RBR reported over a week ago that the FCC had voted unanimously to approve the sale of Clear Channel Communications to Thomas H. Lee Partners and Bain Capital for 26.7 billion, including debt assumption, but the paperwork finally came out yesterday. Although they both voted for the license transfers, Commissioners Michael Copps and Jonathan Adelstein, the FCC’s two members from the Democratic Party, expressed some misgivings.
Copps applauded the de-consolidation effect of Clear Channel having to divest 42 radio stations in the top 100 markets and its ongoing effort to sell hundreds of smaller market stations. So, he said, there might be some public interest benefit. “But there is another side to this transaction, and it’s one that concerns me greatly. I have repeatedly called for the Commission to examine the potential impact of private equity on our ability to ensure that broadcast licensees protect, serve and sustain the public interest. Unfortunately, that has not happened, and nothing in today’s Order indicates that the Commission has had a change of heart. Instead, we once again close our eyes and pretend that nothing has changed—as if these new entities are no different than our traditional broadcast licensees. And there are those who accuse me of living in the past!” Copps railed in his statement accompanying the formal approval.
For Adelstein, his concern is whether the FCC should investigate further claims by Mt. Wilson FM Broadcasters that Clear Channel had required some advertisers in LA to devote 100% of the radio advertising budgets to Clear Channel stations – a claim that Clear Channel denied. “Approval of this transaction will result in less consolidation in the radio industry. While I support this Order generally, I concur in part to highlight my concern regarding alleged anticompetitive practices with respect to advertising in the radio industry. I agree with the Order’s conclusion that, in this case, Mt. Wilson has failed to establish a prima facie case that Clear Channel has engaged in specific anticompetitive sales practices. I am not convinced, though, that the Commission’s inquiry should stop there,” Adelstein said in his statement.
RBR observation: Will Commissioner Copps ever wake up and realize that private equity firms have been radio and TV group owners for decades? In fact, Commissioner, these buyers that you refer to as “new entities” are, in fact, “no different than our traditional broadcast licensees” because entities structured and funded exactly the same way have long been among the traditional broadcast licensees.