Phrenzie.com

In light of the inability to close the buyout of Clear Channel by Thomas H Lee Partners and Bain Capital, I thought to finally talk about Clear Channel as a fascinating company and how much it reminds me Standard Oil, John D Rockefeller’s oil monopoly.

First things, first.  Standard Oil had a ridiculously enormous command over the oil market.  That’s why it was forced to break up into the BIGGEST names in oil you’ll have ever heard of.  I’ll list them, and note that some were merged with each other.

·        Exxon

·        Mobile (merged in 1999 from the union of Exxon)

·        Chevron (merged with Texaco in 2001)

·        Amoco (merged with British Petroleum in 1998)

Clear Channel isn’t quite the monopoly that Standard was (in some markets it didn’t own as many as 7 radio stations as in others ), but it’s got some of the same memorable names in the market place (btw – you could make the same case about GE, but GE is in such different industries that GE is more like a mutual fund).

·        Radio – where CCU had its origins; included in this are real estate holdings of radio towers: properties include the Steve Harvey Morning Show, Power 105.1 in NYC and Rush Limbaugh.

·        Live Nation (fka SFX) – one of the largest outdoor concert promoters.  Live Nation was spun out as a separate company and just did a deal w/ Jay-Z

·        Outdoor advertising (billboards) – through a purchase of Eller Media circa 1997

·        TV (local TV stations) which CCU announced it would sell in 2006 and completed in 2008

The Telecommunications Act of 1996 enhanced Clear Channel’s ability to acquire so many properties. 

 Nonetheless, radio is having a HARD time, since advertising is moving more and more online.  Clear Channel, Radio-One, Cumulus Media, all of them…revenues from radio have either not had meaning growth or are considerably down.  That’s why companies like Radio-One are figuring out their online strategy.

So the news of Clear Channel going private is probably one of the best decisions it can make given current trends – it can always reverse the decision and go public again, like a vasectomy J.