Privatization could bring the close of the Clear Channel era

by Daysha Taylor, November 29th, 2006, 7:00 am

Many radio listeners and station jocks were delighted earlier this month when Clear Channel announced that it had signed an agreement to be taken private in an $26.7 billion deal funded by private capital firms Thomas H. Lee Partners and Bain Capital.

Separately, the company announced that it planned to sell its television operations, as well as 448 (40% of its) radio stations located outside of the country’s top 100 radio markets. 

The historic deal should result in more local content on the airwaves in the near future. Clear Channel controls of about 10% of the US radio market. 

There are still a lot of questions, however. Will the company be sold off in pieces or remain a strong and solid private entity?

Thomas H. Lee Partners is known for its “friendly” buyout practices. But taking time to revamp Clear Channel’s pre-existing slickness is in direct contrast with Bain Capital’s “flip this company” approach. Along with the acquisition, Thomas H. Lee and Bain Capital will gain a 90% stake in outdoor advertising company Clear Channel Outdoor Holdings (NYSE: CCO). With outdoor advertising expected to grow rapidly over the next five years, it’s safe to speculate that this will be an asset that both firms hold dear to their bank accounts. 

In an interview with David Lieberman, Clear Channel CEO Mark Mays indicated that the company is not planning a reduction in staff. Meanwhile, Radio & Records is publishing a column dedicated to announcements about recent layoffs and resignations.

Maybe by this time next year, truly “local” radio will be back in business — catering to actual listeners who live in the broadcast area. And radio news reporters, jockeys, and production personnel will be working in the business again.