KXNO/iHeart Layoffs

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BryceC

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Not entirely true. Corporate greed, deregulation, and low interest rates allowed for the creation of these mega media companies. As they gobbled up local stations, they also piled up debt. Then had to gut these stations as a way to turn a profit or increase profits for shareholders. This started a death spiral - gutting the local media sites which then reduced readers/listeners which reduced revenue which led to more cuts and on and on. That (plus Craigslist - classifieds where a HUGE profit center for newspapers) hurt way more than online content providers. Once quality of local media declined and the number of online offerings increased, audiences shifted. But that was a reaction to the decline of local media, not the cause of if.

We'll agree to disagree on this. The revenue for papers were most impacted by classifieds, that's 100% true. But the decline is still largely from the internet. Say what you want about the papers but I used to read them ravenously. It was the only real source for news. I remember heated debates about where ISU was vs. Iowa on the page, how long or how many articles there were, etc.

If that was still the only real source of ISU news, I'd be subscribing. From 2007 to 2017, the register lost half of it's subscribers. People my age and younger don't get the paper. The amount of content available for me to read about ISU has never been higher, and quite frankly, it's never been better.
 
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Cydkar

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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.

Didn't the people that got let go take part in a dying form of media? I AM not blaming them for losing their jobs, by the way. Not even 0.00001%.

It's pretty clear that those people will adapt and, I predict, be better off.
 

cycloneworld

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Not related to the layoffs (which suck. hard.), to me it shows the importance of spending your money locally. I’ve been guilty of convenience, Amazon, Target, etc but after I moved jobs a few years ago into the East Village, I’ve gotten to know some of the shop owners. That’s a HARD way to make a living.

This year I committed to buying all Christmas gifts locally and it wasn’t easy. But I did it. The more we all support local entities, the more ad dollars they have to pour into these guys’ next venture to reinvent local radio. It’s difficult but not impossible.
 

Boxerdaddy

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Sat radio and podcast are the future. KXNO is fooling themselves if they think moron national shows locally broadcast will compete better.
Maybe i'm just getting old, but I rarely go back and listen to any podcasts. I do watch youtube channels, and some of that content is older, but the reason I listened to radio was that it is current and you could participate by tweeting or calling in if you had a strong opinion. In this day and age, a few hours later and the content could look pretty outdated. I'm sure there other formats that will work, but radio was so easy...start your car and oh it's the fanatics. I didn't have to turn there because my dial was already set from my morning commute.
 
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Urbandale2013

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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.



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



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.
Maybe you are arguing semantics but the last part was my point.

The difference from what I’m talking about is short term returns vs long term sustainable growth.

I actually think there are a multitude of examples that prove my point. We’ve seen it in a bunch of retail companies. Toys R Us was bought by its parent company via a leveraged buy out. They failed because their debt load and a management team that wasn’t fully invested in the company failed to adapt to the new market place with the internet.

There are plenty of examples of companies that saddle brands with debt don’t invest in the product and then are handcuffed because they have to much debt.

For news media you saw the same thing. Leveraged buy outs created large conglomerates which then didn’t invest in the product. As they failed to invest people were intrigued by the internet options. As people turned to the internet options they failed to invest as revenue shrunk. It then has become a cycle where they fail to invest in their product.
 

BryceC

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Maybe i'm just getting old, but I rarely go back and listen to any podcasts. I do watch youtube channels, and some of that content is older, but the reason I listened to radio was that it is current and you could participate by tweeting or calling in if you had a strong opinion. In this day and age, a few hours later and the content could look pretty outdated. I'm sure there other formats that will work, but radio was so easy...start your car and oh it's the fanatics. I didn't have to turn there because my dial was already set from my morning commute.

Honestly my car radio is set on bluetooth to connect to my phone, and to go down the dial to AM or FM I have to almost remember every time.
 

Psyclone

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"To ambush these dedicated, respected pros at 8 a.m. is an insult to them an everyone who listens." That right there is exactly how I feel. Layoffs and cutbacks happen, but the manner in which you implement the changes means something, and the overlords at iHeart chose the wrong way to go about this. They showed no character and even less class, two things those who were fired - especially CW and Peterson - have in spades.

There is rarely a good way to handle these kind of things. Options are probably limited even further when the jobs involve people whose voices go out over the airways.

I feel bad for those that lost their jobs and hope it leads to something better.
 

BryceC

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As they failed to invest people were intrigued by the internet options. As people turned to the internet options they failed to invest as revenue shrunk. It then has become a cycle where they fail to invest in their product.

People were going to turn to internet options anyway. There was absolutely no stopping that.

Mismanagement is apparent in what happened. But there was no stopping the greatest technological boon in our lifetime.
 
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Sigmapolis

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Maybe you are arguing semantics but the last part was my point.

The difference from what I’m talking about is short term returns vs long term sustainable growth.

I actually think there are a multitude of examples that prove my point. We’ve seen it in a bunch of retail companies. Toys R Us was bought by its parent company via a leveraged buy out. They failed because their debt load and a management team that wasn’t fully invested in the company failed to adapt to the new market place with the internet.

There are plenty of examples of companies that saddle brands with debt don’t invest in the product and then are handcuffed because they have to much debt.

For news media you saw the same thing. Leveraged buy outs created large conglomerates which then didn’t invest in the product. As they failed to invest people were intrigued by the internet options. As people turned to the internet options they failed to invest as revenue shrunk. It then has become a cycle where they fail to invest in their product.

I do not think it is semantics -- good products and good customer experience first means a good company. I think we are converging to the same point.

:)

I still do think local media is a special case, though, because of the effect the Internet had on advertising revenues. Here is a chart for retail/department stores, which you aptly bring up as a comparison for another industry riled by the Internet --

47232146_15345119842963_rId6.png


So department stores lost around 33% of their sales to the rise of the Internet. Even that sector did not get the 75% ding that local media got. Plus, look at all that growth for the red line that I imagine the blue line was imagining would be theirs circa 1995.

Leveraged buyouts and the like are fine when you think you are buying into traditionally profitable industries, which local media was before the Internet. When that profitability dries up and collapses just a few years after deregulation let the dogs loose on consolidation of local monopolies, and all the sudden those monopolies are not profitable anymore, then the problem of those buyouts was not doing them in the first place, but doing them not realizing an entire sector's business model was about to become obsolete.
 

Psyclone

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Wouldn't know the specifics of anybody's contract, but all of mine through the years had non-competes built-in. They generally hold water. iFart could waive that, but likely won't.

My guess is that it would be at least 6 months until any of them could work in radio again in DM.
Are non-competes binding if an employee is fired without cause? That would seem hard to enforce.
 

jbhtexas

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Sounds like an opportunity for someone to call iHeart and see if they want to sell KXNO, and turn the station back into a locally-owned local-content station.

The question is whether that venture to create a locally-owned local-content AM (or FM) broadcast station is economically feasible and viable.

I don't care for big media giants, but the bottom line is that most of the 800+ radio stations that iHeart owns were likely once locally-owned. For some reason, the local owners sold those stations. Maybe it was because they just were tired of the business and wanted to cash in, or maybe it was because locally-owned independent stations in many markets can't survive. I guess that is the question...

For every buyer there is a seller...
 
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beentherebefore

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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

Advertising generally was always better for the medium selling the space/time (newspaper, magazine, billboard, radio, TV) than it ever was for the advertiser. Still is. Most advertising is overlooked by the very people companies think they are reaching. Think of how often you flip channels during a commercial break. How often to you click on an ad on a website? Lots of people block ads.

But businesses still advertise. Smart businesses know they need to be more careful with their advertising spending. That certainly has been part of the struggle local radio and newspapers have ad with revenue.
 

beentherebefore

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Sounds like an opportunity for someone to call iHeart and see if they want to sell KXNO, and turn the station back into a locally-owned local-content station.

The question is whether that venture to create a locally-owned local-content AM (or FM) broadcast station is economically feasible and viable.

I don't care for big media giants, but the bottom line is that most of the 800+ radio stations that iHeart owns were likely once locally-owned. For some reason, the local owners sold those stations. Maybe it was because they just were tired of the business and wanted to cash in, or maybe it was because locally-owned independent stations in many markets can't survive. I guess that is the question...

For every buyer there is a seller...
And the big media companies offered tons of money for those stations! In many cases it made financial sense to the original owners to sell.
 
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capitalcityguy

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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.

The company is in trouble, but IMO this is not understanding the success of KXNO and what it means to central Iowa. They big wigs are probably assuming we'll just be as happy with national radio hosts. That might work in a market with NFL, NBA, etc teams. But we are a college sports market first.