Big Deal Rocks Radio Biz: Labels Mull Impact Of Amfm, Clear Channel Pact

NEW YORK-Just three years after Congress de-consolidated the radio industry with the 1996 Telecommunications Act, the largest radio group merger in history is sending a frisson through the U.S. music business.
After a lengthy court-ship, Clear Channel Communications and AMFM announced Oct. 4 that the two would merge in a deal valued at $56 billion (BillboardBulletin, Oct. 5).
The new company, which will maintain the Clear Channel name, creates what the entities call "the largest out-of-home media entity" in the world, boasting 830 stations in 187 U.S. markets-including 47 of the top 50 markets-and reaching a reported 110 million listeners.
Lionel Ridenour, executive VP of black music at Arista, is typical of label executives surveyed in being wary but cautiously optimistic about the fallout from this mega-deal.
"The merger has the potential to be a great move," he says. "My only fear is the lack of competition, where one chain gets so big that radio becomes generic in terms of a brand. As long as, for example, New Orleans radio keeps its nuances, and Chicago radio keeps its nuances, etc., then this merger has a lot of potential."
"On the surface of this merger, it can really be frightening-it's truly one of the biggest conglomerates we've ever seen in this industry," agrees A.D. Washington, VP of R&B field promotions at Capitol. "But if you keep looking, you can also see the advantages.
"For example, with the number of stations that must be divested, the merger offers the opportunity for smaller radio chains to get into markets they've been traditionally screened out of," he says. "So I'm just going to think about the positive aspects and see how things are going to unfold. I believe everybody's going to continue to do what they have to do. And I think product is going to win out no matter who owns the stations: If you've got good product, you'll get it played."
Clear Channel will also hold two radio networks-Premiere and AMFM Radio Networks-and interests in more than 240 international stations in 32 countries; more than 425,000 outdoor displays in 35 domestic markets and 29 international markets; 19 television stations; and equity interests in other radio broadcasting and outdoor advertising entities, including media rep firm Katz Media.
That arsenal is predicted to bring in annual revenue next year of $5 billion, with an additional $500 million added to the coffers in 2001.
Even so, the company is not expecting any wholesale savings in overhead, operating expenses, or staffing. To meet federal ownership guidelines, Clear Channel must sell as many as 125 stations, which analysts value at $255 million.
"We think we'll be able to create some new ownership opportunities for people that may or may