difficult but necessary task today of restructuring our KGO and KFOG station staffs to allow us to meet the new needs of these two stations as we invest in new programming that is redefined, refocused and of the highest quality. Step 4: Acknowledge the difficulty of the firings and blame it on the bogus reasons you opened the letter with. Use the word “invest”. That’s so rare nowadays. Today, we informed the affected employees about these changes, which included the elimination of a number of full-time and part-time positions across these two stations, primarily in the news department at KGO and in key dayparts at KFOG. I want to thank those professionals who are leaving us for their contributions and service to KGO and KFOG, and wish them only the best as they continue on in their careers. Step 5: Thank star talent in hopes that they will not drag you into negative press about the station.
I want to thank the remainder of our team for working with us through this transition and in the coming weeks and months, as the new KGO and KFOG take shape. Together, we will build these newly imagined stations into strong and vibrant brands that our listeners and advertisers will love.
I will be sharing with you more specific details on these programming shifts and additions in the next few days and weeks. In the meantime, please reach out to me directly with any questions. Step 6: Make sure complaints come directly to you so you can squelch them.
Vice President – Market Manager (Guy who gets fired after he fires everyone else)
Cumulus Media Email Policy
PLEASE NOTE: This message contains confidential information and is intended only for the individual(s) named. Employees of Cumulus Media Inc. and its subsidiaries are prohibited from forwarding this email or otherwise disclosing the contents of this email, or any portion thereof, to any third party, including any non-employee of the respective companies. Failure of an employee to comply with this policy will result in disciplinary action up to and including immediate termination of employment. Step 7. Post threatening message at end to keep email from getting in the hands of some smart-ass blogger.
(Original Cumulus letter posted by Matthew Keys of The Desk.)
When I heard about the latest Cumulus bloodbath in San Francisco, I had to make this logo. About 20 staff were fired at KFOG and KGO. The financial press often ignores the real reason for these mass firings. The layoffs are part of the plan and not a freak result of a competitive market. Quite the contrary, consolidation occurs because competition is gone. It won’t matter to Cumulus if they fire their star talent because they also own the competition (who might have otherwise beaten them). Consolidators fire staff so that they may run a skeleton business and claim an increased profit through fewer expenses. It’s that simple.
Competition is actually what we need to end this radio nightmare. Businesses operate at the speed of competition, not at the speed of the consumer. When stations have to compete for the consumer, that’s when great programming occurs. However, corporate radio has pushed the government to create this alternate reality where competition is not allowed. Competition is bought out and consolidated. Rival consolidators now divide entire cities for monopoly control. In the past, many smaller broadcasters acted as disrupters and sent our culture into new, exciting places. Breaking up the consolidators would act as a stimulant to the economy through more local jobs and would also jump start the culture through more local programming. Music movements begin with faith and that is something that consolidators see as a negative on a balance sheet. It takes a human being who feels the music and knows one’s audience to make radio work. That is something that consolidation, by its very nature, destroys for quick gain.
Jim Ladd’s book Radio Waves, is part memoir, part historical narrative about the rise and fall of freeform FM radio. If you don’t know what freeform radio is, you will certainly recognize it in this book, as the very soul of radio. It’s the ability of a local DJ to pick music that they love, play it and speak as they like on the air for their entire show. Such freedom is now gone with tightly restricted corporate playlists and curtailed speaking times. Ladd shows with delicious detail how FM once garnered huge audiences through the simple force of sincerity and localism. The book may be a requiem for FM commercial radio, but is is also an unsettling reminder that good radio is just one decision away. But as long as corporate bosses and finance tycoons run radio, the “safe” choice of pushed programming will always win.
The final chapters of Ladd’s book read like a greek tragedy about the impending murder of the living LA rock station Radio KAOS. Out-of-town owners, motivated by ever-increasing appetites for cash, turn solely to accountants and research to determine programming. The result is a mishmash of mediocrity that tanks the station. The only person who learns a lesson from this is the reader, as the same catastrophe is played out over and over again as management moves up and DJs and listeners are moved out.
Radio Waves is an engaging read that is sprinkled with the author’s personable encounters with rock’s greatest legends. In the end, I was left wondering if all of us know that good radio requires localism and a talented staff; how long will it be till we reimpose the localism rules that were ditched by the government? The move is certainly ripe.
306 pages, St. Martin’s Press
High finance is secretly getting rich off of Radio while ordinary investors (and the tax payers) are stuck with the bill. Private-equity firms load tons of debt onto radio while hand-picking the management and skating with fees. It is no wonder that commercial radio is dying. Those in charge are not radio people. The film CORPORATE FM shows a way out of this.
Radio (like the United States) is the most relevant and vibrant when it is of the people, by the people and for the people. The out-of-town owners have no personal stake to make it live again. Lincoln might say…
Radio, the experts say “call it media”. Those experts are wrong and this is why it matters.
Many well-meaning radio consultants are afraid that emerging technology will destroy radio. These consultants even swayed the former head of NPR “National Public Media?”. Ask anyone on the street what it is; they call it Radio. Even at pledge-time the multitude of volunteers call it radio. These consultants believe that to save radio, it must become more like the internet. We already have an internet. If it were the 1950’s would we be telling radio to call itself TV? Radio survives because it is…radio first.
Changing from “Radio” to “Media” is wrong for 4 reasons.
1. It turns it’s back on 40 years of branding (for NPR). Who would tell Coke change its name from Coke? There are plenty of new popular energy drinks and esoteric teas are gaining market-share. It could make sense if you went only by the numbers. And that is exactly why the consultants get it wrong about radio repeatedly. Coke is Coke and Radio is Radio. …