Clear Channel Sale to End Era...or Will It?

From Washington Post, November 17, 2006:

Clear Channel Communications Inc. has agreed to sell the company to a consortium of private-equity firms and plans to shear off more than one-third of its 1,150 radio stations, dismantling a giant that dominated the industry and became the bogyman of media consolidation for the past half-decade.

The deal is worth $26.7 billion dollars. The plan to sell one-third of its radio stations, 448, to be exact, is coupled with a plan to sell its 42-station television group. The Washington Post may be off base in saying that the selling of one-third of its stations will "dismantle" the media giant, though, when you consider:

None of the 448 radio stations are in the top 100 markets in the United States. Over all, the properties to be sold accounted for less than 10 percent of Clear Channel’s $6.6 billion in revenue last year, the company said.

Even with those sales, Clear Channel will remain a broadcasting behemoth, and its proposed buyers already have big media investments. This combination could raise concerns among regulators. (New York Times, Nov. 17, 2006)

It seems the investors are simply shearing the stations that get the least bang for the buck. These stations may be small market stations facing debt from digital switch costs in recent years, and the new owners of Clear Channel may be trying to sell the burden of those debt, which will be slow to recover to someone else. It's worth looking into.