USA TODAY reporter gives Clear Channel’s Bob Pittman another free ride

After she tweeted me her email address, I wrote a letter on Friday night to the reporter who did the above story and never got a response. Here is the letter I sent:

Hi Laura…  Thanks for responding on Twitter tonight.  You probably don’t know me, but I have been a radio personality for over 30 years, 21 of them in the largest (by revenue) radio market in America, defined as Los Angeles/Orange County, and I read, with dismay, your piece on Bob Pittman. 

Mr. Pittman is an engaging speaker, and he is trying to cultivate a reputation as some sort of futurist or genius with regard to the broadcasting industry, as well as in digital content.  By engaging reporters the way he does, he completely distracts them from the facts about his company.  Did you know that Clear Channel has not generated a profit, after debt service, since 2008, per Bloomberg News? This is because Clear Channel tried to dominate the broadcasting industry by buying up as much of it as it legally could (at one point owning over 1,200 US stations), leaving it with a current debt of over $21 billion. That amount is larger than the annual revenue of the entire radio industry, and larger than the debt of the City of Detroit. 

Clear Channel is trying to pay off its debt by firing thousands of radio professionals and by rolling over its debt into the future under extremely unfavorable terms. This will ultimately have an ending similar to the Hostess Twinkies bankruptcy. Remember? The top brass of Hostess Brands said that they couldn’t monetize their product line even though Twinkies were the most popular snack product in the world. How can that be? It’s when you try to buy up multiple disparate companies and nail them all together, then you find that you can’t achieve the efficiencies that you told the bankers you could.

What is troubling is that, from my perspective, here is a guy who has done nothing but slash and burn what had been a profitable business model for over 80 years, generates zero profits for his corporation, then gives interviews like the one he gave to you in which he positions himself as some sort of sage. Did you know this about Pittman before you ran with your story and choose not to write or ask about it? Or did you not have access to the real information? Don’t take my word for it. Look at this quote from Bloomberg News this week: 

So many investors piled into a May bond sale by Clear Channel Communications Inc. that the radio broadcaster, with a credit rating that implies default is almost a certainty, more than doubled the offering to $850 million.

Did you see this story? http://blogs.wsj.com/privateequity/2014/06/19/why-are-some-mega-deals-more-likely-to-default/

How about this one?  http://host.madison.com/news/local/writers/jack_craver/mitch-henck-the-latest-casualty-of-corporate-radio-ownership/article_d9acf636-fcb0-11e3-a5da-001a4bcf887a.html

And speaking of Bob’s advice to others to accept failure, would you think that the facts in this piece suggest it’s time for Bob and his “genius” to throw in the towel?  http://www.bloomberg.com/news/2013-11-29/clear-channel-burning-cash-to-delay-reckoning-corporate-finance.html

Here are the questions reporters need to ask Pittman, but never do:

• How much profit, if any, has IHeartRadio contributed to the bottom line of Clear Channel Music+Entertainment?
• What parts of Clear Channel are profitable, if any?
• Why can’t this company earn a net profit?
• Since you are such a futurist, Bob, perhaps you can tell our readers in what future year will CCM+E earn a profit, if ever?
• If your company is so successful, why have you fired so many employees?
• If you, as a CEO, can’t generate a profit for the company you run, why should reporters believe that you’re some sort of genius, futurist, or sage?

The real problem is that radio broadcasting is a relatively small business, best understood by those of us who’ve been in the trenches, and that many people who cover it don’t know what’s really going on here.  How bad is the situation? After decades of success in Southern California radio as a drive time personality, I left the radio business to form my own content creation company which operates out of a former laundromat in Burbank. Laugh if you will, but my little company in 2014 is poised to earn more profit than the two top terrestrial broadcasters, Clear Channel and Cumulus Media, combined. That’s not hard to do. If my company earns one single dollar, I will have achieved that goal. And I am about to achieve that goal. Yet, Bob Pittman is a “genius.”

But this is not about me. It’s about Pittman. How could you interview this man without researching the financials of the company he has run, profit-free, for six years? And how could you believe or appear to accept that this CEO, who, in my opinion, previously failed running AOL Time Warner and Century 21, is some sort of visionary? In my opinion, he is the person who is singly most responsible for the devastation of the business I grew up loving. Do you think that your viewers/readers got enough facts in your interview to objectively decide if Bob Pittman is, as he appeared to be referring to himself, a “genius”?  Thanks for reading.  

Tom Leykis

The New Normal LLC

Burbank, CA

PS: MTV was 32 years ago.

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