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Comment on This Story / Send This Article to a Friend BusinessNorth Exclusives New Radio Kid on the Block is an 800-pound Gorilla
To its legion of critics, the new player in the Duluth-Superior radio market is a metaphor for the demise of commercial radio with the end of content regulation and loosening of ownership rules. Meanwhile the two major players already here insist that Clear Channel Communications will be good competition and they look forward to a friendly fight for the ears, if not the hearts and minds of listeners. On Feb. 25, Texas-based Clear Channel acquired the four-station Northland Broadcasting unit in a swap for five of its stations in Indiana, Illinois and Kentucky. Regent Broadcasting, which had submitted a successful bid for the Northland assets in the bankruptcy case of its parent company, also will make a $2.7 million payment to Clear Channel with the closing of their asset exchange agreement. Licenses hadn’t been transferred to Clear Channel in late April, but the new owner already was operating the Duluth stations under a time brokerage agreement with Regent. To date there have been no visible changes at the four stations: oldies KLDJ-FM 101.7; country KKCB-FM 105.1; adult contemporary KBMX-FM 107.7; and news-talk WEBC-AM 560. Employees will be terminated at the closing, but Clear Channel has pledged in its agreement to rehire most or all of them. While the radio landscape is calm for now, look for the new owner to shake things up in its newest market — unless it decides to trade these stations, as it peddled some it owned to get these new ones. That seems unlikely, though as Clear Channel with 1,225 U.S. stations is in all but two of the nation’s top 250 radio markets. It’s already flexed its muscle on one competitor here. Rival Red River Radio operates four Duluth stations, including KISS-FM 92.1. Shawn Skramstad, Red Rock’s general manager, confirmed Clear Channel is enforcing its ownership rights to the KISS call letters, and Red Rock may have to rename its station. Clear Channel’s muscle goes well beyond U.S. radio. It owns and operates: • 250 radio stations in Europe, Mexico, South America and Africa. • 36 U.S. television stations. • an outdoor advertising subsidiary with 776,000 billboards, transit panels and street furniture in 46 U.S. markets, Northern Ireland and Singapore. • an entertainment group that books live concerts, Broadway productions, sports, motor sports; manages 130 concert venues; and operates a talent management and marketing agency. The agency represents sports and news broadcasters, and owns outright tours of such musicians as Pearl Jam, Madonna, Aerosmith and Janet Jackson. Clear Channel (NYSE: CCU) generated $8.4 billion in revenues last year. An adjustment for accounting changes turned what would have been a $725 million net profit into a $17 million net loss. With three times as many radio stations as its nearest rival and the entertainment group, Clear Channel has used its market power to lock acts off the airwaves, raise advertising rates, drive competitors out of business and drive “local” voices out of radio with its canned national programming, according to critics. It’s so reviled that a self-described free speech website, clearchannelsucks.org, follows Clear Channel’s every move. This entertainment conglomerate is the product of the Telecommunications Act of 1996, which loosened controls on radio station ownership. Clear Channel had just 96 stations before the law was enacted. In some markets it’s now the only game in town. The Mays family that co-founded Clear Channel is close to fellow-Texan President George W. Bush, and their company hasn’t been shy about using its market clout to advance conservative causes, and curry political favor. It organized some of the biggest rallies in support of the president’s strategy against Saddam Hussein in Iraq. It’s also accused of discouraging its stations from playing the pop group Dixie Chicks after its lead singer criticized the president during a London concert. Meanwhile, the Federal Communi-cations Commission is considering further relaxation of radio ownership limits, and expanding the 1996 law to the rest of the telecom industry. That’s prompted a Congressional investigation of the effects of radio consolidation. Citing the Clear Channel story, U.S. Sen. Russell Feingold, D-WI, has reintroduced a bill to halt further radio deregulation, and limit owners’ share of audience and advertising dollars in individual markets. Previous BusinessNorth Exclusives Articles:
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