Talk Radio Needs A Divorce

There’s nothing more frustrating than watching talk radio at the very center of the national political debate while broadcast operators head toward full collapse.

From Wednesday’s Washington Times, in a story on Clear Channel’s just-reported $5b quarterly loss:

“Clear Channel is showing us that there are no quick fixes to big corporate financial problems. They’re going to have to operate with fewer resources – and I just hope it doesn’t hurt the end product,” said Michael Harrison, founder of Talkers Magazine, which tracks talk radio.

There are interesting dynamics at work, he said.

“Rush Limbaugh is now being hailed as the leader of the Republican Party. So maybe it’s talk radio, which is the hope of the medium,” Mr. Harrison said.

“Clear Channel hasn’t failed yet. It has traditionally been the pattern that where Clear Channel goes, the industry followed. That was more true when the company was publicly traded, but that’s no loner the case since it went private in 2006,” said Eric Rhoads, publisher of Radio Ink, an industry magazine and blog.

The company is facing a “perfect storm,” he said, paying for past spending sprees and unreasonable hopes of big profits.

“Some of this debt is very old. But there’s now no capital to tap, no new money coming in, and an advertising depression under way. Still, there’s light at the end of this tunnel,” Mr. Rhoads said.

“Advertisers who previously cut their budgets will find that business is getting worse. So they typically seek something less expensive than TV – like radio, which is more cost-efficient,” he added.

Brian Maloney, a Massachusetts political and media analyst who writes “the Radio Equalizer” blog, agrees that Clear Channel – along with Citadel Broadcasting and other radio companies – are in trying circumstances.

“Boatloads of debt, no assets, drifting audiences – it’s a recipe for disaster,” Mr. Maloney said. “And what’s the impact on programming and listeners? That always gets left out of the conversation.”

With their iPods and MP3s, younger listeners are turning away from traditional music formats, he said.

“Talk radio is where there is some real true potential, particularly in the current political climate. But there’s a clear strategy [needed], too. Talk radio needs to divorce itself from this whole mess,” Mr. Maloney added.

Advertisement