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Clear Channel buyout a surprising case, media professor says
The nation's largest radio station operator - San Antonio-based Clear Channel Communications - is being acquired by a pair of private equity capital firms and the family that founded it for nearly $18.7 billion in cash and $8 billion in assumed debt. The chair of the Department of Radio, Television and Film at the University of North Texas says this is a surprising case of new money flocking to traditional media. Dr. Alan Albarran points out the Clear Channel deal follows recent efforts by private equity firms to buy the Spanish language TV network Univision and bid for parts of the Tribune Corporation. "Most media companies have squeezed out as much cost savings as they can, yet we are seeing these private equity firms offer to buy them. It's very surprising," he says. "Do they think they can operate the conglomerates more profitably?" He adds that Wall Street has shunned media companies for having "single-digit, slow growth" potential. Clear Channel operates 1,150 radio stations nationwide, and Albarran says that, as a result, the company was forced to be both creative and aggressive. "Clear Channel has been an innovator in the radio business by clustering its stations in markets to reduce overhead and sharing talent through 'voice tracking.' Following the 1996 Telecommunications Act, it substantially expanded its holdings," he says. Clear Channel is also planning to sell nearly 450 radio stations it owns outside the top 100 U.S. radio markets, as well as its television broadcasting unit. Albarran says this may be an opportunity for smaller broadcasters to expand their reach and scope. "Players in those smaller markets may be able to establish duopolies, where one owner owns and operates two stations," he says.
UNT News Service Phone Number: (940) 565-2108
Contact: Rafael McDonnell 940-565-4835
Email: RMcDonnell@unt.edu
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