Liberty’s Next Move in the iHeart Takeover

They own 5% of iHeart now but failed to take control just prior to iHeart’s bankruptcy as John Malone expands the mergers long game.

Malone is not messing around.  He took the unusual step of asking the DOJ to approve the merger before he gets it done.  Approval is usually sought after you have a deal.  Liberty is playing a chess game with principal iHeart stakeholder Bain Capital.  We’re now learning why a beleaguered radio industry is so critical to Liberty’s future.  How they will likely remake iHeart and the significant effect the merger could have on iHeart’s main competitors – Entercom and Cumulus as well as the music business.  For surviving iHeart employees – which side should you root for?

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Entercom Memo Muzzles Sports Talent

Sales and programming have always been a tough balance in radio.

Where sales dominate, the product tends to be compromised and where programmers have unfettered control, the station can become difficult to unlock maximum ad revenue.

It’s a sensitive balance.  One Entercom sports station (they have sports radio in 29 of the top 30 markets) actually went there – put it in writing in a recent staff memo with some colorful language that interferes with programming and putting the station at a competitive disadvantage.  We have the memo.

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The Countdown to Live Events

The music business is driven by live events.  And the radio industry now more than ever needs the concerts, local events like Jingle Ball and Wango Tango to augment the decline in ad revenue that started several years ago at the hands of digital competitors. 

Then came the coronavirus that suddenly ended the likes of these events and bigger and important music business scenes like SXSW, Coachella, Bonnaroo plus scores of indoor venues shut down by physical distancing restrictions.  No vaccine in site just hope.  Everyone agrees that live events must return for the music business and for radio’s moneymaking live events but the question is when?  As it turns out a very precise answer may be found in the Spanish Flu pandemic of 1918.

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How Powerhouse WBEB Lost 60% Of Its Audience

For 50 years Jerry Lee spent his way to number one in ratings and revenue in Philadelphia with one radio station doing things that were proven to be counterintuitive for radio.

Radio wisdom says cut.  Lee said spend and the results are indisputable.  Over the years more than 10 times well-funded and orchestrated attacks on his FM station were launched and Lee won leaving the others defeated.  In less than 2 years the new owners did what competitors couldn’t do for 50 years – totally tank WBEB-FM.  It isn’t as simple as just cutbacks being the culprit.  It is totally misunderstanding the stations DNA.  With the pressure on due to coronavirus-related advertising shortfalls, studying the decline of WBEB could be lifesaving for others. 

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Entercom Eyes Benefits Cuts

There is more belt-tightening coming as Susan Larkin takes over for longtime COO Weezie Kramer.

This year alone Entercom workers have been asked to take voluntary pay cuts, mandatory weeks off without pay, furloughs without an end date while others have been fired in greater numbers than ever before.  Turns out the first cut wasn’t the deepest.  To coincide with Entercom’s recent restoration of 20% pay cuts there is this to offset it.

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