Clear Channel: No "Limits" To Their Greed

by Michael Hagerty, from his posts on ReelRadio
(reformatted by K.M. Richards; note that this was published before CC changed the calls of 1150 to KEIB)

Clear Channel is now proposing increasing ownership limits in large markets to TWELVE stations. They say this will revive investor interest in their radio properties.

Here's what I get from Clear Channel's proposal.

Not only do they want the right to own 12 stations in a market, they want to remove AM/FM caps.

Currently, in large and major markets, the limit is 8 stations, with no more than 5 FM and 3 AM.

The new proposal would allow them to own 12 FMs. Which I'm sure is the point. It's getting harder to make a workable business model for more than one or two AMs in a market ... and Clear Channel is moving many of its sure-fire AM hits like Rush and Hannity to FM in markets around the country.

So, they could dump all their AMs and own 12 FMs in every market in the country.

I live in Phoenix. Market #15. A big place with a lot of signals. However, if you throw out non-commercial stations, low-power stations, rimshots from just outside the market, and focus just on full-power FMs with a stick on South Mountain, the only ones that have full metro coverage, you know how many there are?

13.

Which means that CC could, if this is allowed, own all but one of the full market signal FMs in a metro market of more than four million people. From an advertising sales standpoint, I'd hate to be the poor SOB who has the one remaining full-power FM.

Okay, that's Phoenix ... but what about a really big market with tons of signals ... like L.A.?

We can prove that Clear Channel has a plan in mind, which if carried out would allow them to own the Top 12 rated English-language FMs in Los Angeles. They've already tipped their hand and showed the prototype of how they'll probably pull this off.

They're donating AMs to the non-profit Minority Media Telecommunications Council (MMTC), which then facilitates getting them licensed to minority broadcasters. Clear Channel gets a nice tax write-off.

Now pair this with the plan to allow 12 stations per market regardless of band and try this scenario for Los Angeles. Here are CC's existing eight stations in the market (all of the FMs have full power/full market coverage):

AM FM
KLAC 570 KHHT 92.3
KFI 640 KYSR 98.7
KTLK 1150 KIIS 102.7
  KOST 103.5
  KBIG 104.3 Total = 8 (5 FM, 3 AM)

First, CC buys the CBS cluster (their largest competitor in the market):

KLAC 570 KHHT 92.3
KFI 640 KCBS 93.1
KFWB 980 KTWV 94.7
KNX 1070 KAMP 97.1
KTLK 1150 KYSR 98.7
  KRTH 101.1
  KIIS 102.7
  KOST 103.5
  KBIG 104.3
  KROQ 106.7 Total = 15 (10 FM, 5 AM)

CC then divests KLAC, KTLK and KFWB to the MMTC, which finds three minority owners for them, to comply with the cap.

KLAC 570 KHHT 92.3
KFI 640 KCBS 93.1
KFWB 980 KTWV 94.7
KNX 1070 KAMP 97.1
KTLK 1150 KYSR 98.7
  KRTH 101.1
  KIIS 102.7
  KOST 103.5
  KBIG 104.3
  KROQ 106.7 Total = 12 (10 FM, 2 AM)

They then buy the Citadel cluster (their next largest competitor):

KFI 640 KHHT 92.3
KSPN 710 KCBS 93.1
KABC 790 KTWV 94.7
KNX 1070 KLOS 95.5
  KAMP 97.1
  KYSR 98.7
  KRTH 101.1
  KIIS 102.7
  KOST 103.5
  KBIG 104.3
  KROQ 106.7 Total = 15 (11 FM, 4 AM)

And divests KSPN, KABC and KNX to the MMTC, which finds three more minority owners, to comply with the cap.

KFI 640 KHHT 92.3
KSPN 710 KCBS 93.1
KABC 790 KTWV 94.7
KNX 1070 KLOS 95.5
  KAMP 97.1
  KYSR 98.7
  KRTH 101.1
  KIIS 102.7
  KOST 103.5
  KBIG 104.3
  KROQ 106.7 Total = 12 (11 FM, 1 AM)

Finally, CC buys KPWR from Emmis:

KFI 640 KHHT 92.3
  KCBS 93.1
  KTWV 94.7
  KLOS 95.5
  KAMP 97.1
  KYSR 98.7
  KRTH 101.1
  KIIS 102.7
  KOST 103.5
  KBIG 104.3
  KPWR 105.9
  KROQ 106.7 Total = 13 (12 FM, 1 AM)

And divests KFI to the MMTC, which finds a seventh minority owner, to comply with the cap.

KFI 640 KHHT 92.3
  KCBS 93.1
  KTWV 94.7
  KLOS 95.5
  KAMP 97.1
  KYSR 98.7
  KRTH 101.1
  KIIS 102.7
  KOST 103.5
  KBIG 104.3
  KPWR 105.9
  KROQ 106.7 Total = 12 (all FM)  

They've taken three competitors (CBS, Citadel and Emmis) out of the market, but added seven new owners ... minority owners at that. Which is how they can say they've helped diversity in the market without laughing out loud.

Their only remaining full-power English-language competition on FM would be Bonneville's KSWD 100.3 and Mt. Wilson's KKGO 105.1 ...both of which struggle to break a 2 share, in a fair fight (and this wouldn't be).

And even if CC only consolidated with the CBS and Citadel clusters, they would have 11 full market coverage FMs and the best AM signal in the market.

Same basic deal in New York. In fact, there isn't a market in America where Clear Channel's 12 FMs wouldn't give them all but one or two of the full signal english-language stations.

Good God.