Clear Channel 2.0

Doomsday is coming.

By mid-April Clear Channel will know whether its shareholders will approve its low ball offer to cash in their chips and take the company private. That is, if the vote isn't postponed -- again.

Seems like America's biggest radio consolidator may be having trouble getting shareholders to do what it wants. The shareholders are restless about this Clear Channel plan. You remember slim and none, don't you? Well, it appears the $19 billion dollar, $37.60 per share buyout by private equity firms Bain Capital Partners and Thomas H. Lee Partners is no slam-dunk. It may be a dunk, but without the slam.

How bad is it?

ISS, Institutional Shareholders Service, the most influential proxy advisor recommended shareholders vote it down and there are others with a lot at stake who have previously called for the same "nay" vote. That's why Clear Channel postponed the balloting. And, more thing -- Texas law requires all shareholders to be heard in these matters so if a shareholder fails to vote, it counts as a "no".

It used to be that when Clear Channel wanted something they got it. The FCC looked so hard the other way that they twisted their regulatory neck. Congress? Well, they were thinking about loosening up the ownership rules once again until they ran afoul of the angry electorate. Relaxing ownership rules is not going to happen now.

If Clear Channel thinks it's advantageous to postpone the vote again, they will. Otherwise, get ready for life with Clear Channel 2.0 -- the revenge of the so-called "evil empire".

Pity the poor people at Clear Channel who are keeping that place together while the company continues to find ways to squander every legislative and regulatory advantage it was given. And even if it happened late, the shareholders (some of whom may have bought CCU and seen it as high as $90 dollars a share) are madder than hell and aren't going to take it any more.

Clear Channel going private may be doomed.

So what of Clear Channel 2.0?

Will the benevolent consolidator decide to do it right this time or will things get worse? Well, the Mays' have already told their employees that no matter what happens in this vote more change is coming.

Come again?

That's all Clear Channel has been doing -- changing.

One new configuration of management after the other. With cutbacks sprinkled in. Then strategic moves like "Less Is More" to publicize to ad agencies that radio carries too damn many commercials. Thanks. Thanks a lot. Then, did I say more cutbacks sprinkled in? Nothing is worse than a mega consolidator with its back against the wall. And Clear Channel has seen better days.

Imagine having to run Clear Channel after a nasty "no" vote should that occur.

Things will get tougher. Their outstanding employees who have had to sit by and work through weak leadership will have to do it one more time.

The litmus test on how bad top management has been at Clear Channel is this:

If a major company bought Clear Channel to operate it, how many top Clear Channel executives would it keep?

This is where I excel. My math is a bit fuzzy but I am good with any number under one -- like zero. Zero current management employees would be in position to run this company if it weren't family dominated.

Why do you think the Mays' are trying to go private. They can't run it.

Clear Channel stations, then, are in for tough times. As the noose gets tightened around San Antonio, the rope gets tighter on budgets, salaries, investing in content, the Internet, their mobile future. As a potential shareholder, what aspect of this operation would make you want to re-invest in CCU?

It's history of driving down shareholder value?

It's inability to lead the radio segment past the number two computer company (Apple) that kicks its butt with a new generation.

It's lack of foresight to help move the industry toward electronic ratings?

The animosity it has caused giving consolidation a scary name?

Plainly, Clear Channel's value is in selling not operating.

So, a neutered Clear Channel is dangerous to its employees, it's listeners and even its shareholders. Things will not get better because in my opinion the Mays' are not operators -- at least in the sense radio people used the word. They can't grow the company. All they can do is sell it. And now, it appears they can't even do that.

Some no doubt would like to see Clear Channel wallow in its own mistakes. I'm not one of them. This is not helping radio as a whole.

Some no doubt would like to see the privatization move go through to help the long-suffering outstanding managers, programmers and sales people of Clear Channel get a chance to work for someone who knows how to compete. I'm not one of them because Clear Channel will still own all the good properties in all the right markets -- a giant still. I personally feel that if the shareholders approved the deal, I would not be surprised to see Clear Channel sell off more stations in the years ahead -- at another profit.

The Clear Channel managers must have had their hopes raised when TV guy Les Moonves knew enough to rehire solid radio guy Dan Mason to help CBS out of its man-made hell. That's not going to happen unless or until the major Clear Channel properties wind up in the hands of a non-Mays company.

So dig in, it's going to be rough for a while longer.

And, I say a while longer, because shareholders may send the message to Clear Channel that they are not going to get away with a $37.60 modest premium offer in this buyout before the deal is approved. In other words, the shareholders are not going to say "uncle" first.

The Mays' will.

That's my prediction: Clear Channel 2.0 has very little to do with righting the ship. It has everything to do with Clear Channel paying the shareholders more for the right to sell off 400+ stations and take the good stuff private.

There's no relief in sight for the cream of the crop still remaining at Clear Channel in any case.

The bully is getting bullied by its shareholders in a showdown at the "Not OK" corral.

This will be a brave new world with new mantras built around the Clear Channel-coined phrase "Less Is More".

Like "Less (Mays) Is More (Shareholder Value)"

Like "Les (Moonves) Knew More" when he put a radio guy in charge of turning around CBS.

Or, "Less (than premium value) Is More (money Clear Channel will have to pay to go private".

Isn't it ironic that the company that termed the phrase "Less is more" has done more to give their shareholders less.

Now it appears their shareholders are going to make them pay -- not less, but more.