BIA Advisory Services conducted a rather insightful webinar at the beginning of the COVID19 pandemic. While every media sector was predicting huge downturns in sales revenues, what struck me most were comments like, ‘but radio sales executives are the most pessimistic,’ or ‘23% of radio sales people don’t feel they will be employed by the same company in six months.’
Why were radio people so gloomy? Is it because the radio industry attracts Eeyores or because radio people were being the most realistic?
Shortly after the global pandemic shut down the world, companies started talking about furloughs for employees. All types of industries were issuing press releases about how they planned to furlough “x,” “y,” or “z” number of employees.
Now by definition, a furlough is supposed to be a temporary layoff. It certainly sounds much less benign than being told you are terminated, fired, riffed or axed. Furloughs gave people hope they would soon return to work and a lifestyle of the way it was. But was that being disingenuous?
I remember when I was a manager in Clear Channel, the company’s top management would tell us to never let a good emergency go to waste. In other words, use the emergency as a cover to do things you already wanted to do, but could now do much more quickly, using the emergency as the reason.
“For a lot of those furloughed workers, a non-trivial number will have no job to go back to, because the company they worked for will have failed or will need fewer workers than they used to,” says Claudia Sahm, a former Federal Reserve economist.
An article in Forbes, quoting an Associated Press story put it this way, “Call it realism or pessimism, but more employers are coming to a reluctant conclusion: Many of the employees they’ve had to lay off in the face of the pandemic might not be returning to their old jobs anytime soon. Some large companies won’t have enough customers to justify it. And some small businesses won’t likely survive at all despite aid provided by the federal government.”
Entercom Converts Some Furloughs into Layoffs
This was the headline in late June in RadioInsight. How many furloughs were converted or how many markets were affected, is not known.
Radio Business Reports carried the first news of this occurring inside Entercom back in April. RBR quoted Entercom Communications President/CEO David Field’s memo to employees which said, “We are doing everything in our power to minimize the number of layoffs through shared sacrifice across the organization, but we will still need to eliminate or furlough a significant number of positions.”
And Entercom was not alone in having to take a serious look at its business in light of the quick and sudden changes brought on by a global pandemic with no vaccine and no treatment options.
Poynter on Newsroom Layoffs, Furloughs and Closures
In an article, Poynter has been updating regularly, sadly admitting that it’s “getting hard to keep track of the bad news about the news right now. But we have to. Here’s our attempt to collect the layoffs, furloughs, and closures caused by the coronavirus’ critical blow to the economy and journalism in the United States.”
At the end of June 2020, here’s what Poynter had for the impact on radio journalism:
- Meruelo Media had furloughs. Meruelo has stations in five markets.
- Forever Media had layoffs . Forever has stations in 11 markets.
- Townsquare Media Group had pay cuts and layoffs. Townsquare has stations and sites in 67 markets.
- iHeartMedia had furloughs and pay cuts. iHeart has stations in 153 markets.
- JVC Broadcasting furloughed some employees. JVC has stations in New York and Florida.
- American General Media had layoffs. American General Media has stations in seven markets.
- Beasley Media had layoffs, pay cuts and furloughs. Beasley has stations in 15 markets.
- Entercom had layoffs, pay cuts and furloughs. Entercom has stations in 46 markets.
- Radio One/Urban One had layoffs and furloughs. The company owns stations in 15 markets.
- Cumulus had temporary furloughs and pay cuts. Cumulus owns 424 stations in 87 markets.
- Alpha Media had layoffs, furloughs and reduced hours. Alpha Media has stations in 21 states.
- NPR had pay cuts for executives and cut pay and benefits.
- Minnesota Public Radio had 14 people accept voluntary buyouts. It also had voluntary furloughs.
- St. Louis Public Radio had layoffs and pay cuts, Poynter has learned. The layoffs include three full-time positions and two part-time positions.
- Hubbard Radio stations had layoffs in St. Louis, Chicago, Seattle, Minneapolis and Phoenix.
- American Public Media announced buyouts and furloughs, including at MPR News in Minnesota. Fourteen people took voluntary buyouts and the same number took voluntary furloughs.
- Minnesota Public Radio and American Public Media laid off 28 people.
- WBUR in Boston will lay off 29 people.
- Chicago Public Media, the parent company of WBEZ in Chicago, laid off 12 people.
- Houston Public Media eliminated eight positions and, at least for now, cut 15 part-time staffers.
You can keep up with the Poynter updates by clicking HERE
Radio’s Advertising Lifeblood
Your local radio station, like your hometown newspaper, depends on local businesses and their advertising dollars. Eighty to ninety percent of their ad revenues come from local businesses, those small “mom & pops,” as we like to call them.
So, when I saw this headline in The Atlantic, “The Small Business Die-Off Is Here,” my heart went into my throat.
Annie Lowrey writes, “The great small-business die-off is here, and it will change the landscape of American commerce, auguring slower growth and less innovation in the future.” What Lowrey tells us is that the small and mid-size businesses had less than two weeks’ worth of cash on hand making it impossible for them to cover rent, insurance, utilities and payroll for any sustained amount of time.
Many business owners have found help from Uncle Sam to be too little, too late. Every day we see another local business decide to close down permanently rather than sink further into debt.
Lowrey writes, “The short-term effects of this disaster are clear: When businesses liquidate, they lay off workers, who spend less in their local economies, making other businesses weaker, necessitating further layoffs. Business failures thus act as an accelerant in a downturn, making temporary damage permanent. This is a central reason why many economists do not expect a sharp, V-shaped rebound to the current recession, but a long, slow, U-shaped recovery.”
AARP on What Comes Next
In the June 2020 edition of AARP Bulletin Abraham Madkour, Sports Business Journal, writes “I don’t see any timeline where athletic events have packed stands. Nobody wants to be around 75,000 people.” So, sports radio stations are going to be really content challenged, which means listener challenged, which translates into advertising challenged.
AARP goes on to say the Saturday night dinner and a movie is now on the endangered list as is your local mall, department stores, and most other retailers. It’s an “extinction event” for local media ad dollars,” says Ken Doctor, media analyst, who adds, “In a world where nobody is going out, age-old diversions are going bye, bye.”
There’s No Place Like Home
Turns out the safest place to be, is in your own home.
People are adapting to working from home, home schooling their children and doing things like baking, learning to play a musical instrument, streaming their audio, video and print content. Our habits are changing and it’s quite likely they will become permanent.
“It’s hard to guess the depth of the downturn, but it will be the worst since the Great Depression,” says Nobel Prize-winning economist Joseph Stiglitz.
Crystal balling the future is always a risk. No one really knows what lifestyle changes will become permanent and which ones will slowly fade away.
I tried to get some sense of permanent change following the Spanish Flu Pandemic of 1918-1919 and found there was little to be gleaned because that pandemic broke out during WWI leading into a roaring twenties, followed by a Great Depression, and then WWII. It really gives us little information about the impact the pandemic ended up having because other events trumped its effects.
Broadcast media didn’t begin as a commercial entity until after the pandemic was in the rear view mirror, so there’s no way to tell what the impact might have been. The Asian Flu (1957) and Hong Kong Flu (1968) killed about 2 million and 4 million people worldwide during the 20th Century, but the disruption to our daily lives doesn’t even live in my memory.
If nothing else, COVID19 is and has been a disruption to Earth’s global village economically. Axios reports that a research report from UBS predicts that 100,000 brick-and-mortar U.S. retail stores will close by 2025, in a trend that started before the pandemic and has accelerated amid coronavirus-related shutdowns.
In 2017, as the radio industry news was filled with employees being RIF’d (Reductions In Force), I wrote an article to help people deal with being let go entitled, “Is Your Iceberg Melting?” You can read that HERE
So, what might a media future look like?
Frederick Filloux asked his college journalism students for their thoughts and I will summarize them for you here:
- Smaller, staff-owned outlets where employees are multi-talented and master a whole palette of tools like data-driven storytelling, video production, infographics and a deep proficiency in social media.
- Rethinking the ownership and the revenue models. Audience centric business models, but not ad-supported ones. Frederick’s students believe that the advertising supported business model is outdated. The future will involve carefully vetted sponsorships.
- Explanatory media, that is fact-checked and establishes itself with an expertise against misinformation. These students say, expertise is urgently needed in today’s media world.
- Print is over. Tomorrow’s media students believe that anything printed embodies the ancient world. COVID19 is only accelerating its demise.
I think COVID19 is going to hasten a rethink about all ad-supported media. Traditional media, born of advertising, will be greatly challenged.
Based on the recent findings of Gordon Borrell, it already is.