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Randy Michaels: Shock Jock to TV Suit

January 31, 2007

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RANDY MICHAELS: SHOCK JOCK TO TV SUIT
 
TVNEWSDAY, Jan. 31, 8:50 AM ET
 
 
The new head of the former New York Times TV stations has a colorful, controversial past. Industry watchers wonder whether a return to radio is part of his strategy.
 
By Price Colman
 
In radio land, the name Randy Michaels has been synonymous with creativity and crassness, raunch and return on investment.  
However you slice him, Michaels, born Benjamin L. Homel, has been enormously successful and left a lasting mark on radio. From the Power Pig WFLZ-FM in Tampa, Fla., to radio revolutionary Jacor Communications and eventually industry behemoth Clear Channel, Michaels has made intensely loyal friends, arch-enemies and tons of money.
"He became the poster child for what people didn't like about corporate radio," says Sean Ross of Edison Media Research. "The irony was Randy was someone who really loved the medium…. Randy was—and remains—a true believer of the concept of better living through national radio."
Will his Midas touch translate from radio into television? Private equity firm Oak Hill Capital Partners is betting it will.
On the heels of its $575 million acquisition of New York Times Co.'s TV stations early this year (the deal hasn't yet closed), Oak Hill created Local TV LLC to run the group and named Michaels CEO.
The station group comprises nine stations in eight markets, network affiliates in mid-size and small markets. And it could be a bit of Back to the Future as the management team includes longtime Michaels colleagues Bobby Lawrence and Pam Taylor.
It's sure to be an interesting, maybe even incendiary, mix: Michaels, the radio madman, taking over a low-profile, staid TV station group.
Aside from a press release announcing the deal, Oak Hill declined to comment further. Michaels did not respond to phone messages requesting an interview. Representatives at Clear Channel also declined to comment.
But, in interviews elsewhere over the years, Michaels doesn’t deny he is not the buttoned-down type. "I have a controversial, colorful personality,” he told the Greater Cincinnati Business Record in 1992 after some of his antics led to a sexual harassment suit and a profile on ABC’s 20/20. “The radio business isn't IBM, and it's not an insurance company. The audience has to think we're having fun.”
Michaels, whose broadcasting career stretches back to the early 1970s, made his mark during a 10-year stint as the top programmer for Taft Broadcasting’s 12-station group. In 1983, he helped launch what became Republic Broadcasting and joined Jacor Communications when it absorbed Republic in 1986.
By 1996, he was CEO of Jacor. He led its aggressive strategy and engineered the merger with Clear Channel in 1999. At Clear Channel, he spearheaded the consolidation push that made the company the biggest radio operator is history with more than 1,200 properties and the target of Big Media foes.
But his style and that of Clear Channel’s controlling Mays family didn’t mesh. He left the company in 2002.
Since the announcement of Michaels’ involvement with Oak Hill, some have wondered whether his proved radio skills will translate to TV. Those who know him have little doubt.
"He understands radio engineering and television engineering is not that much different," says Robert Unmacht of IN3 Partners, a management and operations consulting firm. "He understands Wall Street and marketing. Randy is able to bring all facets of the business together."
Unmacht once owned industry publication M Street Radio, in which Michaels was a minority partner. Clear Channel eventually bought the publication.
"He is a certifiable genius," says Bill O'Shaughnessy of New Rochelle, N.Y.-based Whitney Radio. "He will be good at anything he does—radio, television. It doesn't matter. He's our Steve Jobs."
Michaels does have a dash of television in his background. Jacor scooped up WKRC Cincinnati along with Citicasters’ radio stations in 1996. Although there was some talk about building a TV group, nothing became of it. WKRC is now part of Clear Channel Television.
Michaels worked his way to the top of radio by clustering, guerrilla marketing and promotions, and a spoke-and-hub strategy that enabled advertisers to leverage spot buys across multiple stations and markets, says John Eckberg, author of The Success Effect, and a writer at the Cincinnati Enquirer, where he has covered Jacor and Michaels.
A radio enthusiast from his youth, Michaels may have been the original shock jock but was also a savvy businessman.
"How many guys worked the night shift at an AM radio station then fast forward 20 years and they're worth tens of millions of dollars?" Eckberg asks.
If he is broadcasting’s Steve Jobs, he is also Gallagher, the watermelon-smashing comic, and John Belushi rolled into one. How else to describe a guy who’s followed by tales and charges of farting on air, brainstorming the butchering a pig on live radio, dropping trou at a convention and fake pureeing a frog on air. The stories are legion but the stunts always had a point: Shock tactics get you noticed, the attention generates listeners and bigger audience numbers mean more advertising revenue.
Another Michaels maneuver: During the early Internet frenzy, he was working in Cincinnati radio and registered the domain names of competing stations. If you happened to go to one of those stations' Web sites, you might find a message dissing the station, with a link to whatever station Michaels was promoting.
Michaels went low-profile himself several years ago, in part because his over-the-top tactics brought down too much heat on Clear Channel.
"He rode the telecom deregulation wave faster and better than anyone else," said Eric Boehlert, whose definitive 2001 Salon.com piece on Clear Channel—Radio's Big Bully—and Michaels captured the post-telecom deregulation feeding frenzy. "He was incredibly successful but he made more enemies than friends."
Who needs friends, at least in business, when your name spells profit to investors? Michaels' talent for attracting the money guys, including Chicago real estate magnate Samuel Zell, and his passion for radio helped him make many people wealthy. Zell invested $83 million in Jacor in 1993 when it was struggling. Six years later, Jacor was thriving thanks largely to Michaels, his management team and deregulation and it was sold to Clear Channel for a hefty $3.8 billion.
Now that Michaels is back—his non-compete clause with Clear Channel expired Dec. 31—industry watchers are wondering how long before his broadcast domain once again includes radio.
"It's surprising that Randy has taken this long to get back into radio and it's hard to imagine that he will not ultimately expand back into radio," says Edison Media Research's Ross.
In fact, after leaving Clear Channel in 2002, Michaels has busied himself by spending $13 million at FCC auctions for the rights to build 21 radio stations in small markets.
"When I heard he was buying these [TV] stations, I said to myself, he's going to buy radio too," says Jerry Del Colliano, a former radio industry insider who has his own history with Michaels. "If I wanted to guess—Clear Channel has 400-plus stations they want to get rid of—I'd guess they would want to sell to one person. Randy is the guy who made Clear Channel's fantasy come true. What if Clear Channel sold him a couple hundred radio stations? Then he has the TV and radio business. I think he's going to have radio. That's what his core competency is. I think he would like to be back."
Del Colliano, himself something of a radio wild man back in the day, has known Michaels for nearly three decades. Now a music-industry professor at the University of Southern California, Del Colliano once headed the industry publication Inside Radio.
It was the 1996 Telecommunications Act that brought Del Colliano and Michaels into conflict. When Clear Channel was buying everything in sight, with Michaels leading the charge. Del Colliano was openly critical, saying consolidation was destroying the quality of radio. The primary villain: the "evil empire" Michaels was creating at Clear Channel.
Clear Channel responded with an anti-Inside Radio campaign—a Web site called insideinsideradio.com featuring a doctored photo of a guy with his head up his ass. The photo featured the caption: "Jerry checks with an inside source." The site accused Del Colliano of extorting subscriptions by threatening negative coverage.
Dueling lawsuits followed, and after much ado they were settled. Clear Channel gained Inside Radio and Del Colliano walked away happy and rich.
"The reason I like Randy, he's a very smart guy," says Del Colliano. "He has problems with me and I have problems with him but he's a shrewd dude. He's really a fascinating character, a throwback to an era that was less than kind, but a really colorful, creative guy.
“Anything he does, he's going to succeed at it."

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