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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."

13 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.
    --
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    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.

  2. Sick of Media Behemoths? by jazman_777 · · Score: 4, Funny
    Like CC, Time-Warner, Slashdot? Boyc


    ...connection terminated.

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  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.

    --
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  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.

    --
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  5. 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.
  6. 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.

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    In Soviet Russia, Chuck Norris will still kick your ass.
    1. Re:Interesting... by davecarlotub · · Score: 3, Interesting

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

  7. 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.

  8. 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.

  9. 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: