Radio

iHeartRadio Layoffs During Pandemic Show Its Challenges Go Beyond Lost Ads

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Steve Latart was shopping at Home Depot when his radio-station manager called with bad news: Latart had lost his job of 15 years in iHeartMedia's latest layoffs. "The pandemic messes up the bottom line for everybody," says the former executive producer for Minneapolis top 40 station KDWB's morning show. "But on top of that, they're figuring out what they're trying to do next."

Since January, the world's biggest broadcaster has had three rounds of job cuts — most recently in November, when it let go at least 120 program directors, music directors and production directors in major markets like Detroit and Philadelphia. The layoffs are part of a company pledge to save $250 million through cost-cutting and "modernization initiatives," including automated ad sales.

The pandemic has hit every advertising business hard, and iHeart's broadcast revenue from its 850 stations was down 29% in the third quarter of 2020, compared with the same time last year. But radio is also shrinking for other reasons, and iHeart seems to be using its advertising decline to "basically provide cover" to replace its expensive broadcast staffers with voice-tracking and syndicated content, says George Reed, a media broker who also owns 11 small stations in Virginia.

"They're able to sell nationally and don't seem to be at all focused on trying to grow their local business," Reed says. "The independent broadcasters, Townsquare, Beasley and others, have a real opportunity: iHeart has fewer sellers on the street and it hurts on the local sales."

As advertisers increase online spending, radio has suffered. A recent study by radio analysts Borrell Associates says 20% of advertisers boosted their social media budgets and one-fifth of those cut their radio budgets during 2020. Last year, three stations per week "went dark," says Gordon Borrell, the company's CEO, and this year that number has roughly doubled: "It's easy to call [iHeart] a heartless bastard because they're cutting, but that's what it takes to stay afloat." (IHeart is saddled with roughly $6 billion in debt left over after its 2019 Chapter 11 restructuring.)

The company appears to be shifting from more expensive, live and local programming to syndicated shows and content from its central office, as laid-off employees predicted in January. One recently laid-off employee, who requested anonymity, said his station developed a more efficient method to spread out the production of advertising spots among a number of producers -- allowing the station to cut "a good number of us" who were focusing more deeply on individual ads.

The changes to iHeart's business will ensure that "our best people can serve more communities with great locally focused programming," a company representative said in a statement. "Listeners care about what our personalities are saying, not where they're sitting."

Newly jobless radio talent, like Temple Hancock — who in November lost her job as WNRQ Nashville's morning show producer and host of the Temple of Rock podcast — will now face a job search in a shrinking market. A 32-year industry veteran, Hancock says she might seek part-time work as a voice-tracker — a DJ who provides content to multiple stations — which rarely offers benefits. "I have two teenagers, and they are not listening to broadcast radio — that seems to be the way the industry is going," she says. "The pandemic just made things happen quicker."

A version of this article originally appeared in the Dec. 5, 2020, issue of Billboard.