Clear Channel Rules the World

How a small chain of once-struggling radio stations grew into a giant of the media/entertainment complex

Take a tour around downtown Minneapolis,and at various points you're going to come across something related to Clear Channel Communications. Flip on your car radio, and you'll probably tune in one of seven radio stations it owns. That billboard on Third Street and Park Avenue by the Metrodome? That's owned by Clear Channel, along with most of the other billboards scattered around the metro. The Metrodome itself is home to the Minnesota Vikings, whose radio broadcasts are heard on two of the company's stations in town. And the team is owned by Red McCombs, a Clear Channel co-founder.

Nearer the Warehouse District, you'll come across the Target Center, which was managed by the media giant up until a year ago, and still hosts shows presented by the company. There's also the Quest nightclub, which is predominantly booked by Clear Channel (the Fine Line also books some Clear Channel shows). And there's the Hennepin Avenue theater district, which has featured live events and Broadway shows brought to town by the media conglomerate.

A year ago the mayor and the City Council floated the idea of opening the contract to manage and book the Hennepin Avenue theaters it owns to a bidding process. Since the late 1980s, the rejuvenated downtown theater district has been run by two management groups under contract to the city. In 1990 the theaters took in some $3.3 million in revenue; in the years that followed, the venues have attracted over 6 million patrons to the tune of $230 million. Just since 1998, the city's take has been $6.8 million, including $982,000 in 2004.

Tim Lane

Through the years, the business has grown increasingly complex, and proponents of opening up the contract for bidding argued that city leaders and staffers were too inexperienced to be involved in the theaters' day-to-day management or oversight of the bottom line. There also was the issue of some $22 million in debt the city had racked up on the endeavor; part of the thinking was that a management deal might involve a third party's taking on that debt. So on November 19, the Minneapolis City Council engaged in a heated exchange over who should run the State, Orpheum, and Pantages. The role of Clear Channel in the deal was front and center in the debate.

The two incumbent management groups--Hennepin Theatre Trust, a nonprofit, and the for-profit Historic Theatre Group--had worked with Clear Channel before. But the new proposal stood to make Clear Channel a full-blown partner that would essentially book and manage the theaters. Representatives of HTT and HTG trumpeted what Clear Channel would bring to the table, recounting in no fewer than six pages its theatrical successes in some 50 cities.

With this proposal, one that would allow ownership to fall into the hands of nonprofit HTT in 30 years, Clear Channel, it seemed, was poised to play a more prominent role. The council voted to negotiate with the incumbent theater group, if for no other reason than that Clear Channel offered to back the bonds on the $22 million debt. The council vote that day stipulated that an agreement would be hammered out within 120 days.

And it served as proof that, sooner or later, everyone in the entertainment business is going to deal with Clear Channel.

Locally, Clear Channel arrived overnight in 1999, when, after a series of mergers, the company went from owning zero radio stations in the Twin Cities market to owning seven. Around the same time, the company bought Eller Media, and now owns 80 percent of the billboards in St. Paul, for instance. More recently, Clear Channel has had a huge impact on local club and concert booking. Venues that refused to play ball with Clear Channel have suffered, most notably First Avenue.

For all that's been written and said about Clear Channel, the true reach of the company is not widely known. Clear Channel Communications is perhaps best recognized as the nation's largest radio station owner, with some 1,220 stations in upward of 250 markets nationwide--11 percent of all radio stations in the country--thanks to the deregulation that came with the Telecommunications Act of 1996. It also owns 37 television stations and some 775,000 billboards across the United States.

Clear Channel Entertainment is the San Antonio-based company's promotion and events division, and has increasingly booked music and theatrical acts into some 135 venues it owns or operates in North America and Europe. In a profound display of synergy, Clear Channel often promotes these shows via advertising and airplay on its broadcasting stations and outdoor spaces. In amassing as much as $8.4 billion in annual revenue, the company is helped in great measure by controlling nearly 70 percent of the nation's live shows. In 2002, Clear Channel sold 30 million event tickets, 23 million more than its closest competitor.

A rundown of Clear Channel's local presence, which includes some 200 employees in the radio division and 12 in the entertainment division, looks like this:

 

- KDWB-FM (101.3) Top 40

- KEEY-FM (102.1) Country

- KQQL-FM (107.9) 60s/'70s oldies

- KTCZ-FM (97.1) Adult contemporary

- KJZI-FM (100.3) Smooth jazz

- KFAN-AM (1130) Sports talk

- KFXN-AM (690) Sports talk

- 11 other stations in Minnesota

- Clear Channel Entertainment, the dominant entertainment presenter, books shows at the Target Center, various nightclubs, and Hennepin Avenue theaters

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