Clear Channel--'Bout Time...

John Macy · From: Rockport TX/Denver CO

Clear Channel posts big loss

The largest owner of stations lost $4.67 billion as it wrote down asset values because of the Internet and satellite radio.

By Michael White and Chitra Somayaji

BLOOMBERG NEWS

Clear Channel Communications Inc., the nation's largest radio station owner, announced a $4.67 billion loss yesterday, becoming the second big radio station owner to write down losses this week.

Clear Channel's loss reflects the diminishing value of radio as listeners and advertisers turn to media such as the Internet and satellite radio.

Viacom Inc., the No. 2 U.S. radio company, wrote down its station assets by $10.9 billion on Thursday.

Both Clear Channel and Viacom failed to increase revenue from radio stations in the fourth quarter as national advertising grew 9 percent in 2004, the companies said.

Clear Channel's 1,200 stations are in cities including New York, Los Angeles, Atlanta and Philadelphia. Clear Channel owns six Philadelphia radio stations, including WUSL-FM, WDAS-AM and WDAS-FM.

The media company's $4.67 billion writedown was on the value of stations' radio licenses.

"The growth outlook has diminished versus greater optimism in the past," said Lee Westerfield, an analyst at Harris Nesbitt Corp. in New York, who rates Clear Channel shares "outperform" and doesn't own them. The writedowns account for "factors in the media landscape investors have known for a long time," he said.

Viacom's writedown totaled $18.4 billion and included $7.1 billion for the outdoor advertising unit. It was the fifth-biggest quarterly loss in the U.S.

Since 2000, the average amount of time a listener tunes in to radio in the top 100 markets has declined to 19 hours and 30 minutes from 20 hours and 45 minutes, according to Arbitron Inc., which tracks radio ratings.

Radio advertising in the U.S. lagged behind that of other media in 2004, according to an estimate by Universal McCann, a New York-based advertising agency.

Ad spending on radio grew 2 percent, compared with 12 percent for cable television and 9.5 percent for network television.

In September, the U.S. Securities and Exchange Commission modified accounting rules, forcing companies to limit the value of intangible assets such as broadcast licenses to the "direct value" of the item. Previously, companies were able to apportion other costs to the value of these licenses.

"We do not believe there has been any diminution in the value of our radio stations," chief financial officer Randall Mays said in a conference call yesterday. "It does not affect the ability of this company to generate cash flow. The fair value of our radio stations and outdoor branches exceeded our book value prior to and after this accounting rule."

Clear Channel's loss of $8.15 a share compared with net income of $187.2 million, or 30 cents, a year earlier, the San Antonio-based company said in a statement yesterday. Revenue rose 1 percent to $2.31 billion. Clear Channel said it cut the value of assets by $4.9 billion to reflect an accounting change.

Sales growth at Clear Channel's billboard unit, the company's third-largest by revenue, outstripped the radio stations for the year and quarter, the company said.

In December, Clear Channel introduced an advertising initiative known as "Less is More" to attract listeners and boost ratings. The program, which cut the number of ads broadcast, helped reduce commercial time 13 percent at radio stations in the top 10 U.S. markets from October to January, according to a Harris Nesbitt study.

Laura Martin, an analyst at Soleil/Media Metrics, said in an interview, "2005 will be a transitional year as they implement the less-is-more strategy."

In the first quarter of this year, Clear Channel's radio sales have declined 5.6 percent, chief executive officer Mark Mays said yesterday.

Station owners including Emmis Communications Corp. and Cox Radio Inc., also are reducing their ads, the study said.

Shares of Clear Channel closed down $1.16, or 3.4 percent, to $32.75 on the New York Stock Exchange. The stock has fallen 25 percent in the last year.

chas smith R.I.P. · From: Encino, CA, USA

" Clear Channel said it cut the value of assets by $4.9 billion to reflect an accounting change."

They actually didn't lose money, they had to be more "honest" about how they accounted for their assets. American business tends to have a very creative accounting practice, to accomodate Wall Street.

Donny Hinson · From: Glen Burnie, Md. U.S.A.

I have no sympathy at all for "big music" (recording companies/radio stations) these days.

If their business is lagging, it's their fault, not ours.

Kevin Hatton · From: Buffalo, N.Y.

Sattelite radio and REAL country music anyone?

Eric West · From: Portland, Oregon, USA, R.I.P.

That's one T.

Yup, and you can directly upload your whole mastered product to the people that want to buy and distribute your music. Liner notes, album covers, and "special features" as the network moves into more video formats.

That, taking for granted that you actually want money for it.

I suppose there could be a virtual Pay Pal tip jar...

EJL

Drew Howard · From: 48854

A truck driver friend demonstrated for me his new XM satellite radio box. $90.00 at Walmart.
Pick your genre, no ads, no dropouts.

Corporate radio should be shaking in their shoes.

------------------

Drew Howard - website - Fessy D-10 8/8, Magnatone S-8, N400's, BOSS RV-3

Donny Hinson · From: Glen Burnie, Md. U.S.A.

Chris Bauer · From: Nashville, TN USA

[This message was edited by Chris Bauer on 06 March 2005 at 08:49 AM.]

Webb Kline · From: Orangeville, PA

Hey Donny, SHHH!!! I wouldn't put it past them though.

When I look at the garbage we've been fed for so many years by the big industry guys, I'll be among the first to stand on the the edge and spit on them as their corporate hierarchies fall helplessly into the abyss of failure on that day when their complacency and arrogance finally pushes them over. Shame on them and good for them. They're getting what they deserve.

Jon Light (deceased) · From: Saugerties, NY

I can't imagine greedier scum more deserving of a mighty downfall than the corporate powers that rule the airwaves (with aid and comfort provided by the FCC--don't let the 'decency fines' throw you off track--just a red herring.) But satellite radio is going to eventually need to show something in the way of revenue. I have no idea of their business model but I don't for a second believe that they are a bunch of altruistic anti-corporate-radio saviors and I expect very little to be different down the road. Money talks--not an evil fact but a fact nonetheless and unfortunately it's coca cola, ipana toothpaste and boner pills money that is changing hands, not paychecks for artists.

David L. Donald · From: Koh Samui Island, Thailand

In todays market if you don't play
Janet Jackson and Dixie Chicks, you go under... LOL

Donny Hinson · From: Glen Burnie, Md. U.S.A.

Al Carmichael · From: Sylvan Lake, Michigan, USA

Donny Hinson wrote:

Anyone that thinks that satellite radio will stay at it's current subscription price levels, or that it will remain almost completely commercial-free is...well, suffering delusions.

I agree. The first step in the art of war is eliminating the competition. They will keep the rates low and make their satellite service worm its way into the public consciousness, just like cable TV did. Once it has brought radio to its knees, the commercials will start to raise their ugly heads. When they can start to make money with commercials, they will do it, no doubt. Thats when I will turn it off forever.

Even public radio is not immune for commercials--even if they are self serving. My answer is to carry my iPod and listen to what I want to hear. Radio is so saturated with commercials that I cannot listen to it anymore. We are in a state of flux right now. The only thing certain is the corporations who have the most money will dictate where its going, and my response is that I have an "off" knob on my radio and will unsubscribe to satellite if it goes the way of cable. Actually, I don't subscribe now. I may never.

Chip Fossa · From: Monson, MA, USA (deceased)

Yeah...I pay about $45/mnth for Comcast broadband cable for the pc, and another $45/mnth
for there rock-bottom cable TV. They even took one station off, and increased the monthly fee by about $1.25.
[Oh - there is a cheaper TV cable pack at $11.95 - about 8-9 channels and all local bilge.]

I'm getting ready to just discontinue the TV side of Comcast.

But you know what? If I do, or go with that crummy $11.95 deal - my monthly fee for the Internet side of Comcast WILL INCREASE.
Like they're gonna get you, one way or the other. And where can you go to take your business? Nowhere, that's where.
My buddy in Hampden [next town over] has Charter as his cable. Why can't I go with Charter? Oh, I see. They're not allowed in Monson. But we can buy electricity from Canada. Give me a break.

What are those bums in Congress doing, anyway? De-regulation has backfired big-time.
The real war on terroism should start right here with corporate America.

Sorry - strayed from the topic.

cf

Ian McLatchie · From: Sechelt, British Columbia

To get a picture of what a Great Satan Clear Channel is, not only of radio, but concert promotion as well, check out this article from Harper's:
http://www.findarticles.com/p/articles/mi_m1111/is_1843_307/ai_111695432

Garth Highsmith · Posted 8 Mar 2005 10:38 pm

.

[This message was edited by Garth Highsmith on 09 January 2006 at 08:46 PM.]

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