Rushing Clear Channel

I recently read that Clear Channel(specifically CC Media Holding) reported a Q4 loss of $191.3 million for 2013. Compare that to their Q4 loss in 2012 of $43 million. In that same period, Clear Channel Outdoor reported a loss of $148.4 million. The rest of the year as not kind to them. For all of 2012, the company posted a loss of $424 million, compared to a $302 million loss in 2011.  [Source here] Liberal blogs jumped all over this with some dubious math blaming Rush Limbaugh. I'm no fan of his program but the link is dubious.

The connection they use is his salary. In 2008 Rush signed an 8 year contract for about $400 million. That's not his annual salary, that's his total gross revenue under the deal. He's not earning 50 million per year. He received a signing bonus of 100 million. So (300 ÷ 8 =37.5). His prior deal signed in 2001 was worth $285 million. So Rush landed a 35% raise with his renewal. But in the interval Clear Channel had some problems. Thomas H. Lee Partners and Bain Capital took Clear Channel private in 2008 and in the process racked up 200 million in debt. 

Clear Channel CEO Bob Pittman was quoted as saying “We are very pleased with our Company's progress in strengthening our businesses over the past year, and we look forward to continuing our momentum into 2013...”  I would not be nearly as optimistic after losing 700 million dollars. Moody's estimates that they will be in the hole 16 billion by 2016. Currently they are proposing selling their debt as notes for a total of $500 million that would be due in 2021. Ouch. Their problem is not overpaid talent, it's compound interest on debt.

It's just not accurate to suggest that dropping Limbaugh is a solution to this problem. His ad revenue is probably down, but he's not a money-loser. Despite the efforts of some activist groups such as StopRush, his program rolls on. The focus on his advertisers is savvy, but it doesn't hurt Rush personally. It hurts Premier radio Networks and the radio networks that carry his program such as Clear Channel and Cumulus. But none of those companies release quarterly numbers on ad revenue tied to his program and it's certainly not to their benefit to do so.

I was in Amish country recently and I found that at 2:00 PM I could hear Rush at 5 different spots on my radio dial: 910 WSBA-AM, 580 WHP-AM, 790 WAEB-AM, 830 WEEU-AM , and 1390 WLAN-AM. Those originate in York, Harrisburg, Allentown, Reading and Lancaster respectively. Those were just the ones that came in clearly on a car radio. A total of 600 affiliates still carry his show, nationally. So despite the price tag, those ad revenues are probably well into the black. I would expect that in 2016 when his contract runs out that Rush will have to take a haircut. But in the interim I don't expect any changes.

Give the Gift of Radio

Increasingly I have noticed owners donating their radio properties. I'm not sure what the advantage of this is, unless one had political motives. But that's me being old and cynical, I guess some of these companies are just doing their civic duty. I tried to do the research on this but often the selling price is not publicly available. as cynical as I am I understand fully that many radio property transactions don't require a purchase. When Robert A. Jones is deceased it's totally appropriate that KVLW-FM is distributed with his estate to say Patricia A. Jones. It's also normal to see an new board of regents or directors succeed a new board.

The one other exception I can think of is trying to offload a hopelessly bankrupt property. The Fall 2010 issue of Media Law & Policy [here] wrote the following:

"Are there any alternatives to bankruptcy for a deficit ridden radio station that cannot attract buyers? One alternative carrying potential tax benefits for the owner is for the licensee to donate the assets of the station to a qualified Section 501(c)(3) charitable corporation. For example, a licensee donated the assets of the station to a local college."

To my knowledge most of the stations below fall into that category but I accept that other scenarios could exist. Despite all those rationalizations... actual donations are unusual. Here are some examples from the last couple years. Make of them what you will.

106.9 WKZB - Stonewall MS
DATE: 9-14-11 
This property was donated to Meridian Community College by Mississippi Broadcasters. They have requested the new calls of WEXR. they dropped Classic Hits and went to Easy Listening... an unusual programming decision.

89.9 WAPJ-FM - Torrington, CT
DATE: 9-14-11
WAPJ was already owned and operated by the I. B. and Zena H. Temkin Foundation. They donated it to Torrington Community Radio Foundation, Inc. Which so far as I know is a collection of the community members already involved with the station.

1480 WPFJ-AM  - Franklin, NC
DATE: 8/1/2011
Drake Enterprises donated WPFJ to Toccoa Falls College.  The brand changed to "the dove" but the format is still Contemporary Christian and much of the programing is identical.

690 KFXN-AM Minneapolis MN
DATE: 5/26/11
Clear channel donated this one to the Minority Media and Telecommunications Council  earlier this year. MMTC flipped the format from 9/6/2011 to Hmong ethnic programming. More here.

1360 WTOC-AM Newton NJ.
DATE: 5/26/11
This station was already being held by the Aloha Station Trust, the license company that's been holding a large number of Clear Channel properties since their equity deal in 2009. They donated it to the Minority Media and Telecommunications Council . On August 23rd MMTC sold the station to Radio Vision Cristiana for $46K.

WHJA-AM Laurel, MS
DATE: 4/8/2011
Another Clear Channel donation to the Minority Media and Telecommunications Council. It's was a rare all-blue station and it's currently silent. More here.

1320 KYHN-AM Fort Smith, AR
DATE: 4/8/2011
Another Clear Channel donation to the Minority Media and Telecommunications Council. IN July 0f 2010 Clear Channel put out a press release that they donated KYHN to the MMTC. But they list the state abbreviation wrong and old call letters KYHN became KWHN in April of 2008. The station has been silent since march.  More here.

KMFX-AM Wabasha, MN
DATE:4/8/2011
Another Clear Channel donation to the Minority Media and Telecommunications Council. They listed the calls incorrectly as KYMX in their press release. In June MMTC turned around and sold the already silent property to Alan Quarnstrom's Q Media Group, LLC for $15,000. Calls changed to WBHA on 7/1/2011. They're just simulcasting KCUE. More here.

1340 WYNF-AM - North Augusta, SC
DATE: ?
Another Clear Channel donation to the Minority Media and Telecommunications Council.  The ownership still has not been transferred. Maybe they changed their minds? More here.


1400 WBFN-AM -  Battle Creek, MI
DATE: 7/31/2008
Following an exchange of Clear Channel stations with Cumulus, the latter needed to offload a station to meet the ownership caps. Rather than hold it in trust or sell it they donated it to Family Life Communications Inc.

Radio Self-Censorship

In 2001 it was widely reported that Clear Channel banned 150 songs in response to the terrorist attacks of September 11th. (I claimed that here too.)  Snopes currently lists this as false. That's a bit cut and dry considering the actual turbid tale. Snopes goes on to admit that

"...several of Clear Channel Radio's stations, compiled an advisory list of songs which stations might wish to avoid playing in the short term..."  

Perhaps in their free-wheeling dot com world they don't realize that in the corporate world... that's the same things as a ban. When you get an email from corporate making a gentle suggestion, you obey, or you seek employment elsewhere. To their credit, perhaps that wasn't the right day to play Van Halen's "Jump." Whatever. Snopes did what snopes does. Even if their verdict was dubious, they gave an honest back story. What I want to get to is  a historical precedence for this type of action. It's called self-censorship, and unless you're really dogmatic about free-speech (like me)  it makes some sense.

So let me tell you about the deaths at The Who concert on December 3, 1979. It was in Cincinnati, Ohio at the Riverfront Coliseum.  It had the highest body-count of any  rock concert incident in the United States. Eleven rock fans were crushed to death and 26 were seriously injured. the youngest was only 15. It was not a riot, or a stampede. In the mad rush to get good seats in the "festival seating" about 18,000 people tried to push to the front of the line.  Two objects things cannot occupy the same space at the same time. It's called the continuity principle of fluid dynamics. When 18,000 people try to occupy the same space at the some time some of them get compressive asphyxia (the mechanical limitation of  lung expansion.) More here.


The video above is from an actual 102.7 WEBN-FM newscast following the event. WEBN first went on air in 1967, owned by Frank Wood. (The calls previously were in Buffalo) It started as a classical and Jazz station but slowly became an AOR station, though still owned by Mr. Wood. This is important as Wood was still the owner  well into the 1980s. his son Frank Wood Jr. had moved on to WLS-FM by 1971. In the aftermath of the tragedy WEBN The book Are The Kids Alright? (1981) by John G. Fuller explained

"Frank Wood worked with WEBN staff to assure that programming remained at low key. Album selections for the next day were carefully screened. One song was quickly removed from the list. It was Led Zeppelin's Trampled Under Foot."

WEBN had been promoting the show, and maybe they felt some guilt, or remorse. Or maybe they just thought they were being considerate. Regardless, The Who continued on tour, WEBN continued broadcasting and strangely both exist today much as they did then. Today WEBN is a clear channel owned station and have have been since the Jaycor acquisition in 1999. To my knowledge, they had no air staff remaining from 1979 in 2001 to tell them about the last time they felt the need to self-censor.

The White Areas

A White area has nothing to do with race, though these area's are usually demographically very Caucasian. If you've ever looked at the Arbitron Radio Metro map you would know that the white (and beige) color coded areas are of very low population density. That color key above should look familiar if you're in the radio biz. It's the hue of the rural county, and the unrated market areas.

Shortly after the 1941 NARBA treaty was signed, the FCC turned toward the issue of providing reliable nighttime radio service to the country's "white areas." Oldradio summarized this impending shitstorm as follows:

"Attempts to build a record on the white area issue surfaced as early as an October 1936 FCC hearing, but it was on Feb. 20, 1945, that the FCC officially opened Docket 6741, looking into the future of clear channel broadcasting.Thus began a struggle that was to last 35 years and put a lot of consultants’ and attorneys’ kids through college."

The "white area" problem is that by definition these areas contain a low population density over a large area. What little they had was largely a wash of competing radio splatter and at night it usually got worse. Nonetheless this is what they chose to double down on. Their rationalization was that low population densities can't support the ad revenues necessary to run a radio station.Now today that seems pretty ridiculous. There is nary a county in the US without a radio station in or very near to it. Now many of these may be automated, but that's also the case with major metros.

My point is that they were hawkish on clear channel licenses as a "solution." The circular logic in some ways seems to indicate that this was their goal all along. This was not the 1930s. This was 1945. FM radio was growing, and non-commercial radio was on the rise. It's clear to me that the "problem" was back-engineered from it's solution. You can read the docket here.  On page 5 they defined the problem as they saw it

"More than half the total land area of the United States and perhaps as many as 25 million people principally in Northern New England, the more mountainous regions of the Middle Atlantic States, much of the South, the northernmost part of the Great Lakes Area, withing the Great Plains, and the mountainous areas of the West, and in Alaska are estimated to be outside the range of usable nighttime ground-wave service."

To change licensing practice entirely based on nighttime AM ground-wave reception, totally ignoring night time sky-wave reception, all daytime reception, and the growing use of FM radio... is utter garbage.  While this process began in 1936, this document was printed in 1961. There was ample time to recognize the changing dynamics of broadcasting. In 1948, CBS proposed to the FCC that FM stations should be taken into account in defining white-area service.the FCC responded curtly "Clear channels would always be needed for wide-area service..."  That's just retarded. even in that era the pace of technological change precludes that kind of assumption.

Their "Industry-Advisory engineering committees" suggested at least four national night-time AM services.The FCC went with 13 initially, and added more later. The magnanimous bureaucrats compared it to RFD mail, (Rural Free Delivery.) Dissent at least within the FCC was minimal. Commissioner John Cross criticized it as a "half-solution" for not going far enough. Commissioner Robert Lee dissented more or less on the same issue of scope suggesting that the limits on transmitting power were undue. He was essentially disagreeing with NARBA, not any of the FCC's actions.


So what they approves was a change to the clear channel regulations. Prior to this they permitted only one radio station to operate at night on 24 of the 107 channels available between 535 and 1605 kHz.In 1958 they proposed another 12 and in 1959 another 23 already dithering over power increases and directionality. They still claimed in 1961, that half the land area of the United States remained in a ground-wave white area at night. That may very well be true, but if you've ever been to one of these areas... I'm sure you notices... the cattle don't care.

Radio Stocks

Whether you have an IRA or 401k or even invest directly in stocks you cannot escape the bad news. Every sector is down. It's just been depressing. But particularly hard hit was "terrestrial radio stocks." These formerly promising IPOs are now lining the parrot cage. In 2005 there was some talk of a rebound. Today they're considered a lost cause. CNBC's Jim Cramer trashed them earlier this year in a 7 minute histrionic rant.

I always avoid current events as a topic here. But in terms of radio history: their procession through the stock market is a summary of the changes in the radio industry: the move toward automation, the new competing media platforms, the damn Ipod... You can see it in every rise and fall. It's only this year that Thomas H. Lee Partners and Bain Capital have taken CC private, departing the NYSE. Radio has had four phases in it's first century: The hobbyist phase, the golden era, the post-Television era, the FM era and now... the decline. (Hold your rebuttal until after the last paragraph.)

Clear Channel Communications CCU/NYSE
IPO 7/6/1994 - 29.9
Peak - 11/5/07 - 38.4
went private.. took their stock and went home.


Cumulus Media CMLS/NASDAQ
IPO - 11/16/2001 - 6.99
Peak - 4/23/2004 -22.25
Currently 1.77

Saga Communications SGA/NYSE
IPO - 10/15/1993 - 5.4
Peak - 5/3/2002 -23.20
Currently 4.9

Entravision Communications EVC/NYSE
IPO - 8/11//2000 - 18.1
Peak - 8/18/2000 - 20.0
Currently 1.3

Citadel Broadcasting CDL/NYSE
IPO - 8/1/2003 - 20.09
Peak - 12/26/03 - 22.7
Currently 0.26

Regent Communications RGCI/NASDAQ
IPO - 3/4/2000 - 13.12
Peak - 3/11/08 - 13.68
Currently - 0.7

Cox Radio CXR/NYSE
IPO - 10/11/1996 - 7.2
Peak - 12/31/1999 - 33.25
Currently - 6.85

Entercom Communications ETM/NYSE
IPO - 3/12/1999 - 29.68
Peak - 2/4/2000 - 65.8
Currently - 2.34

Down, down down down way down. But it's not the end. It's a decline owing to an utter refusal to accept a new media model. Automation, mergers, consultants, voice tracking and homogeneous playlists that have converted the early freewheeling FM stations into homogeneous zombie transmitters looping identical playlists. That was cost-effective. It had it's time. That time is over. Change or die boys.

Clear Channel banned 150 songs

It's been written off as urban legend, but it really happened. In the aftermath of 9/11 Clear Channel responded by directing their 1200 radio stations to yank 150 songs.
http://www.chartattack.com/damn/2001/09/1707.cfm

What follows is a partial list of the songs deemed "lyrically questionable" by Clear Channel:
AC/DC: "Shot Down In Flames," "Highway To Hell," "Safe In New York City," "TNT"
Alien Ant Farm: "Smooth Criminal"
Armstrong, Louis: "What A Wonderful World"
Bangles: "Walk Like An Egyptian"
Barenaked Ladies: "Falling For The First Time"
Beastie Boys: "Sabotage," "Sure Shot"
Beatles: "A Day In The Life," "Lucy In The Sky With Diamonds," "Obla Di, Obla Da"
Benatar, Pat: "Hit Me With Your Best Shot"
Black Sabbath: "War Pigs," "Sabbath Bloody Sabbath"
Clash: "Rock the Casbah"
Dave Matthews Band: "Crash Into Me"
The Doors: "The End"
Drifters: "On Broadway"
Drowning Pool: "Bodies"
Dylan, Bob: "Knocking On Heaven's Door," "Blowin' In The Wind"
Foo Fighters: "Learn To Fly"
Godsmack: "Bad Religion"
Green Day: "Brain Stew"
Hendrix, Jimi: "Hey Joe"
Joel, Billy: "Only The Good Die Young"
John, Elton: "Benny & the Jets," "Rocket Man"
Kravitz, Lenny "Fly Away"
Led Zeppelin "Stairway To Heaven"
Jerry Lee Lewis "Great Balls Of Fire"
Lennon, John: "Imagine"
Limp Bizkit: "Break Stuff"
Martha & the Vandellas: "Dancing In The Streets"
McLean, Don: "American Pie"
Metallica: "Seek And Destroy," "Enter Sandman," "Fade To Black"
Morissette, Alanis: "Ironic"
Peter, Paul & Mary: "Leaving On A Jet Plane"
Tom Petty: "Free Fallin'"
Pink Floyd: "Mother," "Run Like Hell"
Queen: "Another One Bites The Dust," "Killer Queen"
Rage Against The Machine: every single song
Red Hot Chili Peppers "Aeroplane," "Under The Bridge"
REM: "It's The End Of The World As We Know It"
Rolling Stones: "Ruby Tuesday"
Ryder, Mitch and the Detroit Wheels: "Devil With The Blue Dress On"
Saliva: "Click Click Boom"
Slipknot: "Left Behind," Wait And Bleed"
Sinatra, Frank: "New York, New York"
Smashing Pumpkins: "Bullet With Butterfly Wings"
Soundgarden: "Blow Up The Outside World," "Black Hole Sun"
Springsteen, Bruce "I'm On Fire," "Goin' Down"
Steam: "Na Na Na Na, Hey Hey, Good Bye"
Stone Temple Pilots: "Big Bang Baby," "Dead And Bloated"
Sugar Ray: "Fly"
System Of A Down: "Chop Suey"
Talking Heads: "Burning Down The House"
Third Eye Blind: "Jumper"
Tool: "Intolerance"
U2: "Sunday Bloody Sunday"
Van Halen: "Jump"

************UPDATE*************

Apparently CC is riddled with anti-American programmers

http://pajamapundits.powerblogs.com/posts/1159907711.shtml

Thought for the day

While driving through San Antonio... I passed both the main office for MUZAK and Clear Channel? Coincidence? I think not.

http://www.muzak.com/muzak.html
http://www.clearchannel.com/