[BC] Citadel trading at 1 penny per share.

[Rich Wood]

------ At 07:07 PM 3/5/2009, Bill Harms wrote: -------

>Even for the most jaded industry professionals, it's stunning to 
>believe shares of one of the nation's largest radio station owners 
>might trade for a single penny.
>
>And yet that's exactly what has happened to ABC Radio owner Citadel 
>Communications, a once-proud group operator destroyed by massive 
>debt, epic mismanagement and a liberal political ideology often at 
>odds with the company's still-successful and profitable conservative 
>talk radio programming.

Two out of three isn't bad, I guess.  I worked for one of ABC 
previous owners (Cap Cities). Political ideology never entered the 
picture. The stations were programmed for ratings and profit. If 
Progressive programming got ratings we would have gone that route. 
Under Cap Cities the GMs ran their stations without micromanagement 
from corporate.

>Citadel's original ownership and management team built a 
>highly-successful firm around conservative talkers on the AM band 
>and country music stations on FM, mostly in medium-sized Sunbelt 
>markets. When subsequent owners acquired ABC Radio and saw their own 
>liberal ideology clash with Citadel's established internal 
>structure, it began to unravel.

That "subsequent owner" is Citadel. They acquired the ABC radio division.

You seem to be contradicting yourself. ABC built a string of 
conservative talkers. You seem to be saying that Citadel's 
conservative talkers clashed with ABC's.

>But recent meddling by Citadel's incompetent managers have led to 
>baffling moves, such as watering down WABC with incompatible, 
>non-conservative programs such as Don Imus and "Joe and Mika", as 
>well as dumping nearly all local programming in the nation's largest market.

Until recently the Citadel Managers were the same as ABC's.  Don Imus 
was brought in with the intention of syndicating him. It appears to 
me that WABC is still doing quite well. Since most of the "non-local" 
programming originates at WABC they can still be considered local. 
They're usually dealing with national issues, so local is irrelevant. 
If they were truly local they'd be dealing more with New York issues 
than Washington.

>Your Radio Equalizer has been tracking this mess for nearly two 
>years, warning of the consequences of this meltdown. In yesterday's 
>Washington Times, yours truly called for a "divorce" to remove 
>highly lucrative talk radio programming away from sagging music 
>radio formats and their rapidly-disintigrating audiences.

How do you"divorce" talk and music? ABC owns multiple stations in 
many markets. Should they all be doing neo-conservative talk? Also, 
do a little research. Radio's audience isn't "rapidly 
disintegrating." It's a slow loss over time, partially caused by 
vapid programming and alternative sources of audio entertainment. 
It's still dominant and will be for as long as there are Boomers 
left. Young listeners have no interest in a bunch of bombastic old 
farts constantly bitching about Democrats. I can understand why 
they'd prefer to be out skateboarding.

>The broadcast industry's rapid deterioration calls into question the 
>Obamist plan to impose a backdoor-Fairness Doctrine designed to 
>suppress opposition voices by breaking large station ownership 
>groups. Before they even have that opportunity, these companies are 
>far more likely to collapse on their own.

What does the unlikely reintroduction of the Fairness Doctrine have 
to do with breaking up large station groups? This rant sounds like 
something from a radio groupie looking in from outside the industry. 
I don't see any backdoor introduction. It's right up front. The 
"rapid deterioration" is more likely caused by the industry's largest 
group being run by a liquidator rather than broadcasters. Sucking up 
to Wall Street isn't helping much, either.

Also, what the Hell is "The Radio Equalizer?" Is he some kind of 
superhero? Does he wear a spandex costume and have spiffy gadgets to 
leap from tower to tower? It sounds juvenile to me.

> From there, who will own these stations? Will some join the 
> newspaper industry and be forced to shut down?

I suspect, with the exception of Clear Channel, that the same people 
who now own the stations will continue to do so.  Yes, some will shut 
down. They'll likely suffer the effects of the oncoming depression 
the same as any other industry will. Advertising budgets are 
shrinking. Advertisers don't usually buy on the quality of the 
programming. The same stations are getting the buys. The only 
difference is the size of the ad budget. Foolishly, companies drop 
advertising when things are tough. That's the time when advertising 
becomes even more important.

Mr. Equalizer, zip up your costume. Even a superhero can get arrested 
for indecent exposure.

Rich