From the Corner Office
This
Month's Topic:
Private vs. Public: The Benefits of Being a Privately-Held
Broadcasting Company in 2006
Remember the 1990's? That's when Wall Street was in love with the radio business, consolidators were bidding up prices for stations to unheard-of multiples, and options were making radio people riche.
No more.
As Wall Street soured on it's love affair with radio, bottom-line demands increased, options went under water, and operating efficiencies became the new buzzword. Now, hot money is chasing new media, websites are being bought by large companies spinning off stations or trying to go private.
What's going on?
It's the nature of public markets to constantly search out the next big thing,
looking for the maximum return on investment. Investors simply react to the
story being told to them by the management of companies, large and small. But
there are other types of investors: those who build for the long term. This is
called "patient capital."
At Greater Media, we are fortunate to be in that second category. Why? Because it changes the focus of how we operate. We do not have to chase the 90-day window of quarterly reporting, and we can look at our business on a longer time line.
That point of view is what allows us to expand our vision to include things like HD Radio, web casting, new programming formats, and new approaches to selling to our advertisers. It allows us to make investments in people and take the time to address these opportunities and feel our way forward to find the proper and rewarding return on that investment.
As a private company, we also are able to maintain our decentralized management structure which empowers the local managers to take control of and responsibility for serving their communities in the most appropriate fashion. I believe strongly that the collective wisdom of the people of Greater Media who live in Boston, Philadelphia, Detroit and New Jersey is far more responsive and creative than any centralized mandate that we on the corporate staff could ever develop. That's one of the keys to really harnessing the power of our employees. As managers we have to listen for those great ideas, because they come from all of you.
The same can be said for our products. As a private company, we can maintain the discipline of researching our audiences and our potential listeners and give them what they want. Not with a corporate-wide format, but with a customized execution for each city that allows our valuable on-air personalities to maintain and deepen their presence in their community and their friendship with their listeners.
Some critics may say that this is old-fashioned; that we're not taking advantage of the economies of scale that modern consolidated radio presents. I couldn't disagree more. The strength of radio always has been, and will continue to be, the local, intimate relationship that we have with our listeners. It may change and evolve with new technology and we will embrace those changes, but the relationship is the key. And the strength of that relationship is what makes radio attractive and effective to advertisers. We can and do produce results for businesses large and small at a remarkably effective cost. It's easy to describe; it's difficult to do well. Competitive pressures and changing business climates can easily pull you away from your long term goals.
And that's where the longer term view of a private company shines. It's our ability to navigate change and find it challenging and exhilarating, and our ability to stay the course. And that's why companies are considering going private.
We're thankful we're already there. Please feel free to contact me by clicking onto the “Ask Peter” located below.
Have a great month!
Best regards,
Peter June 2006