Right of the Dial: The Rise of Clear Channel and the Fall of Commercial Radio. Alec Foege. London: Faber and Faber, Inc., 2008. 320 pp.
If Enron represented “extreme capitalism” whose hubris brought it crashing to the ground in 2001, its equivalent in finance was Lehman Brothers, which imploded in 2008. In radio, it was probably Clear Channel Communications. These corporate histories bear testimony to the ugliness of greed, and offer only weak hope that unregulated recklessness will surely stumble and fall.
Founded in 1972, and later to become America’s fourth largest media conglomerate, rivaling NBC and Gannett, Clear Channel passed from public ownership in 2008 (though subject to the executive leadership of co-founder Lowry Mays and his sons Mark and Randall) into the hands of two private equity firms, Bain Capital Partners and Thomas H. Lee Partners. Early in 2010, the company flirted with bankruptcy, crippled by the debt of the 2008 buy-out; the decline in radio listenership in the wake of MP3, iPod, and mobile devices; and the fall in advertising revenue after the 2008 economic crisis.
In this book, Foege misses the tail end of this family soap opera but successfully chronicles the history and the personalities that contributed to the formation of Clear Channel, as well as the entities it later acquired. These included Liberty Broadcasting System, whose Gordon McLendon invented DJ-title slots in the 1950s, masterminded promotional giveaways, and manufactured scandals as a promotional gimmick. Stan Webb of San Antonio station WOAI created an all-advertising model, circumventing agencies by cultivating ties directly with advertisers, putting them on talk shows, giving presenters a share of the advertising sales revenue, and generally milking every broadcasting minute for its advertising potential. Clear Channel fashioned a philosophy “that anything was possible as long as a station was profitable, preferably extremely profitable,” as Foege reports.
Clear Channel Television (comprising nine stations by 1995, and ties to five others, mostly affiliated with Fox) for a time accounted for 60% of cash flow: they carried no local newscasts and combined cheap programming with high advertising margins. Acquisition of Eller Media in 1997 created synergies incorporating billboards, concert promotions, stations, and advertisers. Clear Channel acquired the Jacor group, including Premiere Radio Networks, in 1998; SFX Entertainment and Bill Graham Presents were acquired in 2000 and folded into Clear Channel Entertainment. It invested $75 million into XM in 1999.
Unlike Enron and Lehman Brothers, the company persists, if somewhat chastened, and remains a formidable player. Foege’s book charts Clear Channel’s meteoric growth (rate of return to investors averaged 26% from 1993-2002), particularly after restrictions on radio ownership were slightly loosened in 1992 and then more dramatically following the 1996 Tele-communications Act. Increasingly ruthless business practices of the 1990s and early 2000s ultimately rebounded on the company’s reputation, triggering its subsequent decline in face of growing criticism.
Clear Channel was the San Antonio-based company that patronized icons of an aggressive, crude Republicanism, some of whose stations contributed to post-9/11 hysteria by censoring the playing of John Lennon’s Imagine (among a blacklist of 150 songs circulated among Clear Channel stations), and urged executives to contribute to the Republican Party. For context, however, Clear Channel also was unfairly singled out for its blacklisting of Dixie Chicks songs after Natalie Maines expressed her distaste for Bush Junior (other networks reacted even more aggressively). And it also supported Liberal Talk Radio and Air America.
At its height, Clear Channel owned 1,233 U.S. radio stations (far more than nearest rival Cumulus Media, which owned 200). While it owned only 9% of all U.S. radio stations, these accounted for 82% of U.S. popular-music airplay. It was a key player in billboard advertising and controlled 85% of U.S. concert promotions through Clear Channel Entertainment (later spun off as Live Nation, whose board members overlapped with Clear Channel). It was involved in television, music promotion, broadcast transmission towers, and programming syndication; and it held substantial interests overseas.
In this morass of potentially conflicting interests lay the seeds of hostility from other industry players and sectors of the public, peaking after a series of critical articles in the 2000s by Eric Boehlert in Salon.com, to which Foege makes generous reference. Even in 2010 it remained formidable, with 900 stations, mainly in strong markets—although it might have sold off some of these had there been a sufficient pool of willing, wealthy buyers.
Criticisms of Clear Channel included the charge that artists were bullied into playing Clear Channel-controlled venues to avoid being banned from the company’s radio stations; use of “voice tracking” technology by which DJs dialed in their “local” broadcasts from centralized locations, and using crude customizations to hide this from their audiences while eliminating local on-air talent—a strategy that backfired with disastrous consequences when stations failed to provide the most basic of alerts in situations of local emergency. Further, Clear Channel stations circumvented FCC ownership restrictions through local management arrangements (LMAs), by which it contracted to supply programming, sell advertising and manage other stations without actually acquiring licenses. The company also developed automated, modal formats of similar music, relying less on DJs and appealing more to advertisers; it controlled music venues and tours in markets where it also owned radio stations and billboards, greatly expanding its power to market to national advertisers and to undermine competitors, charging excessive prices for concert tickets, parking, and concessions.
Foege also documents attempts to reduce the proportion of concert profit that went to artists; transferring higher proportions of Clear Channel Entertainment advertising budgets to Clear Channel radio stations; discriminatory employment practices; and arrangements with Tri State Promotions and Marketing by which Tri State demanded steep fees from record labels if they wanted their artists played on Clear Channel stations.
Less well appreciated is the company’s record of innovation in business and automated programming, and its penetration of African American markets through urban, urban AC and rhythmic formats.
Foege’s work is a rich mine of information for anyone interested in the political economy of popular radio.
Bowling Green State University