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Beware of the Climbing Stock Market

Some in the media are urging caution, saying the underlying economic fundamentals could usher in a swift and forceful market correction.

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Photo by bfishadow CC BY 2.0

Spring is here and good economic times seem to be returning. More Americans are getting back to work as usual, many with newly-injected vaccines. The stock market is surging, with the Dow and S&P 500 rising to near all-time highs.

Some states that enforced the most strict lockdown regulations are now starting to allow citizens to return in larger numbers to restaurants, theatres and entertainment venues.  Even in New York city, with some of the most draconian shut down rules in the country, it was announced last week that Broadway musicals may return as soon as this fall.

But with that backdrop, and with financial markets seemingly revving up, some in the media are urging caution, saying the underlying economic fundamentals could usher in a swift and forceful market correction.

“We have to remember that we saw technology peak in late February and then it dropped significantly. Some of them are negative year to date,” said ER Shares CEO Eva Ados, during Friday’s edition of The Claman Countdown on the Fox Business Network. “Value companies, we’re seeing some of them trading at an all-time high, even though some of them might have bankruptcy risk and weak financial statements. So we have seen a reversion to the mean with overreactions in both growth and value. And investors have to be very careful, going back to traditional fundamental metrics.”

Television pundits will tell you over and over that the stock market is not the only, or sometimes even the best, barometer with which to judge the economy. Thus it would be incorrect to point to a surging stock market as evidence the American economy has rebounded from the pandemic and, more accurately, many states’ shutdown response. 

These same hosts and analysts may differ on policy, but they cannot argue results. After a sluggish economic era for many years following the crash of 2008, employees saw rising paychecks and inflated 401k accounts during the last four years. 

Now, many Americans are watching anxiously as the new Democratic administration plans massive tax hikes on individuals, families and businesses. Much of the market’s success, or failure, could hinge on the deleterious effects of these policies if they are eventually rammed through.

“We think it’s going to be detrimental for our economy, “ Ados told Cheryl Casone. We all know that entrepreneurial companies are the ones that generate the most jobs, compared to the government, and if you tax them higher, you’re taking away the incentive they have to create more jobs, invest more in research and development in the future of our economy, the growth of their company, property, plan and equipment.”

With these possible punishments looming on the horizon, many businesses may already be eying the exits, in efforts to protect their companies, employees and future growth.

“We will also have more companies leaving the U.S. They’ll have an incentive to move to tax havens, such as Bermuda, UAE, and this has a multi-layered effect. The more people you hire, the more money they have to spend in the U.S. economy, and now we are reversing it. We are going the opposite direction.”

Ados boiled down her conversation to this one major risk that could cause the U.S. economy to take a quick turn for the worst.

She didn’t hesitate in saying “certainly it’s taxes. That’s our main concern because the growth of this country is entrepreneurial companies, and without entrepreneurial companies keeping the talent here, keeping technology and growth, and supporting bureaucracy and regulation, unfortunately this is the biggest threat our economy can see.”

Americans are welcoming spring with a feeling of economic optimism. Their hope is that the good times continue rolling, and that burdensome taxation doesn’t crush the recovery just as it is getting started.

BNM Writers

Possible Reversal of The 1973 Roe vs. Wade Decision Dominates Network TV Coverage

“Surprisingly, the overall cable news landscape remained relatively steady in prime time on May 2.”

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News of Justice Samuel Alito’s initial draft majority opinion that would have the Supreme Court overturn the landmark 1973 Roe v. Wade decision — which guaranteed federal constitutional protections of abortion rights — immediately spread like wildfire on the evening of May 2nd.

The development, first reported by the website Politico starting within the 9 p.m. ET hour, holds monumental implications for the nation if the Court officially does overturn the law.

Yet, surprisingly, the overall cable news landscape remained relatively steady in prime time on May 2. Compared to the three prior Monday nights (averaging Apr. 11, 18 & 25), MSNBC’s flagship program “Rachel Maddow Show” slipped 4 percent to 1.94 million total viewers, according to Nielsen Media Research. Its lead-out “Last Word with Lawrence O’Donnell” (1.45 million) was down 7 percent. 826,000 then tuned in to “The 11th Hour” up 3 percent.

Over at CNN, the 9 p.m. hour of “Anderson Cooper 360” (660,000 viewers) ticked up one percent. “Don Lemon Tonight” grew ten percent in the 10 p.m. hour (689,000 viewers) but fell two percent in the 11 p.m. hour (517,000 viewers).

Fox News Channel’s coverage focused on how the leak from the Supreme Court occurred. “Hannity” (2.79 million) stayed even, while the subsequent two lead-out programs on the night jumped up the most (of all cable telecasts) in raw figures — each increased by two million viewers: “The Ingraham Angle” (2.4 million; +9 percent from the 2.2 million average of Apr. 11, 18, 25) and “Gutfeld!” (2.15 million; +10 percent from the 1.95 million average of Apr. 11, 18, 25).

Cable news averages for May 2-8, 2022:

Total Day (May 2-8 @ 6 a.m.-5:59 a.m.)

  • Fox News Channel: 1.484 million viewers; 241,000 adults 25-54
  • MSNBC: 0.631 million viewers; 69,000 adults 25-54
  • CNN: 0.478 million viewers; 102,000 adults 25-54
  • HLN: 0.183 million viewers; 52,000 adults 25-54
  • CNBC: 0.132 million viewers; 32,000 adults 25-54
  • Newsmax: 0.132 million viewers; 18,000 adults 25-54
  • Fox Business Network: 0.112 million viewers; 12,000 adults 25-54
  • The Weather Channel: 0.111 million viewers; 22,000 adults 25-54

Prime Time (May 2-7 @ 8-11 p.m.; May 8 @ 7-11 p.m.)

  • Fox News Channel: 2.286 million viewers; 352,000 adults 25-54
  • MSNBC: 0.996 million viewers; 107,000 adults 25-54
  • CNN: 0.605 million viewers; 131,000 adults 25-54
  • Newsmax: 0.223 million viewers; 26,000 adults 25-54
  • HLN: 0.206 million viewers; 57,000 adults 25-54
  • CNBC: 0.149 million viewers; 54,000 adults 25-54
  • The Weather Channel: 0.142 million viewers; 25,000 adults 25-54
  • Fox Business Network: 0.059 million viewers; 8,000 adults 25-54
  • NewsNation: 0.052 million viewers; 10,000 adults 25-54

Top 10 most-watched cable news programs (and the top MSNBC and CNN programs with their respective associated ranks) in total viewers:

1. Tucker Carlson Tonight (FOXNC, Tue. 5/3/2022 8:00 PM, 60 min.) 3.449 million viewers

2. The Five (FOXNC, Tue. 5/3/2022 5:00 PM, 60 min.) 3.431 million viewers

3. The Five (FOXNC, Mon. 5/2/2022 5:00 PM, 60 min.) 3.371 million viewers

4. Tucker Carlson Tonight (FOXNC, Wed. 5/4/2022 8:00 PM, 60 min.) 3.284 million viewers

5. The Five (FOXNC, Thu. 5/5/2022 5:00 PM, 60 min.) 3.220 million viewers

6. Tucker Carlson Tonight (FOXNC, Mon. 5/2/2022 8:00 PM, 60 min.) 3.188 million viewers

7. The Five (FOXNC, Wed. 5/4/2022 5:00 PM, 60 min.) 3.182 million viewers

8. The Five (FOXNC, Fri. 5/6/2022 5:00 PM, 60 min.) 3.151 million viewers

9. Tucker Carlson Tonight (FOXNC, Thu. 5/5/2022 8:00 PM, 60 min.) 3.047 million viewers

10. Hannity (FOXNC, Wed. 5/4/2022 9:00 PM, 60 min.) 2.876 million viewers

36. Rachel Maddow Show (MSNBC, Mon. 5/2/2022 9:00 PM, 60 min.) 1.941 million viewers

159. Real Time With Bill Maher “Episode 599” (HBO, Fri. 5/6/2022 10:01 PM, 55 min.) 0.870 million viewers

161. Stanley Tucci “Piedmont” (CNN, Sun. 5/8/2022 9:00 PM, 60 min.) 0.859 million viewers

290. Last Week Tonight (HBO, Sun. 5/8/2022 11:01 PM, 42 min.) 0.567 million viewers

356. The Daily Show (CMDY, Wed. 5/4/2022 11:00 PM, 31 min.) 0.434 million viewers

Top 10 cable news programs (and the top  CNN, MSNBC, HBO and HLN programs with their respective associated ranks) among adults 25-54

1. Tucker Carlson Tonight (FOXNC, Tue. 5/3/2022 8:00 PM, 60 min.) 0.623 million adults 25-54

2. Tucker Carlson Tonight (FOXNC, Mon. 5/2/2022 8:00 PM, 60 min.) 0.553 million adults 25-54

3. The Five (FOXNC, Tue. 5/3/2022 5:00 PM, 60 min.) 0.533 million adults 25-54

4. Tucker Carlson Tonight (FOXNC, Thu. 5/5/2022 8:00 PM, 60 min.) 0.503 million adults 25-54

5. Tucker Carlson Tonight (FOXNC, Wed. 5/4/2022 8:00 PM, 60 min.) 0.480 million adults 25-54

6. Hannity (FOXNC, Tue. 5/3/2022 9:00 PM, 60 min.) 0.475 million adults 25-54

7. The Five (FOXNC, Wed. 5/4/2022 5:00 PM, 60 min.) 0.474 million adults 25-54

8. The Five (FOXNC, Mon. 5/2/2022 5:00 PM, 60 min.) 0.445 million adults 25-54

9. The Ingraham Angle (FOXNC, Tue. 5/3/2022 10:00 PM, 60 min.) 0.444 million adults 25-54

10. The Five (FOXNC, Thu. 5/5/2022 5:00 PM, 60 min.) 0.441 million adults 25-54

76. Last Week Tonight (HBO, Sun. 5/8/2022 11:01 PM, 42 min.) 0.231 million adults 25-54

81. Rachel Maddow Show (MSNBC, Mon. 5/2/2022 9:00 PM, 60 min.) 0.228 million adults 25-54

96. Don Lemon Tonight (CNN, Mon. 5/2/2022 10:00 PM, 60 min.) 0.211 million adults 25-54

129. The Daily Show (CMDY, Tue. 5/3/2022 11:00 PM, 31 min.) 0.167 million adults 25-54

152. Real Time With Bill Maher “Episode 599” (HBO, Fri. 5/6/2022 10:01 PM, 55 min.) 0.154 million adults 25-54

Source: Live+Same Day data, Nielsen Media Research

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BNM Writers

What Would a Jeff Warshaw Consortium Takeover of Cumulus Mean?

When the news of Warshaw’s consortium became public, some of us looking for a knight on a white horse wondered if this was what we had been waiting for. The announcement led to the question: would a Jeff Warshaw-led Cumulus be an improvement over the current management?

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On April 14, 2022, reports became public that a consortium led by Connoisseur Media CEO Jeff Warshaw made an unsolicited, $1.2 billion bid (including debt) to acquire Cumulus Media.

Reuters reported that Warshaw planned to take the company private with a bid of $15 to $17 per share. As a result, Cumulus shares which traded in the $10 – $11 range over the past year, jumped to $14.21, a 40% increase and a level not seen since July 2021.

Cumulus management responded to the reports by acknowledging the indication of interest and stated it was “reviewing the letter.”

During Cumulus’s Q1 22 earnings call on May 4, President/CEO Mary Berner announced a $50 million stock buyback program and rejected the Warshaw consortium acquisition bid.

Radio companies have lagged the overall financial markets for over a decade. I have participated in conversations with groups that already own radio stations and others currently outside the industry who have considered buying radio groups.

In 2013 music streaming service Pandora bought an FM station in Rapid City, South Dakota. Upon first hearing that news, some of us thought perhaps they realized how undervalued FM signals were and would invest in the medium. Alas, Pandora thought they had found a backdoor means to lower its music royalty costs but otherwise had little interest in broadcast radio.

As somebody who has been involved in every facet of the radio industry for nearly 40 years, I was interested in far more than just the investment implications of the proposed buyout.

When the news of Warshaw’s consortium became public, some of us looking for a knight on a white horse wondered if this was what we had been waiting for. The announcement led to the question: would a Jeff Warshaw-led Cumulus be an improvement over the current management?

To answer that question, I used reviews from the website Glassdoor. Reviewers can rate the company on a one to five bases, with five the best and one the worst.

These reviews have to be taken with a grain of salt as former employees may have an ax to grind, but this caveat holds equally true for all employers.

The company Jeff Warshaw currently runs, Connoisseur Media, receives an average of 2.9 stars (out of five) on Glassdoor. This rating is based on just 32 reviews, so the low sample size is a factor to consider.

Cumulus currently has an average of 3.2 stars on Glassdoor based on over 800 reviews.

These Glassdoor reviews suggest that a new Cumulus led by Warshaw wouldn’t be an improvement over the current management. If it takes a knight on a white horse to make Cumulus a better company to work for, it will have to wait for another day.

To be fair, I don’t know Jeff Warshaw. I have never spoken with him. I would appreciate the opportunity to talk to him at the appropriate time (assuming that his attempted takeover remains ongoing). I also welcome employees of Connoisseur or Cumulus who feel the average reflected on Glassdoor is unfair to contact me (andy@andybloom.com). I will accept comments and input anonymously regardless of whether it is more positive or negative than Glassdoor poses for use in a future column.

While we’re looking at the reviews for Connoisseur and Cumulus, it’s a worthwhile exercise to see how the other major radio broadcast groups fare:

iHeart also rates a 3.2 with over 2,200 reviews.

Audacy receives a 3.5, which is misleading as it’s based on 23 reviews. Entercom had 691 reviews and rates a 3.1.

The best I can find in the industry among the majors is Cox with 4.1. Again, this may be deceiving. Apollo Global Management scores a more modest 3.1.

Hubbard has no reviews. I’m not sure why.

SiriusXM appears to have the highest current score at 3.6.

You’ll find common themes, positive and the negatives are dizzyingly familiar across the companies throughout these reviews.

The main reoccurring negative themes include:

· Low pay

· Long hours

· No chance for advancement

· Doing the work of too many people

· Management pays lip service to feedback but doesn’t do anything

The main reoccurring positive themes include:

· The people

· Fun place to work

· Perks – such as free tickets

· Glad to be working in the industry

I was curious about the differences between the companies employees rated higher and lower to work for. Listening to a couple of recent earnings calls revealed some of the variations. In next week’s column, we will examine some of the differences.

Are the pros and cons listed above familiar to you? I welcome your input and anonymous comments for next week’s follow-up column. Please reach out to me at andy@andybloom.com.

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BNM Writers

Dave LaBrozzi Knew What He Wanted From Day One

LaBrozzi has nearly four decades of experience in radio, most recently as Vice President of Programming for WABC Radio in New York City.

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Dave LaBrozzi was very high on my interview ‘wish list,’ second only to the guy who does the insurance commercials with the nasty emu. There seems to be little LaBrozzi has not accomplished in his career (with the exception of doing an insurance commercial with an obnoxious emu.)

He’s got that voice that hits you like a freight train. That radio voice, even if he doesn’t sit in front of the microphone these days. One of those booming set of pipes you’re just born with.

LaBrozzi is one of those guys who knew what he wanted from day one. Or at least when he was ten years old. Truth be told, he said he was one of those kids who sat at his mother’s kitchen table talking into a wooden spoon as though it were a microphone. 

“I wanted to be the next Pirates play-by-play voice,” LaBrozzi said. “Working as a disc jockey was right up there too. The spoken word has always been a passion for me.”

Future moves in his life were made with one eye focused on a career in radio. It’s the only career he’s ever been involved with. Today he’s with KDKA Radio News, the world’s first commercial broadcasting station. “It’s an honor to be here with these legendary call letters,” LaBrozzi said. “It’s become a second home and a thrill to be sitting in this office.”

LaBrozzi has nearly four decades of experience in radio, most recently as Vice President of Programming for WABC Radio in New York City. Prior to WABC, he was Program Director of WPLJ-FM. In addition to his work in New York, Dave spent 14 years as Vice President of Programming for Audacy’s Baltimore stations and has also spent time programming in Nashville, Austin, San Antonio, and Pittsburgh.

LaBrozzi was appointed brand manager for KDKA, overseeing the content strategy, talent, operations, and branding. 

KDKA was launched in 1920. It started as an opportunity to instantaneously provide news and information about the presidential election returns in the race between Warren G. Harding and James M. Cox. 

LaBrozzi said he’s extremely proud of his current on-air lineup. “Larry Richert has been here for 25 years. Kevin Battle has come back. In all, we have a really solid staff that’s deeply entrenched in the community.”

When LaBrozzi drops into his chair behind his desk in the morning, he checks the stories to make sure they’re talking about what matters to people on any given day. “We’re working hard to get back with the community, checking in with people one-on-one.” 

LaBrozzi said they grade stories after they’ve aired, deciding whether they hit their mark and if they mattered. He said it’s important to talk with people and visit neighborhoods.

“I hope local papers hang on; they play such a vital role in the community.

I started in a small station in upstate Pennsylvania with 2,000 people. It was an oldie’s station. The first record I played was ‘Here Comes that Rainy Day Feeling Again,’ by The Fortunes.” 

That song must be like a first love for LaBrozzi. If he’d played a Lawrence Welk song, he might not be where he is today.

His father was a high school administrator and was able to identify his son’s strengths and weaknesses from the get-go. 

“He knew my academic career wasn’t going to send me to Harvard,” LaBrozzi said. “He also knew I had the passion and drive to succeed.”

LaBrozzi tells his on-air folks to connect with listeners one-on-one. “It’s all about being authentic,” he said. “I want them to share their life experiences. Audiences can tell when a person is disingenuous. You can have a different sound on the air, but you have to be real.” He went on to say his staff is very passionate and believes in what they’re doing.

He was born in Emporium, Pennsylvania. Today the town boasts a population of close to 2,000 people. Compared to Andy Griffith’s Mayberry, that’s a metropolis. He went to Mansfield State College, but the radio bug called, tugged, and pulled. “I tell people I got thrown out of college because of what I didn’t do,” LaBrozzi jokes. He said he’d intended to get a business degree, but the math requirements sent him running for the exit.

Why radio? “I think it’s a passion, drive, not that different from being an athlete. It’s something deeply within our souls. “My wife was in the business but gave it up to home-school the kids.”

When he’s not busy being a radio executive, LaBrozzi likes to indulge in books. “I’m reading Ernest Hemingway right now,” he said. “I’ve watched some of the Winning Time series on HBO. It’s entertaining if not factual.”

Then came the dreaded question. Where do you think radio is going?

“I think social media is doing so much to help our industry,” LaBrozzi said. “We need to embrace all it offers. There’s always a need for more information on a local level.”

With LaBrozzi ‘in the can,’ now I have to track down that Emu guy.

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