This article originally appeared in the February 2018 issue under the headline “Radio Silenced.”

In 2006, a pair of Boston private equity firms approached San Antonio billionaire L. Lowry Mays about selling Clear Channel Communications, the world’s largest operator of radio stations and billboards. The firms offered $26.7 billion, a number that would make the deal one of the largest buyouts in history. But for Mays, the decision to sell was a difficult one.

He had a powerful attachment to the company. He’d spent most of his adult life building it from a single station in San Antonio into an industry behemoth, and his two sons were now executives there. But the price and the timing were too good to resist. Mays was getting older, radio was facing a wave of new competition from the internet, and it seemed as if the golden era of local broadcasting was over. It was a good time to get out.

“It was best for the family to sell and take the chips off the table,” he tells me from his San Antonio office.

His instincts were almost eerily good. Today Clear Channel is a markedly different company from the one Mays sold. It adopted the tech-hipster moniker iHeartMedia, and its finances are a mess. The company has lost money every year since 2007, and it’s saddled with $20.4 billion in debt. Credit analysts predict it could file for bankruptcy any day now.

This is all a far cry from the days when Clear Channel was the most dominant player in the radio industry; it helped to usher in the era of talk radio and was regarded by many as a nearly unstoppable force for the blandification of rock music. But as a song that probably didn’t get a lot of play on Clear Channel stations would have put it, the harder they come, the harder they fall.

In the end, iHeart fell victim to simple mathematics.

Mays never intended to get into radio—Forbes once dubbed him “the accidental broadcaster.” He was born in Houston and grew up in Dallas, the son of a salesman who was killed in a car accident when Mays was twelve, leaving Mays’s mother to support the family by selling real estate. Mays got a bachelor’s degree in petroleum engineering from Texas A&M before joining the Air Force, which sent him to Taiwan to supervise construction of a pipeline for the Chinese Nationalist government. He was just 22, but he oversaw thousands of workers digging the pipeline by hand. After his discharge, he earned an MBA at Harvard, then settled in San Antonio and eventually set up his own investment banking firm. In 1972, a group of investors approached him about buying KEEZ, a local radio station. Mays passed, but he agreed to co-sign the note so the group could finance the purchase. Then he promptly forgot all about the deal.

A few months later, the bank called, said the group had defaulted on its loan, and told him that as the co-signer, he now owned the station. Mays knew nothing about the radio business, so he called his friend and fellow San Antonio entrepreneur B. J. “Red” McCombs. At the time, McCombs’s media understanding extended only to the advertising he bought for his car dealerships, but he agreed to invest in the business anyway. Mays learned on the job, and he bought two more stations, in Oklahoma. For a time, all of his radio properties were losing money, and he had to pay his workers’ salaries out of his own pocket.

In 1975, though, the company purchased San Antonio’s WOAI, one of a limited number of AM stations in the country with a Class 1 license (often called a “clear channel” because it is protected from interference from other stations and can therefore be heard nationwide). Mays hired John Barger, the programming director for Dallas’s KRLD, who persuaded him to change the format from Top 40 to talk radio. According to Right of the Dial, a book by the journalist Alec Foege, they then pursued an aggressive sales strategy, offering news coverage to advertisers.

That approach helped stabilize the company’s finances, and Mays capitalized by launching an ambitious growth plan. He bought up stations across the country, and in 1984, the company, now known as Clear Channel Communications, went public. In 1996, Congress removed limits on the number of stations one owner could have in a single market, and Clear Channel expanded to more than 1,200 stations nationwide.

Clear Channel’s rapid growth turned it into a Wall Street darling. Between 1995 and 2000, it was one of the best-performing listings on the New York Stock Exchange, and its shares generated a return of more than 1,300 percent. Along the way, Clear Channel also branched into billboard advertising, television stations, and concert production.

Illustration by Christopher DeLorenzo

Touchdown, Aggies!

On November 24, 1921, what was possibly the first ever play-by-play radio broadcast of a football game aired from Texas A&M University, Mays’s alma mater. Updates were sent via Morse code.

Though investors were enamored of Clear Channel, music aficionados bristled at its growing influence. According to detractors, the company centralized programming decisions, aired the same DJs in multiple markets, and homogenized playlists. At one point, the company had stations in 247 of the country’s 250 biggest markets, controlled 60 percent of rock radio listening, and dominated Top 40 formats nationwide. A 2006 study by the Washington, D.C.–based nonprofit Future of Music Coalition found that Clear Channel’s strategy had little public benefit. “When you fire so much of the local talent, replace the DJs with robots, and largely play nearly identical playlists in every market, it only makes sense that the results include fewer opportunities for musicians to get airtime,” says Kevin Erickson, the group’s national organizing director.

Clear Channel also stoked the ire of many music fans—and certainly garnered the support of many others—when multiple stations, including one in San Antonio, banned the Dixie Chicks from their airwaves after singer Natalie Maines criticized George W. Bush for his handling of the Iraq War. Though Clear Channel denied that such a ban was an official policy (another radio operator, Cumulus Media, was much more overt), the company did hold a series of pro-war rallies around the country that included Glenn Beck vilifying the Dixie Chicks.

Regardless of such controversies, Clear Channel made Mays a billionaire. In 1996, he gave a $15 million endowment to the business school at A&M, which now bears his name. (Last year his family foundation pledged another $25 million to the school.)

By 2006, though, the future of the industry was uncertain. Clear Channel was still doing well, but after peaking in the nineties, the company’s shares had fallen by more than half. Advertising markets were fragmenting. The internet enabled advertisers to target more-specific audiences, so the mass-market advertising in which Clear Channel specialized was losing its appeal.

The Mays family began fielding offers for the company, and a handful of groups made proposals. Though the firms recognized that there were problems with the company’s growth, they believed they could squeeze better returns out of Clear Channel’s stations. Ultimately the Boston private equity firms Bain Capital and Thomas H. Lee Partners teamed up to place the highest bid. To complete the deal, they agreed to take on $8 billion in debt, and then borrowed even more to finance the purchase.

Shareholders approved the deal in September 2007—just a few months before the Great Recession. As the bottom fell out of the economy, Clear Channel’s shares dropped. Many of the banks underwriting the deal balked as the value of the buyout fell, but the transaction ultimately went through in July 2008. Still, the suddenly adverse economic situation, the heavy debt load, and emerging competition from XM and Sirius satellite radio left the company in a hole it has never climbed out of.

In 2011 Clear Channel hired Robert Pittman, an MTV co-founder and former AOL executive, to turn things around. The company rebranded itself iHeartMedia, but the makeover didn’t improve its fortunes. Local radio and outdoor advertising, which remain iHeart’s main businesses, have been steady during much of the past decade, but they haven’t grown as they once did. “If you can’t grow cash flow significantly, you can’t manage $20 billion in debt,” Mays told me.

In the end, iHeart fell victim to simple mathematics: interest payments on its debt total about $1.8 billion a year, yet its operating cash flow is between $1.6 and $1.7 billion, according to Philip Brendel, a credit analyst with Bloomberg Intelligence. Creditors may attempt to negotiate a “prepackaged” bankruptcy, Brendel says, which would enable the company to restructure its debt and emerge as a stronger business. But if iHeart and creditors can’t agree on terms, lenders may force the company into bankruptcy, and iHeart could be tied up in a lengthy court battle.

In light of how things turned out, Mays says he harbors some regret about selling the company he built from the ground up, but he also admits that he would probably do the deal again if given a second chance. The price, after all, was “extremely good”—too good to pass up.

And, debt or not, it’s unlikely that Mays could have solved the problems that have plagued local radio in recent years. According to one recent study, listeners—and, therefore, advertisers—want choice, something that Sirius and streaming services such as Spotify and Pandora are well positioned to offer while iHeartMedia is not. To succeed, it turns out, the company needed a lot more than a change of name.