Bob Pittman Talks Silver Linings On Clear Channel Conference Call
October 31, 2011 at 3:15 PM (PT)
BOB PITTMAN made his first appearance on a CLEAR CHANNEL quarterly conference call as CEO by touching on his bullish belief in the company's prospects -- despite what looks like a soft Q4 and radio's lack of respect by the advertising community -- as well as offer a rationale for the recent Reduction In Force.
He opened the conference call by noting how he first became an equity investor and Digital Chief before being promoted to CEO: "I had a chance to test drive the car before I bought it," he said, adding later that he initially invested $5 million in equity. "I see a real upside in the company; it has incredible fundamentals and an incredible infrastructure to create ... [considerable] value."
We're going to think and act like a nimble start-up ... We'll either be a leader or at least a fast follower
The problem: "Radio's advertising clout clearly not what it should be," he stated. "Radio is AMERICA's companion and is doing very well with consumers, but it is under-utilized and undervalued by advertisers." His mentality was affirmed by another CLEAR CHANNEL spokesperson who noted that pacings indicate that CLEAR CHANNEL's Q4 will be flat at best.
Despite CLEAR CHANNEL's size, "We're going to think and act like a nimble start-up;" PITTMAN said, speaking of its digital efforts. "We'll either be a leader or at least a fast follower." He frequently cited CLEAR CHANNEL's iHEARTRADIO FESTIVAL -- and how they promoted it -- as an example of its aggressive digital efforts. Case-in-point: The iHEARTRADIO app has been downloaded 44 million times.
When the subject of the recent RIF layoffs was broached, PITTMAN likened the move to the original reason behind voicetracking: bringing big-market assets to smaller markets. "We were looking at the smaller markets and realized that they don't have the economic structure to [generate the kind of revenue] they have in the big markets," he said.
Describing the current small-market radio business as somewhat "outmoded," PITTMAN said, "We took a hard look at the smaller markets and said, 'It's 2011, how do we make the product better?' That was the driving force [behind the moves]. It's a horrible thing that some people lost their jobs, but at the same time we got rid of jobs, we added jobs in our national programming platforms and in digital. It's more of a reallocation of resources.
"It's a different way of doing business," PITTMAN continued. "You have to acknowledge that the world is different in 2011. Now, after reorganizing our business, we're in great shape to operate better, improve our quality of programming, attract more listeners and generate more revenue.
"It's not about cost savings," he asserted. "Certainly there will be some savings there, but we're adding costs at digital, so it's not just an effort to reduce costs. It's truly to improve quality of what we offer people. Having once been a local DJ in MISSISSIPPI, I know what you're up against in a small market. That's why I'm actually very excited about what JOHN HOGAN and his team has done."