I've written before about Clear Channel trying to sell itself to a couple of private equity firms. Today, our Department of Justice, until recently run by Albert Gonzales, the demon spawn of John we-don't-need-the stinkin'-Constitution Ashcroft and now in the infirm hands of Michael no-opinion-on-torture Mukasey has decided CC must sell off stations in Cincinnati, Houston, San Francisco and Las Vegas as a condition of approving the deal. This is "to assure continued competition in markets where the transaction would otherwise result in a significant loss of competition." Oh, please. I'll still respect you in the morning and the check is in the mail. Turns out Bain Capitol and Thomas Lee Partners (the equity firms) have radio interests in those markets.
Let me see if I've got this right. The largest Radio owners in the world will be sold to a new company that will make IT the largest owner in the world and the DOJ thinks selling a dozen stations out of roughly 1000 makes a friggin' difference? As if somehow one big corporate owner is somehow better than another?
This could very well be the time when we look back and say this was the beginning of the end. Equity firms do one thing-buy companies and sell them for profit...usually by slashing costs (read: jobs) hence the term "strip and flip".
Radio has plenty of owners that don't give a shit about how good the station is as long as they make the numbers. Does anyone really believe an equity firm will invest in the stations to grow their value? No. They'll slash and burn them and then sell to another big company...assuming station values continue to rise. I'm not an economist, but I bet they won't. That could mean selling off the stations at fire-sale prices...to another big company. And the hits just keep on comin'.
No comments:
Post a Comment