Originally created 10/02/00

Consolidation gives power to group



Staff Writer Frank Witsil sat down with Cumulus Media's local general manager Gary Pizzati to discuss the radio business and its future.

Mr. Pizzati's office walls are covered with inspirational posters with pictures of eagles and tigers, and sayings about preparation, customer service and leadership.

Wearing a bright blue shirt and necktie, he leaned back comfortably in his black leather chair, put a foot up on his desk and responded in rapid-fire bursts.

Q: A lot is going on in the radio industry today. How has it changed in the past 10 years and where will it lead?

A: Conceptually, consolidation has changed everything.

Rather than there being seven general managers and seven different owners in a market, there are now only two, maybe three owners in a market place. That gives broadcast companies tremendous strength and ability to leverage large pieces of business from advertisers where they only have to deal with one or two people to get their entire radio budget.

That's what we do best in Augusta. We use the power of our cluster to demonstrate to our clients the ability of Cumulus as a whole.

Next.

Q: Why all the consolidation?

A: I don't know why it happened, all I know is that it has happened. And once the FCC put the regulation in place that broadcast owners can own a lot of radio stations, I think what happened was they went hog wild on it.

Q: You've been described as an aggressive general manager. How would you describe yourself?

A: I'm very aggressive. I'm very competitive. I have a lot of perseverance. And I enjoy being out in the marketplace. I'm known as aggressive because I try very hard to gain the most revenue market share I can get my hands on while satisfying our customers. I do that through our dynamic sales organization that I've assembled.

Q: You often use a military metaphor to discuss your competition with other stations. Is there truly a battle for the airwaves out there?

A: There's a battle for two sets of customers. There's a battle for customers who listen to you. And there's a battle for customers who spend money with you.

(With) the people who listen to you, there is a battle for you to go out there and make sure they see you in good organizations, you're very visible and when you're out there you look the best you can look and you're the best you can be.

When you're battling for customers dollars you have to make sure that those customers are satisfied to 1,000 percent of what you do every day. There is a tremendous battle.

Yes, I use military terms because down here, Frank, we use real bullets.

Q: I should confess, as disclosure, that I listen to Y105. What stations do you listen to?

A: I listen to all five stations on any given day while I'm driving to work. I also listen to my competitors. I want to know what's going on with them. I want to know what is happening. I want to see what customers are spending money with them and why not with us. I do my own, sort of, competitive media marketing each day.

Q: If we were to go out to your Cadillac right now, what would be in your CD player and what would your radio be tuned to?

A: Stevie Ray Vaughn would be in my CD player guaranteed. On the radio you would hear all five stations on my buttons and my competitors on my second set of buttons.

Q: Any favorites?

A: Not really. But I love listening to Kiss 96, and I love to listen to the Minnesota Fats in the morning.

Q: Some listeners, to be honest, don't like you. They say you gutted a good newscast, that you have no loyalty to your on-air talent or formats, and I was wondering, how you respond to those listeners?

A: I apologize if they are upset. But everything that has been done in this market has been based on pure business. Radio is now a very big business and I, as well as anyone else who runs a cluster of stations for a publicly-held company, we have a tremendous obligation to our shareholders to deliver a very profitable business at the end of each day.

Q: What is the profit-margin of the stations?

A: A good cluster should run between 40 and 45 percent of the bottom line.

Q: Is that your goal?

A: I like to run this place at about 48 percent.

Q: Is the bottom line all that matters?

A: What matters is your performance to your shareholders. And, and, our ability to service your community the best way you can. Remember you're satisfying two customers again.

You are serving your shareholders, and you are satisfying your listeners. Your listeners are a part of your community. You have to make sure your radio stations are out there in the community serving the people and serving charitable organizations that matter. At the same time, you have a tremendous obligation to your shareholders for the money they have invested in your company?

Q: What about your obligation to you employees?

A: I have a tremendous obligation to my employees and they know it. They have my home number, my pager number, my cell number. They can call me at any time and reach me at any time and I will always be there for them.

Q: Are you a heartless general manger?

A: No, I am a business-driven general manger.

Q: Does that mean you are insensitive to your employees emotional needs?

A: Oh no. You can ask my employees. When they have problems, trials and tribulations, they come sit in my office and talk to me about their personal problems and I deal with it accordingly.

Q: I want to ask you about the pending deal with Clear Channel. You have described it as a "win-win" deal.

A: Cumulus had some great markets and some cash. Clear Channel had some great markets and cash and Lew Dickey and the Mays family put together a great deal to benefit both companies.

Q: I want to ask you a question you used to ask rhetorically to turn speculation away from talk of selling the cluster: Why would Cumulus sell one of its most profitable clusters? Will you now answer your own question?

A: Why did they do it? Because it was one of the most profitable clusters. It was a good move for both parties.

Company: Cumulus Media Inc.

Headquarters: Milwaukee, Wis.

1999 Sales: $212.6 million

Total employees: 3,200

Local employees: About 80

Location: 500 Carolina Springs Road, North Augusta

Stations: More than 200 nationally in 46 markets

Local stations: WEKL-FM, WRXR-FM, WUUS-FM, WGUS-AM, WBBQ-FM, WBBQ-AM, WXKT-FM, WLOV-AM, WZNY-FM



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