Clear Channel – The Private Version

Sometime in the next few months – probably sooner rather than later – Clear Channel – will probably get shareholder approval to take the company private.

Clear Channel as the “Evil Empire” has earned plenty of scorn beyond what I’ve written since it became apparent what their end game was. They’ve earned their reputation whatever it means to radio people.

So I thought I would look toward the future to a world with a “smaller” consolidated giant – the new private Clear Channel. Cumulus has also announced its intention to go private and more will follow. So, what will Clear Channel -- The Extra (Private) Terrestrial look like:

1. Don’t let its size fool you – six hundred or so stations is a lot less than the 1,100 plus they have now, but they will remain powerful. They own some of the best real estate in all the top markets.

2. The private Clear Channel still won’t be able to run these properties. Their owners and current top management do not value the talent and, dare I say, independence of the best general managers, programmers and sales executives.

3. They don’t have to run these properties exceptionally well – a few winners per cluster will be all it takes to keep things warm for the sell down that is coming next.

4. My belief is that the new private Clear Channel will be caretaker of these valuable properties until they can be repackaged, re-purposed and sold. They may sell them down gradually but I expect a few “big bangs” for large, large amounts of money. Radio is in its sunset. It has no next generation to keep it growing so you can expect the next sell-off to happen within five to ten years.

5. This San Antonio gang that couldn't shoot straight really missed the boat because radio is still doing remarkably well in smaller, local markets. The large markets are more vulnerable to the ups and downs of advertisers. So they go and sell their smaller markets. Go figure. They couldn't run them.

6. I predicted Radio President John Hogan would be back working again and he has in fact taken over responsibility for some very large Clear Channel markets. LA for example. Some of those who knew his work in Atlanta say in effect “God forbid”. I even think Mark Mays may have to get more active in everyday operations. But even this crew won’t kill off the increasing value of the Clear Channel remnants.

7. The private version of the “Evil Empire” won’t be getting any kinder or gentler. It’s not in their DNA. This band of consolidators has always had one thing in mind – shareholder value and when they are the private shareholders nothing will change.

8. Big money investors don’t typically amp up the expenses, they prune and fine-tune. My poor friends and their associates at the new “Evil Empire” are going to see things get ugly. Stress. More cutbacks. Virtual programming. Google “AdNonsense”. Smaller sales staffs. Betcha Premiere Radio Networks gets sold! Your regional managers aren’t going to get any smarter. Maybe their outstanding managers will turn to the emerging new media business. Your many skills will make you a superstar here.

9. I could say that the next five years will be like rearranging the deck chairs on the Titanic but this ship isn’t going down. Employees may wind up overboard but the Mays' will be rescued in a life boat operated by a few Wall Street money people. There are still sharks around.

10. The radio industry that needed a consolidation leader – a company that loved radio – got Clear Channel instead. It was the worst of times to come up lame. Since 1996 the Internet took off, the iPod entered on the scene, record labels self-destructed, digital downloading came of age, the smart phone arrived and social networking has now emerged. Damn.

The other major consolidators are nothing to write home about either, but Clear Channel was, is and for the near future will continue to be the poster child for wrecking a pretty damn good business.

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