Saturday, September 26, 2009

Thoughts, Observations, and Opinions from the 2009 NAB Radio Show

W. C. Fields is reported to have said, "I once spent a year in Philadelphia, I think it was on a Sunday." If you attended the NAB Radio Show this week in Philly, you, like I, can relate. I flew up on Tuesday to attend our Media Services Group meeting, and returned home Friday night. In between, I met with a number of MSG clients, customers, friends, competitors and various industry contacts at our suite in the Marriott, in the convention meeting rooms, and in the various hospitality functions throughout the convention. Here are a few thoughts and observations on the state of the radio industry as viewed through the Radio Show prism.

In general, the convention exceeded my expectations, though they were low . . . very low. This is the most challenging time in my 37 years in the broadcasting business. Station brokerage is my day job, and it is no secret that station trading ground to a halt a year ago. That said, there appears to be a bit of a thaw. While we will not likely return to anything resembling "normal" anytime soon (at least until senior debt returns), there are a few deals in the works and buyers and sellers are starting to talk again. In fact, "Inside Radio" ran this observation as its lead story on Wednesday (http://ftp.media.radcity.net/zmst/daily/C3886.pdf).

As always, Lew Paper's annual seminar for radio dealmakers ("Dickstein Shapiro's Broadcast Financing 2009: Surviving the Meltdown") was standing room only, and set the tone for the week. Most of the panelists (bankers and group heads) seemed to agree that we were probably at the bottom of the cycle, that we have seen the worst. Lew Dickey had the line of the morning when he suggested (paraphrasing) that lenders feared "Chapter 22, which is Chapter 11 twice." I also heard the phrase "kicking the can" repeated from the lenders. That describes a restructuring that essentially puts off any write-downs/foreclosures for some period of time, usually a year. The theory is that the buyer gets to buy time, and that the real restructuring will occur at some point in the future, presumably when the economic outlook is rosier. It looks like there will be a great deal of can kicking.

Interactive revenue and using social media seemed to be the themes of many of the panels. And radio seems to be playing "catch-up." That is better than not playing at all. It is definitely time to reinvent. Insanity is defined as doing the same thing over and over, and expecting a different outcome. Doing what we've always done will not cut it. Several of the group heads acknowledged that the industry quit investing in talent, research and marketing, that we got "fat and happy." That sounds to me to be the first step toward the cure.

Unfortunately, I missed the Marconi Awards this year due to another commitment, but kudos to KKOB-AM for 2009 Legendary Station, as well as to the other station winners.

Alexis Glick (FOX Business Network) delivered the keynote at the Friday luncheon, also suggesting that maybe we have seen the worst. Saga's Ed Christian received the National Radio Award. He is a very worthy recipient for his tireless efforts in promoting the industry. Congratulations to Ed!

All in all, it was a good week. Attendance was off, but that was to be expected. In spite of that, we had a steady stream of meetings with station buyers, sellers, and bankers in our suite all week. Next year's show will be in Washington, DC. Even with all of the pressure to reduce expenses, the Radio Show is a good investment of both money and time. If you didn't make it to Philly this year, try to get to DC in 2010. Hopefully, we will have some successes to celebrate by then!

George
Media Services Group