5-3-2012
Answering a general question about expenses from Wells Fargo analyst Bishop Cheen yesterday, Radio One CEO Alfred Liggins addressed how his company is constantly dealing with rising expenses in a business that does not experience a ton of growth. He kicked it off by detailing how the fees paid to Arbitron have nearly doubled in five years.
Five years ago Radio One was paying radio's only ratings service $6 million per year. Now Radio One, with its 53 stations, pays $11 million. Liggins also explained how expenses are cut from programming. Here's what Liggins said:
"The cost of business always goes up. We reduced the cost in our radio division dramatically since the downturn. You have to be a hawk on cost. It's forced us to be better operators. You've got to get it everywhere. You have to do more with less. You have to get it out of your labor force whenever you can. You have to figure out how to do more with less people. You have to figure out, from a technology standpoint, to streamline that labor force. Our talent costs have been going down and will continue to go down. Because what you can afford to pay someone when there is $20 billion in the industry changes when there's only $15 billion in the industry. When those contracts come up, the new deals have to reflect those realities. Ratings are down for Urban and Hispanic Radio so that's also going to reflect those realities. You've got to get your costs savings $20,000 at a time. In the meantime you have to go where the revenue is growing...online."
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