Saturday, May 31, 2008

Radio Wavemaker

By: Ann Saphir June 02, 2008
Chicago Business
powered by Crain's

Randy Michaels, the former shock jock charged with jolting Tribune Co. back to life, is grabbing the media giant by its Brooks Bros. lapels and shaking hard.

He yanked the salaries of his ad sales reps and put them on commission. He poked public fun at Trib Tower execs who, he said, would rather call the rotund Mr. Michaels "tall and good-looking" than speak the truth.

He crammed employees of Tribune's WSFL-TV in Miami into the Fort Lauderdale offices of the company's South Florida Sun-Sentinel and made them report to the paper's publisher. And he upbraided the publisher of Allentown, Pa.'s Morning Calldx in front of employees, accusing him of not providing an "honest budget."

In short, Mr. Michaels, 56, is hewing to the script that worked for him during his long career in radio: a brash style that holds nothing sacred.

As a radio programmer in Cincinnati in the early 1980s, Mr. Michaels once used the airwaves to label a programmer at a rival radio station a "spineless, gutless wimp" for refusing to talk to him when he dialed in to the rival's live talk show, recalls Dave Mason, the target of the vitriol and now the morning man at San Diego radio station 105.7 FM, who counts himself an admirer of Mr. Michaels'.

That's a dramatic contrast to the genteel style of the old Tribune regime, where corporate protocol could require a dozen signatures for a routine decision.

"The Tribune has done things the Tribune way for a long time," says Jeff Smulyan, chairman of Emmis Communications Corp. in Indianapolis, who knows both Mr. Michaels and Tribune's former CEO, Dennis FitzSimons. "Somebody like Randy comes in and says, 'These people are great people, but nothing has stopped the decline. How do we reinvent it?' That requires off-the-wall solutions, and the first thing is challenging the culture."


Mr. Michaels — hand-picked last month by Tribune Chairman Sam Zell to be the company's chief operating officer — is not one for small gestures. After turning around a handful of stations from Kansas to Florida, he expanded radio station operator Jacor Communications Inc. to 230 stations from 13 in five years. In 1999, he helped engineer a merger with San Antonio-based Clear Channel Communications Inc., becoming CEO of Clear Channel Radio, the nation's biggest radio operator, in the process. By the time he departed in 2002, Clear Channel controlled 1,200 radio stations.

"When Randy was Jacor CEO, he had 25% growth in an industry that was doing 15%," says Jay Meyers, who worked with Mr. Michaels at both Jacor and Clear Channel. Mr. Michael's favorite saying is "Let's go," according to Mr. Meyers. "It's like, get on the speeding bus or get out of the way," he says.

Mr. Michaels' relationship with Mr. Zell goes back to his Jacor days: Mr. Zell took over the company in 1993 and made sure Mr. Michaels stayed on as president. In December, he recruited Mr. Michaels to run Tribune's broadcast and interactive businesses, then last month handed him the keys to the entire organization.

Mr. Michaels was born Benjamin Homel in upstate New York but started going by the name Randy Michaels in his early days as a disc jockey. While introducing Mr. Michaels to staffers in January, Mr. Zell described him as "weird and different," which Mr. Zell seemed to mean as a compliment. And, indeed, the Chicago billionaire seems to share an iconoclastic, frank-talking management style with Mr. Michaels.

Mr. Zell has sounded the alarm with Tribune employees about the company's predicament in no uncertain terms.

"This is a crisis. We've got to save this business. We've got to make this work," he told Chicago Tribune employees in February. "If we keep operating the way we've been operating in the past, there is no future."

Tribune's $12-billion debt doesn't leave room for Mr. Zell's point man, Mr. Michaels, to pursue a consolidation strategy a la his Clear Channel heyday. In fact, Tribune has been in sales mode lately, striking an agreement to unload Newsday, ramping up efforts to sell the Chicago Cubs and considering the sale of Tribune Media Services assets.

Even so, Mr. Michaels is freely taking other pages from his past. Last month, Tribune's national cable TV channel re-branded itself "WGN America" in preparation for an overhaul, taking on a new slogan: "TV you can't ignore." Jacor's slogan under Mr. Michaels was, "The noise you can't ignore."

Detractors worry that Mr. Michaels may repeat other, more controversial moves.

At Clear Channel, he promoted a system called voice-tracking, in which "local" radio shows would be produced by DJs in studios hundreds of miles away. Voice-tracking eliminated jobs, but at a cost to radio's reputation, says John Gorman, a media consultant who remembers hearing a Clear Channel DJ mispronounce the name of the Cleveland suburb from which he was purporting to broadcast.

"If Randy repeats what he's done in radio, we'll see a lot of newsrooms eliminated," Mr. Gorman says, predicting a scenario in which local newscasts are "video-tracked" from other studios to save money. Mr. Michaels himself in April described for investors a relaunch of the Miami TV station this fall in which news "will be done primarily from the Sun-Sentinel Web site using a very high-tech, slick look."

Mr. Gorman also sees the potential for Tribune companies to sacrifice content for the sake of advertising. On May 18, Tribune readers were treated to a taste of one such possible future: a wraparound ad that obscured the two left-most columns of the front page. Such "spadias" were originally tried at smaller Tribune papers, and Mr. Michaels told investors that he hopes to make them a key strategy for these papers going forward.

Mr. Michaels, who declined requests for an interview, has hired a half-dozen former colleagues from his radio days. Under this team, Tribune's self-promotion has taken on an edge that recalls the prankster spirit of the radio background they share.

In May, both the Los Angeles Times and Newsday ran promotional ads claiming the newspapers were "more popular" than the leading local radio stations.

"All they have done is unearth a sleeping giant," says John Caraccilo, president of the Morey Organization, which owns three Long Island stations. He's organized counterattack ads calling out Newsday's "lies."


The newspaper environment is deteriorating at a rate Messrs. Michaels and Zell never expected when they took over.

In a January visit to the Allentown paper, Mr. Michaels assured employees that he wasn't planning newsroom cuts. "I think we have been cutting muscle, and we need to stop it," he said, to loud applause.

A month later, with revenue falling faster than projected, Tribune told its employees it would shed 400 to 500 newspaper jobs company wide, many of those in editorial.

Mr. Michaels has publicly conceded that he has a tough job ahead of him. But he's already shown he's ready to go about tackling that job differently from his predecessors.

"Has he calmed down a bit since when he was an off-the-wall program director in the '80s? Probably," says friend and former employee Mr. Meyers. "But the truth of the matter is that he absolutely believes in fierce competition. For you to have a bigger sandwich, that means you got to take some meat from the other guy."

©2008 by Crain Communications Inc.

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