KXNO/iHeart Layoffs

[dexterhawk]

This is sad (dont know if it's been posted)

That blows.

 

[cyclone618]

I promise that we will have information coming. I don’t have answers right now. Just a really sad day. BUT I’m going to take this as an opportunity to do the following things:

1) Spend lost time with my family

2) Re-connect with God

3) My passion: covering the Cyclones

4) Figuring out how to build whatever the Register was to our state 30 years ago for the future.

thank you so much to all of you in this thread for the support. It seriously means so much. This forum is like family to me

Chris:
I know this sucks but you and the others will all get through it and be better off in the end.
Last October 1st I lost my job unexpectedly. That next Saturday while at the ISU/TCU game, I was notified that my brother was being admitted to hospice. I left the game and went to Omaha to be by his side. He died the next morning. It was the worst week of my life, but I knew the job issue was minor compared to other people’s issues.
I know you’ll still be busy with CF, but be sure to take some time off (probably more than you think you should) to do the things you mentioned. I started a new position with an awesome company near the end of October and it has been great. I only had a few weeks off but could have used more.
Many, many people have been in the same position, and everyone told me it would be for the better. I’m sure it will be for you and the rest of your KXNO team. Take care.

 

[CycloneRulzzz]

True, and maybe that makes this situation different

If they didn't have those I could see your side.

 

[Gunnerclone]

I thought the same thing......from what I can tell, Murph and Andy are stand up people overall and are the types that WOULD stand with coworkers vs their own interests....but it's true, ultimately people have to make decisions based on their own needs.

In this case, Murh and Andy could also leverage their popularity and capital to help others out, but even that's tough (meaning, what if they could help half of their laid off friends but not the other half, etc).

Murph and Andy are more like politicians. They blow with the public winds.

 

[c.y.c.l.o.n.e.s]

If you read this link it explains their restructuring plan. Not sure I understand it all. As mentioned earlier in this thread, they cut around 1000 people.

https://www.rbr.com/americas-top-radio-company-refocuses-on-common-needs/

The thing that bugs me most is the statement by the CEO.

"iHeart is the rare example of a major traditional media company that has made the successful transformation into a 21st century media company – one with unparalleled scale, reaching 91% of Americans each month with our broadcast assets alone, more than any other media company. We are now using our considerable investments in technology to modernize our operations and infrastructure, further setting us apart from traditional media companies; improving our services to our consumers and advertising partners; and enhancing the work environment for our employees.”

I hate the way that CEOs blow smoke about their company no matter what the situation. I'm sure this statement was crafted by their marketing department. So let me get this straight... You screwed your creditors out of billions of dollars by declaring bankruptcy after making horrible financial decisions and then screwed over 1000 employees during reorganization but you are a rare example of a successful transformation into the 21st century? Got it.

 

[ArgentCy]

A newspaper could charge $0 a line for an ad and they would still not get people to read a newspaper.. The delivery method has changed

The medium has been disrupted and the public now thinks everything should be free. Music. TV. Radio. All media. Just look at CF during a game. Someone always asks how to pirate a game.

There's little compelling reason to pay for news now, but that also starts to take the professional newsperson out of the equation. We're left with hack bloggers or weird conspiracy backers

A quest for profit is part of business. Greed by charging $7 a line for an ad? Jeez. Not sure if that's greed when a market supports it. Either way it's a sad situation

Radio has always been free. That model hasn't changed one bit. And I've seen some evidence that the numbers are flat to even up. So clearly something else has changed. Newspapers and radio are not the same even though some are lumping them together.

 

[BWRhasnoAC]

If you read this link it explains their restructuring plan. Not sure I understand it all. As mentioned earlier in this thread, they cut around 1000 people.

https://www.rbr.com/americas-top-radio-company-refocuses-on-common-needs/

The thing that bugs me most is the statement by the CEO.

"iHeart is the rare example of a major traditional media company that has made the successful transformation into a 21st century media company – one with unparalleled scale, reaching 91% of Americans each month with our broadcast assets alone, more than any other media company. We are now using our considerable investments in technology to modernize our operations and infrastructure, further setting us apart from traditional media companies; improving our services to our consumers and advertising partners; and enhancing the work environment for our employees.”

I hate the way that CEOs blow smoke about their company no matter what the situation. I'm sure this statement was crafted by their marketing department. So let me get this straight... You screwed your creditors out of billions of dollars by declaring bankruptcy after making horrible financial decisions and then screwed over 1000 employees during reorganization but you are a rare example of a successful transformation into the 21st century? Got it.

Sounds like a Mitt Romney job.

 

[DeereClone]

A newspaper could charge $0 a line for an ad and they would still not get people to read a newspaper.. The delivery method has changed

The medium has been disrupted and the public now thinks everything should be free. Music. TV. Radio. All media. Just look at CF during a game. Someone always asks how to pirate a game.

There's little compelling reason to pay for news now, but that also starts to take the professional newsperson out of the equation. We're left with hack bloggers or weird conspiracy backers

A quest for profit is part of business. Greed by charging $7 a line for an ad? Jeez. Not sure if that's greed when a market supports it. Either way it's a sad situation

Radio has always been free so nothing there is or has changed. OTA TV has always been and is still free so that hasn't changed either.

I think in this case it comes down to losing power when you don't have local ownership and the decisions are made in a board room thousands of miles away, with nothing but profits in mind. IHeart thinks they can play nationally syndicated garbage all day and a lot of us will still listen, because we like listening to sports talk, and they can probably make more money under that model.

 

[Sigmapolis]

Actually, consolidation of media companies started after the Telecom Act of 1996 which dramatically reduced important Federal Communications Commission (FCC) regulations on cross ownership and allowed giant corporations to buy up thousands of media outlets across the country. This led to accruing massive debts which were supported by high ad and, more importantly, classified ad revenues. Those high ad revenues meant that cuts could be made to production (layoffs in the newsroom of small-time reporters, etc) without hurting revenue which thereby increased profits. I suspect you can find some graphs that depict the consolidation of media companies, which had happened prior to 1996, accelerated shortly thereafter.

Until they murdered it, the golden goose of the newspaper business was classified ads. This was essentially money for nothing. You didn't even need to pay sales people a commission for it. You just answered the phone and recorded what they want. WIth these massive debt loads and a demand for profits by shareholders, media execs could gauge consumers by raising classified rates to whatever they wanted. In some markets, ad rates wen from $2/line to as high as $7/line. And people had no choice but to pay it.

Along comes the Internet revolution of the early 2000s and entrepreneurs everywhere were looking for ways to cash in. Enter online classifieds like Craigslist, Cars.com, Autotrader, etc. I read somewhere that online classifieds saved consumers something like $4B between 2000-2005. That means it cost newspapers $4B in the same time. I suspect that is the initial drop in ad revenue in your graph before Google even gets into the marketplace.

As the golden goose laid fewer and fewer eggs, the high debt loads could not be sustained and shareholder profits dried up, the death spiral started. The small cuts to the product when times were good had already push some away. Now layoffs were inevitable because of lost profits. In addition, subscriptions rates were increased. Paying more for less/worse content drove even more readers away. This further decreased ad revenue, which meant even more layoffs and/or more consolidation. More consolidation without the highly profitable ad revenue that had propped it up prior was a recipe for bankruptcy.

It was not that consumers shifted away from newspapers to online news that led to a drop in ad revenue. It was corporate greed that created monopolistic conditions that were ripe for innovation like online classified services. Media execs were greedy and ignored the signs that revolution was afoot. Their entire business model was propped up by gauging consumers and when consumers shifted away, they had no plan B.

TL/DR: Newspapers killed themselves by being greedy.

Yep -- plenty of big companies bought into or formed up and got into local media and communications in the 1990s, coincidentally right before the Internet cut the legs out of their subscriber base, traffic, and advertising revenues. I think that is more poor timing than really the fundamental cause here of the rise of the Internet.

Local newspapers and radio were actually a pretty steady and profitable industry prior to the deregulation of the 1990s that you point out and the dawn of the consumer Internet. Having a local monopoly like that can serve your bottom-line rather well if you manage it. So those big companies bought into that, thinking those profits would be a fixture, and the previous owners cashed out and headed to a beach in México, while nobody really appreciated what the Internet was about to do to their business model.

Then revenues crashed... costs cut, further consolidation and mergers, etc., all the stuff you point out. I think the point that you are implying is that there had not been the series of consolidations or if the industry had not turned its back on the old fashioned "all the news that's fit to print" nobility and ethos, then they would have kept their subscriber and their ad base and none of this would have happened in the first place.

Sorry. I am not buying it. The industry has done itself no favors during the downturn, but I would imagine most of those are out of desperation to stay afloat in an almost impossible situation. I doubt sticking to an old business model in the face of the utter collapse of their revenue base was going to work out for them. Everything you are talking about is a desperate rearranging of the deck chairs on a sinking ship when their revenue base collapsed, and the rise of Google is a perfect proxy of it.

Consumers -- the ones who do not buy subscriptions or support advertisers because they want it free and now and ad-free online -- are the fundamental cause here. We do not get what big companies try to force us to have. We get what we want.

 

[DeereClone]

Sounds like a Mitt Romney job.

Get out the binders!

 

[Cy$]

This is a really good post. Proud of you!

A blind squirrel finds a nut once in a while

 

[Clonefan32]

Controversial question:
Do we know that these moves aren't good for the company? It's not a non-profit.

On the surface it looks like a bad move but maybe it isn't. A company in trouble can't stand pat.

I don't think it's a matter of "good move/bad move". To me the bigger issue is how we got here. It looks to me like, as with many other industries, the smaller business were gobbled up by these larger, multi-million (or billion) dollar organizations. The problem here is someone like Iheart racked up a monumental debt load while failing to account for the fact that they were taking part in a dying form of media.

I think small radio companies could survive this kind of downturn. On a more micro level you can deal with a general downturn by investing in new relationships, finding good local talent, etc. With a larger corporation, they become a line-item as they try to keep their head above water.

So I guess I have a hard time deciding between "good move/bad move" when this situation is completely and totally self inflicted. They got greedy, over leveraged themselves, and now are gutting things in an effort to stay viable.

 

[Urbandale2013]

I don't think that's controversial. They just filed for bankruptcy and are shedding a ton of jobs nationwide. Financially it makes sense for them, even though the end result really sucks.

The only part I hate is how hard KXNO got hit compared to other stations.

https://radioinsight.com/headlines/183270/ongoing-list-of-those-affected-by-iheartmedia-cuts/

I don’t think it’s controversial to evaluate how to better make money. I think it is controversial to cut out most of your product and pretend like it will bring long term success. In the short term it probably makes sense to do this but in the long term it makes no sense. They destroyed their loyal following and made everyone mad.

 

[Urbandale2013]

Yep -- plenty of big companies bought into or formed up and got into local media and communications in the 1990s, coincidentally right before the Internet cut the legs out of their subscriber base, traffic, and advertising revenues. I think that is more poor timing than really the fundamental cause here of the rise of the Internet.

Local newspapers and radio were actually a pretty steady and profitable industry prior to the deregulation of the 1990s that you point out and the dawn of the consumer Internet. Having a local monopoly like that can serve your bottom-line rather well if you manage it. So those big companies bought into that, thinking those profits would be a fixture, and the previous owners cashed out and headed to a beach in México, while nobody really appreciated what the Internet was about to do to their business model.

Then revenues crashed... costs cut, further consolidation and mergers, etc., all the stuff you point out. I think the point that you are implying is that there had not been the series of consolidations or if the industry had not turned its back on the old fashioned "all the news that's fit to print" nobility and ethos, then they would have kept their subscriber and their ad base and none of this would have happened in the first place.

Sorry. I am not buying it. The industry has done itself no favors during the downturn, but I would imagine most of those are out of desperation to stay afloat in an almost impossible situation. I doubt sticking to an old business model in the face of the utter collapse of their revenue base was going to work out for them. Everything you are talking about is a desperate rearranging of the deck chairs on a sinking ship when their revenue base collapsed, and the rise of Google is a perfect proxy of it.

Consumers -- the ones who do not buy subscriptions or support advertisers because they want it free and now and ad-free online -- are the fundamental cause here. We do not get what big companies try to force us to have. We get what we want.

I think their point and the point I definitely agree with is the problem was the leveraged buyouts of media organizations. This combined with traditional media losing out on some of their ad revenue with the internet and readership to more niche entities killed the industries.

Whether anything should be done about predatory investing is another discussion for another place but in the last 40 years a lot of investing has been about maximizing returns and not about running successful businesses. Companies like iHeart are not good corporate citizens because they exclusively care about profit rather than providing a good or service.

 

[HFCS]

Whoa......national shows all around now? Wtf

I've yet to hear a national sports talk radio show that doesn't induce vomiting. It's like a dumber version of The View for men.

 

[HFCS]

Sat radio and podcast are the future. KXNO is fooling themselves if they think moron national shows locally broadcast will compete better.

 

[Sigmapolis]

I think their point and the point I definitely agree with is the problem was the leveraged buyouts of media organizations. This combined with traditional media losing out on some of their ad revenue with the internet and readership to more niche entities killed the industries.

I do see the point, but I do not see it as particularly relevant when their subscriber and advertising revenue bases crashed so hard. Bad and shortsighted decisions about content and talent could hurt on the margin, sure, but I doubt even the stupidest and most cocaine-fueled, money-grubbing MBA could cause an industry to lose 75% of its funds from its primary source of revenues if they set out to try. The Internet did that.

Again -- deck chairs on the Titanic.

Plenty of traditionally local or mom-and-pop industries went through waves of corporate acquisition and buy-ins from hedge funds and the like starting in the 1990s through present. Did any of the others have a revenue drop like that? Can you point to one? Local journalism is unique in this phenomenon, and it comes from the shift in consumer preferences because of the options and competition created by the Internet.

Whether anything should be done about predatory investing is another discussion for another place but in the last 40 years a lot of investing has been about maximizing returns and not about running successful businesses.

I did not realize their was a difference. Successful business make money, no?

Companies like iHeart are not good corporate citizens because they exclusively care about profit rather than providing a good or service.

iHeart sucks, obviously, but I will leave you with a Steve Jobs quote --

"I have my own theory about why the decline happens at companies like IBM or Microsoft. The company does a great job, innovates and becomes a monopoly or close to it in some field, and then the quality of the product becomes less important. The product starts valuing the great salesmen, because they're the ones who can move the needle on revenues, not the product engineers and designers. So the salespeople end up running the company."

Companies that act in the way you describe are ones on the way out. Ones that love their products and their customers are going to be sticking around.

 

[Clonefan32]

I've yet to hear a national sports talk radio show that doesn't induce vomiting. It's like a dumber version of The View for men.

I've always enjoyed the Deadspin article that took a deep dive into how ESPN created their own news cycle surrounding the Anthony Davis trade:

https://deadspin.com/espn-has-created-another-phony-news-cycle-out-of-its-ow-1831343140

Heads up-- a little foul language used in the article.

It's so indicative of how these national programs work. Generating their own "takes" only to report on their "takes". Just horrible product.

 

[c.y.c.l.o.n.e.s]

I don’t think it’s controversial to evaluate how to better make money. I think it is controversial to cut out most of your product and pretend like it will bring long term success. In the short term it probably makes sense to do this but in the long term it makes no sense. They destroyed their loyal following and made everyone mad.

They destroyed the loyal following of one radio station. I'm sure they are banking on the fact that we are soon going to forget about this and aren't going to permanently boycott all of these stations in Iowa. If you boycott KXNO but then just listen to The Bus then they haven't really lost anything.

Iowa[edit]
Ames

• KCYZ - 105.1 - Hot AC
• KASI - 1430 - News/Talk

Cedar Rapids

• KKSY-FM – 96.5 – New country
• KKRQ – 100.7 – Classic rock
• KMJM – 1360 – Classic country
• KXIC – 800 – News/Talk
• KOSY-FM – 95.7 – Top 40
• WMT – 600 – News/Talk

Davenport

• KUUL - 101.3 - Top 40
• KCQQ - 106.5 - Classic rock
• KMXG - 96.1 - Adult contemporary
• WFXN - 1230 - Sports
• WLLR-FM - 103.7 - Country
• WOC - 1420 - News/Talk

Des Moines

• KXNO - 1460 - Sports
• WHO - 1040 - News/Talk
• KDRB - 100.3 - Adult hits
• KKDM-FM - 107.5 - Top 40
• KDXA-FM - 106.3 - Alternative

Sioux City

• KGLI - 95.5 - Adult Contemporary
• KSEZ - 97.9 - Rock
• KSFT-FM - 107.1 - Top 40
• KMNS - 620 - Sports
• KWSL - 1470 - Spanish Adult Hits

 

[KnappShack]

Radio had always been free. That model hasn't changed one bit. And I've seen some evidence that the numbers are flat to even up. So clearly something else has changed. Newspapers and radio are not the same even though some are lumping them together.

I would respect your point if you had Wifi or SiriusXM in your car.

I haven't listened to a radio station over the air in forever. Streaming and satellite models are disrupting and trying to find a hold.

Are the radio demographics in the sweet spot? Are the teens and 20 year olds clicking on the radio or Spotify/Pandora/XM/YouTube?