Selling stations 

Clear Channel throws the little ones back

This week’s media headlines were dominated by the news of a proposed merger between Sirius Satellite Radio and XM Satellite Radio. While media experts and Wall Street prognosticators scramble to figure out what lies ahead for the new $4.6 billion conglomerate, one of the nation’s largest media companies, San Antonio, Texas-based Clear Channel Communications, is quietly divesting 448 radio stations across the country, including all 19 of its FM and AM stations in Montana.

Gene Peterson, market manager for Missoula’s six Clear Channel stations (KBAZ-FM, KENR-FM, KGVO-AM, KLCY-AM, KLYQ-AM and KYSS-FM) confirmed that Clear Channel’s 19 Montana properties are being sold to Blue Point Media, a Chicago-based media company headed by Chris Devine. Devine also owns Marathon Media of Chicago, the company that owned the six Missoula stations before Clear Channel bought them in 2000. A call to Devine for comment was not returned by press time.

Peterson said the sale shouldn’t result in any perceptible changes for local listeners.

“All of the decisions, all of the people, all of the call letters remain local,” he said Feb. 20.

In November Clear Channel announced plans to sell the company to two private equity firms, Thomas H. Lee Partners and Bain Capital Partners, for $18.7 billion. The company also announced that it planned to sell off about a third of its 1,150 radio stations. All the stations up for sale are outside the nation’s top 100 media markets.

Peterson said he didn’t have specific details of the buy/sell agreement between Clear Channel and Blue Point (Clear Channel officials in Seattle are handing the sale; the Montana stations will remain under Clear Channel ownership until the Federal Communication Commission approves the transfer of the licenses later this year), but documents filed with the FCC show that the Montana stations are part of a deal that transfers 22 FM, 13 AM and six translator stations in Minnesota, Idaho, Iowa, North Dakota and Montana to Blue Point Media for $45.7 million.

Eric Boehlert, a former senior writer for and now a senior fellow at Media Matters for America, a Web-based nonprofit media research center, says Clear Channel’s pullout from Montana helps relax the competitive stranglehold the company has had on much of the commercial radio industry in the past decade.

“I think it’s good news because I think Clear Channel proved that allowing them to have too many radio stations wasn’t doing anyone any good,” says Boehlert, who has written extensively about Clear Channel’s consolidation boom. “That doesn’t mean all 19 radio stations in Montana are going to be run by mom and pop, but it does mean they’re going to be owned by somebody else, and that’s a good thing.”

In 1992 Congress relaxed radio ownership rules allowing companies to own more than two stations per market, a scenario previously prohibited by federal law. Four years later the Telecommunications Act of 1996 deregulated media ownership, thereby allowing Clear Channel to own even more stations. With the federal restrictions lifted, Clear Channel went on a buying spree, and by 2000 the company owned more than 1,200 stations across the country, making it the largest single owner and one of the most powerful players in the music industry. The Montana stations, which the company purchased in 2000, were among the last 200 stations to be swept up in Clear Channel’s consolidation rush.

By the late 1990s critics were charging that Clear Channel was monopolizing the airwaves. Musicians and managers accused the company of using strong-arm tactics to force artists into scheduling concerts at venues the company owned. Bands that refused to book at Clear Channel venues and bands that partnered with competing radio stations to sponsor concerts reported having their songs pulled from Clear Channel playlists. Critics also complained that Clear Channel was homogenizing FM radio by automating broadcasts and eliminating live local disc jockeys.

The company’s plan succeeded for a while and stock prices peaked at about $100 per share in 2000. But then came MP3s, Internet file sharing, music-on-demand services, Apple’s iTune software and the iPod music player. Over the course of the next seven years the company’s stock plummeted. As of press time stocks were trading at around $37 per share.

“I don’t think it was a successful business plan,” Boehlert says. “Clear Channel bought the wrong industry at the wrong time.”

Peterson says that despite the criticism leveled at Clear Channel over the years, the company was good for Montana radio.

“They’re gone now, so there’s no reason for me to say anything good, bad or whatever. But from a personal local radio standpoint, they were outstanding,” Peterson says. “They improved all of our facilities and gave us a lot of wonderful tools and resources. They replaced virtually all of our transmitting equipment and our broadcasting facilities are state of the art.”

Peterson says he doesn’t expect the sale to affect any of the Missoula stations’ programming, and he doesn’t expect any major staffing changes.

“As far as we’re concerned it’s probably good in that we know Chris Devine and have worked with him before,” Peterson says. “We think they think Missoula is a pretty good market and these are pretty good stations. I can’t see them wanting to make any changes.”

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