Clear Channel Layoffs Hit Radio Hardest
The cuts were made at the behest of Clear Channel's new owners, Thomas H. Lee Partners and Bain Capital Partners, who took the company private in a $20 billion deal last year and are now seeking to trim about $400 million in costs. The near-decimation of the nation's leading radio and outdoor advertiser is another indicator of the gravity of the situation facing traditional media during a steep recession.
Citing the "unprecedented downturn," Clear Channel CEO Mark Mays said in a memo that a "significant portion of these positions represent a realignment in our sales departments," but added that there were cuts across the board in all departments.
Sounding a bit like a wartime leader, Mays promised the employees who remain: "We will get through this together." In his own memo, Clear Channel Radio President and CEO John Hogan sketched out the challenges facing radio in particular: "We continue to see softness in the advertising market; we continue to compete with all forms of media for both audience and advertising dollars; and we continue to have to do both in a way that's smarter, faster and more effective."
On the up side, Mays wrote that "everyone in our investor group, on the Board, and in the executive leadership team remains bullish about the long-term growth prospects for Clear Channel."
Pointing to the company's substantial digital properties, Hogan was hopeful that Clear Channel might dodge the worst of the downturn. He reminded employees: "In recessions, there is a flight to quality by advertisers." Hogan added that radio in general "continues to have the largest, most desirable audience of any media," including broadcast TV, cable, and newspapers.
Clear Channel Radio is also said to be cutting costs by replacing some local shows with syndicated content, according to The Wall Street Journal, although popular local shows will stay on the air. Examples include local morning shows replaced by Ryan Seacrest in a number of markets. Long an industry leader, this approach may be imitated by Clear Channel's competitors down the road.