The Weird Channel Deal

Did you see how Clear Channel began saying publicly that the Lee and Bain bailout may never happen? Then, a few days later brinksmanship brought the banks and Clear Channel together to arrive at a lower, more realistic purchase price at $36 a share along with other considerations. Now their fate is in the hands of the shareholders once again.

Leave it to the largest, storied radio group to come up with one of the weirdest sales that has ever graced our industry.

First, Clear Channel honchos do a gut check and find nothing there – so they decide to sell – that’s, what, about two years ago now?

Then, they audition investment bankers – taking their own good time – trying to milk every dollar from the buyout. I guess you can’t blame them for that, but it was almost a regal setting. Investment bankers, kiss our rings and tell us what you have for us.

It’s a far cry from that today.

Then, you may remember, Clear Channel tried to push through a buyout price that made shareholders up in arms. That’s hard to do unless you are screwing them in public – which is what Clear Channel did. Eventually, they wasted more time and had to up the buyout price to quell the shareholder unrest.

Meanwhile the industry continued to declined. Only arbitragers could love the CCU share price spread.

More time passed.

Then, while investment banks started getting jittery, the economy started tanking, Wall Street got nervous, the real estate market took a dive, gas prices went up, radio competition increases and a recession started, the investment side of the deal didn’t even think to renegotiate the price.

Until, that is, the wheels came off a few months back and the banks that were supposed to fund the Clear Channel deal balked.

Then the matter was in Clear Channel’s tried and true territory – the courts.

The deal could get done as it goes for a shareholder vote again. Or, it may not happen at all.

How weird. Clear Channel, used to getting its own way, may not get its way this time. And if it does, Clear Channel may be lucky to get out of Dodge (on a private plane, of course) to ride into the sunset with one more payment -- by compromising.

Did I mention the part about what happens to an industry when the largest (by far) operator is running on empty with an eye toward the exit sign?

It isn’t pretty. The pride and professionalism of Clear Channel employees, station executives and talent is what is going to make the final Mays paycheck possible.

Ironically, the same people the Evil Empire routinely abuses, underpays and restricts is the group that will get them rich one more time.

And it is time that is of the essence here.

The sooner the Clear Channel stations are redistributed to owners who are willing to invest in them – the better it is for the employees and the industry.

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