The Radio Equalizer: Brian Maloney

09 November 2007

New Imus Employer - ABC Owner Faces Troubling Financial Picture

BRACING FOR THE WORST

New ABC Radio Owner Reports Disturbing Outlook





*** UPDATED BELOW ***


After their new employer delivered a grim financial outlook to Wall Street today, already jittery ABC Radio employees are bracing for substantial cutbacks across the board. For talk radio, the impact could be huge, as popular talk hosts, anchors and other staffers are caught in the crossfire.

Citadel - ABC owns and operates major talk stations across the country, including WABC/ New York, KABC/ Los Angeles, WLS/ Chicago, KGO - KSFO/ San Francisco, WBAP/ Fort Worth- Dallas, WMAL/ Washington, WJR/ Detroit and many additional outlets in smaller markets.

Making matters worse is the new and expensive Don Imus deal, which is expected to send many successful talkers to the unemployment line.

Though rumors of layoffs had been circulating for some time, Citadel Communications CEO Farid Suleman all but confirmed a coming wave of housecleaning in a conference call for analysts and investors held earlier today.

In fact, the earnings report was so dismal that it shocked industry analysts and led to yet another drop in Citadel's already sagging stock price, pushing it further into penny stock territory.

Given a brutal outlook for the radio business and its own particularly alarming financial future, the company was forced to write off an unexpectedly large portion of the value of its stations, sending investors running for cover.

At 1pm Eastern, CDL shares were collapsing, down $1.06 to a mere $2.80 per share, a more than 26% drop. That represents a loss of $280,000,000 in market capitalization.


There's no question that Citadel will attempt to right itself by slashing employee headcounts to an extent perhaps never before seen in radio. But the loss of so many successful hosts and highly- skilled newsroom staffers will greatly harm ABC Radio's product.

And even with drastic reductions, the cost savings will be minimal, especially considering the amount it is paying Imus.

In particular, the Imus deal is the wrong move at the wrong time, but by the time Citadel realizes this, it will be too late. Previously, we listed key hosts that are believed to be most in danger of termination.

In the end, the big question is whether Citadel bit off far more than it could chew in acquiring ABC Radio. It's too bad that ABC's airstaff is likely to pay the price for their new employer's mistakes.

Worse, the damage done to talk radio across the board will be substantial and hard to overcome. While the medium remains more popular than ever with listeners, some of broadcasting's top managers seem determined to kill it off for good.


UPDATE: as the trading day continued, CDL shares were pounded even further, closing down $1.46 at $2.40 a share (a 38% loss in just one day). Volume was a heavy 11.5 million shares (405% higher than normal) and Citadel's total market cap loss for the day was a staggering $385,000,000.

As recently as 2003, Citadel shares traded as high as $23.00.


FOR New England regional talk radio updates, see our other site. New: will continued arrogance get in the way of a new Howie deal?

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11 Comments:

  • My inside source at WABC tells me, Imus is hired under one condition , to alter his show into a 4 hour "Hillary is evil" bashing fest.

    He is now an RNC operative, otherwise Citadel would never hire him

    You control the media
    You own the media
    you control the message

    now stop whining, Imus is now another RNC talk show host.

    By Blogger Jared, at 09 November, 2007 13:57  

  • will greatly harm ABC Radio's product.


    being a rightwing propaganda outlet, already lowered the product's quality.

    profit is not even a motive to ABC radio, they are about the message, spreading propaganda, they are rewarded by the RNC.

    Operatives, most of the hosts attend GOP meetings on how to use the media to spread their lies. FACT

    it is a propaganda outlet, Imus will be part of the lies as well. It should be illegal, we do not have government media in America, WABC radio and Citadel is the practically government radio. What they do shuold be declared illegal propaganda.

    The entire network should be placed under arrest, crimes against America, much like Hitler's ministry of propaganda, they are criminals, using a supposed "independent and free" press to spread government propaganda. They deserve jail time, the entire network, they practice Un-american activities.


    This is not about free speech, this is about blatent RNC propaganda.
    If it was not a known fact, Hannity, Limbaugh, Levin and Ingrham attend White house meetings to guide their lies, I would not care less what they say. They are breaking the law. They are a co-ordinated propaganda machine.
    JAIL ABC RADIO, they are CRIMINALS

    By Blogger Jared, at 09 November, 2007 14:48  

  • Hush, hush....FLUSH, FLUSH!!

    By Blogger hashfanatic, at 09 November, 2007 15:56  

  • You call it right wing propaganda. I call it truth in Media.

    Don Imus attacked both the left and the right. He was not hired just to bash the Hillary express. If you believe that then you are all ignorant of what he stands for.

    Just wait another 23 days and you will see the Imus I know in all his glory.

    By Blogger Bruce, at 09 November, 2007 19:20  

  • That's a fairly good analysis, Brian.

    The big problem with radio revenues right now is the disporportionate number of corporatist dollars going to candidates in both parties. Radio most likely won't even get its typical paltry percentage of political dollar when the full tilt election cycle comes around next summer and fall. Let's face it, the RNC and corporatists bankrolled the wrong willing propagandists. Now the nation's tilting center left and the dead ender, scared witless lower middle class white guy that feeds his paranoia with a steady diet of right wing claptrap is no longer a worthwhile demographic to target.

    The corporatists see a sure bet in Hillary Clinton, the source of seething, loathing and anger of the pissed off pale face. It may get ratings but that isn't translating into revenue.

    Think about that, my right wing brethren. If you had cheered on the debate and encouraged left wing and liberal radio rather than deriding it at every turn, it could have actually made talk radio and the left/right debate compelling. But people like Brian, partisan driven programmers and sales managers and the sub-100 panty boys that post here didn't realize that defeating left wing talk sped the irrelevence of the medium. Aren't you proud?

    Talk radio is out of step with America and, as thus, out of sync with the buying public. National and local advertisers are moving on because radio missed the mark and is slowly and surely following it aging demographic to the grave.

    Take a bow, neocons. You're driving the death nails into radio's coffin.

    By Blogger Dave Carroll, at 09 November, 2007 19:40  

  • BDS at its best guys. I'm a conservative, I would never listen to Imus, and as far as I can tell, he is a liberal. You can have him and Geraldo. They look much better in liberal suits. And ABC radio is RNC propaganda? What a hoot. If it goes sour, it has to be liberal.

    By Anonymous Anonymous, at 09 November, 2007 19:48  

  • Can we get real here?

    Citadel was in financial trouble long before Don Imus imploded in April.

    Don Imus has been calling Hillary Clinton "Satan" for at least 5 years and probably longer...he was going to bash her anywhere he landed. And this was when he was employed by CBS/Viacom....a DNC "safe haven".

    Bo one...not Imus, not Citadel, not any reliable media reporter, has said any or all of Citadel's talk hosts will be canned...some might, but some ain't all that great to begin with.

    Citadel will probably offer Imus on the free market to see what the interest will be...even if he competes against other Citadel stations, that just means two income streams from Citadel product {certainly nothing original here...ask Clear Channel, CBS Radio, etc.}.

    Jared....lighten up, dude. I realize you're in a blue funk over the Dem's total failure in Congress, with their lies, deceits, and bumbling incompetence.
    Gee...I'd feel your pain, if I was Bubba Clinton.....

    Can't see Don Imus attending GOP meetings to create program content...he'll leave that to Charles McCord & Rob Bartlett....
    so relax, Big J....you always have Air DNC..er...Air America...if it hasn't closed down, mired in debt, with few stations and even fewer listeners.

    By Blogger Nick, at 09 November, 2007 19:49  

  • You know who else had an "inside source"? David Berkowitz.

    By Anonymous Anonymous, at 09 November, 2007 23:11  

  • jared's inside source what a laugh.

    By Blogger pf1, at 10 November, 2007 04:03  

  • "Making matters worse is the new and expensive Don Imus deal, which is expected to send many successful talkers to the unemployment line."

    Successful? Imus is a producer with a proven track record. Suleman looking to increase revenues by $70M for '08, existing product not capable of delivering this type of growth. Result changes!!!

    Broadcast is an efficient market.

    Imus Returns D3C 3...

    Chanx

    By Blogger channelXRFR, at 10 November, 2007 10:38  

  • The market listens to and patronizes the truth. If 'the majority' wanted liberal viewpoints owners would happily provide them. The fact that the true majority favors the current shows winning on radio and cable is proof of what is popular opinion. Rather than liberal (socialist) shows providing screeching banshee finger pointing, and having the listeners run screaming in the other direction, how about some content that people agree with? Eh?

    By Blogger Robert, at 12 November, 2007 16:20  

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