We want what Mel’s having.
Mel Karmazin, CEO of Sirius XM Radio, convinced the government to allow him to merge Sirius with XM – the only two competing satellite services – thus making them one monopoly.
The Mel argument was that satellite radio wasn’t just competing with satellite radio but with every form of media entertainment out there.
He won.
Now Clear Channel is back at the FCC again after four years and proposing ownership “tiers” exactly to their monopolistic liking.
Increase the number of stations a company can own from eight to 10 in a market that has between 55-64 total radio stations (hey, I thought you said radio competes with all media and not other stations).
In markets where there are 65 or more stations, Clear Channel would respectfully like to own between eight and 12 stations. It argues that this type of move could “jumpstart” the terrestrial radio industry (wait a minute – you mean jumpstart Clear Channel, don’t you?).
And then they have the nerve to argue that “Easing the local radio ownership limits, at least in the largest markets, will recapture investors’ interest in radio broadcast companies. It will also stimulate the long-dormant market for radio station transactions.”
I have not heard anything about the listener – the consumer or the advertiser. Just consolidators.
Talk about a sense of entitlement. You don’t have to blame young people, just greedy old people who run consolidated radio companies.
But sit down for this argument:
“Broadcast radio remains one of the least consolidated of the country’s major industries.”
How comforting.
Is that why radio consolidation has been such a colossal failure?
Clear Channel took 102 pages to tell the FCC “None of these powerful competitors are limited in the number of outlets or program streams they can provide”.
And they are looking to hit it out of the park.
Abolish the limit on the number of AM or FM stations a consolidator (predominantly Clear Channel) can own.
Make it possible for grandfathered clusters to be sold as one transaction.
Don’t worry, The Evil Empire is very concerned about minorities (which is why I guess they hire so few of them as managers). Waivers for anybody who helps stimulate the number of minority and female-owned stations.
I can just see this image of Clear Channel execs with they fingers crossed, hands behind their backs hoping nobody at the FCC compares the number of stations they used as incubators for minority ownership when compared to the 99% better ones they kept for themselves.
Clear Channel seems to think that there is an atmosphere for deregulation in Washington which is the most amazing thought I have heard in an Obama Administration. But, hey, whatever helps you become bigger and badder.
Look, as my readers know, Clear Channel must repay $18 billion in debt in a few short years or face bankruptcy. They generate about a billion in revenue each year. Isn’t going to happen.
What are these people thinking – Clear Channel can’t buy more stations!
Or, can they?
Of course, they can.
More fees, more money for Lee and Bain, the investment bankers who are running the group into the ground currently.
Fees for everyone.
That’s entertainment!
In a more sobering moment, all radio would need at this point is more consolidation. In fact, it needs less.
Radio needs re-regulation – redistribute these hundreds and hundreds of radio properties to people who will definitely not run up $18 billion in debt while cutting local programming and putting talented professional talent, sales execs and managers out of work.
In a way, you could also make an argument that if Clear Channel isn’t careful about what it wishes for, that they may get it. In addition to fathering Repeater Radio, they have absolutely no clue how to interface with the new media competitors who they are comparing themselves with in the digital space.
Putting streaming radio stations on the Internet hasn’t done it audience-wise or financially. And beyond that, there is nothing digital that Clear Channel (or for that matter any other consolidator) could call a growth component.
Clear Channel doesn’t even budget even 3% of its annual operating expenses for the new media arena in which it claims it wants to operate.
Just more stations.
More cost cutting opportunities.
More monopoly.
Some people have a hard time understanding how investment bankers could want to get bigger when they are so upside down with debt from what they presently own.
Don’t confuse consolidation for radio broadcasting – you know, serving listeners and advertisers.
Leveraging money is their game.
When you run out of things to buy, you create more thus Clear Channel's present plea to expand ownership limits for radio stations.
I don’t know whether Clear Channel will succeed or fail in their attempt. And I have no idea whether they will even get some accommodations from the FCC. I suspect not, but in another day and in another political arena, Mel Karmazin did.
What I do know is that smaller operators and some medium size groups are beginning to separate from market leader Clear Channel in how they run their stations these days.
Once they copied the leader. Now, they seem to be looking (even if they are not investing) in new media as an equal and separate tandem business for the terrestrial stations they own.
They are rehiring morning personalities for their terrestrial stations. Taking another look at how to regain a local edge.
This is good. Very good.
Clear Channel’s intentions.
Bad.
Very bad.
Except for them. But isn't that what consolidation turned out to be.
Monopoly.
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