Friday, January 25, 2008

FCC Approves Clear Channel Buyout

According to Radio Ink and The Wall Street Journal, the FCC has approved a $19.5 billion private equity buyout of Clear Channel Communications, led by Bain Capital Partners and Thomas H. Lee Partners. As a part of the agreement with the commission, Clear Channel will sell radio outlets in 42 markets, and is encouraged to sell those to female- or minority-owned businesses.

The always outspoken commissioner Michael Copps was quoted by Radio Ink:
"This case is a close call and one that I approach with decidedly mixed feelings," said Copps. "On the one hand, this transaction could lead to a measure of de-consolidation in the radio industry. The largest radio chain in the country will be divesting 42 radio stations in the top 100 markets. Although at this point we do not know who the purchasers will be, by definition they will be companies with far fewer stations than Clear Channel. At the same time, Clear Channel is in the process of selling many of its stations in smaller markets. So while the new company will remain a media giant—now re-focused on the largest markets—there are some potential public interest benefits to this deal. "

However, Copps repeated his earlier concerns about the effect of allowing private equity investors into the broadcasting business. "I have repeatedly called for the commission to examine the potential impact of private equity on our ability to ensure that broadcast licensees protect, serve and sustain the public interest. Unfortunately, that has not happened, and nothing in today’s order indicates that the commission has had a change of heart. Instead, we once again close our eyes and pretend that nothing has changed—as if these new entities are no different than our traditional broadcast licensees."
The deal must still be approved by the Justice Department.