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The Entercom Axe Falls On Chicago
- Thread starter tbolt909
- Start date
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andreajesus
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All Access is linking to Feder's article - https://www.robertfeder.com/2019/06...ffs-hit-entercom-chicago-stations/#more-22006
So the article says 8 people, none of which are on air. That cluster has over a hundred employees in that office. It's nice that they're getting recognized, but I've been noticing the company has been letting people go in just about every market. Some of them are on air. So yes the stock value is going down, but staffing isn't a function of stock value. It's about the crossroads between expenses and revenues. If expenses go up, and revenues stay stable, you have to let some people go. And there's no question that expenses are going up.
This is a company that has a lot of back office people, and a lot of infrastructure that's still built around a radio-TV cluster that has been broken up. There are economies of scale that were promised to stockholders in the merger that haven't taken place. This should begin the process of economization.
This is a company that has a lot of back office people, and a lot of infrastructure that's still built around a radio-TV cluster that has been broken up. There are economies of scale that were promised to stockholders in the merger that haven't taken place. This should begin the process of economization.
Whenever I hear about a big employer laying off a large number of people, I wonder why they had that many people to lay off in the first place. If your traffic and billing office can reduce its number by seven, why was the staffing so large in the first place?
I certainly don't want to kick someone as they are losing a job. It's really tough. And I sometimes think big corporations are mean because the executives know a big layoff will often goose the stock price.
But why was the Entercom/CBS support staff so large in the first place? I've never worked in a company where there were seven people in the office, let alone one where the company could lay off seven people and still have enough people to send out the bills and handle the commercial logs. Maybe presidential candidate Andrew Yang is right. In the next decade, automation and technology will not just displace plenty of factory workers, but many others... bus, taxi and truck drivers, bookkeepers, X-ray technicians, etc. Maybe one or two people in the front office of a radio cluster of seven stations will be able to do all the work needed?
I certainly don't want to kick someone as they are losing a job. It's really tough. And I sometimes think big corporations are mean because the executives know a big layoff will often goose the stock price.
But why was the Entercom/CBS support staff so large in the first place? I've never worked in a company where there were seven people in the office, let alone one where the company could lay off seven people and still have enough people to send out the bills and handle the commercial logs. Maybe presidential candidate Andrew Yang is right. In the next decade, automation and technology will not just displace plenty of factory workers, but many others... bus, taxi and truck drivers, bookkeepers, X-ray technicians, etc. Maybe one or two people in the front office of a radio cluster of seven stations will be able to do all the work needed?
I think I explained it in my previous post: Entercom bought the radio division of a multi-media company. They inherited the employees that came with that. When it was owned by CBS, those employees weren't identified as radio only. They worked for CBS. Entercom came in, and determined the company was overstaffed, compared to their levels. Beasley determined the exact same thing when they bought some CBS stations several years ago. One company staffs a certain way, another company staffs differently.
Empire-building can occur at a large company. Thus, positions deemed important at CBS may be considered cruft at Entercom.
Honestly, this is no different than any of the other Entercom properties. Since the merger with CBS, ETM has been trimming office staff in various ways. Billing is being done at a central location; bills sent out and checks coming in. Sales assistants are being cut, digital is also being centralized. It's company-wide, not just Chicago. If I read the Chicago thing right, at this point, no on air staff has been cut.
Yes. Entercom, like many larger broadcasters, does traffic, continuity, A/P, A/R, billing, collections and the like at central locations. It's efficient because those bottlenecks we have all experienced when one traffic person is out sick or on vacation or leave can be spread across a larger staffed central location where responsibilities for single stations and clusters are spread across a whole team of people.
Many groups are centralizing production, too.
Was it all Administrative Staff, or was some of it from Programming, Promotions, or on-air talent? Anybody care to throw out any names? Can you even trim anymore from the 'XRT staff? I'm guessing they've already been running a pretty tight ship for awhile now.
The article in the OP says it was all administrative people.
I spent ten years in commercial radio before I moved over to a parallel universe (magazine publishing). At one company I worked for, ownership (bankers) brought in a guy with no experience in our business to run the place. The guy quickly brought in a bunch of his buddies to help him out. The problem was, his cronies also had no experience in publishing and were every bit as clueless as their pal, the boss. That didn't stop ownership putting all these empty suits' names on the various publications' mastheads. As one Publisher quipped....."that's not going to leave a lot of room to list the people who do the actual work!"
Suffice to say this short-lived regime did not go well. And the square pegs were quickly removed from their round holes.
My point is simply that I know what it's like to have a "surplus" of administrators. I'm not saying that's the case with Entercom. I don't like to see people lose their jobs. But it MAY be an encouraging sign that the cuts are coming from the top. At least at the outset.
As has already been mentioned, they've cut production people in other markets, and I've heard they're centralizing HR as well.
Not long ago, an old friend told me "Entercom is the new Clear Channel." This seems to be the beginning of that.
Once they've cut the administrative staff to the bone, they'll look at their stock price and say "hmm...not quite there yet. More cuts!" and then they'll start in on programming and air talent. More syndication and voice tracking. Regional VP's of Programming making decisions while the local PD just takes orders. Then just when you think they can't possibly cut any deeper, they'll announce another round of layoffs. If they're really trying to emulate iHeart, it will probably happen around the holidays.
Maybe. First of all, nobody buys stock based on expenses. Take a look at how many employees Amazon has. Nobody is worried about expenses there. Because their profits are large enough to create a huge margin. Radio isn't growing. So what Entercom needs to do is build alternate revenue streams. That's what iHeart was doing. They made cuts on air, but at the same time, they were hiring people for online positions. Sometimes they hired people they had just fired from a station to do online work. You'll probably see that at Entercom. These radio companies are adapting to a new marketplace. There are still lots of job opportunities at these companies. But you better know how to do a lot more than just sit at a microphone and read the weather.
I think it's pretty well established that when company announces staff/expense cuts...the stock rises.
And even if it isn't the case, the people running the companies think that it is, and act accordingly.
At the moment, Entercom is going through all the legacy CBS properties and cutting staff. Is it justified? Well, prior to the sale the radio division was a cash cow for CBS. Even the supposedly bloated markets like Chicago were bringing in money.
Rather than just add the stations to their portfolio and keep the money rolling in, David Field and company looked at it and asked "how can we squeeze even more out of it?" Was CBS Radio perfect? Hardly. Yet rather than try to generate more revenue by investing in the properties, Entercom has chosen to generate more revenue by cutting expenses. If that was a good idea, iHeart wouldn't have gone bankrupt.
The CBS properties never fully adjusted to the post-recession smartphone and PPM environment. Their margins were much more narrow than they had been in the early 2000's. The were reported to be making money, but the cash cow had metamorphosed into a cash skunk. It was starting to smell bad, and rather than try to fix a declining business, CBS sold.
Entercom bought because they knew the could do many cuts that they think will not harm the business. Consolidation of traffic, billing, production in central processing centers. Synergies by combining more stations in the largest markets. Fewer managers.
I guess I'm at a loss to understand how "do everything that iHeart does, only cheaper and worse" is good for the business.
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