2006/11/10
Taking Clear Channel private (local links)
Also at BlogJosh.
Sometime in the next week or so, we may hear that one of the largest entertainment groups in the world, Clear Channel Communications, has been bought and taken private, for something in the range of $17 billion dollars.
Clear Channel owns some 1200 radio stations, a bunch of television stations, an outdoor advertising unit and a slew of music venues across the country.
Locally, Clear Channel owns five radio stations in Syracuse, six in Binghamton, six in Utica, and seven in Rochester; they own the ABC television affiliates in Syracuse and Watertown, and the Landmark Theater in Syracuse. I'm not sure about the outdoor operation, but it wouldn't surprise me if they owned at least a few dozen billboards in the area.
Why the diversification? Well, look at it this way: You can have a radio station that makes songs popular, then bully musicians into playing a free tour of your venues under threat of not playing their songs on your 1200 stations. You can advertise the concerts on your radio stations, television stations and billboards, and all the money is just shifting from one of your subsidiaries to another.
But taking the company private could actually provide some benefit to the public. Public companies are accountable to their stockholders. They're required to push their profits as high as they can. This is easily done by sharing resources – including radio personalities, facilities, and news operations. And with the technology available today, the company could easily have one person working, say, from 10 p.m. to 4 a.m., handling all 24 stations in Utica, Binghamton, Rochester and Syracuse from a remote location, and no one would notice – unless there were an emergency, and all of a sudden, you couldn't get a news crew there, because there isn't one.
Private companies* don't have to please their stockholders. Sure, they have owners and employees and other stakeholders, but if they want to blow money here and there on innovation that doesn't pan out, it's OK – and all the better if it does work out. Private companies have the ability to spend some cash on trying something new without having to justify the expense.
So, I'm thinking this is a good thing. We'll see.
*Disclaimer: I work for Advance Communications, which is currently the largest privately held media company in the U.S.; I'm not sure if Clear Channel would be bigger, but it would be very big.
Sometime in the next week or so, we may hear that one of the largest entertainment groups in the world, Clear Channel Communications, has been bought and taken private, for something in the range of $17 billion dollars.
Clear Channel owns some 1200 radio stations, a bunch of television stations, an outdoor advertising unit and a slew of music venues across the country.
Locally, Clear Channel owns five radio stations in Syracuse, six in Binghamton, six in Utica, and seven in Rochester; they own the ABC television affiliates in Syracuse and Watertown, and the Landmark Theater in Syracuse. I'm not sure about the outdoor operation, but it wouldn't surprise me if they owned at least a few dozen billboards in the area.
Why the diversification? Well, look at it this way: You can have a radio station that makes songs popular, then bully musicians into playing a free tour of your venues under threat of not playing their songs on your 1200 stations. You can advertise the concerts on your radio stations, television stations and billboards, and all the money is just shifting from one of your subsidiaries to another.
But taking the company private could actually provide some benefit to the public. Public companies are accountable to their stockholders. They're required to push their profits as high as they can. This is easily done by sharing resources – including radio personalities, facilities, and news operations. And with the technology available today, the company could easily have one person working, say, from 10 p.m. to 4 a.m., handling all 24 stations in Utica, Binghamton, Rochester and Syracuse from a remote location, and no one would notice – unless there were an emergency, and all of a sudden, you couldn't get a news crew there, because there isn't one.
Private companies* don't have to please their stockholders. Sure, they have owners and employees and other stakeholders, but if they want to blow money here and there on innovation that doesn't pan out, it's OK – and all the better if it does work out. Private companies have the ability to spend some cash on trying something new without having to justify the expense.
So, I'm thinking this is a good thing. We'll see.
*Disclaimer: I work for Advance Communications, which is currently the largest privately held media company in the U.S.; I'm not sure if Clear Channel would be bigger, but it would be very big.
