Recession Radio

One radio veteran says the recession may be good news for people who want to hear more music on the radio.

“Radio advertising was down last year,” says the local deejay. “Then the recession hit. Right now, Clear Channel has been hit by a perfect storm,” he says, because contract renewals for expensive morning shows will eventually come up for renegotiation.

Clear Channel has the highest-paid local morning shows in town. Insiders estimate that the radio group is on the hook for $8 million to $10 million in annual salaries for its morning shows. On Star 94.1 (Jeff and Jer) and 101.5/KGB (Dave, Shelly, and Chainsaw), it is estimated that each team gets between $2.5 million and $4 million a year.

Other Clear Channel contracts are with Rock 105.3’s Mikey Show and New Country 95.7’s Tony & Kris. Each ensemble is estimated to make $1 million annually. Channel 933’s AJ’s Playhouse has a payroll estimated in the $500,000 range.

Radio advertising in June was down 17 to 18 percent from last year.

“That’s unprecedented,” says one exec. “If you get a decrease in 8 to 10 percent in one year, that’s considered really bad. This is a train wreck.”

The deejay says, “Car [dealerships] used to be radio’s biggest spenders. Have you noticed how few car spots there are on the radio now? Advertisers have started shifting from radio to other media.”

Recently, Media Audit announced a survey that indicated adults in San Diego spend more hours per week on the Internet (three and a half hours) than listen to terrestrial radio (almost two and a half hours per week).

“It’s so much cheaper to send out an email to two million people than to buy time on radio,” says the deejay. “Look how well Google does. Plus, people are now consuming their music elsewhere, like iTunes, Pandora, and Live 365.”

Another insider says though morning-show deejays may not make as much on their next contract, they are not destined for extinction.

“Where would KGB be if Dave, Shelly, and Chainsaw went away? That station dies in the middays and afternoon; Dave, Shelly, and Chainsaw make that station what it is.”

– Ken Leighton

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