Payback Time For The Consolidators

Clear Channel owns 1,150 radio stations and apparently can't seem to produce a stock price over $30 these days. That is until it announced intentions to pursue other options (like going private or selling assets). Not exactly a vote of confidence. And they're not alone, the other media companies are hurting (CBS Radio comes to mind. Notice they are selling not buying). My radio friends knew in 1996 that consolidation wasn't going to work. Yes, they heard that bigger is better and big companies can do better things for their audiences but they also knew that the consolidators' audience was about to become Wall Street not Main Street. Many lost their jobs or were neutered in their positions. Now media consolidation -- the house that Congress and the NAB built -- is in play. Big media conglomerates looking to get out -- get their money, keep some control, take parts private. Sounds like a retreat. This comeuppance is of little satisfaction to people who love the radio and music industries. While consolidators were fiddling, radio and records was burning. After all, the radio and record industries are joined at the hip. The damage has been done. New technology has arrived. A determined new generation has taken back their media with the help of technology and the Internet. But there is one last screwing to take place. Hedge funds -- the ones Rep. Barney Frank (D-Ma) is threatening to go after if the Democrats take back the House and he becomes chairman of the Finance Committee -- are hovering like vultures waiting to swoop down. Present ownership limits stand in the way of a total screwing, but there are ways around it -- limited partnerships and trusts. And of course, relaxing the ownership limits (NAB -- the fat cat's point person on this -- has already petitioned the FCC for changes that would allow looser limits and joint media ownership.) But, if the Democrats win Congress, the last media moguls standing have to get more creative. The consolidators are taking the last helicopter on the roof in a retreat that screams "we can't operate, we can't proliferate so we will liquidate". This is of little solace to people who really care about radio and records -- two co-dependent industries damaged by the misguided strategy that consolidation is good. They may be angry that their industry has been hijacked and that they have personally been harmed but what they should really wish for is that these precious assets wind up in the hands of people who really care about operating them -- small, local and regional companies who foster competition not suppress it. Now that's a winning formula for a comeback -- if it's not already too late.