Tuesday, January 27, 2009

Is Clear Channel Fooling Itself?

Last week’s Clear Channel bloodbath took an especially high toll on the sales departments. I am not questioning the need for cutbacks in the current economic environment. Clear Channel certainly is not the only company that has laid off employees. And Radio is not the only industry that has laid people off.

I’m just wondering about Clear Channel’s math, and its judgment. After all, good salespeople should pay for themselves. Sales personnel in most companies work against a draw. (Yes, some Radio companies pay them commission only.) Anyone not making or barely making his or her draw should not be working there, in good times or bad. But salespeople earning far more than their draw in commissions are worth their weight because they contribute big-time to the bottom line. Yet Clear Channel cut some senior people who were big billers, and then divided their accounts among more junior staff whose respective draws were smaller.

Okay, I get it. The draws or additional commission earned by the top sellers are no longer part of the P&L statement so the “P” gets a lot bigger. Armed with the numbers, John Hogan gets a back pat from the Mays Brothers, who in turn deliver the good news to Bain Capital.

The “P” getting bigger, however, takes into account a big assumption. That assumption is that revenue remains the same. And that’s what I wonder whether Clear Channel is understanding or wants to understand.

I am not talking about revenue influenced by the economy. I’m talking about revenue brought in by the client relationships, selling talent, knowledge and creativity of leading salespeople. In other words, the Clear Channel business model assumes that without top sellers, station billing remains the same since the accounts have been reassigned. Not so fast.

And what about new business? If you look at which salespeople historically have grown billing, you will be peering at senior sellers.

That CC’s decimation of sales staffs was done in this fashion was not a surprise. For several years, the company has been driving out senior people in favor of inexperienced types who agree to knock on doors in return for a paycheck. In fact, Clear Channel had been prodding its sales staffs to bring in more direct business as opposed to agency business; that way, the cluster does not have to rebate commission to an agency. Of course, virtually all major advertisers retain agencies.

A lot of media buyers at large agencies are voicetracked so to speak. With multiple markets to get on the air quickly, knocking out buys is sometimes a numbers-crunching, almost mechanical process. But relationships and solutions still count. And, those of us who have been around for awhile value the talent of senior sellers that cannot be replicated by the folks knocking on doors around town.

For many years, ABC used WYAY-FM as a flanker to protect Kicks (WKHX-FM), its Atlanta flagship. Yet Citadel chief Farid Suleman was once overheard by local staffers expressing his puzzlement regarding why two country stations would be in the same cluster. Enough said about leadership of today’s radio companies. Brace yourself for an interesting 2009.

You can email me at roddyfreeman@bellsouth.net. Thanks for reading.

Tuesday, January 20, 2009

Radio One's Chess Game

Last summer, a friend who is plugged in with Radio One CEO Alfred Liggins told me that Liggins wanted to move the successful urban talk format from 102.5 to 107.5, replacing 107.5’s 7-year-old Smooth Jazz sound. He added that Radio One wanted to then sell 102.5.

I can’t say I was surprised. Smooth Jazz stations had succumbed in a number of markets last year, starting with New York’s WQCD. The talk format on 102.5 (WAMJ), featuring the syndicated Steve Harvey, Warren Ballentine, Al Sharpton and Michael Baisden, was tremendously overachieving relative to its meager signal. The 107.5 (WJZZ) signal is Radio One’s best.

In the end, 107.5’s Smooth Jazz format was pushed off the deck by a combination of things: Arbitron’s PPM, 102.5’s success, Steve Harvey, and Bruce Demps’ personal mission.

The urban talk format’s shift to 107.5 will set off several changes at Radio One’s Atlanta cluster. At 7PM on Wednesday, January 21, 107.5 will begin simulcasting the talk programming of 102.5. Then on Monday, February 2, WPZE (Praise) will move from 97.5 to 102.5. Simultaneously 97.5 will begin a simulcast with 107.5. Hot 107.9 (WHTA), the company’s hip-hop station, will remain at the top of the dial.

My inclination would be to handle things a little differently but more on that later.

Arbitron’s PPM has not been kind to formats with high TSL and low cume, of which Smooth Jazz is one. So WJZZ probably would not have had a flourishing ratings future.

WAMJ (102.5) has the weakest signal and best ratings of the Radio One properties in the early going of the PPM. WAMJ’s 3,000-watt signal, emanating from Ben Hill, does okay in town but runs into problems in Mid and North DeKalb, where WLKQ, 102.3 in Buford, causes splatter even on good car radios. A couple of years ago, Radio One offered to pay WLKQ owner Davis Broadcasting to move the 102.3 tower 5 miles farther from Atlanta, so 102.5 could move to a more central location. Not surprisingly, Davis declined.

Steve Harvey walked onto the syndicated morning stage in 2005 and immediately took the battle right to Urban AC morning fixture Tom Joyner. In market after market, Harvey beat Joyner and became a hot property for syndicator Premiere. WAMJ grabbed the show, and it propelled 102.5 to ratings glory. In morning drive, Harvey at times edged Joyner on Kiss 104.1 (WALR-FM) in key demos despite WAMJ’s puny signal. The comedian’s potential on a bigger station was obvious, especially since he was moving his home to Atlanta.

When PPM in Atlanta became a reality in October, Joyner was #1 of all stations in morning drive (Persons 6+); ditto that performance in November. Observers theorized Joyner’s emphasis on the election and its aftermath was the reason. The December PPM, however, showed both Joyner and Kiss overall jumping into the #1 spot.

A radio acquaintance told me she knew Radio One Regional Vice-President Bruce Demps when they worked together in Florida. She remarked, “Bruce is on a mission,” a mission that has not been on track so far. In a highly-motivated attempt to narrow the ratings gap between V-103 (WVEE) and Hot 107-9, Demps cast aside the well-regarded Jerry Smokin’ B as Hot’s PD. Original Hot PD Steve Hegwood, for whom Radio One corporate had no more room in DC, was dispatched to Atlanta to head the cluster’s programming. Despite some on-air changes, the huge ratings gap remains.

Bruce Demps felt if Tom Joyner was #1, and Steve Harvey beat Joyner all over the place, Harvey could kick Joyner’s butt on a better signal. Of course, higher ratings mean more advertising revenue. So the move to 107.5 makes some sense. But wait…I said Demps is on a mission. He wants to be #1, needs to be #1, and is leaving no stone unturned. To make sure the scan on every potential listener’s radio stops at Steve Harvey, Demps will use the current Praise signal at 97.5, proven capable of getting ratings on its own, to duplicate the programming of 107.5.

Personally I think Radio One has it partially wrong. Moving its most-listened-to station to its best signal at 107.5 is a logical decision. And 107.5, with its antenna around the corner from Perimeter Mall, does have its strongest penetration in the northern areas. The 97.5 signal, beamed from Tyrone south of Atlanta, obviously provides more solid coverage in the southern portion of the market.

The 107.5 signal does become unlistenable on a small stretch of I-85 in the Tyrone/Peachtree City area. However, 107.5 throws a city-grade signal over all of Atlanta. In fact, its city-grade signal stretches south of Atlanta. While I recognize Radio One’s desire to deliver a clear signal to the large African-American population in Clayton and South Fulton, the 97.5 simulcast seems a waste of a valuable signal, even more so with Steve Harvey, a destination morning host whom people will seek out. The great majority of the 97.5 and 107.5 signals city-grade the exact same geography.

Here’s what I think Radio One should do in order to maximize ratings and revenue. Steve Harvey mornings and Michael Baisden afternoons, though long on talk, were designed for Urban AC stations. I would move Harvey, Baisden and evening host Si-Man from 102.5 to 107.5, and then add urban AC in middays. That would give Radio One a bona fide competitor to Cox’s Kiss 104.1, which has a much more powerful signal but transmits from Newnan.

I would leave Warren Ballantine and Al Sharpton in middays on 102.5. The election is over, and their stellar 2008 ratings performance may or may not continue. I would fill the other dayparts with urban talk product. The station might want to go for former Atlanta Sunday morning icon Ike Newkirk, who would be a perfect fit. Syndicated product is also available, such as American Urban Radio Networks talk host Bev Smith and AURN sports talker Ty Miller. Other options include a simulcast of such a show as WOL/Washington’s Joe Madison or WWRL/New York’s Errol Lewis. A mostly-syndicated talk outlet at 102.5 would be a low cost proposition that could add significant billings. Finally, I would leave Praise where it is, at 97.5.

A couple of other wrinkles are in the Radio One master plan but at least 18 months from fruition. The company has a construction permit to move 107.5 to a new tower near Jimmy Carter Boulevard and Buford Highway. Power will increase from 21,500 to 50,000 watts at about the same height as its present antenna.

Radio One’s primary motivation to increase power is not a better signal for 107.5; it’s about making Hot 107-9 more competitive with V-103. Did I mention that Bruce Demps is on a mission? The 107.5 move will lessen the short spacing problem between 107.5 and 107.9, enabling 107.9 to increase power from 27,000 watts to 35,000 watts.

I have to admire Radio One for what it’s accomplished in Atlanta. The company went from zero stations in 1994 to 4 stations without acquiring one existing Atlanta station. That enabled R1 to establish a viable Atlanta cluster at pennies compared to purchasing existing Atlanta signals. We’ll soon learn if Radio One’s upcoming moves were the right ones.

I would love to hear from you. Email me at roddyfreeman@bellsouth.net. If you ask me not to quote your comment, I promise not to.

Monday, January 12, 2009

94-9 The Bull: What Was CC Really Thinking?

Just weeks before Clear Channel Market Manager Jerry Del Core was to be replaced by Chuck Deskins in 2006, CC head John Hogan was overheard muttering the following in fist-pounding fashion as he was leaving the station: “We’re gonna make Atlanta work!”

It’s no secret that the Atlanta cluster has been Hogan’s Achilles heel. The cluster includes 2 fine signals, 94.9 and 96.1; and 2 move-ins that cover the market plus an AM. Billings had taken a high dive, down an estimated $22 million from 2004 to 2005. Del Core, who was brought in to right the ship at the end of 2004, had billings rising somewhat in 2005, but not high enough and soon enough for the growingly impatient Hogan.

Rumors started flying in the fall of 2006 that Clear Channel was going to change all of its FM formats. The rumor came to partial fruition when the legendary 96 Rock moniker was retired and replaced by young-skewing Project 9-6-1. Whether that shift was wise is another discussion for another time. The 96.1 move, however, was overshadowed in short order by the format flip at 94.9 from soft AC to country in December.

Prior to launching 97-1 The River at the start of 2006, Cox did research on where the market’s holes were. The station had a huge signal across the market’s northern environs, leading observers to speculate that country might work. Nevertheless, the research indicated that Kicks 101.5 listeners were satisfied with the product that they were getting; not thrilled, mind you, but satisfied.

With Kicks the dominant station and Eagle 106.7 as a flanker, the market had no hole for country. Together the ABC (at the time) combo had a 12+ Arbitron share of about 7.5%.

Clear Channel’s Lite 94-9 was a successful soft AC station, though not as successful ratings-wise as it had been under the Peach moniker for years. But, Lite was billing approximately $15 million and, with live local talent in only morning and early midday, not prohibitively expensive to run.

So why did 94-9 flip a successful station to a format for which the market had no hole? Our guess is that the Clear Channel brain trust looked at the $24 million or so that Kicks billed. In their utter frustration and determination to grow revenue, Clear Channel decided they wanted some of that, format hole or not.

The Bull burst onto the scene in December, 2006, jolting Lite listeners enjoying their Christmas music. The Bull’s initial theme was “The biggest stars, the biggest hits.” Imaging was aggressive.

The new CC station showed some promise. The station ran jockless with a lower commercial load than Kicks. The only strange element of the original Bull was the inclusion of songs by classic rockers such as Steve Miller and John Mellencamp, presented within the context of, “We play all kinds of country.” A massive January TV campaign was designed to induce trial, and according to the Arbitrends, it did.

This post’s title encompasses two issues. The first of course is what drove Clear Channel to blow up Lite FM and introduce The Bull. The second is what got into the mind of company management, making them think they could slap anything on the air, and Kicks would just roll over. The inferior sound of the station was especially surprising given that Clear Channel's national country PD, Clay Hunnicutt, sat in the driver’s seat.

Kicks was not a great station but a good one. It had finally gotten its morning act together for the first time since Moby, as Cadillac Jack gave it an instant heritage show. The remaining Kicks air force of Kristen Gates, Bill Celler, Wylie Rose and Scotty O’Brien was solid, and PD Mark Richards has always appeared to be a master of formatics.

In early 2006, The Bull changed course, replacing its in-your-face imaging with a laid back sound, as the station’s positioning became “Real Comfortable Country.” Although it later dropped the positioning, The Bull continued as a laid-back alternative to Kicks, and with an expansive playlist to boot. The exodus from Kicks decided The Bull was not the promised land; when all was said and done, Kicks handily won the Winter, 2007 book although The Bull did take a little bite out of the large Kicks share.

The real mystery came next, as The Bull introduced Nashville’s Big D & Bubba on a voicetracked, patched-together basis. Voicetracking can work in most dayparts, but putting on the show in morning drive in Atlanta had everyone scratching his head. What were they thinking? The Bull continued plodding along, getting handily beaten by Kicks and even edged by the ABC flanker, Eagle 106.7. The Bull was live and local from 8AM to 7PM with Paul Coffy and Lance Houston but was truly a second-rate station.

In January, 2008, The Bull made an earnest effort to establish a real morning show when the station hired Cletus T. Judd, who had returned to his native Atlanta after a ton of success at WQYK in Tampa. However, The Bull had a little problem, the lack of the budget needed for Cledus to play the role he had played at WQYK, the comedian who chimed in with punch lines.

Paul Coffy, not exactly a morning talent, would identify the songs, sounding like an interpreter. Cledus would take it from there, supported by Jamie Massey and later Kristen Gates. But Cledus just was not capable of taking it from there. An employee at The Bull told me that at WQYK, a morning host carried the show, and Cledus chimed in with funny lines.

Early in 2008, Citadel, now owners of Kicks and (the former) Eagle 106.7, bestowed two gifts upon Clear Channel. In a budget-cutting massacre, the company released morning co-host Kristen Gates, afternoon driver Wylie Rose and evening talent Scotty O’Brien from Kicks, and flipped Eagle 106.7 to a syndicated oldies format. Kicks replaced Wylie Rose and Scotty O’Brien with Seri Rose in middays and Rob Lee in evenings, both minor-league caliber talent. Midday host Bill Celler, a staple at Kicks for years, reclaimed afternoon drive. The morning show was improved slightly with the addition of former Eagle morning co-host, the talented and likeable Dallas McCade.

The Citadel massacre provided a great opportunity for The Bull, but the station just limped along as a bastion of mediocrity, continuing to rank toward the bottom of the pack despite being one of the market’s best signals.

Mid-2008 was the time for Clear Channel/Atlanta’s biannual replacement of its Market Manager. Chuck Deskins was superseded by Melissa Forrest. (Deskins, however, was given an excellent job as Director of Sales for Clear Channel’s Miami cluster.) Forrest is known for her programming smarts and product focus, and she reportedly has been all over The Bull.

The ax was applied to Cledus T. Judd early in the fall. Thanksgiving weekend was as good a time as any to start a re-launch with 3,000 songs in a row, commercial free. When The Bull returned to regular programming the following week, Madison Reeves debuted as the midday personality from 9AM-2PM, proving you can be two places at one time. Reeves is also on Birmingham’s 103.7Q from 9AM-2PM. Of course, her shift at The Bull is voicetracked, which can work in middays. Reeves has a star quality about her and is a big improvement.

Evenings are now ably voicetracked by Ty Bentli of Chicago CHR station Kiss 103.5, replacing the laid back Kix Layton, who also was voicetracked. Bentli is excellent also. Moreover, the music and imaging are both vastly improved, with the music more familiar and the imaging more aggressive and creative. The station has come alive to some extent. The weekend jocks continue to be very weak.

The key to whether The Bull will challenge Kicks is mornings. For now, Kristen Gates and Todd Veal are holding down the fort.

Atlanta is a huge urban radio market, and the country shares are limited. But the market probably could handle 2 successful country stations. Kicks has given The Bull an opening, and The Bull has started to take some advantage of it. The Bull has languished for 2 years. Will it really get up and fight?