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Article Excerpt
"HAPPY, HAPPY, HAPPY FRIDAY!" blares the voice from the radio. It's Big D and Bubba in the morning. It's rush hour, so to speak, in Abilene, on a dreary day in late January. Big D and Bubba are country music disc jockeys on KEAN-FM, 105.1 on the dial, the number two radio station in town. This is their drive-time show. Today they are talking by phone with country comedian Rodney Carrington about his new pilot on ABC. "Do you know how cool that is?" Big D asks Carrington, referring to the TV show. "That is just awesome! This is your shot to make it huge, man!" They chat on for several minutes. Bubba and Big D are fawning and ingratiating; Carrington is funny and anecdotal. Then, unprompted, Carrington breaks into a little song that begins, "Do you want to do something that rhymes with 'truck'?"
To most listeners in the area, this might seem to be just another morning on a local radio show, but Big D and Bubba do not live within 500 miles of Abilene. In fact, they are careful never to reveal their true location--Nashville, Tennessee, where the two are employed at station WSIX-FM. Big D and Bubba's show airs in Abilene through the magic of a technology called voice tracking, which allows songs, ads, and promos from Abilene to be seamlessly matched with voices from Nashville. The same sort of cyber-radio is taking place down the hall at two of KEAN's sister stations in Abilene, KHYS-FM and KULL-FM. At KHYS, "Mornings With Chris and Dina" is actually voice-tracked from KZII-FM, in Lubbock, 150 miles away. At KULL--"Kool 92" oldies--midday host Gina Davidson is physically located in Biloxi, Mississippi, at station KMJY-FM. Nor is the "news" these stations air exactly local, or even proprietary. None of the three have a real news operation. They buy all their news from either CNN or from the TV station KTXS and run the same spots. Over at "The Talk of Abilene," KSLI-AM, 100 percent of the programming--which includes syndicated personalities Glenn Beck and Sam Donaldson and news from CNN--comes from somewhere in cyberspace, very far away. KVVZ-AM, "The Ranch," a "regional Mexican" station, plays music all day long like an automated jukebox. As far as one can tell, there are no deejays at all.
The common thread among all eight of these radio stations is their parent company, Clear Channel Communications. If you have been paying even scant attention to the news during the past few years, you have probably heard something about the San Antonio-based media empire. Since 1996, when Congress passed a in law removing the limits on how many radio stations a single company could own, a handful of giant, Wall Street-driven radio conglomerates has emerged, effectively curling the legs out front under the old morn-and-pop-dominated radio business for the first time. These include, among others, Cumulus Media, Infinity Broadcasting, and Emmis Communications (the company that owns Texas Monthly), but by far the biggest is Clear Channel, which, in eight years, has gone from owning 40 radio stations to some 1,200-thirty times the previous legal limit-and which now has an astonishing weekly audience of 180 million people. In Abilene, Clear Channel's use of voice tracking, syndicated programming, and technology that links its stations together in high-speed digital networks are all hallmarks of the new, nationwide radio chains. So is its market dominance: In Abilene the company's six stations control 31 percent of the market.
But more than its extraordinary growth, the one thing you've probably heard about Clear Channel is that it has ruined radio. In the past five years the company has become the whipping boy for all of the perceived ills of the radio and music industries, pilloried in the press and tongue-lashed by senators at congressional hearings. If you believe its many critics, Clear Channel is responsible for a breathtaking litany of sins: the destruction of "localism" in American radio, the politicization of radio in the form of conservative talk shows and banned playlists, the spread of obscenity on radio shows, the raking of money in exchange for radio play. At a Federal Communication's Commission hearing in San Antonio last January, hundreds of people waited in line for hours for the chance tee off on the company they believe is destroying radio in America. For some time now it has been almost impossible to find anyone, anywhere, willing to defend Clear Channel.
The reason is no mystery: In the course of its $22 billion-plus buying spree, Clear Channel has become one of the most brutally aggressive companies in American business, frightening even the proponents of industry deregulation with the speed and scope of its acquisitions. The company owns far more than radio stations: It is also the country's biggest radio syndication company, featuring such personalities as Rush Limbaugh and Dr. Laura; the nation's largest concert and event promoter; and the largest outdoor advertising, or billboard, firm in the world. (It owns forty television stations.) Recently the company has leveraged these holdings in ways that have outraged people in the music industry, such as intimidating musicians into playing when and where Clear Channel wants by threatening to withhold promotion on its stations. The Department of Justice is now reportedly investigating the company for antitrust violations. The image Clear Channel has created for itself--that of a rapacious and unforgiving competitor--has turned it into one of the most hated companies in America.
But in spite of the ease with which the company has been demonized, Clear Channel, for all of its very real arrogance and excesses, is being unfairly blamed for the death of a world of radio that hasn't existed for at least a quarter of a century. There is no question that radio has in fact undergone a vast metamorphosis; it is far less local and more corporation-dominated than it used to be, especially in smaller markets like Abilene. Radio stations around the country are increasingly similar. Regionalism and once-common "regional hits" are dying, and your average local band's chances of getting radio airplay are near zero. News staffs are greatly reduced. Syndicated shows like Limbaugh's rule the daytime airwaves. But whether you like these changes or not, they are really just symptoms of a disease that has plagued radio for decades, one that was only made more potent by the deregulation of the industry eight years ago. None of this was invented by, or is unique to, Clear Channel, a company that, it must be noted, fives and dies by its stations' Arbitron ratings, which in turn are entirely determined by the listening habits of real human beings. "They are unfairly pegged as the company that is destroying localism in radio," says Katy Bachman, who covers the company for the industry trade journal Media Week. "To say they are just jamming things down peoples' throats is silly."
IN ATTEMPTING to understand Clear Channel's Mephistophelian public image, the first thing to grasp is that the company's billionaire founder and chairman, Lowry Mays, and his sons, Mark Mays and Randall Mays, chief operating officer and chief financial officer, respectively, are old-school capitalists. They might give generously to charities, but they have cold, clear eyes for their own bottom line, and this forms the basis for the company's strikingly negative reputation. They cut costs. They count beans. They life people. They consolidate operations. They install whiz-bang technology. They keep Wail Street happy. They don't especially care what you think. For such a large communications company, Clear Channel has weirdly antediluvian ideas about how to deal with the media, which routinely trash them. Until a year ago, they did not even have a PR person; and even now that they do, when you call that PR person, you a re shunted to a Manhattan PR firm that then ceremoniously refuses all your requests for interviews. The media officer, apparently, can't be trusted to talk to the media.
Before 1996, the Mayses ran a company that owned a mere 40 radio and 16 television stations. People who knew them back then say that it was a small, rather friendly company. The owners knew all their general managers and program directors and even ninny of the salespeople by name. "They would come by and they would leave notes saying, 'Congrats,' or 'I owe you a margarita,' or whatever," says Yogi Gilligan, who sold advertising for Clear Channel stations in Austin. "Mark Mays would sign the notes with his trademark smiley face."
But with its manic buying binge, Clear Channel's management acquired a hard, unforgiving-many would say ruthless-edge. This was at least in part because of the management culture of several of its larger purchases: AM/FM Inc., of Dallas, then the nation's largest radio company, and Kentucky-based Jaunt Communications, the nation's second-largest radio group. Both were hyperaggressive, hyperacquisitive firms that had been on their own buying binges. Both had killer shark managers. Jacor in particular was a rough-and-tunable competitor. And when Jacor chairman Randy Michaels took h over Clear Channel's radio operations, Jacor's culture became Clear Channel's. No more smiley faces. Instead, there were regional managers who would tell local station general managers or sales managers that if they didn't make their members that week, they would be fired. In the years that followed the first wave of consolidation, Clear Channel became notorious for a mean-spirited, micromanaging, tough-guy culture. According to Steve Hicks, the chairman of Capstar Partners, which owned more than three hundred stations now owned by Clear Channel, "Jacor was a take-no-prisoners culture. It was never win-win with them. It was win-lose. You had to lose." It also enforced such barebones frugality that it is still widely referred to as Cheap Channel. Says one former sales account executive who left the company: "They put all of our stations together, and we were all relegated to one printer. So I had to buy my own printer and my own ink cartridges."
WHAT WAS happening, in fact, was that Clear Channel was struggling mightily to digest its new empire, trying to weld literally dozens of company cultures together. "You have to remember that they were attempting to do something that had never been done before," says Hicks. "They were ha completely uncharted waters." The Mayses and their management team did have many success stories, quickly turning money-losing and debt-ridden stations into moneymakers, which helped drive up their stock price. Wall Street applauded them as deft turnaround artists. But sometimes their management style backfired. They lost hundreds of talented employees, both through firing and voluntary departure, and they ran some old, valuable radio properties into the ground. At KHFI-FM, in Austin, long one of the top two or three stations in the city, Clear Channel has failed resoundingly to hold its share of the market. According to former employees, when Clear Channel was challenged by two well-funded local competitors, it refused to spend the money needed to defend its turf. "Clear Channel just let us slide," says Mary Kaye Stuart, a former sales executive. "You don't just sit there and take it. You don't let them kick you around. You advertise. You promote. You do what you have to do. But they didn't." The result: KHFI is now the twelfth-ranked station in Austin, with roughly a percent share of the market. KEAN, in Abilene, which Clear Channel acquired in 2000, once boasted a 40 percent market hare. Now, a few years after its acquisition, it struggles to hold a second-place share, in the II percent range.
With Clear Channel's 1999 purchase of SFX (which it renamed Clear Channel Entertainment), the country's largest concert promoter, this hard-edged radio culture was now superimposed on yet another tough, old-school business. The world of talent buying, booking, and concert promotion has never been for the faint of heart. And it is here where many of die complaints about Clear Channel's anticompetitive behavior have originated. The basic allegation is that Clear Channel radio stations threaten to with hold promotion or airplay from a musician unless the musician lets Clear Channel Entertainment book the show. Two examples from the Dallas area illustrate how this often works. In 2001 an outdoor concert called Taste of Dallas was being booked by the Professional Musicians of Dallas-Fort Worth, a union that often does such bookings. Festivals like this depend on radio support, promotion, and sponsorship. But when the festival's executive director approached Clear Channel's stations, she was told that they would not promote the concert unless she bought her headliner talent through Clear Channel. Illegal? Probably not-the world of antitrust law is an ill-defined place. Hardball? Without a doubt. Last year blues singer-guitarist Susan Tedeschi, who had been booked by the same group to play a Fort Worth festival, canceled her agreement after a Clear Channel station pressured her to play another festival, in Addison, that it was promoting. "This underscores the consequences of combining talent buyers and broadcasting," says union president Ray Hair, who was involved in both transactions. "Clear Channel muscled Tedeschi's booker and manager to dump our date." The union made such a slink about it that Tedeschi ended up not playing either concert.
Deals like that were especially bad for Clear Channel's image, as was the $80,000 fine levied by Florida's attorney general lot running national radio contests that listeners were led to believe were local. These things drew attention and seemed to confirm the notion that the company was a predatory giant, that owning both the biggest concert promoter and the biggest radio company gave it too much concentrated power over musicians. At last year's congressional hearings, the company's leveraging of its twin empires of concert and radio drew more complaints than any other type of offense. And it is likely...