Do you think things would have been better off, or more creative without these behmoths around? Or was it all done soley so a few people can
get rich?
Historically, people like Marconi and Thomas Edison got into radio to get rich. So there's nothing new there. Same with Bill Paley. And they did. A lot of people got very rich owning radio stations in the 30s, 40s, 50s, 60s and 70s. The story of the 80s was that the founders of radio were looking to cash out. The problem was radio was too small a platform for major companies like GE or Westinghouse to make money any more. So lots of people were selling, and the only guys buying were Robert F.X. Sillmerman and Jeff Smulyan. Big media or electronics companies simply weren't interested any more. They were the companies that built radio. So the "behemoths," as you put it, have always been around. Even the family companies like Sonderling or McLendon had become behemoths by the 80s.
But the question was: Who was going to provide the business support in the future? The answer came in investment companies. But the people building radio by the early 90s were building radio-only companies. Because quite frankly, no one else was buying. The Mays family in San Antonio ran one of the best radio companies in the business in 1992, and they decided the time was right to start expanding. Deregulation in 1996 made that possible, and radio was no longer the small platform it had become.
Do I think things would be better off? At the end of the day, someone has to provide the money to pay the people and handle the costs. Broadcasting has become an industry that requires a lot of legal and engineering services, and that costs money. Programmers don't have the connections to attract the kind of money necessary, so you have to partner with someone who does. Did the Mays family think they'd end up with a company 20 billion in debt? Of course not, and the fact is they were doing well for a long time. They couldn't get as much credit as they did if their goal was to lose money. Their business model was built on the radio reality of 1998, not 2008. When you buy a lot of stations, and not all of them are profitable, you end up running a deficit. If you run a company that isn't diversified, so all of your income is from one business, and that one business hits a slow period, as we did in 2008, you go deeply into debt. Cumulus is in far better shape with 10% of the debt that Clear Channel has. But even then, they have to run their stations based around the money they can make.
We all know that radio doesn't have the monopoly it did 20 years ago. It isn't the best value for advertisers. That hurts the ability of these companies to spend money on programming. Companies with no debt are operating in that same business environment, so my answer to your question is that radio would not be better off with smaller companies. In fact, my view is that given the consolidation that has occurred in every other industry, including retail and the music industry, radio would be worse off. Because it would not be able to make the kind of deals we can now with the music industry, which is core to our content. And we would not be able to attract national advertising dollars, which is core to the health of our business.
