Art or Money?

By John Pellegrini

This is an article you’re not going to enjoy reading. Truthfully, I’m not enjoying writing it, either. But this is something that needs to be addressed and needs to be discussed. We’re talking about the future of radio production; specifically, your career. Huge changes have occurred in radio. Those changes are going to make it more difficult for many people to continue doing their job the way they have been. The truth is that if you want to survive in the world of radio, you’re going to need to make some important choices about the future of your career. The good news is, you can still have a career as a radio Production Director. The bad news is, you may not be able to make a living at it.

I’ll use Chicago as the market example because I know what’s going on here, and this is one of those “Major Markets” that many of us dream of getting to. Also, you may want to go back and re-read my article, “The Dream Gig” (RAP March 2000) because a lot of what I wrote then can be applied here. This is, unfortunately, not a time for levity or jokes. We’re seeing something quite startling happening in radio right now to the Production Director’s position, and it is something that should concern everyone. What we’re seeing is an unprecedented across the board salary reduction for most Production Director’s positions. And we see no sign of this being reversed any time soon.

Here’s what I’m talking about. Not only are Production Director jobs being eliminated from many stations (especially in cluster situations), but also salaries are being reduced by as much as $20,000 per year. I know what you’re thinking, “my salary isn’t being reduced, and most of the Prod Directors that I know haven’t had their salaries reduced… so what’s the deal?” Well, if you’re currently employed as a Production Director, it is very unlikely that your salary will be reduced. But, if you leave to take another job, the person who replaces you should expect to get the same salary as you, right? Wrong. In Chicago, jobs that paid between $60,000 to $75,000 are now being offered between $40,000 to $55,000 per year. The person who replaces you will be hired at a far lower salary than what they were paying you. Likewise, if you try to move up to a larger market, you will be offered a salary that’s far lower than the one they gave your predecessor. I know of several prod jobs in the last year that paid $50,000 and are now coming in at $30-35,000. Yes, production jobs in Chicago are now basing out as low as $30,000 per year. I wish I were making this up.

The sad truth is, the days of the Production Director making high five to low six figures at one radio station are gone. If you are currently one of the few remaining lucky Production Directors who pull down between $95,000 and $150,000.00, consider yourself an endangered species. We will never see those kinds of salaries again in this business. If you’re just getting started in radio right now, I have to tell you that in all honesty you’ll very likely never get paid much more than what you already are being paid.

Jobs for show producers aren’t any better. A producer’s gig used to pay between $30,000 to $45,000, but now we’re seeing stations paying $19,000 to $25,000 for the job. Who’s willing to be a show producer for that little? High School graduates and broadcast school students. That’s right, some of the major Chicago news, talk, and sports talk stations are hiring 18 to 25 year olds with no experience and putting them in charge of producing their big deal talent—not just overnights, but morning and afternoon drive shows! Less than ten years ago the very idea of a major market station hiring producers with no experience and putting them in drive time shows would have been considered insane. Now, it’s considered an excellent business decision.

The fact of the matter is you can make more money as a Production Director in smaller markets than you can here in Chicago. And I’m sure the situation isn’t any better in New York, Chicago, San Francisco, or Philadelphia (to round out the top five). The greatest salary drop that I have heard about so far was an imaging job that had been paying $130,000 two years ago, is now paying $55,000. You may think that the new person didn’t negotiate as well as the previous, but there was no negotiation. The replacement person was told that $55,000 was the salary, and if they didn’t want the salary, then they didn’t have to have the job. Yes, they knew how much the previous person was making, and that knowledge didn’t help them at all (no, this is not a personal story… this happened to a colleague of mine). “You don’t want to work here for $55,000? We’ve got dozens of demos from people who would love it.” And that’s the whole sad problem… so many of us are so driven over the idea that we must make it to the majors that we’re willing to sacrifice too much salary in order to get here. Then, you do get here and you realize just how hard it is to make it on such a low income. The Corporate higher ups know full well that so many people in the small markets want to get to the majors, and they’ve discovered that they can cut salaries and can still find plenty of people willing to accept the lower amount. Even if you want to take the idea that perhaps the previous person who was making $130,000 was more talented or experienced, you still can’t justify a salary cut of $75,000!

“What’s wrong with these salaries,” you might ask, “$40,000 to $55,000 is pretty good money, even for a major market.” Not if you want to have anything more than a studio apartment. It comes down to the cost of living. Here in the city of Chicago the average rent rate for a two-bedroom apartment is $1,000 per month, without parking. Sure, you can get rent cheaper, but you wouldn’t want to live in those neighborhoods, trust me. The average price for a two-bedroom condo is $150,000. By the way, that’s a two to three bedroom home, not detached, possibly without a garage, and not in any kind of an exclusive or even upper bracket neighborhood. No, it doesn’t get much better in the suburbs, either. The fact is, in order to find housing that’s affordable on $40K to $55K, you’ll have to live way out in what John Coleman used to call “the Ultra Boonies.” We’re talking a two hour commute or greater. By the way, I haven’t even added that parking your car in downtown Chicago is now on average over 20 dollars per day.

Now, if you’re single, you can still afford to live here on that kind of salary. But, do you plan on remaining single for the rest of your career? Sure, if you’re married or with a significant other you have double salaries. But your expenses also increase, and in many cases, the extra salary is just enough to cover the extra expenses, and you still don’t get much further ahead. Plus don’t forget that property taxes are far more expensive in major metropolitan areas, and I don’t care what you may think… you DO pay property taxes when you rent in the form of higher rent rates. In 1998, rent rates increased in Chicago by an average of $150 per month, due to increased property taxes. And there is one thing you can count on with property taxes… they rarely decrease—especially in a major metropolitan area where everyone wants to live, and the cost of housing continues to rise because of that fact.

It gets worse. Several of the top 10 markets are smaller than Chicago, but have a much higher rent and housing cost average. In Washington DC, market # 10 (and the second highest real estate pricing in the USA), the average cost for a home is $240,000 and the average rent rate for a two bedroom apartment is $1400. In San Diego, it’s $220,000 for a home and $1200 for a two-bedroom apartment. Both markets pay lower salaries for production people than Chicago. The highest real estate in the USA continues to be San Francisco, where the average cost of a two-bedroom home without a garage is approaching $300,000, and rent rates for a two-bedroom apartment are over $2,000 per month. Now, here’s the question that you must answer truthfully if you expect to remain in radio as a Production Director while still having aspirations of making it to a major market: How well could you do under those circumstances making less than $60,000 per year?

Unfortunately, there will always be people who are willing to sacrifice salary for the alleged benefit of being in a major market. But what happens is, they get a couple of years down the road, and discover that they intensely dislike having to blow their entire paycheck on housing expenses, and very little left over for any kind of social life. And now they’re stuck. They can’t find a better gig because they’re already at the top. There’s no place left to go, and even free-lance won’t make up the difference.

What about talent? What about “paying the best for the best?” Forget it. Salary reductions are the fact of life, even for air personalities. In this past year, just in Chicago alone, we’ve seen four major air personalities fired or released due to salaries. Three morning people, and one evening personality—all either fired or released because their salaries were too high. All of their replacements were brought in for between half to a quarter of what they were previously making. One of the morning persons was hired back by the station after listener protest, but they were hired back for afternoons, and at half the salary they used to be making. All three of the morning personalities, by the way, had agents. Did having an agent help them? No. The agents were told exactly the same thing that everyone else is told; “There is no negotiation.” Or, and this is my favorite, “you’d really be better off in a different market.” That line was said to a 21 year Chicago radio veteran. The worst case of all involved a guy who’d been in Chicago for nearly 30 years, making around $350,000 in morning drive. He was fired and his replacement came in at $90,000 per year… a two hundred sixty thousand-dollar pay cut! The replacement was eventually let go, because, as you could guess, the only person who would consider taking a morning shift with that kind of salary reduction was a beginner. The replacement had been a producer of a rival morning show and had no on-air experience at all. The new morning person came in for around $150,000 to $175,000 by most estimates, but that’s still around $200,000 less than the previous person!

The other unfortunate aspect is that I’m not talking about just one company. I’m talking about an industry wide situation that’s occurring inside every broadcasting corporation around North America. It’s starting here in the majors, because this is where the highest salaries are. But believe me that it’s headed for the secondary markets as well. Corporate radio has learned what other businesses have long ago realized, the quickest way to raise profits is to cut out the bottom line. Reduce salaries and eliminate jobs. Why are they doing this? Because, they’ve over-extended themselves in the buying frenzy. They’ve paid too much for the radio stations and television stations and newspapers and other media outlets that they purchased so quickly. They’ve paid far higher prices than they should have for properties that have no chance of ever making the money back in advertising revenue alone. So, get rid of high priced staff, and reduce the expenses. Corporate radio is doing to itself exactly what the rest of Corporate America did back in the 1980s during the “raider” and “hostile takeover” years. And as always, the people at the top make millions while those of us here must make the sacrifices for them.

Production people and air staff aren’t the only ones getting hit, either. Many sales Account Executives have seen huge reductions in commission rates while at the same time seeing their goal structure triple to the point where many aren’t sure if they’ll ever be able to make commission. Several of the corporate powers in different companies have vocally tinkered with the idea of making benefits part of the commission structure as well. It appears that this is only a matter of time before Account Executives will find that they no longer have medical insurance this quarter because they didn’t make their goal last quarter. Of course, most stations merely fire those who don’t make their quarterlies more than once.

Gone are the days when Account Executives could rely on being able to get ahead because they could always go into management. If you take a look at the highest parts of corporate radio, you’ll discover that most of the major positions in the big offices are now occupied by lawyers and majority stockholders, and not former LSMs, GSMs, Program Directors, or even GMs. It seems that there is very little chance of moving up in the corporate world anymore, for either programmers or Account Executives, and those that do move up find themselves more and more frustrated because of the increasingly demanding goals being placed on them. Ratings aren’t enough any more. Sales aren’t enough any more. Lower salaries and lower commissions must also accompany each quarterly report. Get rid of the high priced talent and A/Es. Let them go somewhere else if they want that kind of money.

You may laugh and scoff at this and say, “well that’s business, and that’s good for America.” You may laugh and scoff all you like… until it happens to you. The fact of the matter is, if you have more than 10 years in this business, and if you make more than $50,000 a year, your job and salary are in jeopardy, and I don’t care what your job is or where you do it. The bottom line is more important than talent to the industry these days. The sad fact of the matter is that in the cases of the air talents that were fired or released here in Chicago because of salary, there was only one instance of listener protest being vocal and strong enough to bring one of them back. And like I mentioned, the talent that was brought back was not returned to the morning show, and was handed a salary reduction. However, the most frightening aspect for air personalities to remember is this: The ratings of the stations were barely affected. Yes, they did experience some small percentage of ratings decline, but the amount of money the stations saved in salary far outweighed the loss of listeners. Besides, the drop in ratings was no greater than each station normally had during any given year of up and down books.

Again, I wish I was making this up. I wish this was fantasy. Unfortunately, this is only the tip of the iceberg. Think about it this way: If the major radio corporations can get away with massive salary reductions, job eliminations, and drastic commission cuts like this in the major markets—where the supposedly highest priced, most experienced and talented industry people reside—what do they have in mind for the smaller markets? Wholesale slaughter, perhaps?

If you think I’m trying to make you panic, you are absolutely correct. The situation is getting worse every year, and there is absolutely no sign of an end. I have no solutions, grasshopper. I have no suggestions. You must come up with your own answers to these problems. I only present the facts as a warning to you. I’ve been mentioning things like this coming for a few years now, and it’s getting worse every single year. From entire air staffs being fired and replaced with voice-tracking (the new automation) to salary reductions to job elimination, this industry is out for blood. Will it be yours? There is only one thing you can be completely certain about right now: the old phrase that we used to live by, “Talent will always be rewarded in radio,” is dead and buried. The only thing that’s being rewarded right now is cost cutting and the bottom line. You may think you’re talented enough to survive, and I hope you are; but unless you’re already at the top, the chances of you getting there with the same perks and salaries as those who are there now is almost non-existent. The longer you’ve been in the business, and the higher your salary has become, the harder it will be for you to remain where you are at the level you’re being paid. Trust me, the corporate bean counters are looking, or will be soon looking, at your salary the way Cortez looked at the Aztec gold in Mexico, and you’re Montezuma. Unfortunately for the Aztecs, Montezuma’s revenge came after he died. Those who don’t study history are doomed to repeat it. Will you make that mistake?