3-20-13
By all accounts, the new man in charge at Dial Global, Paul Caine, was a rising star at Time Inc. and considered a possible successor to CEO Laura Lang. Time Inc. is in the process of spinning off from parent company Time Warner. In an interview with AdWeek, Caine said his departure had nothing to do with the spin-off and hinted Dial Global pursued him for the CEO job. "This is a really good opportunity. This clearly wasn't something that happened in the past week or two. I was not looking to move on.?
And it looks as if the thinking at the board level of Dial Global was to get new ideas in the building. Outgoing CEO Spencer Brown said, "The company needs a chief executive with a different skill set to steer it through its next phase of growth. We believe Paul is uniquely well-qualified to do just that." It was only a month ago that Brown was tapped to be the CEO, breaking up the co-CEO trio of Ken Williams, David Landau, and Brown.
The 48-year-old Cain had been a rising star during his 23 years at Time Inc., eventually being promoted to EVP/Chief Revenue Officer and Group President of Advertising. What does that title mean? Caine was responsible for ad revenue at all of the Time Inc. magazines, a stable of titles that includes Sports Illustrated, People, and Time. Caine begins his new position at Dial Global on April 5 and takes over as the company weaves its way through a rough patch. Dial Global has gone through several major changes at the CEO level, a major refinancing of the company was completed, and it was delisted from the NASDAQ.
A Dial Global press release says Caine will "create a new opportunity for Dial Global to expand the marketing and monetization of audio, starting with the company's lineup of premier sports, entertainment and news content that includes the NFL primetime games (including the playoffs and Super Bowl), the NCAA Men's Basketball Tournament, CBS Radio News, NBC News Radio, the NBC Sports Radio Network, and the Grammys. As mobile platforms continue to multiply the occasions for listening, the demand for premium digital audio content is growing fast. This represents a substantial, undeveloped opportunity for content providers, distribution partners and marketers alike."
(3/20/2013 9:53:09 AM)
The Caine hire surprises me. No disrespect to him, but he grew up in sales, yet this company needs a turnaround guru. Dial needs someone who will manage to the bottom line, not just the top line. I note the following:
-- Even after its proposed recapitalization (that has a target close in April), the company has huge debt levels (I estimate about $170 million, post recap). That sum is still too high for a company with no real assets (Dial does not own radio stations, etc.).
-- Growing revenue will be part of the solution (presumably Caine's strength, as a former CRO at Time). But someone needs to do a mathematical review of each of Dial's lines of business, and immediately cut those that do not generate positive cash flow. For too long the company has merely chased "sizzle and PR" rather than profitablity (shoot, look at the press release: you would think the CEO transition was a "victory" and all is really good; they just fired their three CEOs in the past 60 days).
-- To service debt, Dial cannot "grow its way out of its problems." It will have to make some hard, cash-flow-based decisions, something the three CEOs were not willing or able to do.
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