The extent of the damage COVIC-19 will have on broadcasting is only just beginning to become evident.
In the US advertising revenue has been devastated and with wild unemployment projections of up to 30% there and 2.2 million US deaths being forecast, the level of uncertainty is understandable.
The big networks are beginning make cuts and just overnight Entercom CEO, David Field, announced that due to the downturn in advertising a “significant” but unnamed number of positions will be eliminated or furloughed (placed on leave without pay).
Bonus payments for the first half of the year have been eliminated, there will be salary reductions of between 10% and 20% for everyone earning over $50,000 p/a and the company will suspend its dividend and 401K company match.
The CEO will also take a 30% pay cut.
The Beasley Media Group of over 60 stations has announced that 67 positions across the company have been eliminated.
Another 18 full-timers and part-timers were furloughed and all remaining full-time employees will have their hours reduced from 40 to 36.
The hope is to bring the furloughed employees back, and bump full-time hours back to 40, at the end of the second quarter, June 30.
CEO Caroline Beasley will also take a 20% pay cut.
The Adams Radio Group of 24 stations are cutting staff wages by 10%.
iHeartMedia, CEO Bob Pittman will not be taking a salary or any incentive bonuses for the remainder of 2020, and other senior managers will have their pay cut from 30% to 70% through the end of 2020.
iHeart is also furloughing some employees for 90 days and the company made it clear that these are not layoffs and those that are being furloughed will be hired back as soon as possible.
iHeart is also temporarily suspending its 401K match.
At Townsquare’s 322 stations, 65 employees have been let go, 26 of them from the corporate office.
CEO Bill Wilson and others from corporate have all volunteered to take a 10% pay cut and Townsquare has temporarily suspended its 401K match.
Smaller networks are also feeling the pinch with Neuhoff Communications 20 stations suspending its 401K match, with CEO and President Beth Neuhoff foreshadowing layoffs as the next possible step amid the fear that some existing clients may not be able to pay for current advertising.
JVC Broadcasting CEO John Caracciolo has temporarily furloughed a number of employees with hopes of bringing them all back when the crisis ends, and he has terminated his own employment as paid CEO but will continue to run the company voluntarily.
Across the pond NZ MediaWorks staff have been asked to take a 15% pay cut, while here Grant Broadcasters has cut staff numbers, reduced operating costs and the Senior Executive team has agreed to a reduction in their base remuneration in response to the COVID-19 pandemic.
At SCA all staff earning over $68,000 p/a will be required to take an immediate 10% pay cut for the next six months, excluding any employees paid an award-based wage. Onair staff have also reduced their fees and contracts by 10%.
The big question remains, is this enough?
The Federal Governments latest new wage subsidy scheme, Jobkeeper, will help provide some relief and certainty for some stations and their employees over the next 6 months, but it is quite possible the full impact won’t be felt for some time.
While not enough to save some staff from facing a redundancy, the Jobkeeper payment looks like it has taken some pressure off Grant Broadcasters as it slows its redundancy process.
CEO Alison Cameron has told radioinfo: “Absolutely the government JobKeeper program has helped us. I hate to think how many redundancies we would have had to enact (or salary cuts/reduction in hours) without it.”
Company CFO’s will have a number of plans in place for the next 6 months and they will take no comfort with what is happening in the publishing world with Newscorp suspending a number of community newspapers across the country, and Bauer in New Zealand shutting down its magazine publishing as ad revenue continues to decline.
Radio listening could be getting a resurgence as often happens in a crisis, but the client list is diminishing, and while categories such as bars, clubs and restaurants are pausing or repurposing their ad schedule due to the temporary closure of their premises, some new advertiser categories are increasing ad spend to get their message across.
So is there a bright side?
Radio strategy and research company BPR has just released research conducted in Europe over the past few weeks that indicates radio consumption is up during the Corona virus crisis, reinforcing the reasons companies should keep advertising if they can.
The online study of 1700 people found that media habits are changing and radio listening is increasing during the period of COVID-19 lockdowns.
Meanwhile back in Illinois, Mike Hulvey who is the COO at Neuhoff Communications and well known for his enthusiastic optimism, and he told radioinfo this morning, “It’s a very difficult time across the globe to be sure. As I have told many people, it’s raining, we’re all getting wet, so let’s not be upset about our dripping clothes.
“Let’s keep focused on what we will do when the sun starts shining.
“Our folks are cranking out some great content, working very hard to serve our communities, inspiring!”