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Telecommunications

The irony in Clear Channel’s DJ decision

By Sierra Jiminez
November 1, 2011, 1:14 PM ET
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Last week Clear Channel Communications cut back on local DJ’s across the country in an effort to tackle its $20 billion debt problem. Instead of hearing familiar local on-air personalities, listeners will hear their local news delivered by the company’s newly created national programming team, headed by Tom Poleman.

The cutbacks are part of the company’s larger goal to restructure its regional market strategy. “We’re beefing up some areas and restructuring some others,” said Angel Aristone, a spokeswoman for Clear Channel Communications (CCO), in an e-mail to Fortune. “That’s what is needed to keep our business nimble — to keep up with the times, including using technology to improve and grow our business.”

The decision comes less than a month after media guru Bob Pittman was named CEO of Clear Channel. The irony? Pittman started his career as a DJ in Jackson, Mississippi at the age of 15. He later dropped out of college and pursued a career in radio, making his way to Milwaukee, Chicago, and eventually New York City. From there, Pittman climbed his way up the corporate ladder to becoming CEO of MTV Networks. By the time he was 43, he became COO of AOL (AOL), where he helped transform the company’s business model from one dependent on subscriber revenue to one focused on advertising.

In an earnings call yesterday afternoon, Pittman addressed the recent layoffs, saying the cutbacks were less of a cost cutting measure and more of a revenue generating tactic. “Having been a local disc jockey, started out in Brookhaven, Mississippi at age fifteen. I know what you’re up against in a small market in terms of the financial limitations,” Pittman told reporters. “And I’m actually very excited about what John [Hogan] and his team have put together here.”

In an interview with The Huffington Post, Pittman said the best opportunity to turn Clear Channel around would be to shift its large portion of local ad sales to nationwide ads. While the company insists it’s not replacing local coverage with national programming, it is shifting its focus on creating content that can be shared nationwide. This new model may just do that.

The company has a long road ahead, however. If it brings more cuts close to the executive team’s hearts, that enthusiasm may begin to dampen.


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