By Jesse Marx
By Chris Parker
By Jake Rossen
By Jesse Marx
By Michelle LeBow
By Alleen Brown
By Maggie LaMaack
By CP Staff
There was resistance on Capitol Hill, but broadcast conglomerates argued that more media concentration would actually improve the variety of radio programming. For instance, they claimed, if ABC Radio owned one "classic rock" station in a market, and ABC or, say, Infinity Broadcasting (two prominent rivals at the time), bought the other locally owned classic rock station in the market, there would be little reason for two classic rock stations. "Diversity" became the industry's buzzword for promoting the bill.
The industry had the ear of President Bill Clinton, who was seeking reelection that year. Clinton professed to be impressed by the arguments the broadcasters made, and was almost certainly impressed by the coin they contributed to his reelection campaign. The president pushed Congress to pass the measure, which he signed in February 1996.
What followed was an unprecedented wave of large corporations merging with large corporations. AOL fused with Time Warner. Viacom became one with Infinity Broadcasting, and then with CBS. ABC merged with Walt Disney. And so on.
For all the press these huge alliances garnered, there was a ripple effect among smaller owners as well. As the industry became deregulated, a mergers-and-acquisitions boom commenced in the industry. One of the first local harbingers of this effect came in 1992, when Colfax Communications, a south Minneapolis company headed by a WCCO radio general manager, bought WCTS-FM (100.3), which had been a Christian station, for $10 million. Then Colfax, with the help of investors who had made their cash off of the Craftsman tool company, purchased KQQL-FM (107.9), an oldies station.
In 1995, KDWB-FM (101.3), long considered one of the most influential top 40 stations not on either coast, was bought by Dallas-based Chancellor Communications for $22 million, a local record, and by the end of the year the company owned KTCZ-FM (97.1), KEEY-FM (102.1), and KFAN-AM (1130). The following year, Colfax bought nine more stations in Phoenix, Milwaukee, and Boise. Two months later, in August 1996, Colfax sold all 12 of its stations to Chancellor for $365 million. Suddenly Chancellor owned seven stations in the Twin Cities.
But the mergers didn't stop, and local radio listeners could be forgiven for losing track of who exactly was programming the music coming out of their car stereos. In 1997, Chancellor Broadcasting merged with another Texas-based broadcaster, Evergreen Media, and was christened Chancellor Media Group. The company owned 103 stations in 21 major markets. (The Twin Cities market is the 15th-largest in the U.S.) By the end of that year, Chancellor had formed a new national network called AMFM Radio.
During this age of consolidation, it became evident that nobody did mergers and acquisitions better than Clear Channel. Though the company had operated below big-media radar in its early years, its deep pockets and deal-spotting acumen left the company in a position to make major purchases at will. Clear Channel was taken public in 1984, and during the 1990s, its stock went from $4.60 a share in 1993 to $95 a share in 2000. (Mays's sons, Randall and Mark, have taken major roles in the company's management over time; Mark Mays is currently the CEO and president of Clear Channel, Randall the CFO and executive vice president.)
In 1996, Clear Channel bought 49 radio stations. The next year, it bought 70. In 1998, it bought Jacor Communications and its 206 radio stations to the tune of $6.5 billion. Clear Channel bought AMFM in October 1999. That acquisition, for $24 billion, netted Mays and Clear Channel 830 more stations. (To assuage the rumblings of antitrust regulators, Clear Channel quickly sold off an additional 100-plus stations for $4.2 billion.) The next closest radio competitor was Cumulus, which had a relatively paltry 230 stations at the time.
After years spent amassing its radio empire, Clear Channel began to move vertically in its acquisitions, buying up companies elsewhere in the media/entertainment supply chain. The real watershed came in 2000, when Clear Channel bought a promotions company called SFX. SFX had become a corporate raider in the booking business, buying such longstanding promotions companies as Bill Graham Presents. By 2000, SFX was staging more than 26,000 events annually. Clear Channel bought SFX for $4.4 billion, and folded it into Clear Channel Entertainment. Suddenly Clear Channel was booking thousands of concerts a year.
In addition to the radio and television stations, the concert venues and outdoor advertising, there are such holdings as Clear Channel Satellite, based in Colorado, providing a variety of satellite transmission services; Clear Channel Wireless, a high-speed internet service based in Cincinnati; Inside Radio, an industry trade publication; and Katz Media Group, an ad firm in New York City that works with 2,100 radio stations, 350 television stations, and 1,700 cable operators.
And the list goes on. Clear Channel owns Motor Sports Group, promoter of more than 600 car and cycle racing events a year. There's Premiere Radio Networks, which distributes Rush Limbaugh and other shows to 7,800 radio stations; Prophet Systems, a company that makes the technology that allows DJs to "voicetrack," or record radio shows in one city for several stations in other cities; and SFX Sports Group, a talent management and marketing agency that represents 500 professional athletes, including Michael Jordan and Andre Agassi. Another spin-off of Clear Channel produces the television shows Smallville and Arli$$. The company also has a stake in XM Satellite radio. And Clear Channel owns the touring rights to the Broadway productions of The Lion King, Hairspray, and a chunk of The Producers. In fact, the company owns prominent theaters both on Broadway and in Chicago.