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Clear Channel Goes Private and Streamlined

Posted by Zonk on from the folding-in-on-itself dept.

7Prime writes "Clear Channel Communications Inc., the nations largest radio, billboard, and entertainment outlet, announced their intention this morning to sell the company to a consortium of private-equity firms for over $26 billion. In addition, Clear Channel's TV division, as well as its smallest 448 radio stations would be sold out of the company and will be looking for potential buyers." From the article: "The buyers, led by Bain Capital Partners and Thomas H. Lee Partners, also are bidding for Tribune Co., which owns several newspapers and television stations. That process is ongoing. If Bain and Lee purchase Tribune, they may be forced to sell certain newspapers and television stations to comply with Federal Communications Commission regulations that prohibit one company from owning a newspaper and radio or television station in the same city. The buyers paid $37.60 per share for Clear Channel, the highest price the stock has seen since mid-2004, and a 25 percent premium on the stock's average price in October. The purchase price includes the assumption of about $8 billion in debt."

30 of 94 comments (clear)

  1. The End of the Beginning? by RobertB-DC · · Score: 5, Interesting
    Here's a note I sent to the KHYI-Fans email list, a group of fans of independent alt-country station KHYI (and others) in Dallas:
    As Winston Churchill said, "This is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning." Clear Channel, the company that took advantage of greed and laziness in the radio biz and used it to buy over a thousand formerly independent radio stations, is in the process of being bought out itself.

    Don't expect to hear good music on the radio again right away, but according to the AP wire, CC is already planning to sell of 448 of its 1,150 radio stations and all of its 48 TV stations. They're all in small markets, and together make up only 10% of CC's revenue. But putting those stations back in local hands -- even if they're still part of some corporate portfolio -- will give good music an opportunity to start eating at the edges. And "702 radio stations" had a decidedly less impressive ring than "Over 1,100 stations" -- meaning that CC won't have the same ability to push advertisers around.

    On the down side, CC is likely to be bought out by a private investor group. That means that they won't be subject to the financial disclosure requirements that publicly traded companies must comply with, so the company will become even less transparent than before. But with dwindling influence both in market share and in Washington, it may not matter anyway.

    It's the end of the beginning, but the end of corporate radio can't come soon enough.
    --
    Stressed? Me? Of course not. Stress is what a rubber band feels before it breaks, silly.
    1. Re:The End of the Beginning? by lucabrasi999 · · Score: 4, Insightful
      Don't expect to hear good music on the radio again right away

      You know, the LAST time I heard good music on commercial radio was probably 1984. I wouldn't necessarily blame all of the crappy music on Clear Channel. Blame it on the desire to "please most of the people most of the time".

    2. Re:The End of the Beginning? by jfengel · · Score: 5, Interesting

      Clear Channel + Major Labels were a kind of unholy feedback loop of genericizing music. The labels knew that they could hit one target and have their music played in every single market, so they had no reason to try to create music for minor tastes. In fact Clear Channel would rather try to play the same music in every market, and knew that the labels would test for what made the most generically popular music. That made the music even more generic, which made aggregating the radio stations even more profitable.

      It didn't help that with the lack of really independent radio stations, there didn't seem to be anybody willing to call Clear Channel and the labels on payola, which is an open secret in the music industry. Everybody knows, and it's illegal, but since the only people involved are profiting, nobody sues. The ones who would sue are already out of business, or recognize that they don't have the kind of money it would take to call Clear Channel and the labels to task.

      So it's not just the desire to please most of the people; it's the fact that pleasing most of the people most of the time is so very profitable, especially when you can take a community good like the airwaves (the single best way to advertise music) and deprive the community a chance to use it.

      This isn't going to change anything any time soon. This is just them recognizing that smaller markets aren't profitable. Independent bands and labels still will have a hard time getting air play, because it'll still be a challenge to find the niches.

    3. Re:The End of the Beginning? by RobertB-DC · · Score: 2

      As a Dixie Chick fan, I'm not surprised you're happy to see Clear Channel retreating [if that is in fact what's happening here?].

      You betcha. Not that it would help with the current album, which is stylistically all over the place (with the possible exception of Country). But "Travelin' Soldier" didn't deserve to get thrown off the charts in 2003 just because Bush and his buddies needed a straw man (woman?) to distract voters. (I may need to get one of your products after all...)

      Oh, by the way, I would like to thank you and your fellow Canadians for supporting the Chicks' "Hey, we're still here!" tour! Their seven (count 'em!) kids won't go hungry after all.

      --
      Stressed? Me? Of course not. Stress is what a rubber band feels before it breaks, silly.
    4. Re:The End of the Beginning? by Luscious868 · · Score: 2, Interesting

      I think the consolidation of local radio stations is partially to blame for the decrease in CD sales that the record companies have been complaining about. For most people radio is the primary means of finding new music and when most of the stations in your market play the same top 40 crap day in and day out, you're exposed to less music and you'll probably by less music by extension. It's clearly not the only problem plauging the music industry but I'm certain it plays a large role.

      I never listen to the radio anymore because I get tired of hearing the same stuff over and over and as a result I by less music because I'm exposed to less music.

    5. Re:The End of the Beginning? by UncleTogie · · Score: 2, Insightful
      But "Travelin' Soldier" didn't deserve to get thrown off the charts in 2003 just because Bush and his buddies needed a straw man (woman?) to distract voters.

      I didn't stop listening to the DCs because of ANYTHING the Bush administration had to say; those ninnies will be lucky just to hold the White House. I just didn't care for the way it went down. They're free to say whatever they'd like; my dad fought for that freedom. IMHO, the DCs were playing to the crowd. This happened in London, during a time when the war was really unpopular there. They wanted to score brownie points with the crowd, and by all accounts did so. Yay for them.

      HOWEVER:

      If their fans here in the US have a problem with that statement {or the retraction....or the reinstatement...}, and vote with their pocketbooks, that's our right. I'm not trying to censor speech, just the opposite. However, just as I disagree with Louis Farrakhan, David Duke, and refuse to buy their material, I reserve the same right with the DCs.

      --
      Don't tell me to get a life. I'm a gamer; I have LOTS of lives!
  2. Sick of Media Behemoths? by jazman_777 · · Score: 4, Funny
    Like CC, Time-Warner, Slashdot? Boyc


    ...connection terminated.

    --
    Slashdot: Failed Car Analogies. Amateur Lawyering. Anecdote Battles.
  3. In other news... by Quaoar · · Score: 4, Funny

    Due to recent budget cuts, Clear Channel has reduced the size of their song lineup. Instead of playing 10 different a day, the stations will now loop the latest Coldplay single 24/7.

    --
    I'll form my OWN solar system! With blackjack! And hookers!
  4. KTVF... by 7Prime · · Score: 4, Interesting

    I work for a small Clear Channel owned TV station here in Fairbanks, Alaska, KTVF, and I found out about this this morning when I came into work. Not a whole lot will change when we get sold (depending upon the owner). Many of the CC TV stations were bought by CC just a few years ago when CC tookover The Akerley Group, of which our station was a member. We have been through 4 different coorporations (statewide and national), in the last 15 or so years... none of the sales having any reliviance to the profits of this station.

    So, basically, our website will probably change (since it's currently a Clear Channel developed layout), we will no longer be pushed into the sales promotions that are currently required of us, and our logo will probably have to be changed a bit. I just hope the new boss isn't the same as the old boss... so to speak.

    --
    Multiplayer Gaming (defined): Sitting around, discussing single-player games with my friends, at the bar.
  5. Call me suspicious, but... by Valdrax · · Score: 2, Interesting

    A group of investors wanting to take private some of the largest media companies at high prices and willing to accept large debt for it? I kind of wonder what they expect to get out of it. This kind of a media consolidation at a loss smells of political and not financial motives to me, and I have to wonder if someone's not trying to be the next Rupert Murdoch.

    --
    If it's for-profit but free, you're not the customer -- you're the product (e.g., the Slashdot Beta's "audience").
  6. Please please please by computertheque · · Score: 2, Interesting

    Does this mean that we'll get some decent radio stations back? Clear Channel effectively ruined the radio for me, NPR being the only remaining reason to turn it on.

    1. Re:Please please please by 7Prime · · Score: 3, Interesting

      Well, 445 of the smallest radio stations are being cut loose (about 1/3rd). So there are some local stations that will now be out from CCs thumb (and under someone else's, most likely). You might just get your wish. This effectively cuts the size of CC down by quite a bit, and it takes them out of the tallons of the "I want my money NOW!" shareholders. They have been trying to do this for quite some time, actually. Going private is probably the best thing that has happened to the media industry in years.

      --
      Multiplayer Gaming (defined): Sitting around, discussing single-player games with my friends, at the bar.
  7. And in related news... by JonTurner · · Score: 2, Interesting
    ... its smallest 448 radio stations would be sold ...
    Music fans rejoice. IOW, there's a small chance that, some day, you may be able to find a radio station with Music That Doesn't Suck.
  8. Interesting... by errxn · · Score: 3, Insightful

    ...that this topic is in the 'Politics' section. That may say more about /. than it does about Clear Channel.

    --
    In Soviet Russia, Chuck Norris will still kick your ass.
    1. Re:Interesting... by mikelieman · · Score: 2, Insightful

      "...that this topic is in the 'Politics' section. That may say more about /. than it does about Clear Channel."

      Or perhaps it's just well known that ClearChannel is a big tool of the Bush Administration?

      Neil Young did a tour about it...

      --
      Technology -- No Place For Wimps! Grateful Dead and Jerry Garcia Chatroom -- http://www.wemissjerry.org
    2. Re:Interesting... by davecarlotub · · Score: 3, Interesting

      Politics? ClearChannel banned the Dixie Chicks records after they spoke out against Bush.

  9. Anti-Trust....the old fashioned way by PreacherTom · · Score: 3, Insightful

    Sounds to me like a case of spontaneous anti-trust. Overall, I think this will be a very good thing for the communications industry. It'll shake things up a bit and hopefully offer some more variety and freshness. That is, of course, unless someone rolls in and buys them all.

  10. Mitt Romney gets his own media empire by Squirmy+McPhee · · Score: 5, Informative

    Bain Capital is a private equity firm that was founded by Mitt Romney, outgoing governor of Massachusetts and 2008 presidential hopeful. (Last year they tried to buy the entire National Hockey League.) I guess we can't really know how meaningful that is until the 2008 election is upon us, but a presidential candidate with his own network of radio stations is courting controversy to say the least.

    1. Re:Mitt Romney gets his own media empire by EVil+Lawyer · · Score: 3, Informative

      This is just a tiny stretch. Mitt founded Bain but he doesn't have any control of the organization now. He is not even a member of the firm at this point. Not to mention Bain is only one of a number of private equity firms in the consortium that's purchasing Clear Channel.

  11. "They" do it for the money. by NotQuiteReal · · Score: 2, Insightful
    Investors do not take a company private, to the tune of $26 Billion, for "politics".

    The do it because they think the publicly traded company is worth more than the market does.

    See here for a nice summary.

    --
    This issue is a bit more complicated than you think.
  12. Radio (Used To) ==Geek by Kozar_The_Malignant · · Score: 2, Insightful

    >how is this related to a techno nerd/geek site?

    Back in the day, nerdness was all about radio and other homebrew electronics. That morphed into computers, and here we are. Ownership of radio, teevee, computer, and telecom companies has always been fair game for discussion here.

    >In Michigan a man was arrested for having sex with hios girlfriends dead dog in full view of a preschool, but I don't expect that to be on slashdot either.

    Yet somehow it made it onto Slashdot after all. Go figure.

    --
    Some mornings it's hardly worth chewing through the restraints to get out of bed.
  13. Oh, what a lucky man he was by jmb-d · · Score: 2, Interesting

    I can't abide pop music. Top-40 radio is horrid. Blathering, inane DJs suck.

    Thankfully, I'm lucky enough to live within the broadcast region of WRNR, an independent station. There's no playlist -- the DJs are free to play whatever they want. Refreshing, that.

    If only they did a streaming broadcast...

    --
    In walking, just walk. In sitting, just sit. Above all, don't wobble.
    -- Yun-Men
  14. Does it really shock anyone by palindromic · · Score: 2, Funny

    that Clear Channel is hugely in debt? Their marketing peoples' "formula" for success resulted in some of the most grating, asinine garbagey programming ever. People hate it so much they actually donate their money freely to NPR in the overwhelming fear that the one reliable station on the dial might disappear. And fuck me, the COMMERCIALS these ad-wizards came up with, I honestly couldn't think of something more effective in triggering a Pavlovian response to hit the scan button than the shit they engineer to try and sound "cool" or whatever the fuck marketing group-think buzzword their slimy little brains secreted at CC meetings. Seriously.

  15. Re:Politics? Should be Religion by Kenyon · · Score: 2, Insightful

    Yeah, it's also his right to think that they're wrong to be Christian. That's not wrong, right? LOL.

  16. Too little & too late by crovira · · Score: 2, Insightful

    The broadcast model of communication is clearly dying as too few channels producing too little content and being too used to outrageous profit margins on costs based on too small a market. (notice the word consumer is absent from this little tirade.) The blockbuster is dead. Long live pod (Portable On Demand) casting.

    --
    MSBPodcast.com The opinions expressed here are my own. If you don't like 'em... Think up your own stuff.
  17. Now they don't _have_ to make money by smchris · · Score: 2, Insightful


    One thing about going private is that there won't be any stockholder grandstanding for liberal political motives. And the owners can be as political as they want because they don't have to run the company for the stockholders' profit.

  18. This sucks by deevnil · · Score: 2, Funny

    Clear Channel is going to be able to buy something new and ruin it.

  19. Re:front by Perseid · · Score: 2, Interesting

    I wouldn't go that far. The Madison, WI Air America affiliate is a Clear Channel station.

  20. Some alternate alternatives by doom · · Score: 3, Informative
    computertheque wrote:
    Does this mean that we'll get some decent radio stations back? Clear Channel effectively ruined the radio for me, NPR being the only remaining reason to turn it on.

    Well, for me that would be Democracy Now!, which you can may be able to hear broadcast somewhere, depending on where you live, e.g. KPFA, in the SF Bay Area, and WBAI in the New York area. In general, the Pacifica stations do a decent job of "alternative" broadcasting, provided you don't mind the almost exclusively left-wing focus.

    Also, there are many, many small college stations (and other non-coms) scattered around, usually located at the bottom of the dial. They also all have internet streams these days:

  21. Re:ClearChannel is not about music by jfengel · · Score: 2, Interesting

    Absolutely. The same thing happens in TV. You're not the network's customer. The advertiser is the customer. You're the product. The music/news/whatever they're broadcasting is a capital expense to ensure a supply of product, and like any company they want to maximize return on capital by minimizing expenses.

    I'm nearly 40 but I'm not old enough to remember a day when that wasn't true. They've gotten better at it, or perhaps just realized that they could farm up their product with less work (the 44 minutes a TV show lasts now, compared to 55 back in the 60s).

    I'm hoping the Web will take these guys out as soon as possible.