Posted by chicagomedia.org on January 17, 2009 at 12:50:02:
In Reply to: NY Post looks at Clear Channel cut coming next week posted by chicagomedia.org on January 16, 2009 at 13:31:10:
Clear Channel to Cut Staff Amid Content Shift
By SARAH MCBRIDE | WSJ
JANUARY 16, 2009, 4:35 P.M. ET
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Clear Channel Communications Inc. plans to lay off about 7% of its U.S. staff and replace more local shows with syndicated content, moves that could affect the broader radio and outdoor advertising businesses for years to come.
Tuesday, Clear Channel will lay off around 1,500 employees, mostly in ad sales, and implement other cuts aimed at saving close to $400 million, according to a person familiar with the situation. The company, which employs about 20,000 people in the U.S., declined to comment.
To some extent, the cuts will catch Clear Channel up with other radio companies, which have engaged in layoffs and other cost cuts since early last year. Clear Channel's restructuring lagged behind competitors thanks largely to an 18-month battle to take the company private, a process that ended in July 2008. The coming round of layoffs was reported Friday by the New York Post.
But other radio and outdoor-ad companies could end up embracing certain strategic elements of Clear Channel's restructuring if they see it finds success. Clear Channel is the largest U.S. company, by revenue, in both radio and outdoor advertising.
On the radio side, the company is likely to eliminate chunks of local programming and replace it with national programming, much as it has been bringing Ryan Seacrest's Los Angeles-based radio show to other markets in recent months. If a local show seems successful, the company will try to syndicate it faster than it might have in the past, a person familiar with the situation said.
The bulk of Clear Channel's job cuts will come on the sales side, eliminating those who aren't top performers. "The focus is on rewarding the very best salespeople, and letting them maximize their own compensation," in part by picking up accounts from their less stellar peers, this person said.
Clear Channel salespeople will also focus on educating advertisers about the efficacy of the radio and outdoor marketplaces, long seen as the stepchild to more technologically advanced media like the Internet. As more advertisers grow disenchanted with the Internet -- where search-based advertising is doing well, but some types of banner ads have lost their luster -- the company hopes more money will swing back to tried and true media like radio and billboards.
Last year, Bain Capital LLC and Thomas H. Lee Partners LP took the company private in a transaction valued at $18 billion. At the end of the third quarter, the company had $19 billion in long-term debt.