Monday, February 23, 2009

Control Your Expenses

You’re a pilot flying @ 36,000ft. No parachute. You have two major problems:

1)   There’s another plane careening towards you and unless you do something about it IMMEDIATELY, you’re going to hit it. Worse yet, each of your actions (steep dive, fuel dump, pulling up) come at the expense of your long term goal: Landing this plane safely on the ground.

2)   You are out of fuel above mountainous terrain.

This describes many of you reading this.
Short Term Problems: The looming bank. Survival.
Long Term Problems: Listeners & Clients defecting to new media.

So let’s get past this major obstacle in front of us. If we don’t do that, we’ll never have the opportunity to land this thing. If we can accomplish both goals with the same strategic move, great, but our singular goal right now is to avoid this collision. If you don’t stay within your covenants, if you don’t make your scheduled payment to ‘The Man’, it’s all over. There will be no opportunity for a landing. The impact @ 36,000ft will break you up and there will be no plane left to land.

Many Terrestrial Radio critics are out there suggesting glorious changes we should make to our radio stations: “Invest in this. Buy that. Hire a format Guru to create specifically targeted formats to reach specific listeners meeting this Psychographic criteria.” This reminds me of a few years ago: I had broken my finger playing roller hockey. It looked wrong and clearly needed medical attention. As I was leaving the rink, a nice kind woman starting giving me advice on what to do with it. “I work at WholeFoods in the Personal Care section”, she said. “You should use their soy wraps, curd foams, natural dressings, antioxidants, blah blah blah.”… All with the confidence of a surgeon. I was baffled by how CONVINCED she was, even though she had no clue. (I love WholeFoods, I’m in there twice a week getting takeout, etc.)

Now I probably don’t recognize the full benefits the soy humus wrap, I’ll concede that. But WholeFoods lady must concede that she doesn’t really comprehend the gravity of this situation. Nor do Terrestrial Radio critics: We’re dealing with big numbers, big responsibility, lots of people’s jobs, lots of listeners, and a lot of money.

Terrestrial Radio Station C-Levels: If you need to cut to avoid that oncoming plane, you cut all you need to cut. If you have to cut jobs or salaries by 10% to save the other 90% of the jobs, you do it. If you need to make some short term sacrifices for long term survival, you do it! And anyone that tells you different hasn't been in your situation and definitely isn’t in that same plane as you.

Remember, in this example, we were cruising at 36,000ft. You’ve got to use this altitude to your advantage. In 2002, when the bubble burst, there was no cushion for all the dot-coms. You have a cushion, and unfortunately, you’re going to have to burn through a lot of it in the next 2 to 3 quarters. The alterative is no alternative: A mid-air collision. You owe it to your shareholders, your listeners, and your clients to be here after the economic downturn passes.

1 comment:

  1. Hey Cousin Tony Great Job

    Your Cousin Tony