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Clear Channel Goes Private and Streamlined 94

Posted by Zonk 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."
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Clear Channel Goes Private and Streamlined More

Clear Channel Goes Private and Streamlined

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  • The End of the Beginning? (Score:5, Interesting)

    by RobertB-DC ( 622190 ) * on Thursday November 16, 2006 @06:30PM (#16877054) Homepage Journal
    Here's a note I sent to the KHYI-Fans [yahoo.com] email list, a group of fans of independent alt-country station KHYI [khyi.com] (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.

    • Re:The End of the Beginning? (Score:5, Insightful)

      by lucabrasi999 ( 585141 ) on Thursday November 16, 2006 @06:36PM (#16877146) Journal
      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".

      • Re:The End of the Beginning? (Score:5, Interesting)

        by jfengel ( 409917 ) on Thursday November 16, 2006 @06:45PM (#16877270) Homepage Journal
        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.

        • Too little & too late (Score:3, Insightful)

          by crovira ( 10242 )
          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.

        • In fact Clear Channel would rather try to play the same music in every market, ...

          Maybe the corrected statement should reach In fact Clear Channel would rather try to play the same recording in every market

          ClearChannel is not about music or "entertainment". It's about delivering advertising to your ears. You should be able to figure that out from its actions: just enough filler between the ads.

          Back when the company was still prefering to keep a low profile, I stumbled across a rare interview with

          • Re: (Score:3, Interesting)

            by jfengel ( 409917 )
            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

            • I recall that on the US network channel that won the bid for a monopoly on broadcasting the 1996 Olympics an hour of prime time TV contained about 7 minutes of actual sports. The few shows I see nowadays, I see without ads. On US commercial network tv these shows take an hour. Without the ads, they're about 35 minutes, less if you skip the intro music and closing credits.

              The web does have the potential to take those guys out, but they key is to promote DRM-free technology and open standards. If we g

        • This is why I'm listening to the local University music station 90% of the time.

          By some miricle, they're not into the "payola" thing and they don't have advertistng. (I know my spelling sucks)

          so sometimes they pay really crazy farout music, but most of the time, it's really, really good.

          Cheers
          Ben
      • That's why radio is on the decline. I can't stand listening to radio anymore. They loop whatever 10 songs that are popular at the moment, every day, in the morning, in the evening, the same f-ing songs! Thank god my commute to work is only 10 minutes. I built myself an iPod hookup to my car, and I listen to my iPod in shuffle mode. It's much better than listening to song X for the millionth time.

        If my commute was longer than 30 minutes each way, I would definitely get Sirius satellite radio. I find it a big
      • 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 [wrnr.com], 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...

    • Re: (Score:2, Interesting)

      by From A Far Away Land ( 930780 )
      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?].

      I hope this brings about a new age in American radio and billboards, where there's less group-think, and more think-think.
      • 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 [abandonedstuff.com] after all...)

        Oh, by the way, I would li

        • Re: (Score:2, Insightful)

          by UncleTogie ( 1004853 )
          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

          • Re: (Score:2)

            by killjoe ( 766577 )
            The problem is that clear channel refused to play their songs altogether. If the consumer wanted to listen to them they didn't have that choice.
            • That's just the tip of the iceberg. After September 11th they "suggested" to the channels to basically not play any song that mentioned an airplane or had "questionable" lyrics. It wasn't an outright ban but I'm going to guess that songs on that list got a lot less playtime and considering that the list included "all songs" by Rage Against the Machine I'm glad that Clear Channel no longer has the power to heavyhand itself.
        • It's too bad someone moderated you offtopic, because they don't understand that the Dixie Chicks are at the heart of what's wrong with American radio operation. The Top can tell the Fans what they are going to listen to, and why. There would have been minimal outrage in even the "country" states if radio Clear Channel radio stations hadn't been ordered to hype the "I'm ashamed Bush is from Texas" comment.
    • To quote Stephen Colbert (from memory, from when he was on TDS): "The problem with music today isn't that it's offensive. It's that it sucks."

    • Re: (Score:3, Interesting)

      by Luscious868 ( 679143 )
      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 ra

  • Sick of Media Behemoths? (Score:4, Funny)

    by jazman_777 ( 44742 ) on Thursday November 16, 2006 @06:38PM (#16877174) Homepage
    Like CC, Time-Warner, Slashdot? Boyc


    ...connection terminated.

    • Slashdot isn't a Media "Behemoth". It's an aggregator. OSTG is a "behemoth", but Slashdot is mostly independently controlled. OSTG just puts up ads.

  • In other news... (Score:5, Funny)

    by Quaoar ( 614366 ) on Thursday November 16, 2006 @06:38PM (#16877176)
    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.

  • KTVF... (Score:5, Interesting)

    by 7Prime ( 871679 ) on Thursday November 16, 2006 @06:42PM (#16877238) Homepage Journal

    I work for a small Clear Channel owned TV station here in Fairbanks, Alaska, KTVF [webcenter11.com], 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.

  • Call me suspicious, but... (Score:3, Interesting)

    by Valdrax ( 32670 ) on Thursday November 16, 2006 @06:43PM (#16877246)
    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.
    • The money is made in the transactions. The company, likely will be IPO'd a few years hence, because the money is made in the transaction. One can get rich through financial manipulation that is economically unsound. People are worried about taxes, but they should be worried about having their money stolen through financial manipulations of various kinds.
    • 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 [wikipedia.org] for a nice summary.

      • Re: (Score:2)

        by grcumb ( 781340 )
        Investors do not take a company private, to the tune of $26 Billion, for "politics".

        Ah my poor, benighted child. When was politics ever about anything but money?

        If you don't see the sense in owning the equity and using it to further one's agenda, then I fear you'll be condemned to never have much of either. (Pace, Ben Franklin.)

        • Ah my poor, benighted child. When was politics ever about anything but money?

          Since forever. Politics is about power, which is only incidentally involved in money.

    • "Private investors" = Mays Family (Score:1, Informative)

      by Anonymous Coward
      The group of investors is the Mays family. I am a former employee who still has many contacts there. In another deal, some of their assets will be in new hands, but only a 10% part of it which is under-performing. These include the CC Television and some 448 radio stations.
    • This happens all the time, in every industry. Private equity firms buy public companies at a premium, take them private, shake things up, and sell them to someone else or take them public again. They are betting that they can do better with the company than current management, or chop the company up into smaller parts or put it together with other companies, to unlock value.

  • Please please please (Score:3, Interesting)

    by computertheque ( 823940 ) on Thursday November 16, 2006 @06:44PM (#16877252)
    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.

    • Re:Please please please (Score:4, Interesting)

      by 7Prime ( 871679 ) on Thursday November 16, 2006 @06:49PM (#16877312) Homepage Journal
      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.

    • Re: (Score:2)

      by oskard ( 715652 )
      Same here, NPR was the only reason to listen the the radio for me. So I switched to Sirius Satellite Radio, where I could hear Howard Stern and specific programming genres. It is currently $13.95 a month, and I would recommend the service to ANYONE who can afford it, especially those with long commutes who yearn for some good, uncensored Talk Radio. The daily show on Howard 100 is better than it has ever been on terrestrial radio, and the lineup of hosts on Howard 101 are entertaining too (especially if

    • Some alternate alternatives (Score:4, Informative)

      by doom ( 14564 ) <doom@kzsu.stanford.edu> on Friday November 17, 2006 @01:58AM (#16880762) Homepage Journal
      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! [democracynow.org], which you can may be able to hear broadcast somewhere, depending on where you live, e.g. KPFA [kpfa.org], in the SF Bay Area, and WBAI [wbai.org] 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:

  • And in related news... (Score:3, Interesting)

    by JonTurner ( 178845 ) on Thursday November 16, 2006 @06:46PM (#16877276) Journal
    ... 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.

    • Re: (Score:2)

      by robkill ( 259732 )

      ... 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.

      Assuming they aren't sold to one of the remaing three big players (CBS Radio, Entercom, and Citadel). Granted all there are in the ~150 station category, but assuming a three-way split, you have 3 corporations with about 300 radio stations apiece. If these stations are already being run cheaply as "repeaters" of cen

    • 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.

      I consistently find radio with Music That Doesn't Suck. But then, I listen to the Classical Music station and the Rock Station That Doesn't Play Anything Newer Than The Mid-80s. :)

  • Interesting... (Score:3, Insightful)

    by errxn ( 108621 ) on Thursday November 16, 2006 @06:51PM (#16877336) Homepage Journal
    ...that this topic is in the 'Politics' section. That may say more about /. than it does about Clear Channel.

    • Re: (Score:3, Insightful)

      by mikelieman ( 35628 )
      "...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...

    • Re: (Score:3, Interesting)

      by davecarlotub ( 835831 ) *
      Politics? ClearChannel banned the Dixie Chicks records [bizjournals.com] after they spoke out against Bush.
      • This may look political on the surface, but it was always about business. When an artist voices their opinion consumers get to voice theirs. In the case of the Dixie Chicks many consumers were upset about their political stance during a time of war and threatened to stop listening to the radio if the Chicks weren't pulled. For wrong or right, when enough people clamor about the same point radio stations listen. If people stop listening, then their ratings go down (Arbitron, eg. measures those ratings). If r

  • Anti-Trust....the old fashioned way (Score:4, Insightful)

    by PreacherTom ( 1000306 ) * on Thursday November 16, 2006 @06:54PM (#16877366)
    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.

  • Mitt Romney gets his own media empire (Score:5, Informative)

    by Squirmy McPhee ( 856939 ) on Thursday November 16, 2006 @06:55PM (#16877388)

    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.

    • Re:Mitt Romney gets his own media empire (Score:4, Informative)

      by EVil Lawyer ( 947367 ) on Thursday November 16, 2006 @11:28PM (#16879898)
      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.
      • Not a stretch at all... You think the founder of the company doesn't still have friends there? You think they won't be sympathetic to the old boss' presidential campaign?

        Plus, he couldn't buy it himself - its not like Bush owns News Corp (i.e. Fox News) - Murdoch does his bidding for him, to get around equal time and campaign finance laws.
  • .. I thought the Church of Scientology had got its own TV network.
  • It will be private just long enough to reorganize and cut the fat and then hello, IPO. Same thing with Freescale and a couple of other big companies just bought by private equity firms.
  • since the republican controlled congress pretty much said "monopolies are ok" that clear channel (one of the largest and most insane monopoly) saw this coming and decided to break up before being forced to break up, becuase i'm assuming a democratically elected congress will strike monopolies down pretty quick.
    • Before you label Republicans as the only guilty party for the consolidation of radio, let me remind you as to who was in the White House when the Telecommunications act of 1996 was passed. I don't recall seeing President Clinton putting up a fight about this one.

      • Re: (Score:2)

        by Valdrax ( 32670 )
        The bill passed 91-5 in the Senate. The only people to vote against it were some of the strongest anti-corruption, anti-railroading Senators in the country -- McCain, Feingold, Leahy, Wellstone, and Simon. When it was taken over to the House, it was passed after only an hour and a half with minimal discussion 414-16.

        Now, in case you aren't aware, that's a veto-proof majority. I doubt Clinton was willing to tilt at windmills over it.

    • Re: (Score:2)

      by Valdrax ( 32670 )
      Note: Anti-trust enforcement is entirely the province of the executive branch.
      • Note: Anti-trust enforcement is entirely the province of the executive branch.

        Note: Anti-trust statute amendment and anti-trust budgeting are entirely the province of the legislative branch.

  • that the headline would stop at "Clear Channel Goes"
  • ... that I can hear all of my favorite Clear Channel banned songs again?

    http://en.wikipedia.org/wiki/List_of_songs_deemed_ inappropriate_by_Clear_Channel_following_the_Septe mber_11%2C_2001_attacks [wikipedia.org]

    (List of all songs banned by CC post 9/11)

    • I have heard all of those songs on CC owned stations. Yeah I live in an area saturated with them.
  • If the comments in this forum about nothing worthwhile being on the radio dial, with the possible exception of political talk, since the mid 1980s and my own experience with newspapers thus far (I have never been a subscriber) are any thing to go by then these private equity firms are going to loose their collective shirts in this business. When was the last time you saw any of your friends younger than thirty (30) regularly listening to music radio stations or reading a paper newspaper? Clearly there is va

    • Re: (Score:1)

      by tepples ( 727027 )
      When was the last time you saw any of your friends younger than thirty (30) regularly listening to music radio stations

      K-12 school buses in my area play mainstream music radio stations, allowing the RIAA to advertise to kids.

  • 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 engine

  • Now they don't _have_ to make money (Score:3, Insightful)

    by smchris ( 464899 ) on Thursday November 16, 2006 @10:43PM (#16879612)

    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.
    • One could argue that they now have less leeway than before for political chicanery. When you buy a company with flat revenues for 12x EBITDA, you'd better make a lot of money, and fast, or you will be crushed by the debt. They need to give the audience what they want, whether it's political or not is not really up to them. Not that I'm arguing that, but one could argue...

  • This sucks (Score:2, Funny)

    by deevnil ( 966765 )
    Clear Channel is going to be able to buy something new and ruin it.
  • Ah,good ol' private equity,bringing nothing but debt on the table
  • In 1991, an independent radio station was started in Hawaii. It was called Radio Free Hawaii, and played music by request. Each week you could fill out a ballot, requesting 10 songs you wanted to hear and 3 songs you didn't want to hear. In addition you could nominate a song you think would be a hit (one that hasn't been played before), and a song or artist that should be "sledgehammered" off the air forever. On Saturday mornings they would count down the top requested songs, and "Sheriff" Norm, the sta
  • 26 Billion seems a lot for radio in today's tech landscape.... sounds like they may have a different use for all that licensed bandwidth.

    If I had it all available I'd turn it into a massive wireless 'data' network, stream the radio channels with better-targeted ads worldwide and charge monthly fees to users in addition to the normal ad revenue.

  • Its not a radio station or owner of a radio station thats making radio suck today, its the crappy manufactured digitally processed garbage being passed off as music today. Probably one out of 1000 artists today can actually perform without all of the stage and/or studio processing..we see this most in hip/hop and rap IMO. Its like the saying "everybody wants to be a DJ"...nowdays everyone thinks they are an artist. Im sure some Apple fanboy will mod me down for this next part, but software like Garage Ba

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