Memo to Clear Channel: Will you please stop your whining. Take the haircut. Agree to your revised deal with Frequency License LLC.
$350 mil may be 23 percent less than the original $452.1 million offer – but, come on, you’re still getting a good – albeit more pragmatic – deal.
Just cut your losses and get the hell outta Dodge. Now!
This isn’t about saving face. This is about saving your ass. If your biggest deal goes south, you’re a bleeding, wounded animal, ripe for the kill and, right now, your obstinacy is doing nothing other than making a team of rich lawyers richer.
Haven’t you come to grips that the only ones feeling sorry for you are your fellow rats?
For just this once, listen to the Dutch uncles whose counsel you’ve ignored for the past decade.
The spectators I’ve talked to admit that there is something peculiarly entertaining in witnessing the decline and fall of Clear Channel - the company that will forever be known as the one that gave the radio industry a bad name.
It’s a great study for the Harvard Business School – how Clear Channel went from being the name of a media company to a verb whose definition was “screw up” to, finally, a curse.
Clear Channel never got the connection between what they were programming and what listeners wanted and what their clients expected and what they delivered.
It’s not the rank and file’s fault. Not even close. Clear Channel employs some of the most talented and creative people in this business. I’ve talent coached and commissioned Clear Channel’s talent for profitable free-lance projects. The same applies to sales and marketing. Clear Channel constricts talent, which results in an abysmal product while constraining sales to sell it using their method. It’s a recipe for failure.
Do you know how many times I’ve heard, “If they only let us do it this way?”
Facades, no matter how well built, eventually crumble.
Their mash-up mingled lies with a rare truth or two and left it up to the shareholders to figure out which was which.
So, now we have a company that’s closer to dust than flesh.
Last year Clear Channel shareholders discarded the 33 percent premium, which was offered by BainCapital and Thomas H. Lee for the terminally troubled radio division. The deal had to be upped by $800 million. Earlier this year, the standard buy-out price was 15 times cash flow - four times larger than the 2002 level, which corresponded with the level that was reached prior to the leveraged buyout market bust in the late eighties.
The clock is tick-tick-ticking on the BainCapital-Thomas H. Lee-Clear Channel deal. September 25 is the date of the shareholder vote to go private.
There are some things that money can’t buy. One of them is being a fly on the wall at Clear Channel’s headquarters.
The mood in San Antonio has to be like the French during the final days of their doomed aristocracy.
They have problems that even nightmares wouldn’t cover.
Like the dot com bomb, history will record the private equity phenomenon of the past year and a half as another archetypal Wall Street bust.
The abrupt halt of el cheapo financing has inflicted such chaos in the buyout market that it’ll be hard-pressed for BainCapital and Thomas H. Lee to artificially inflate Clear Channel’s true value.
As they say, timing was everything.
On paper, BainCapital and Thomas H. Lee specialize in buying out and rebuilding troubled companies. In reality, they strip them like a car thief and part out the pieces, usually to create new companies and IPOs to dump on gullible investors for a few billion more than they paid for it.
Clear Channel won’t be among them.
It's now a buyer's market, a seller's nightmare and therein lays the silver lining - broadcasters could and should end up back in the broadcasting business! This past decade has proved that only broadcasters know how to make money in broadcasting. The Frequency License LLC deal will bring real broadcasters back into the fold.
Of course it’s not that cut and dry.
Those running radio made it look like an industry managed by circus clowns. Pushing HD Radio as the next big thing while lobbying against an XM-Sirius merger? How about bawling like babies over Arbitron’s people meter glitches in its trial run? Hate to clue you in but the old-fashioned 20th Century diary was already showing high cume, low quarter-hours, and plummeting time spent listening. Then there was FreeFM, Jack and Jill, extreme rock, and a surfeit of other formats that any real broadcaster would’ve rejected.
Radio’s crawl back to legitimacy will take time – and it will, as all other re-invented businesses, have to marry itself with new media in new, innovative ways.
Face it. Who other than real broadcasters should be given the opportunity to bring legitimacy back to the industry?
Radio isn’t dead. It’s an industry in a serious need of a reboot.
Meanwhile, Clear Channel will become an ever-more distant memory in the rearview mirror of broadcasting history.
And that’s the best news of all.