Guest Columnist ...Venture Capitalists Are Circling. by Jerry Del Colliano
Professor of Music Industry at USC Former TV and Radio Broadcaster Founder of "Inside Radio"

There are a lot of fine people in radio who are watching the collapse of the Clear Channel empire as long overdue. Within a month, we may know the fate of the empire which includes 1,150 radio stations. The end won't be pretty -- unless you are a Mays family member. They'll be just fine. Maybe come away with a private radio company -- a spin off. Perhaps the sale of the outdoor division. In any case the vultures are circling the carcass as real vultures do when they spot something dying. Who would have thought? Well, I did and I said so when I owned Inside Radio. Took a lot of criticism for my position that deregulation and the consolidation it created was not good for radio. I didn't see the iPod coming -- let's be real. Nor did any of us see the disenfranchising of the next generation vis-a-vis radio. That didn't help.

Good always comes from bad so if consolidation didn't sit well with you, consider these premonitions of the future as the number one radio chain is in play. Many of their stations will be sold. That's a good thing -- maybe - if it puts them in the hands of smaller buyers who want to operate the stations for the long haul. But most of the Clear Channel properties may (I said may) be held by investors looking to -- what else? -- build them up to sell them off for a bigger profit. After all, that's what venture capital does. But this time they may have a rude awakening.

Radio is no longer a growth business -- sorry to say. At best, it's paddling water to stay even. Station prices may not appreciate as venture capitalists project. After all, Wall Street is lined with bad financial decisions made by investment banks. Other groups will sell some properties as well and smaller owners are the likely buyer (everyone is smaller than Clear Channel). In the end Clear Channel has to live with its legacy that on departing from the dominant platform it aspired to, it did not leave the industry we all love any better off. For that, let's hope the money they're about to make on the way out the door is worth it.

--Jerry Del Colliano
Visit Jerry's blog at http://insidemusicmedia.blogspot.com/


 


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