If you think that only the radio industry is dysfunctional, think again.

There are four majors remaining in what’s left of the record business and EMI could lose control to Citigroup very soon – the bank that propped the label up with billions of dollars during hard times.

And it all could happen before the New Year.

The private equity firm of Terra Firma under the management of Guy Hands is already whispering that they may have to turn the label over to the bankers.


That sounds like radio and no good can come from it.

You almost can’t blame a bank for wanting its money back when you’re talking about billions. I get that. What they don’t get is that bankers don’t know how to operate anything.

I refer you back to radio.

Terra Firma lost a court battle not long ago with Citigroup where it basically said that they were lured into buying EMI – that’s fraud except that the courts didn’t buy it. 

$6.7 billion later, Terra Firma is in quicksand despite cost cutting almost certainly guaranteeing that one of the big four labels will be up for grabs when the bank takes over.

It would be as if Citadel filed for bankruptcy and then Cumulus wanted to steal it as it emerged. 

Hey, wait a minute! Didn’t that already happen?

There are serious repercussions for the music industry if Citigroup takes back EMI and eventually sells off the small parts.


Cumudel — What Happens When You Cross a Cumulus with a Citadel

You've heard of the banking concept called too big to fail?

The proposed merger of Cumulus with Citadel is too failed to be big.

Everyone thinks Cumulus CEO Lew Dickey is forcing a merger with the recently bankrupt Citadel to grow his media empire.

Well, don’t fall for it.

Dickey is trying to save his own neck as I will go on to explain. The last two radio groups anyone would put together is the red ink drenched Cumulus with the fresh from having screwed their investors Citadel.

Two radio groups behaving badly – only a desperate radio CEO could come up with this idea.

And make no mistake about it, Lew Dickey is desperate.

Cumulus has failed to turn around local sales even with the Atlanta-based national sales system that even a dummy can follow. Unfortunately for Cumulus, their salespeople are not dummies – at least not all of them. And those poor suckers hired from other industries with no experience are probably more naïve than stupid.

Face it.

The best part of watching Lew Dickey try to engineer an unfriendly takeover of Citadel is seeing Citadel CEO Farid “Fagreed” Suleman sweat and “Tricky” Dickey beg – in public.

Go ahead, admit it!

But the prospect of Cumudel is a not-ready-for-primetime maneuver born more of necessity on the part of Cumulus than the need of Citadel to sell out for $31 a share.

This battle is a Christmas present to all the screwed employees of radio. It has everything a drama could ask for – greed, jealousy, power and sex. Okay, three out of four ain’t bad.

I feel like I know these two pretenders like the back of my hand and believe it or not I know how the desired merger of Cumulus with Citadel is going to end and what it is going to mean. 


Music Media Predictions for 2011

Today I have 12 predictions for you about the year ahead in music and media, radio and the mobile Internet. Most of you who have been reading me for a while know we’ve had a pretty good record of seeing the music and media future. 

Here’s a taste of my predictions (counted down in order):

  1. What I think Apple will do to impact music and radio in 2011
  2. The Performance royalty for radio – yes, no?
  3. One major label will go bankrupt in the year ahead – we name it
  4. The future of Pandora
  5. The most endangered radio group CEO (take a guess)
  6. The hostile takeover of Citadel
  7. The first radio company to derive 10% of total revenue from new media
  8. The biggest new media business not on radio’s radar screen (but should be on yours)
  9. What’s next after Facebook and Twitter
  10. The future of paid subscriptions
  11. The unseen obstacle to providing content to 40 million iPads
  12. Clear Channel’s secret preparations for their big move in 2012

As low as 38 cents a day to subscribe to Inside Music Media. My 12 Music Media Predictions for 2011 might be a great way to get started.

Check out the options to subscribe (monthly billing or one year discount) by clicking “read more” then let me know what you think of these predictions. 


Radio Royalty Revolt

This piece is about real alternatives to the damaging music performance tax that is ready to be imposed on radio stations either by law or by concession.

There are real alternatives but you wouldn't know it from what's being discussed.

Just yesterday, there was some last minute maneuvering in Congress to get the performance rights tax for radio ready for House passage with an eye toward later Senate approval. Sooner or later, the music tax is coming to radio. I’m betting sooner.

There is a discussion in this article about the snowball effect on radio’s capitulation to the music industry even if it is initially at 1% of a station’s revenue. This piece outlines the latest behind the scenes machinations and the threat to music in new media.

Today’s piece also reveals new options going forward for radio stations and individuals who want to negotiate their own deals instead of having the NAB do it for them. There is precedent. A little known action as recently as a few weeks ago. I’ll fill you in.

Then, the “plan”.

Four steps that are completely legal and in your hands that can lead you to a livable deal with record labels.

The stakes are high.

The return of terrestrial music radio to a healthy place is on the line and without this approach, you can pretty much forget about harnessing those 40 million iPads that analysts say will be in the hands of consumers by next year at this time.

If you’d like to access this story, check out the options under “read more”.

Have a great day! -- Jerry 


Massive Radio Firings Ahead

This piece focuses on how the three major consolidators – Clear Channel, Cumulus and Citadel will reduce their number of employees over the next 12 months. It is my best projection and I name percentages and the most endangered positions.

There is a discussion about the mentality of venture capitalists who run today’s radio groups to get an idea of how they think on cutbacks and downsizing and there is a projection of what’s ahead for each group.

Clear Channel: The two biggest areas where personnel will be dismissed over the next year. The changing severance package likely to be offered. I’m predicting the eventual selloff of hundreds of Clear Channel stations due to the inability to pay off $19 billion in debt and how this will impact employment. How much smaller Clear Channel will be next December compared to today expressed as a percentage.

Cumulus: Lew Dickey is not really going to complete an unfriendly takeover of Citadel but he is going to continue his unfriendly takeover of Cumulus. The jobs most likely to see turnover even while Dickey is hiring wet behind the ears replacements. Some of his clusters will be running on empty so we’ll discuss the strategy, as we understand it. Cumulus’ workforce will be reduced significantly over the next 12 months. Don’t count on using the company copying machine to print resumes or much severance pay, for that matter.

Citadel: This odd-duck company is cutting workers for a reason different than Clear Channel and Cumulus. There is also a new influence to reckon with for employees there. This article discusses where the cutbacks are coming from and who will be wielding the axe going forward.

All in all – 2011 will have a deleterious effect on radio as we have known it and I’ll project where it will all end up in the next five years.

If you’d like to access this story, check out the options under "read more".