Once again in this wild year of 2009 in the media business, something previously unthinkable has actually happened. A large radio station group owner has filed for bankruptcy.
Not too long ago, holding a local radio station license was like holding “a license to print money.” Not anymore. Today, Citadel, which owns more than 200 radio stations nationwide, filed for Chapter 11 protection. Two years ago, this company bought the ABC Radio Network and legendary stations like WABC in New York, KABC in Los Angeles, WLS in Chicago and WJR in Detroit from the Walt Disney Company.
The irony of this bankruptcy is that many Citadel stations are very successful, in modern terms. They attract a relatively large audience, maintain a strong brand in the marketplace and turn respectable profits for the corporation. What happened in this case is that Citadel apparently borrowed too much money that it can’t pay back, when it’s supposed to. So, the company has to go to bankruptcy court to renegotiate with its creditors.
When most of the public hears “radio bankruptcy,” they figure that radio is a medium that people don’t want anymore. That’s not necessarily true. Radio still attracts a relatively large, albeit older, audience, especially in large markets where listeners spend many hours per week in their cars. Just like local television, newspapers (of course), magazines and even information-oriented Web sites, advertising revenue is scarce. That seems to be part of a bigger trend. In tough times (particularly during a cash crunch), it’s easy for corporations to slash ad budgets, along with PR and other forms of communications. It’s happened across the country, in many industries. It has affected every traditional form of communications and stunted the growth of some “new media.”
But is it best? We don’t think so. When this economic mess is over, we believe the companies that will be in the best position for success are those who communicated their messages during this downturn. Those who chose to stay “under the radar” will fall behind instantly. There are far too many in the “let’s stay quiet and ride it out” category. They might not make it through the recession and, unfortunately, they are dragging media companies down with them.