This company leaves few open channels on the radio dial. Clear Channel Communications is the #1 radio company in the US, with about 900 stations that reach more than 110 million people. Its Premier Radio Networks produces syndicated radio content for more than 5,000 stations. Clear Channel also sells spot advertising for about 4,000 radio stations and 600 TV stations through Katz Media. In addition to radio, the company owns a 90% stake in Clear Channel Outdoor Holdings, one of the world's largest outdoor advertising companies with about 840,000 display locations worldwide. The company is owned by CC Media Holdings, an investment group led by Thomas H. Lee Partners and Bain Capital.
More than just a radio business, Clear Channel is an out of the home advertising business that can reach hundreds of millions of people through its broadcasting and display operations. The company has grown into a leviathan through acquisitions both large and small, and in many markets it operates both radio stations and billboard displays. Its concentration on one source of revenue, though, left Clear Channel vulnerable as the recession led to weakness in advertising. The company responded by laying off about 10% of its workforce during 2009 in an effort to cut expenses.
Clear Channel's vast holding of radio stations accounts for almost 50% of sales and is is largely organized into clusters, with multiple stations serving individual markets. The strategy allows it to centralize certain back office functions such as finance, marketing, and human resources within a market so that its stations can operate with fewer expenses. Market clusters also allow Clear Channel to sell air time to advertisers across multiple stations within that market. The company holds a dominant position in many of its local markets; its chief competition comes from other major radio broadcasters such as Citadel Broadcasting and CBS Radio (part of CBS Corporation).
While the recession and advertising slump posed a serious challenge for Clear Channel, the radio business in general is struggling as listeners turn to newer technologies for news and entertainment. The company has been investing heavily in high-definition digital radio (HD Radio) to woo listeners away from mobile MP3 players and digital satellite radio services SIRIUS and XM Radio (both owned by SIRIUS XM Radio). In addition to offering higher fidelity sound, the new technology makes it possible for stations to broadcast more channels using the available bandwidth. Clear Channel has also made sizable investments in online broadcasting technologies to attract listeners who might not otherwise tune into traditional radio services. Its Internet streaming efforts compete against a growing number of online music services from AOL and Yahoo!, as well as Pandora Media.
Clear Channel Outdoor was also hurt by the recession as advertisers pulled back on spending. With weakness in the US and Europe, the company is focused on expanding its international operations, especially in growing economies such as China and Turkey. Clear Channel Outdoor competes against other international giants, including CBS Outdoor and JCDecaux. Outdoor advertising accounts for more than 45% of Clear Channel's sales, with most of that coming from markets outside the Americas. The company spun off a 10% stake in its display advertising business through a 2005 IPO.
Clear Channel's syndicated programming business, meanwhile, has evolved into an industry leader itself. Premiere Radio distributes a roster of programs that includes such high-profile personalities as Rush Limbaugh, Dr. Laura Schlessinger, and Ryan Seacrest. It competes against other syndicators such as Westwood One and Citadel Media and generates revenue through syndication fees and selling commercial air time. To maintain its position, the company must invest heavily to retain and sign new talent. Premiere's contract with Rush Limbaugh, for example, made him one of the highest-paid radio personalities: The eight-year deal signed in 2008 was reportedly worth $400 million.
As the company draws closer to its 40th anniversary, its long association with San Antonio's Mays family is coming to an end. Mark Mays, son of founder Lowry Mays, stepped down as CEO (remaining as chairman) in 2011 after more than six years leading Clear Channel. Mays took over in 2004 for his father and led the family's effort to take Clear Channel private in 2008 for $24 billion including debt, one of the largest media buyouts in history.
The going-private transaction, a joint effort between the Mays family and private investment firms Thomas H. Lee and Bain Capital, was originally proposed in early 2007, but a series of regulatory hurdles along with a slowing economy and tightening credit markets delayed the closing. As part of that transaction, Clear Channel sold several hundred radio stations, many serving smaller markets. (At it's height, the radio behemoth owned or managed more than 1,200 stations.) Clear Channel also sold its portfolio of some 55 TV stations to private investment firm Providence Equity Partners for $1 billion in 2008.