The Voice of America

Clear Channel, the San Antonio-based radio behemoth, has been blamed for everything from politicizing the airwaves to destroying musical diversity, but has the company everybody loves to hate gotten a bum rap?

April 2004By Comments

HAPPY, HAPPY, HAPPY FRIDAY!” blares the voice from the radio. “It’s Big D and Bubba in the morning!”

It’s rush hour, so to speak, in Abilene, on a dreary day in late January. Big D and Bubba are country music disc jockeys on KEAN-FM, 105.1 on the dial, the number two radio station in town. This is their drive-time show. Today they are talking by phone with country comedian Rodney Carrington about his new pilot on ABC. “Do you know how cool that is?” Big D asks Carrington, referring to the TV show. “That is just awesome! This is your shot to make it huge, man!” They chat on for several minutes. Bubba and Big D are fawning and ingratiating; Carrington is funny and anecdotal. Then, unprompted, Carrington breaks into a little song that begins, “Do you want to do something that rhymes with ‘truck’?”

To most listeners in the area, this might seem to be just another morning on a local radio show, but Big D and Bubba do not live within 500 miles of Abilene. In fact, they are careful never to reveal their true location—Nashville, Tennessee, where the two are employed at station WSIX-FM. Big D and Bubba’s show airs in Abilene through the magic of a technology called voice tracking, which allows songs, ads, and promos from Abilene to be seamlessly matched with voices from Nashville. The same sort of cyber-radio is taking place down the hall at two of KEAN’s sister stations in Abilene, KHYS-FM and KULL-FM. At KHYS, “Mornings With Chris and Dina” is actually voice-tracked from KZII-FM, in Lubbock, 150 miles away. At KULL—”Kool 92″ oldies—midday host Gina Davidson is physically located in Biloxi, Mississippi, at station KMJY-FM. Nor is the “news” these stations air exactly local, or even proprietary. None of the three have a real news operation. They buy all their news from either CNN or from the TV station KTXS and run the same spots. Over at “The Talk of Abilene,” KSLI-AM, 100 percent of the programming—which includes syndicated personalities Glenn Beck and Sam Donaldson and news from CNN—comes from somewhere in cyberspace, very far away. KVVZ-AM, “The Ranch,” a “regional Mexican” station, plays music all day long like an automated jukebox. As far as one can tell, there are no deejays at all.

The common thread among all eight of these radio stations is their parent company, Clear Channel Communications. If you have been paying even scant attention to the news during the past few years, you have probably heard something about the San Antonio-based media empire. Since 1996, when Congress passed a law removing the limits on how many radio stations a single company could own, a handful of giant, Wall Street-driven radio conglomerates has emerged, effectively cutting the legs out from under the old mom-and-pop-dominated radio business for the first time. These include, among others, Cumulus Media, Infinity Broadcasting, and Emmis Communications (the company that owns Texas Monthly), but by far the biggest is Clear Channel, which, in eight years, has gone from owning 40 radio stations to some 1,200—thirty times the previous legal limit—and which now has an astonishing weekly audience of 180 million people. In Abilene, Clear Channel’s use of voice tracking, syndicated programming, and technology that links its stations together in high-speed digital networks are all hallmarks of the new, nationwide radio chains. So is its market dominance: In Abilene the company’s six stations control 31 percent of the market.

But more than its extraordinary growth, the one thing you’ve probably heard about Clear Channel is that it has ruined radio. In the past five years the company has become the whipping boy for all of the perceived ills of the radio and music industries, pilloried in the press and tongue-lashed by senators at congressional hearings. If you believe its many critics, Clear Channel is responsible for a breathtaking litany of sins: the destruction of “localism” in American radio, the politicization of radio in the form of conservative talk shows and banned playlists, the spread of obscenity on radio shows, the taking of money in exchange for radio play. At a Federal Communications Commission hearing in San Antonio last January, hundreds of people waited in line for hours for the chance to tee off on the company they believe is destroying radio in America. For some time now it has been almost impossible to find anyone, anywhere, willing to defend Clear Channel.

The reason is no mystery: In the course of its $22 billion-plus buying spree, Clear Channel has become one of the most brutally aggressive companies in American business, frightening even the proponents of industry deregulation with the speed and scope of its acquisitions. The company owns far more than radio stations: It is also the country’s biggest radio syndication company, featuring such personalities as Rush Limbaugh and Dr. Laura; the nation’s largest concert and event promoter; and the largest outdoor advertising, or billboard, firm in the world. (It owns forty television stations.) Recently the company has leveraged these holdings in ways that have outraged people in the music industry, such as intimidating musicians into playing when and where Clear Channel wants by threatening to withhold promotion on its stations. The Department of Justice is now reportedly investigating the company for antitrust violations. The image Clear Channel has created for itself—that of a rapacious and unforgiving competitor—has turned it into one of the most hated companies in America.

But in spite of the ease with which the company has been demonized, Clear Channel, for all of its very real arrogance and excesses, is being unfairly blamed for the death of a world of radio that hasn’t existed for at least a quarter of a century. There is no question that radio has in fact undergone a vast metamorphosis; it is far less local and more corporation-dominated than it used to be, especially in smaller markets like Abilene. Radio stations around the country are increasingly similar. Regionalism and once-common “regional hits” are dying, and your average local band’s chances of getting radio airplay are near zero. News staffs are greatly reduced. Syndicated shows like Limbaugh’s rule the daytime airwaves. But whether you like these changes or not, they are really just symptoms of a disease that has plagued radio for decades, one that was only made more potent by the deregulation of the industry eight years ago. None of this was invented by, or is unique to, Clear Channel, a company that, it must be noted, lives and dies by its stations’ Arbitron ratings, which in turn are entirely determined by the listening habits of real human beings. “They are unfairly pegged as the company that is destroying localism in radio,” says Katy Bachman, who covers the company for the industry trade journal MediaWeek. “To say they are just jamming things down peoples’ throats is silly.”

IN ATTEMPTING TO UNDERSTAND CLEAR CHANNEL’S Mephistophelian public image, the first thing to grasp is that the company’s billionaire founder and chairman, Lowry Mays, and his sons, Mark Mays and Randall Mays, chief operating officer and chief financial officer, respectively, are old-school capitalists. They might give generously to charities, but they have cold, clear eyes for their own bottom line, and this forms the basis for the company’s strikingly negative reputation. They cut costs. They count beans. They fire people. They consolidate operations. They install whiz-bang technology. They keep Wall Street happy. They don’t especially care what you think. For such a large communications company, Clear Channel has weirdly antediluvian ideas about how to deal with the media, which routinely trash them. Until a year ago, they did not even have a PR person; and even now that they do, when you call that PR person, you are shunted to a Manhattan PR firm that then ceremoniously refuses all your requests for interviews. The media officer, apparently, can’t be trusted to talk to the media.

Before 1996, the Mayses ran a company that owned a mere 40 radio and 16 television stations. People who knew them back then say that it was a small, rather friendly company. The owners knew all their general managers and program directors and even many of the salespeople by name. “They would come by and they would leave notes saying, ‘Congrats,’ or ‘I owe you a margarita,’ or whatever,” says Yogi Gilligan, who sold advertising for Clear Channel stations in Austin. “Mark Mays would sign the notes with his trademark smiley face.”

But with its manic buying binge, Clear Channel’s management acquired a hard, unforgiving—many would say ruthless—edge. This was at least in part because of the management culture of several of its larger purchases: AM/FM Inc., of Dallas, then the nation’s largest radio company, and Kentucky-based Jacor Communications, the nation’s second-largest radio group. Both were hyperaggressive, hyperacquisitive firms that had been on their own buying binges. Both had killer-shark managers. Jacor in particular was a rough-and-tumble competitor. And when Jacor chairman Randy Michaels took over Clear Channel’s radio operations, Jacor’s culture became Clear Channel’s. No more smiley faces. Instead, there were regional managers who would tell local station general managers or sales managers that if they didn’t make their numbers that week, they would be fired. In the years that followed the first wave of consolidation, Clear Channel became notorious for a mean-spirited, micromanaging, tough-guy culture. According to Steve Hicks, the chairman of Capstar Partners, which owned more than three hundred stations now owned by Clear Channel, “Jacor was a take-no-prisoners culture. It was never win-win with them. It was win-lose. You had to lose.” It also enforced such bare-bones frugality that it is still widely referred to as Cheap Channel. Says one former sales account executive who left the company: “They put all of our stations together, and we were all relegated to one printer. So I had to buy my own printer and my own ink cartridges.”

WHAT WAS HAPPENING, IN FACT, was that Clear Channel was struggling mightily to digest its new empire, trying to weld literally dozens of company cultures together. “You have to remember that they were attempting to do something that had never been done before,” says Hicks. “They were in completely uncharted waters.” The Mayses and their management team did have many success stories, quickly turning money-losing and debt-ridden stations into moneymakers, which helped drive up their stock price. Wall Street applauded them as deft turnaround artists. But sometimes their management style backfired. They lost hundreds of talented employees, both through firing and voluntary departure, and they ran some old, valuable radio properties into the ground. At KHFI-FM, in Austin, long one of the top two or three stations in the city, Clear Channel has failed resoundingly to hold its share of the market. According to former employees, when Clear Channel was challenged by two well-funded local competitors, it refused to spend the money needed to defend its turf. “Clear Channel just let us slide,” says Mary Kaye Stuart, a former sales executive. “You don’t just sit there and take it. You don’t let them kick you around. You advertise. You promote. You do what you have to do. But they didn’t.” The result: KHFI is now the twelfth-ranked station in Austin, with roughly a 3 percent share of the market. KEAN, in Abilene, which Clear Channel acquired in 2000, once boasted a 40 percent market share. Now, a few years after its acquisition, it struggles to hold a second-place share, in the 11 percent range.

With Clear Channel’s 1999 purchase of SFX (which it renamed Clear Channel Entertainment), the country’s largest concert promoter, this hard-edged radio culture was now superimposed on yet another tough, old-school business. The world of talent buying, booking, and concert promotion has never been for the faint of heart. And it is here where many of the complaints about Clear Channel’s anticompetitive behavior have originated. The basic allegation is that Clear Channel radio stations threaten to withhold promotion or airplay from a musician unless the musician lets Clear Channel Entertainment book the show. Two examples from the Dallas area illustrate how this often works. In 2001 an outdoor concert called Taste of Dallas was being booked by the Professional Musicians of Dallas-Fort Worth, a union that often does such bookings. Festivals like this depend on radio support, promotion, and sponsorship. But when the festival’s executive director approached Clear Channel’s stations, she was told that they would not promote the concert unless she bought her headliner talent through Clear Channel. Illegal? Probably not—the world of antitrust law is an ill-defined place. Hardball? Without a doubt. Last year blues singer-guitarist Susan Tedeschi, who had been booked by the same group to play a Fort Worth festival, canceled her agreement after a Clear Channel station pressured her to play another festival, in Addison, that it was promoting. “This underscores the consequences of combining talent buyers and broadcasting,” says union president Ray Hair, who was involved in both transactions. “Clear Channel muscled Tedeschi’s booker and manager to dump our date.” The union made such a stink about it that Tedeschi ended up not playing either concert.

Deals like that were especially bad for Clear Channel’s image, as was the $80,000 fine levied by Florida’s attorney general for running national radio contests that listeners were led to believe were local. These things drew attention and seemed to confirm the notion that the company was a predatory giant, that owning both the biggest concert promoter and the biggest radio company gave it too much concentrated power over musicians. At last year’s congressional hearings, the company’s leveraging of its twin empires of concert and radio drew more complaints than any other type of offense. And it is likely that this is what prompted the Justice Department’s investigation. If Clear Channel is ever forced to divest something, odds are that it will be its concert arm, Clear Channel Entertainment. Either way, Clear Channel has become a company nobody wants to mess with.

IT HAS ALSO BECOME THE SUBJECT of a huge body of myth, the thrust of which is that Clear Channel is filling the airwaves with both indecency and right-wing politics while threatening to end localism in the American radio business. The generally accepted notion is that the company is the Antichrist, but when you closely examine charges against it, the majority of them are either not true, address practices that nearly every other company in the radio business has adopted (most of which, though lamentable, are the direct and predictable result of deregulation), or involve business tactics that were in place long before Clear Channel amassed its empire.

Take the most frequent charge: that by controlling the playlists at its far-flung stations in some three hundred radio markets from its San Antonio headquarters, it is responsible in large part for the droning sameness of radio music in America. While it is hard to argue against the idea that “oldies,” “urban,” “alternative rock,” “country,” or “hot adult contemporary” formats sound similar from Boise to Beaumont (and overlap quite a bit too), this is not a product of Clear Channel centralization. Contrary to what critics like musician Don Henley have suggested, almost all of Clear Channel’s programming and operating decisions are made at the local level. The company’s competitors, including Emmis, work this way too. Song lists are researched regionally and selected station by station. Except for a few brief attempts to use national programming directors for its “KISS” branded stations, decisions about what to play are, by corporate policy, made locally.

In 2003 Clear Channel researchers made more than two million phone calls to listeners. They held focus groups and produced some 10,000 local audience reports. They—and their competitors—know exactly what people want to hear. Critics may want to hear more Pete Yorn and Patty Griffin on contemporary-hits stations; listeners say they want Linkin Park, 50 Cent, and OutKast. That is why the playlists are so small and also why they sound so similar across the country. Simply put, if stations do not play what people want to hear, people turn them off. Rush Limbaugh, with 20 million listeners, is a pure product of the free market. Musicians complain, ever more loudly and with good reason, about their lack of access to the airwaves. The decline in the number of independent radio stations means that regional hits are less and less likely. And the intensive use of market research by Clear Channel and everybody else means that program directors are less and less willing to take chances. This may be undesirable in a country that values musical diversity, but it is an industry trend that is at least thirty years old. The only thing new about it is that everybody in the business is doing it.

Nearly every one of Clear Channel’s competitors voice-tracks too, in one form or another. What Big D and Bubba are doing is representative of about 9 percent of Clear Channel’s total programming (though the percentage is far higher in small-city markets like Abilene). Voice tracking is deceptive, of course, particularly when remote disc jockeys, armed with cheat sheets from the local stations showing weather and local news, actively pretend to be somewhere they are not. But voice tracking is also a predictable response to one of the biggest changes in radio in the past decade, which has nothing at all to do with Clear Channel: the decline in importance of the disc jockey. People want music these days more than deejays (the rise of satellite radio is an example of this); voice tracking is an inexpensive way to bring higher-priced talent to small markets. It is also—as in Abilene—highly customized for local markets in a way that the alternative, satellite feeds of national shows are not. And again, Clear Channel’s more prominent competitors, like Infinity—which owns 185 stations in the country’s big-city markets and makes only slightly less radio revenue than Clear Channel—are doing exactly the same thing. In the Tom Petty song “The Last DJ,” he bemoans the disappearance of the disc jockey who “plays what he wants to play.” His complaint—and it is true—is that deejays no longer make music decisions: Local and regional program directors do. But deejays haven’t made their own selections in forty years (except at college and public stations, which are not run to make a profit). To say that Clear Channel’s bigness and corporateness have somehow inflicted this on the country is like holding Apple and IBM responsible for the death of the typewriter.

Nor is Clear Channel responsible for the radical reductions in local radio news staffs that began in earnest in the late eighties: The FCC did that. First it flooded the country with new FM licenses that helped drive half of the country’s radio stations into the red, forcing them to lay off workers. Then it repealed the so-called Fairness Doctrine, which more or less required local stations to have their own news. This means that local news had been gone at most stations well before consolidation took place. The only exceptions were the biggest talk stations. Like the other radio conglomerates, Clear Channel centralizes its news operations; it has 110 news bureaus employing about four hundred people.

Then there are the myths. It was widely reported, for example, that Clear Channel banned the Dixie Chicks from all of its stations after singer Natalie Maines criticized President Bush. This is patently false. The Chicks were indeed banned from the airwaves but by Clear Channel rival Cumulus. There was also the list that was supposedly sent from corporate headquarters in San Antonio after 9/11, enumerating 150 songs that were not allowed to be played. This instance of draconian corporate censorship turned out to be an attempt by several Clear Channel managers at individual stations to be sensitive to their listeners. They made the decision on their own, without a command from San Antonio. “It was a way of trying to show the sensitivity that you would want to exhibit in any trying time, like when somebody dies,” says Bob Cole, a Clear Channel deejay, talk-show host, and radio veteran who has the number one-rated morning show in Austin, on KVET-FM, and who was a participant in conference calls when the list was discussed. “It was never an edict or a mandate. We just didn’t want to incite any hate or animosity.” (Cole agreed to speak to me in spite of the company’s refusal to grant interviews.)

The most famous story of all concerns a January 18, 2002, train derailment in Minot, North Dakota, that resulted in a deadly ammonia spill. Minot is a city of 36,500. Clear Channel owns all six of its radio stations. The popular version of what happened, liberally referenced at last year’s congressional hearings, is that when city officials called the stations, there were no humans there to tell people of the danger because the stations were running on autopilot. The truth is that the spill happened at 1:37 in the morning, a time when few small-city deejays or engineers are working anywhere in America. Most either sign off or play satellite-fed or automated music. Clear Channel could not be expected to have fully-staffed radio stations at that hour. In any case, according to Bryan Obenchain, the editor of the Minot Daily News, the TV stations got the story first while the radio stations continued on autopilot, and this was one of the reasons that people got angry. But what you never read about was that Clear Channel’s lack of promptness in responding was part of a larger failure of the city’s Emergency Alert System, which included misunderstandings by the police and city officials about how to use the system. Clear Channel probably bears some of the blame. But nothing like the gross negligence suggested by the legend, which has been trumpeted across the land by North Dakota senator Byron Dorgan, among many others.

There were other incidents too, which have now entered Clear Channel’s voluminous catalog of offenses. They include the antics of a Florida shock jock named Todd Clem, a.k.a. Bubba the Love Sponge (not the “Bubba” of “Big D and Bubba”), who was indicted and acquitted in the on-air slaughter of a boar and whose crude, often sexual talk resulted in a $755,000 fine for Clear Channel; the on-air slaughter of a chicken at a Clear Channel station in Colorado; the advocacy, by three Clear Channel deejays in Houston, Cleveland, and Raleigh, of hurting or interfering with bicyclists on the road by opening car doors on them or throwing things at them; and the pro-war rallies advocated by Clear Channel syndicated radio personality Glenn Beck and sponsored by some twenty local Clear Channel stations across the country.

But in case you haven’t been listening recently, all of this is more or less business as usual in American radio. Last year the FCC received 250,000 complaints about on-air indecency or obscenity. The fines levied on Infinity, which pioneered shock-jock radio with Howard Stern and others, dwarf those paid by Clear Channel. The rallies sponsored by Beck and the Clear Channel stations were tolerated but not did not originate at corporate headquarters; they were also replicated at stations owned by Federated Media and Susquehanna Media, as well as at Infinity. All this is not to say that killing animals on the air isn’t a horrifying thing, but it is not unusual in today’s radio. Only when the government decides to take stronger action against indecency, which, in the wake of the Super Bowl, it appears to be doing, will this change. “Clear Channel is a victim of its own operating philosophy, which is local market control,” says KVET’s Cole. “Any local market is only going to be as good as its local management and its regional director.”

IN THE PAST TWO YEARS, SINCE John Hogan took over Clear Channel’s radio division from Randy Michaels, the company has finally shown both a new sensitivity to public opinion and an aptitude for reform. After the outcry in Congress and elsewhere last year about the common industry practice of taking payments from record promoters—so-called payola—Clear Channel fired its independent promoters and said it wanted to avoid even the appearance of “pay for play.” In February Clear Channel fired shock jock Clem, purged its airwaves of the Howard Stern show (which it had bought from Infinity), and proclaimed a policy of “responsible broadcasting” and “zero tolerance” for X-rated talk. (Clear Channel’s critics believe that Stern was kicked off only because he had recently talked negatively about President Bush.) It even apologized publicly for its treatment of bicyclists and agreed to sponsor several charity rides.

But bringing back the smiley face to Clear Channel—indeed, even breaking up the company—is not going to eliminate all the perceived evils of modern radio. After all, what has happened in the industry, it can be argued, is precisely what America’s deregulation-minded politicians wanted when they changed the rules back in 1996. When you deregulate a huge, fragmented industry, a few big companies eat many little ones. Everyone knows this. And Clear Channel’s attempt to build a national brand is as American as rhubarb pie. It is no different from what any other national chain store or restaurant or mortgage business has ever done. Clear Channel is simply the “big box” of radio, though it will never be able to match the wholesale destruction of small companies that accompanied the expansion of behemoths like Wal-Mart, McDonald’s, and Citibank.

And back in Abilene, the evils wrought by consolidation in the radio business are not quite as clear as they may seem to Clear Channel’s critics in Washington. There is no doubt that localism has taken a hit. There are more voice-tracked shows, which means fewer deejays. There are fewer radio workers than there were before the radio conglomerates bought in. There is less truly local news. But according to one small radio operator who competes successfully against Clear Channel, there are positive changes too, and the business climate is generally healthier there than it was ten years ago. “When the larger companies bought the smaller ones, it added a degree of stability,” says Scott Powell, who with his wife, Amy Meredith, owns the Spanish-language station KKHR in Abilene. “There has been less changing of hands, less changing of formats.” Meredith says that the advent of the big companies has meant both more revenue for all stations as well as more competition. “When we got here, KEAN held a thirty to forty share,” she says. “It was so hard to compete against them. Cumulus’s KBCY took them down and that loosened up buyers’ minds to the idea that there are other stations. We actually do better every year.”

And this, ultimately, was the goal of deregulation. Does it mean fewer quirky little stations that play offbeat or eclectic stuff? Of course it does. But deregulation was a process designed to create a better atmosphere for business, not musical diversity. And as this era has shown time and again, despite the loss of localism and personal service they have to put up with, Americans are embracing the big-box model. If you feel different, if you lament what has happened to radio, don’t blame Clear Channel. Blame Congress, which rewrote all the rules.

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