Bob Pittman and Mary Berner are in the corner offices for iHeart and Cumulus. They have received a lot of flak from radio veterans. I certainly have had my disagreements with them. I have never met either and don’t really have a sense for them as individuals. But it is time to evaluate the position that they are in and perhaps some of the mistakes made along the way.
When you are the boss, you get the credit or the blame. If you are a host or a brand manager, you are under ratings pressure. I have heard that news/talk radio stations don’t live by the ratings like music stations. That may be mostly true, but if there’s a terrible monthly or a book, good luck with that thinking. If you have started a job as a program director or a host in the last few years, you are likely still trying to reinvent the station.
Some stations need big changes, or the previous host retired and the new show is slow to gain traction. Well, Mary Berner and Bob Pittman were hired to clean up the mess that was created by people who escaped with their golden parachutes more than a decade ago.
Inheriting a Mess
Bob Pittman and Mary Berner walked into stifling debt and creditors who want their money back. Have you ever had financial problems? I certainly have. Getting calls from a creditor or creditors for a small debt is difficult. Imagine getting collection calls for billions of dollars that you can never repay. How does that discussion go? How would you respond? So, Bob and Mary are not just preoccupied with creating great experiences for listeners and advertisers — they are likely overwhelmed by pressure from all sides.
Now, I have never met Mary Berner or Bob Pittman. I don’t have a sense for them personally. But if you have had to administer a reduction in force, it sucks. Before these big corporate cutbacks, I was on calls with regional managers instructing the local cluster to cut a job or two. It was a terrible decision. One market manager I worked for evaluated office culture — there were a couple of staffers who were disruptors and not team players, so while tough, it made sense. The cuts we are seeing now are not for culture or efficiency. They are a desperate attempt to satisfy creditors.
Some of the people cut were worker bees doing several jobs while being an integral part of their communities. If you were cut, this didn’t have anything to do with your performance. These decisions were made by bean counters, likely in connection with the hedge fund geniuses just looking at expenses versus revenue.
Consolidation’s Lasting Damage
Now, are Mary Berner and Bob Pittman culpable for where we are as an industry? Did they make mistakes? I make mistakes every day. It’s not on purpose — we make 35,000 conscious decisions every day. Most of these decisions are made instantly. Some of these decisions are risks that are stupid; most, hopefully, are amazing.
When radio consolidation occurred, the top competitors for advertising revenue were newspapers and the phone book. Radio’s dominance with listeners was huge, but the revenue was anemic. The theory went like this: consolidation would provide revenue growth by absorbing the companies not as focused on growing their business. Here’s what happened in many cases — a consolidated cluster didn’t allow for growth among the lesser brands; it was too busy protecting the biggest biller in the building. This actually damaged radio’s innovation. I know more than one program director whose station overachieved in the ratings, only to watch the cluster’s market manager grow defensive of the cash cow instead of getting excited about developing another cash winner.
Let’s get back to Mary and Bob. There was never a moment where they were truly focused on innovation for radio. If you disagree, give me examples of new formats from the past decade. Why has there been a lack of innovation in radio over the past decade? It’s because even a short-term drop in ratings and revenue is considered a moment to panic. What are Bob and Mary to do? They are prisoners of their companies’ covenants.
Holding the Tail of a Debt Tiger
I thought the creditors would get sick of the bad debt on their books and demand that these companies sell off assets. I believe that if you showed up to Cumulus and iHeart wanting to buy a cluster at a deep discount, they would sell it to you in a blink of an eye. Audacy and Cox have sold off significant clusters in the past year — local businesspeople now own great clusters in Tulsa and St. Louis. I can only speculate that the buyers simply aren’t there.
So, what were Bob and Mary to do? Cumulus eliminated several positions in my market. iHeart eliminated several positions at a couple of stations that I ran. I know the pain and stress for those people who were displaced — I have been on the phone with several of them. It is crushing. Radio has been playing defense instead of trying to conquer their markets and gain market share. The debt carried by radio’s biggest companies is our industry’s biggest enemy. Mary and Bob are holding the tail of a debt tiger, and it is a losing proposition.
Peter Thiele is a weekly news/talk radio columnist for Barrett Media, and an experienced news/talk radio programmer. He currently serves as News/Talk Format Captain for Zimmer Communications. Prior to joining Zimmer, Peter held programming positions in New York City, San Francisco, Des Moines, Little Rock, Greenville, Hunstville, and Joplin. Peter has also worked as a host, account executive and producer in Minneapolis, and San Antonio. He can be found on Twitter at @PeterThiele.