Judy Ellis: Citadel’s Top Operator (6/16/03)
By Reed Bunzel
Take a look at this year’s profile on the Most Influential Women in Radio and you’ll find that, while women have begun to assume top management positions throughout the Radio industry, very few have cracked the corporate glass ceiling.
Citadel Communications Chief Operating Officer Judy Ellis is one of those who have. Just four months on the job — she joined the company in early February — Ellis has quickly acclimated herself to a company that owns 225 stations in 43 markets. In her short tenure at Citadel, she has visited nearly all of them and claims to have met just about every one of the company’s employees. Her take on this whirlwind tour: “We have some wonderful stations with some great people in just about the most beautiful markets in the country.”
Prior to joining Citadel, Ellis served as senior vice president/market manager at Emmis Communications, where she was responsible for the company’s three New York stations. She joined Emmis in August 1986, when the company purchased WQHT-FM from Doubleday Broadcasting Company. Over the next 17 years, she was responsible for some bold, innovative moves that rocked the nation’s No. 1 Radio market.
For example, 10 years ago, she oversaw the launch of Hot 97, one of the first stations to propel Hip-hop into mainstream format status. “Everyone told us we were crazy,” Ellis told the New York Daily News earlier this year, recalling the skepticism that greeted the new station. “People said that even if it worked as a format, we could never sell it to advertisers.” But Emmis did; and today, hip-hop has become one of the major format players in virtually every large market in the U.S. "We created a format that's everywhere," she notes. "I'm unbelievably proud of the team that did that."
She should be proud: Despite format battles and ratings inroads, Ellis managed one of the most profitable market clusters in the country, keeping her Emmis stations consistently in the Top 10. It was exactly that kind of leadership that Citadel Chairman/CEO Farid Suleman wanted when he tapped her to run the group’s day-to-day operations.
Understandably sensitive about the company’s pending IPO — it could kick in any day now — Ellis is mindful of the SEC’s mandatory “quiet period.” From a financial standpoint, all she can say is that Citadel’s cash flow last year was up 40 percent, and the group is poised to see even greater upside over the next several years. “Forstmann Little’s financial goal is to make their money back and then some, the same as anyone when they make a purchase like this,” she says. “My job is to help them do that.”
INK: What surprises have you experienced, moving from Emmis’ New York market manager to being COO of Citadel?
JE: Probably the biggest surprise I had — and this is pretty much based on all the phone calls I got about what I should expect — was that Spokane Radio is no different from Radio in New York. They look the same, they operate the same, and the people have as much talent. In fact, in many cases, there’s more opportunity to expose your talent. In a lot of markets, you can have someone who’s the production engineer who also does a shift on the weekends.
Are your responsibilities different, now that you’re overseeing 225 stations instead of three?
This may not make any sense, but responsibility on some level is finite. It’s total. When I worked for Emmis, managing stations in the country’s largest market, I felt total responsibility for the success of the company. That may sound egomaniacal, but the fact is, the company got so much of its revenue from the New York market. And that’s not to say that I picked up anyone’s slack. It’s just that there was never a letdown moment for me. I never felt one second that I could let someone else pick up any. So no, I don’t feel any more responsibility now, because that’s how I operate. Every little thing has to be taken care of.
What functions are your primary responsibilities at Citadel? What is Farid Suleman’s role at the company?
We are very loose. It’s a lot of fun to be a two-man show. Farid and I have never written out a list of “you do this and I’ll do that.” We take care of whatever has to be taken care of. Clearly, Farid has far more capabilities in the finance area, and if there are stations we want to buy, he’s the best person to make the deal. But for someone who never ran a Radio station, he’s a really good operator. He can walk into a market and identify issues just like that. It’s amazing. So we both do everything. We’ve kind of divided up some particular markets where we think we have a huge upside, and it’s almost a competition. It’s as if we’ve said, “These are yours, these are mine — let’s see who can get them bigger.”
How much can you tell us about Citadel’s IPO? Is today a better climate to debut an IPO than, say, six or 12 months ago?
It could happen tomorrow, so I have to be really careful. I can tell you that we’re waiting for certain economic indicators, and then we’re going to do it. But that’s about all at this point.
Obviously, the Wilks purchase suggests you’re in acquisition mode. How does this work into your overall operational strategy?
We have a mission. We know what we want to accomplish, and we will get there through a combination of acquisitions and through increasing the profitability of our properties.
Is there an upside, considering that Forstmann Little paid $2 billion for the company?
This is a sensitive one, but yes, the company is worth more than Forstmann Little paid for it. Our cash flow last year was up 40 percent, so there is upside. Also, there are some real benefits to a company like this. Right now, we are a middle-market company that did not get hit with the war as the major markets did. The other thing is that 80 percent of our revenues come from more than 30 of our markets, which means that, if we take a hit somewhere, it’s not as if Infinity takes a hit in L.A. or Clear Channel takes a hit in New York — so we’re safer.
Excluding Citadel, what do you consider some of the best-run groups in the Radio business today?
Infinity has great management and great properties; their management does what they need to do to get the job done. Cox is a well-run company. And of course, I have to say Emmis.
What are some of the challenges in introducing a new culture to Citadel, and how have you adapted?
One of the things about Citadel is that they had a culture previous to the acquisition by Forstmann Little, and that culture is gone. Larry Wilson did a wonderful job putting together great markets, and our Country Radio stations are so great everywhere, but that’s gone. When a person controls a culture and they leave, the culture leaves, too. Farid has been here a year — and one of the things I loved about this opportunity was the opportunity to create a culture. After seeing our markets and meeting almost everybody at this point, I know what the culture should be, and I can tell you this will be a very people-oriented culture. Radio stations are nothing without their people, possibly more so than any other business I can think of. We have a great opportunity to create a really good culture in a world of consolidation, where culture has meant less and less. Ultimately, you want to attract the very best people, and that’s why culture is important. If you have a company of good, happy people, you will win.
Do you sense any trepidation in your people about what might change when the company goes public?
Not really. Farid has been here for a year, and he’s already made changes in accounting and in the way we report. In fact, I don’t know how he got this done as one person in a year. There really will not be any changes, because we operate now as a public company. We have to show increases month-to-month, quarter-to-quarter. I am asked this question when I go out to our markets, and I tell our people that I can’t see how an IPO would change our day-to-day life at all, except that it’s an opportunity for our people to have a piece of the company and to accumulate some wealth. Will some of our reporting from our accounting offices change? Yes — but that doesn’t really affect our Radio stations and our day-to-day operations.
What operational advantages does Citadel have over groups that are more oriented toward the larger markets?
There are many. For instance, we’re in position to go into a market, see an opening, maybe change a format in a week. We have many stations in many markets, which deliver the revenue, so we can go in and turn an Oldies station into a Hot AC and not take a big hit. But in the last five years, how many format changes have been in New York that weren’t precipitated by the mainstay — Opie and Anthony — being thrown out, or shifting Jammin’, which was just not making money in a market with $800 million a year? That’s a problem for public companies dependent on major markets, which we’re not.
How important is it to be considered one of the most influential women in Radio?
Believe it or not, I am way too shy for these things. It’s not me. I believe that women have made such a difference in Radio, and I would hope that enough women are in positions that there’s just not a need to separate them out. If you look back at last year’s MIW issue, I said, “Most women in Radio have a limited amount of power and influence over what happens in this industry as a whole.” And that’s still the case.
You also said that the industry needed more women CEOs and COOs. Now, one year later, you’re a corporate COO.
(laughs) I knew nothing about this job when I said that.
Is it important to identify women who have excelled in this business, as Radio Ink does with its “Most Influential Women” issue?
There are many great women in our business, and the positive part of this recognition is that it gives people an opportunity to see what some of them are accomplishing. What Radio Ink has done with this Most Influential Women in Radio issue is create a place where people can see accomplishments by women, because sometimes they just fall below the radar. You’re identifying them, and you’re making them more visible.
Does “influence” mean something different for men and women?
Honestly, I believe women’s influence doesn’t go beyond their sphere — those people who work for them, whereas Mel Karmazin has true influence. Lowry Mays has influence. Farid Suleman has influence. And these men have influence not just within their own spheres. If you look at where the women are from the first Radio Ink MIW issue, you’ll see that many of them have been fired. And being fired is okay, if you’re being paid for a year and given 10 million dollars. Fire me for that; I’ll love you. But there’s being fired and there’s being fired — and I’m talking about the kind of being fired where you need to find another job. Look at how many of these women have been fired that way, and it says a lot about the kind of influence many of them really have.
So what kind of “influence” means something to you?
I’d like to influence the rates we charge in a market. I’d like to influence the share of market we get. I’d like to influence how well we can work for our clients. Can I mentor a young woman and help her? Yes. But I have two children at home. I have to take care of them first. The kind of influence I want is to make the Radio industry a better industry.
Do you think you face any kind of bias because you are a woman in an industry that’s still largely dominated by men?
I may be a bit of a Mr. Magoo, but no, I don’t. I’m five feet tall. I’m teeny. So it may be possible that when I get off a plane in the Deep South, a GM says, “Holy shit, what the hell is that?” But if they are looking at me like that, I don’t notice it. Instead, I go into our markets, I meet our people, I talk to everybody, and I ask questions. I get the job done — or at least I try. And if people are thinking, “How can a woman do this?” I’m not aware of it. Look at Farid and me: This company is run by an Indian and a woman. We’re a weird team.
What does it take to lead a team the size of the one at Citadel? What are the qualities that make a good leader?
You need to attract the best people, put them in place, and let them do their job. I personally like dynamic leaders. I like the sort of leader where you and everyone else know that they’re in the room: people who have a personal connection with everyone on their staff, people who can identify problems quickly and don’t get stuck with a lot of the fluff. It also takes a lot of energy.
Do you have all of those?
I know I have a lot of energy. I’ve never felt I was lost in a room. So I’m probably right in there with everyone else.
How do you identify good managers within your organization, and what qualities do you look for when hiring new managers?
I like the problem-solvers. I like the people who find it fun to solve problems. On the other hand, I don’t like excuse-makers. If I go into a market that has problems, I want to hear the things that are being done positively to move it forward. I want to hear the confidence; I don’t want to hear all the hand-wringing excuses. And I don’t want to hear about how bad it used to be.
Or how good it was before consolidation?
Here’s the reality: Learn to live with it. Consolidation is part of our lives whether we like it or not. Fussing about what you can’t change is so unproductive. But if you look at the positives of consolidation, you can see how it has allowed employees — in the case of the public market — to get a piece of the action, to accumulate some wealth, which is a wonderful thing. You can go to a market in Flint, Michigan, and it will sound like a major-market Radio station because we have the equipment and the talent to make that happen. And that’s a real positive.
Randy Michaels once said that people reminisce about “how good it was before consolidation” because we all remember how good things were early in our careers. What’s your take on this?
I think he’s onto something. There’s an age deal, a memory of how things used to seem a lot more fun. But along with that, we also have to remember that the good old days were also days where there wasn’t a lot of accountability. People liked that. They enjoyed that lack of pressure. Well, one way or another, growing up is just not going to be that way. You can blame consolidation if you like, but accountability just goes with everything else as you grow up.
Let’s shift gears a bit. What’s Citadel’s perspective of HD Radio?
It’s not on the radar screen. They have a lot of work to do. It’s just way down the road…there are more pressing issues right now.
There’s been a lot of talk recently about cluster selling’s impact on revenues. What’s your take on cluster selling?
Somebody out there is cluster selling, and we all know who it is. I do not believe in discounting a Radio station’s value, and clustering does that. But you have to look at every situation, and you have to maximize that situation. The biggest problem I have with clustering is that those who are doing it aren’t increasing Radio’s share, period. They’re just trying to take a bigger share of the Radio pie. All of us in Radio need to be out there working in the best interest of the industry. We need to be pushing out the sides and bringing more people into Radio, instead of totally being focused on getting a share of what exists. In every case you have to sell the stations for the value that they are, without discounting them. You also have to look at your market and do what’s best. I don’t think there’s one answer for this, but I do think that discounting isn’t the answer.
Is cluster selling really the culprit here, or is it just poor performance?
You know what’s so funny to me? Suddenly, Infinity has a quarterly conference call, and they give down numbers for the first time, and they blame clustering. Then everyone yells, “We don’t cluster!” Well, it’s not unlike politics, where the pendulum can swing rapidly from one side to the other. Right now, it seems to be the fashion to say, “We don’t cluster,” when my guess is that everybody does a little of it. It’s funny: A New York Times article said Farid Suleman started clustering. That’s not true. Everyone knows that John Fullam brought the Clear Channel model over to Infinity.
Is Radio still trying to steal from other Radio stations, rather than trying to take business away from other media?
Yes, we’re still fighting each other way too much, and yes, we are not going after new business enough. That’s what I mean by not pushing out the sides enough. We’re also not training our people enough to not do that. There’s a lot of upside for Radio — there’s a lot that we can do better.
What’s your opinion of the Portable People Meter?
We all know that everyone out there is telemarketing. And it’s getting more and more difficult to get anyone to agree to give you answers. Arbitron has to get people on the phone before they do diaries, and people are being asked to do way too much. I think another form of measurement is inevitable. Still, there are parts that I don’t get: When I wake up in the morning, my alarm goes off in my bedroom. Then I go into the bathroom, where I turn on another Radio, and it might not even be the same Radio station. Then I go into the shower. I really don’t know how you measure all that, how you accurately measure morning drive or other parts of the day. But something is inevitable.
Are declining Time Spent Listening levels something to be concerned with?
Yes. Some of it has come from people having way too much inventory. I’m a very product-oriented person. If we have the product, we can bring that back up. On the other hand, I’m not convinced that it’s necessarily an accurate representation of listening. It could just be a measurement problem. But either way, I am concerned about the results.
What do you consider Radio’s single greatest competitor?
I believe we are our own worst enemy. I love to tell that to people: “Look at your own Radio station as your biggest competition. How do you do better? How can you beat that Radio station?” Ultimately, we need to be more customer-focused, really working to get results for the advertiser.
Does Radio face a substantial risk from other emerging media, such as satellite Radio?
Radio is a local medium, and non-local Radio isn’t a threat. Satellite Radio has 500,000 subscribers? Come on. I know that if you’re an Urban AC in New York, the music that’s played is very different from the music that’s played in Los Angeles, which is very different from Chicago, and that’s different from the South. Music is regional, and you can’t cover that with national programming. Plus, they’ve started to play commercials, so where’s the benefit? At the end of the day, people want to know what’s happening in their town. They want to listen to someone who knows where I-95 is. I don’t think we have a threat from anything that isn’t local.
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