Media Deconsolidation (Part 17): Clear Channel Station Sell-off

by on May 3, 2007

This is just a quick follow-up to an entry I posted late last year about Clear Channel’s possible divestiture of a significant number of its radio stations across America. Now we’re getting details and the sell-off is ready to begin. On Wednesday, Clear Channel said it would be selling 362 of its 1,150 radio stations as the company continues to shed assets and go private. Clear Channel hopes to fetch roughly $820 million from the sale of these radio stations. The company is also selling off TV assets. All total, the company expects to divest itself of almost $1.9 billion worth of properties.

As I’ve said many times before in this ongoing “media deconsolidation series,” this is just another sign of how dynamic the media marketplace is. Despite all the hand-wringing we’ve seen over media consolidation in recent years, critics fail to realize that this industry has continued to rapidly evolve, expand and innovate regardless of the ebbs and flows of media ownership patterns. A few years ago, mergers and acquisitions were all the rage. Today, however, a “back-to-basics” strategy is back in vogue that is seeing operators shed assets to figure out how to make customers happy while also weathering the storm of technological changes reshaping the media landscape. In other words, markets work!

But don’t expect the media Chicken Littles to say a peep about any of this. They’re always too busy concocting their next horror story about how the media sky is about to fall on our heads. This week, it’s the Rupert Murdoch offer for the Wall Street Journal. Who knows what it will be tomorrow, but there’s always something they want to complain about. Meanwhile, the rest of us are struggling to deal with the avalanche of media options that we’re showered with every second of our lives.

Incidentally, even though the media critics have always tried to paint Clear Channel as an evil monopolist that took over the entire radio industry in the late 1990s, the reality was quite different: Clear Channel never owned more than 10 percent of all radio stations in America. Some monopoly! And now that they are selling almost 400 of their stations, that percentage of the overall pie is going to plummet.

Finally, it remains to be seen if those smaller, rural stations that Clear Channel is divesting can survive on their own. The media critics have always wanted such stations to be independent of larger media conglomerates, but in today’s hyper-competitive media marketplace, the future of free, over-the-air radio is uncertain. In particular, it is very unclear if small, rural radio station groups can make it in this new environment. Ironically, therefore, we might see the day very soon when policy makers and media critics alike are longing for the days when larger companies like Clear Channel helped support–even subsidize–the existence of smaller market operators.

But regardless of who owns what or how big they are, the FCC and Congress need to fully deregulate these markets and let broadcasters do whatever it takes to survive. The outdated ownership rules and market caps that continue to constrain sensible market deals need to all go. Antitrust law will always exist should concerns about market power arise. But, again, in today’s world of cut-throat competition for our eyes and ears, one wonders why any regulation of the media marketplace is needed at all.

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