As had been rumored, Clear Channel — the largest ownership group in radio, with more than 1,500 stations — has been sold. The purchase price: $26.7 billion. As Radio & Records reports, the result will be 448 radio stations put on the market:
Veteran broker Frank Boyle tells R&R he expects the pricing on this sale to be a lot like what CBS pushed through when it put its stations out for bid last summer. In Boyle talk: “Steep.” “I think there will be some steep pricing and I think they will drive a hard bargain,” Boyle says. He also expect that Goldman, Sachs & Co. will ride herd on the sale and that “for brokers like myself, we’ll not be on the first two or three tiers, it’ll be the Wall Street guys [who get first pick at the inventory]. Then it’ll get down to 10 or 15 guys like me who have an inventory of ready buyers.”
Still, there is great cause for excitement with so much new inventory becoming available, figures Dick Blackburn, whose Blackburn & Co. is based in Alexandria, Va. “There will be a market like there hasn’t been for quite a while since we’ve had a pretty small inventory for so long,” Blackburn says. “Now there will be some really attractive assets on the market and there will be a lot of interest in it.”
Clear Channel, the nation’s largest radio group with more than1,500 outlets coast-to-coast, could spawn the beginning of a new ownership era for many individuals and groups, Blackburn and Boyle tell R&R. Boyle says that with so many stations being available for purchase at once, the “emergency of four-to six new groups that would use this as seed groups” is possible. Blackburn acknowledged that, while remote, there is always the chance that a company might come “out of nowhere with zero stations and [buy] 100 or 200 stations.”
Clear Channel was more than the proverbial 800-pound gorilla in the radio business. Taking itself private, and if the new owners of the stations it sells do in fact pay a steep price and finance the purchase with debt, means the certainty of more uncertainty throughout the radio industry. It’s a reversal of consolidation, as at least the biggest player is breaking up, but if the audiences are getting smaller and the price for station purchasing stays high, it still may impose some harsh economics on the day-to-day station operations.
Jeff Jarvis and others have suggested that for “old” media to stay relevant, they need to, among other things, get “hyperlocal.” That goes against the Clear Channel model of buying up large numbers of stations, putting them on the same basic format, and automating as much as possible to cut costs. If debt leads to more automation and homogeneity, this will continue the decline of radio. But if getting stations in different hands leads some owners to experiment more with returning the local voice to radio, it may be the start of something good.