December 1, 2015

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First Mediaworks

Rick Cummings: “The Emmis-izer” (05/24/04)

By Reed Bunzel, editor-in-chief

Don’t call him a radio contest pig or even a boy wonder — but Rick Cummings definitely caught the broadcasting bug early in life. While still a student at Cloverdale High School in Indiana (and class president, to boot), he landed a job doing the play-by-play of local high school basketball games for an FM station in nearby Greencastle. It was that first taste that sparked a desire to get into broadcasting, with the ambition of being the voice of a professional sports team.

With this goal in mind, he enrolled at Butler University, where he continued his love of play-by-play, this time covering Bulldog football and basketball games at home and around the country. Alas, he finally realized that, with only 50 professional play-by-play jobs on the planet, his goal might be a little more difficult to attain, so he began to take a broader view of the radio industry. After graduating magna cum laude from Butler with a major in radio/television and a minor in journalism, he landed an on-air job at WFMS Indianapolis. Subsequently a talk show host at WTIC Hartford and WSMB New Orleans, Cummings worked his way up to program director at News/Talk-formatted WNTS in Indianapolis.

In 1981, Cummings joined Emmis Broadcasting as the first program director at the company’s flagship station, WENS in Indianapolis. Three years later, he was named national program director for Emmis, overseeing WENS Indianapolis, WLOL Minneapolis, KSHE St. Louis, and Magic 106 Los Angeles. In 1987, he became executive vice president of programming for the company, overseeing all programming at the 11-station group. During this time, he designed the format for and signed on KPWR (Power 106) Los Angeles, WQHT (Hot 97) New York, and the country’s first all-sports station, WFAN New York.

While maintaining corporate duties, Cummings moved to Los Angeles in 1991 to assume on-site program direction at Power 106. He quickly returned the station to number one in the ratings; and he established the Knowledge is Power Foundation, raising more than $1,000,000 for programs benefiting Los Angeles youth. He returned to corporate duties full time in spring 1996 and in 2002 was named president of Emmis Radio.

Radio Ink recently caught up with Cummings on one of his many corporate trips, this one to New York, where he was looking in on Hot 97.

You came into your position from programming, rather than sales. What learning curve did you experience when you assumed your current duties?
It’s a pretty steep curve. When I first started in this role two years ago, I would get up in front of sales staffs, and I knew that these people knew I haven’t sold a lot of commercials in my life. But what I’ve learned over the last few years — and I guess I knew this from all my years in programming — is that it is not about what you know; it’s about your willingness to learn. It is not about having all the answers; it’s about having good questions. I’d say 98 percent of this job or any other job is taking an interest and getting involved. Remembering those things has served me very well. I just finished two days of client calls here in New York, and I don’t think I lost us a single piece of business.

What are your direct responsibilities at Emmis? How do you split duties with Jeff Smulyan?
Jeff is an incredibly smart guy when it comes to operations, and when I have a particular operations issue, I’ll certainly seek him out, but for the most part, he leaves the operations of his divisions to his division heads. Jeff is definitely the guy on any potential deal or any discussions about the finances of the company. Most of his time is spent on big-picture ideas, such as studying where the industry is going and trying to find ways to enhance radio’s position in the media world.

Over the past 30 months, Emmis’ share price has nearly doubled, from $12 in late 2001 to around $24. How much of that happened because of the economy, and how much of it was hard work to get the company back into the black?
It is equal parts. If the economy weren’t doing better, we’d still be mired in some ugly numbers. When our stock price dropped into the $12-dollar range, we thought it was ridiculous. We knew it was more valuable than $12 a share. It has come back to a nice level, but we still think it ought to be higher than it is. Sometimes I look at what we’re doing and say, “Hey, we just had great ratings, we had a great year even though the economic environment wasn’t great, and our stock price hasn’t moved.” Then we can have an earnings call and talk about our great numbers, and the next day the stock goes down. Of course, sometimes it works the other way, and you get a break here and there. In the end we just say, “Let’s do all the right things for the business; let’s make all the right strategic decisions; let’s always try to break through our numbers so we become known for that.” Then, how we get treated by the stock market is how we get treated.

In his recent conference call, Jeff Smulyan said last year was the best in the company’s history. How much of that success came from successful operations, and how much came from external economic factors?
The economy has set us all back a little bit the last few years, but that’s getting better. Still, one of the things we’re proudest of is that, over our last three quarters, our advertising rates have gone up, and now we’re moving in the right direction. We’ve done that three quarters in a row — something a lot of companies haven’t done yet. The fact is, there are still some significant radio companies that are all about growing their own share, rather than pushing rate, and that’s an issue radio must deal with.

We hear a lot of rhetoric about increasing radio’s share of the advertising pie. How much can we realistically expect to move the needle?
In theory, we’ve gone from 7 to 8 percent of the pie over the last 35 years. How do we get beyond that? As an industry, we don’t get beyond that until we sell the value of the medium. It is undersold by the entire industry. The RAB has some pretty compelling information that indicates we’re considered a mid-pack medium. There are a number of reasons for that, and we’re going to have to make progress on those fronts in the next few years if we expect to be taken seriously and not be seen as a cottage industry that’s going to shrink from 9 percent to 8 to 7. Those issues are related to return on investment for advertisers — they want documentation of the effectiveness of their investment. This includes electronic invoicing, the Portable People Meter and digital transmission. All these things must happen if we want to be taken seriously.

There’s a lot of lip service paid to going after competing media, rather than other radio stations in the local market, yet industry competition remains fierce.
This is a terribly fragmented, competitive business, and I’m sure Emmis is as guilty as the next guy. We all say, “Let’s target newspaper and other media,” and we have done a better job with that. But let’s face it, a big chunk of the business is still transactions, and in that world you are competing with your peers. If an avail comes up, we’re not pitching against newspapers and TV; we’re pitching against other radio companies. Still, a little over two years ago, Emmis put in place a five-year sales strategy, and we definitely are generating some dollars with it. Instead of going after other radio companies, we’re going to the decision-makers who advertise their products and brands, to find out how to do a better job for them. It is a longer-term view of the world, and it is a more difficult way to execute business in the short term, but it gets great results.

With major-market consolidation virtually over, can a company like Emmis adequately improve performance based on same-station growth?
The low-hanging fruit was picked a long time ago, both on the expense side and the revenue side, so one of our challenges is uncovering growth opportunities. We’ve certainly got them — in many markets we have stations that can certainly do better — but we also have a lot of top-rated, mature radio stations with very high ceilings and not a lot of breathing room.

Can you squeeze more cash flow from a station like Power 106 in L.A.?
Power 106 was the number-five biller in America last year. Can we get it to number four? Yeah. Number three? Absolutely. I think we were #7 two years ago. So we can improve it a rank or two, but that won’t make a huge difference in the way this company performs. Other than organic growth through improvements in the markets, or improving the radio station here and there, we’re trying to figure out where we can find significant upside for the radio division.

So where do you look for this upside?
We’ve really pushed our interactive division the last two years as an alternative revenue stream, and frankly as an enhancement to our over-the-air brands. We’re pretty proud of our interactive division. We were part of LMiV — a noble experiment that hit the wall pretty badly. I’m glad we tried to build a cooperative venture with other radio companies — we rarely get a chance to collaborate and do things that are potentially good for the whole industry. But it just didn’t work. We closed the doors on it and started our interactive brand, and within a year we were in the black. The margins aren’t anything like a mature radio business, but it’s making money, and we’re proud of that. Our next goal is to turn that into a real, live business that creates meaningful revenue across the division.

Can you continue to improve performance on a station such as WQHT in New York when you have a strong competitor nipping at your heels?
We are still up a couple shares on our competitor in the target 18-34 demo, but it’s a real live competitor. Still, we’ve always felt that “Hot” is the biggest hip-hop icon on the planet, and if we can maintain a 2-3 share lead, we can drive up our performance. That’s what we’ve been able to do. To continue along those lines, however, we need a new morning show that generates great ratings. That is probably the number-one priority in this division.

Where do you look for new, talented personalities?
We have a pretty good track record at developing great talent. We know how to build shows, and we know how to find the talent. What we’re trying to do in New York is create an atmosphere in which that process moves faster. If you look at people such as the Baka Boyz at Power 106 or Funkmaster Flex at Hot 97, most of those personalities are not the result of people like me sitting around a conference room, drawing some things on an easel and saying, “Here’s the strategy.” It is more a case of constant brainstorming and constant lead-chasing, where you approach someone you think has the potential to be a great morning show host.

How deep is radio’s talent pool?
It has always been tough to find great talent, and I think it will get worse. We’re most concerned that we don’t find a lot of people who are interested in doing radio. Take Hot 97 — that station has always been driven from the street. It still is, but it’s tougher and tougher to find kids in the streets with real talent — kids who want to work here instead of MTV. If it’s difficult in large markets to find that talent, imagine what it’s like in Keokuk, Iowa. We started to see that 10 years ago: When we uncovered talented kids, some were absolutely enthused about doing radio, but others were more interested in working the comedy circuit or movies or television. We must do a better job of recruiting and make sure young people understand that, if they have the talent, they can make a ton of money in this medium.

What about WKQX in Chicago? Should that station be doing better?
It’s been a struggle there for close to three years. We’ve had a direct competitor, and while we continue to win, it’s been a war in which many lives have been lost. It is a heritage alternative station that went on the air in 1992 — one of the first in the format. It has a big morning show in Mancow, and we have a new PD who started around the first of the year. He’s the best PD we’ve had in that building since we signed it on. We also have a new sales manager and a retooled sales team that’s the best we’ve ever had there. We have a marketing department with a new leader. The on-air talent, top to bottom, is the best we’ve ever had at Q101. Yet here we sit, in a battle to the death. We ask ourselves, “Is there something else we could be doing with this radio station that makes more sense?” We keep coming back to the same answer: “No.”

Is there an alternative, no pun intended?
No. Sometimes you just have to be the very best you can be, and wait for the evidence that proves the case. We’re far better on the talent front, both on the air and behind the scenes. We are the heritage player. We had a bad year last year and still out-billed the competition 4:1 in revenue. We look at all that and say, “Who should give up here?” I continue to tell our people in Chicago that they must absolutely focus on being the very best they can be and performing at the absolute best of their ability.

Tell us a little about Red 104 in St. Louis.
Red went on the air in early January, and it is very much an experimental radio station. I said to our brain trust in St. Louis — Rick Balis, John Beck and Dean Mutter: “Look, we’ve been the third or fourth guy in a number of different formats, and I’m just not interested in doing that anymore.” They came back with this Red idea: “music with class.” It’s sort of martini-bar music, and the early returns are very encouraging. Whether we’ve stumbled onto a format that works all across America, we don’t know yet.

As a former programmer and group president, what’s your take on the Portable People Meter?
I am a believer in PPM. I have no quarrel with any group head who says there are things that are wrong with PPM; I’m sure there are. We looked at the Philadelphia study and said, “This will be really good news for Emmis in some markets and probably not great news in other markets.” The first study indicated that it doubles and triples the cume of a lot of mass-appeal radio stations, but some of the more TSL-driven stations didn’t do well. I don’t think we can look at PPM in our own self-interest, market-by-market. We have to decide whether it is a practical, digital measurement tool for advertisers. The Procter & Gambles of the world look at us and say: “These guys are still measuring their audience with a diary? What’s wrong with them?” I’m sure that PPM has every bit as many flaws as Nielsen does, but I’d still rather have a flawed instrument that is viewed as fairly modern, not the diary.

Let’s talk about indecency. Is your zero-tolerance policy clear enough for everyone in the company to follow?
I think it is, but I’ll bet you could talk to some of our talent who would say that’s not true. We put our zero-tolerance policy in place to let people know we are dead serious about this. The reaction was pretty negative, and it bordered on everything from reluctantly cooperative to negative to fearful. The next day, one of our kids was running the board for Rush Limbaugh in one of our markets and bleeped Rush 11 times — he’d been saying things like “getting a Monica Lewinsky.” The kid’s explanation was: “You said zero tolerance — I didn’t want to lose my job.”
We wanted to tell our talent, especially those who are aiming their shows fairly young (18-34): “Look, you can do this and you can still get ratings. You just need to be a little more creative. You need to stay away from ‘blue.’ You can get this done if you focus on doing it.” Now, have we made some mistakes? Absolutely. But in terms of spoken content, we’re in pretty darned good shape. The talent has really stepped up. To figure out where the line was, they asked a lot of questions. Everybody has adjusted quite nicely.

Is indecency on the radio a big problem, or is this a small issue that’s been blown out of proportion?
This really isn’t a big issue, except for shows targeted to 18- to 34-year-olds, particularly men. Pretty much every waking moment, they’re thinking about sex — even when they’re sleeping. Then we’re telling our talent they can’t talk about the thing their audience thinks about all the time. What we’ve learned is that you can talk about it, but you have to be more creative — and you have to be very careful. They’ve all adjusted to that. It’s taken some time, but I think most of those show hosts would tell you today that they’re getting through it OK.

To what degree do you think the indecency issue has been politicized during a polarized election year?
In the beginning, I felt that a lot of this was just about politics — just about congressmen being up for re-election, wanting to go back to their home district and say, “I voted against indecency in the strictest way possible.” Then I went to the Responsible Programming Summit at the NAB in Washington, and I saw first-hand the amount of feedback from the American public over the Super Bowl show. Had Janet and Justin done that very performance on Letterman, there probably would have been a ripple, not much else. But the American public just went nuts. They were saying, “How dare you put that kind of thing on when you have the kids running around the living room, our neighbors are over, and you put this on?” That’s where things got out of control.

It seems as though things got out of control very quickly.
We’re a country where people are very reactive. It’s easier than it’s ever been to send an opinion, negative or positive. In the past if you were angry about something like this, you had to go to the trouble of finding out the person to write to, writing the letter, putting a stamp on it, putting it in the mail. By the time it got to the person you wanted to complain to, you were over it. Now, one person with a big address book can e-mail that entire address book and say, “Did you see what happened on the halftime show? I’m mad as hell, and you should be, too.” All of a sudden, you have 500,000 complaints in Washington.

What do you expect to come out of the NAB’s Responsible Programming Summit?
Most likely, there will be some code of standards that we all can live with. That will help us with the more negative congressmen, who will be able to look at us and say, “These guys are making an effort to police themselves.”

How important is the culture of a company, and what has Emmis done to define its culture?
At times, our culture may have kept us from growing as rapidly as some other groups, because we truly care about the people. It manifests itself in such things as budget discussions. Every year, such rising costs as health insurance present areas we could cut, but we just refuse to do that. When it comes to training, health benefits, and career growth, we try to go all out. The benefits of this approach far outweigh the costs; but in a cost-driven, 90-day world, where you’re measured by driving performance up, it’s still important to balance it with the important things. You have a culture that works when people talk about someone new coming into the company, and the plan is to get that person “Emmis-ized” by a certain date. That word is actually used on a pretty regular basis around here.

Is radio sufficiently prepared for a rapidly evolving media environment — and all the competitive factors that come with it?
We’re always asked about satellite radio — it’s an obligatory question in all earnings calls. We’re far more worried about other things. I have a 14-year-old daughter and a 12-year-old son, and one of my biggest concerns is that they’re absolutely not interested in radio. It’s not on their radar. They’re getting to that age where that should have started to happen, but there are so many choices out there. They have CDs that they burn and exchange, MP3 players — so many ways they can exchange music and information. Many other things compete for entertainment, from gaming to 500 channels of TV. All these things take away from time listening to radio. We have a bigger challenge down the road than we know.

How important is radio-industry conversion to HD Radio?
It’s critical for us to be supportive of IBOC. We have to drag this thing kicking and screaming into the digital age. We need to do everything we can to create local, entertaining, relevant product that the kids can’t get somewhere else.

Is Emmis doing its part to convert to IBOC?
We’re doing three markets this year, at least one station in each of those markets. I’d love to do it in more, but it gets back to the question of resources. We’re absolutely going to support it. I’m not supporting it because of satellite radio as much as I’m just interested because this is where the world is. Everybody understands things like high definition, surround sound, digital vs. analog. We must be in on that movement. If not, that’s just one more blow to the medium, making it tougher to present ourselves as one of the leaders.

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