Robert Short Jr. grew up in a segregated Syracuse, New York, neighborhood during the late 1960s and 1970s, where as a young black male he developed “a strong moral commitment to the African American community” and “a love for rhythm and blues music” that, he told me, would ultimately drive him to “do something crazy”: start a radio station. Short went to Ohio for college, then returned home in 1980 to work as an accountant. “I was doing well,” he recalled, with a somber, matter-of-fact tone. “I made enough to buy a house, which I owned outright. I had a family. And I built up a pretty big record collection, too.” As a teenager, Short had enjoyed listening to Syracuse radio, but after living out of state he realized that something was missing from his hometown’s offerings. “The city had no heartbeat, no rhythm. Music radio was all country and western, rock, Top 40; there was nothing like an urban format. The only black music was the crossover artists: Michael Jackson, the Commodores, Gladys Knight, Marvin Gaye. And even then we’d only hear the big commercial hits, the ones everyone knew and had heard a thousand times. Not Marvin Gaye live in the London Palladium singing ‘Let’s Get it On.’ Nothing special, no songs from the vault. And you know, without a heartbeat, you’ve got no life.”
In 1980 about one-fifth of the city’s 170,000 residents were African American, yet there had never been a black-owned radio station in Syracuse, and, according to Short, “blacks here never had a real voice.” “At first I just complained about it,” he recalled. “Then it dawned on me: instead of waiting for someone else to do something, why don’t I do it myself?” Short began shopping for an FM station, but he quickly learned that the cost of entry was prohibitively high. During his search, however, some contacts informed him that the FCC, which had long been pressured by civil rights groups to increase minority representation on the airwaves, was concerned that Syracuse had no stations serving its sizable black population. In fact, the commission planned to license a new station designed for African American listeners, and in 1988 it formally opened the application process.
“There was a thirty-day window to apply, and I decided to do it. I knew it would be expensive, but not how expensive. And I knew it would be long, but not how long. I would say that I spent $175,000 to $200,000 of my own money just to get through the process. It lasted six years. The legal fees alone were over $100,000; then there were engineering studies, research, consulting, FCC filing fees. I mortgaged my house. I got cash advances and maxed out my credit cards. I borrowed money from my parents and my siblings. I risked everything. The big companies [competing for the license] dragged out the process to weed out the small players. And if you drop out, you lose everything you put in.”
Short Broadcasting won rights to the license in 1993, but by then he had run out of resources and had to find new investors. It took about a year to raise the capital and build the station, and in May 1995 WRDS 102.1-FM went on the air. R&B music was the soul of WRDS, and during its initial months the station relied on satellite services and syndicated African American personalities, such as Tom Joyner and Doug Banks, who were airing for the first time on Syracuse radio. “Some people complained about the syndicated programs,” Short acknowledged, “and I tried not to use them too much. But we had to get off the ground.” Once the station was established, Short indeed made community programming, civic affairs, and locally oriented talk shows key parts of the mix. “My vision,” Short explained, “was to have an urban station that that would unify the black community. The mainstream news would really only cover the black community of Syracuse when there was a problem. They focused on shootings, on drug busts, on crime. We covered town meetings. We addressed issues in the schools. Discrimination. We brought people who were affected by all this into the studio to discuss issues that got no attention. If there were controversies in the Syracuse black community, we’d try to air them, too. The school district didn’t like me, because I was always giving editorials about the state of our inner-city schools. But we had kids who weren’t passing the fourth-grade reading test. I’m a product of the Syracuse public schools, and my own kids were in them at the time. This stuff really mattered to me. It was personal.”
Unlike most large commercial radio stations, Short treated the public-service responsibilities required of local broadcasters as opportunities for community building, not as burdensome obligations. “I started a station-sponsored Unity Day, when we’d have a big BBQ at the beach, play volleyball, bring in music. We invited all the local organizations to come together. The health clinics did immunizations, tested for blood pressure and diabetes. We had corporate partners give bike helmets to kids. We had all the service agencies, the fire and police departments. It was great.” Short’s own public-service passion involved working with kids. “I must have spoken at every high school in the city. I talked about staying in school, being a black business owner, having role models. We sponsored Little League teams for neighborhoods that couldn’t afford them, bought them uniforms and gear. And we did special programs, like field trips to the radio station and to the Knicks exhibition game in Syracuse. It was their only chance to see professional basketball players live, and they’ll never forget it.”
WRDS attracted listeners immediately. “Within a year everyone knew of our station,” Short reported. “Initially we were around number ten in the market, with about four percent of the audience. But we usually had the highest time-spent-listening of all the stations, and we were often number one or two with eighteen- to thirty-four-year-olds. Eventually we got as high as the top six or seven stations in the Syracuse market. This was about a twenty-million-dollar market, and so if we could pull in five percent of it that was a million dollars, enough to make things work.” The local advertising market was difficult to crack, partly, Short explained, because some businesses proved uninterested in target marketing to African American listeners. “That’s just something the black media has to face.” Yet gradually the station’s sales representatives made inroads, and Short was cautiously optimistic that the advertisers would follow the audience.
Then the Telecommunications Act of 1996 went into effect. “The playing field changed right beneath our feet,” Short said. “I was competing against some big companies before, but it was relatively fair battle because they couldn’t monopolize the whole advertising pie. Clear Channel moved in and took over seven stations, and a lot of small broadcasters sold their licenses. Clear Channel’s operating costs were unbelievably low, because they moved their stations together, turned them into jukeboxes with voice-tracking technology and syndicated programs—which they also owned!—and they had one general manager oversee the whole group. Clear Channel had the top sales reps; they even own Katz Media Group, which represents more stations than anyone else, and they offered special advertising packages to big customers who bought into their group. They also owned the billboards, which you need for radio promotions. They owned the theaters, so it was hard to promote your own concerts. And they owned SFX Entertainment, which books the talent, which means they basically owned the artists. They would squeeze you out, and the little guys just couldn’t compete. The system was just too difficult, all the way around.”
WRDS was more than a business for Short. Both his dreams of running a radio station and his commitment to enriching the cultural life of Syracuse’s African American community made him reluctant to sell out even when the advertisers pulled back their purchases. When fees spiked for the Arbitron ratings service, to which Short subscribed so that his sales representatives could deliver the same market data to advertisers that Clear Channel offered, he was forced to pare down the staff. But Short’s partners were less willing to endure regular beatings from the ruthless giant that dominated the Syracuse market, and they persuaded him to sell WRDS to another competitor, Radio Corporation (later renamed Galaxy Communications) in 2000, after only five years on the air. Radio Corporation converted WRDS-FM into WZUN-FM, switched from the urban format to light rock, and when that failed experimented with two other styles of programming. Clear Channel took advantage of changes in WZUN’s format to convert one of its own stations to the urban contemporary style. It played similar music to WRDS, Short said, but the conglomerate’s approach to station management was completely different. “They don’t line up special programs to get the kids into basketball games. They don’t have anyone going into the schools. They do zero community work. They don’t give our community a voice. They don’t want us to have a voice. They just want us so they can sell ads.”
In January 2003, Short appeared before the U.S. Senate Committee on Commerce, Science, and Transportation at a hearing on media ownership, where he testified: “WRDS is a victim of the 1996 Telecommunications Act … It was not my desire to sell WRDS when we did. We sold because … Clear Channel was able to exercise market power with advertisers in a manner with which we were unable to compete.”1 Short, who had served on the board of directors for the National Association of Black Owned Broadcasters, regretted that “because of the Telecom Act, there are only a few remaining African American broadcasters.” Today he continues to work occasionally in media, recently coproducing a documentary about Dorothy Gilliam and Ernest Withers, two black journalists who covered the civil rights movement. But Short’s entrepreneurial energy is now focused on a small business that sells gift baskets in a local mall, and whose public-service contributions to Syracuse are relatively modest.
IN OCTOBER 1999, ONE YEAR BEFORE CLEAR CHANNEL’S STATIONS squeezed Short Broadcasting out of Syracuse, then president and CEO Lowry Mays announced that his fast-growing conglomerate would spend $23.5 billion to merge with, and effectively absorb, AMFM, whose vice chairman and CEO of the new media division was his old friend Steve Hicks. “The Mays team,” Business Week reported, put together the deal “in little more than five days. Once we had the ability to move, we moved like lightning,’” said Lowry’s son and future successor, Mark Mays.2 AMFM was hardly Clear Channel’s first major purchase of another radio consolidator. In 1998 Clear Channel paid approximately $6.5 billion to acquire Jacor Communications, the Covington, Kentucky, company that spent more than $1 billion purchasing stations and programs after the 1996 Telecom Act passed, building up to 206 stations in twenty states by July 1998. When Clear Channel acquired its rival, it hired Randy Michaels, the flamboyant former shock jock who was Jacor’s CEO, as president of its radio division.3
Clear Channel was just one of about a dozen ambitious corporations that were selling equity and borrowing heavily to take over stations throughout the country in hopes of establishing dominance in the radio market after passage of the Telecom Act. AMFM had itself formed just two months before, when Capstar and Chancellor Media Corporation combined to form the nation’s largest radio station group, with 463 outlets. Viacom, which took over CBS and its Infinity Broadcasting radio divison in 1999, was in the midst of building an empire of approximately 180 stations, the majority concentrated in major cities with large audiences and lucrative advertising markets. At the same time Cumulus Media, an Atlanta-based company that focuses on small- and midsize cities, was assembling a fleet of more than 250 stations. By 2002 there were twenty-one companies that owned more than 40 stations (the cap before 1996), with the ten largest—Clear Channel, Viacom/Infinity, Cumulus, ABC/Disney, Cox Communications, Citadel Broadcasting Corporation, Entercom Communications, Emmis Communications, Radio One, and Univision Hispanic Broadcasting Corporation—controlling 67 percent of the industry’s revenues. According to the Future of Music Coalition (FMC), a Washington, D.C., nonprofit that does research on how media policies affect the interests of recording artists and listeners, the result is an oligopoly: “Virtually every geographic market is dominated by four firms controlling 70 percent of market share or greater,” and “in smaller markets, consolidation is more extreme.”4
None of the radio giants can compete with Clear Channel, which by the end of its feeding frenzy controlled nearly 1,240 stations, several times more than its main competitors. Clear Channel also owned the nation’s leading programs, because in the deal with Jacor it obtained Premiere Radio Networks, a syndicator whose list of some seventy talk, entertainment, news, and sports shows includes those by Rush Limbaugh, Dr. Laura Schlessinger, and Glenn Beck, and the American Top 40 program. Premiere shows aired on roughly seven thousand stations, which meant that the great majority of U.S. radio outlets would have to rely on the industry giant for key programming.5 In addition, Clear Channel acquired Prophet Systems Innovations (as well as Ray Lockhart’s three stations in Ogallala), whose automated programming technology would make the integration of these disparate properties that much smoother.
By 2002 Clear Channel employed 60,000 people in 63 countries and generated $8.4 billion in revenues. According to its corporate fact sheet, Clear Channel’s various holdings reach roughly 154 million people, or 75 percent of the U.S. population over the age of eighteen. Its U.S. radio stations enjoy a weekly audience of 110 million listeners, and its 26,000 annual concerts, family events, and sports competitions attract more than 66 million people. Clear Channel also owns and operates 41 television stations, 240 foreign radio stations, and more than 144,000 advertising displays, “including billboards, street furniture, transit panels and airport and mall signage,” as well as 655,000 displays “in more than 60 countries throughout Europe, Asia, Australia and Africa.”6 It even owns a leading industry trade publication, Inside Radio. The previous publisher, Jerry Del Colliano, had been critical of Clear Channel’s managerial practices.7 Although Clear Channel is best known for its radio operations, it’s easy to see why Mays told Fortune magazine: “If anyone said we were in the radio business, it wouldn’t be someone from our company … We’re not in the business of providing news and information. We’re not in the business of providing well-researched music. We’re simply in the business of selling our customers’ products.”8
Yet that was a business that Lowry Mays had not yet mastered, particularly when it came to local radio, and listeners, especially young ones, were turning away in droves. In September 2002 Duncan’s American Radio, one of the industry’s leading market research services, warned that radio listenership had sunk to a twenty-seven-year low, and three years later Abritron reported that Americans were tuning in to radio three hours less per week than they had in 1993.9 There’s no question that the recent emergence of satellite radio, Internet radio, MP3s, and personal listening devices has threatened the future of traditional broadcast radio stations. But before any of these external threats posed real problems, Clear Channel had become the industry’s own worst enemy, flooding the airwaves with standardized formats, automated programs, rip-and-read journalism, endless commercials, and a uniform diet of politically partisan, parochial talk shows that dulled local radio and pushed large segments of the audience off the dial.
LOSING LISTENERS IS ALWAYS BAD FOR RADIO COMPANIES, BUT FOR Clear Channel the downward spiral of audience ratings was especially bad news. The problem was not simply that the company had acquired about nine hundred more stations than its largest competitor, but also that it was still paying for them. To finance its media properties, all of which came with considerable operating expenses, Clear Channel had accumulated about $9 billion of debt by 2003, as well as a BBB- credit rating and a “negative” stock outlook from Standard and Poor’s.10 Like other media conglomerates that had borrowed heavily to expand their holdings during the booming market of the 1990s, in the early 2000s Clear Channel faced intense pressure from investment bankers to increase its profit margins. The radio division was able to eventually raise advertising rates once it pushed out smaller competitors and established a dominant presence in local radio markets. According to Jon Mandel, the co-CEO of the multibillion-dollar media marketing company Media-Com, Clear Channel leveraged its stronghold on radio advertising in cities where it had multiple stations to force “large cost increases over what supply and demand would have caused in a free market.” The result, he testified to the U.S. Senate Committee on Commerce, Science, and Transportation, is a “consolidation tax” that is paid first by businesses and then passed on to consumers. “In Atlanta, costs are 155 percent higher than free market, which is a consolidation tax of $144.5 million per year. New York radio is overcharged by 30 percent. $156 million per year … The people and businesses of Austin are overcharged by 95 percent … And in Tulsa, Atomic Burrito has to sell a lot more beans or lay a worker off to cover the $4,200 per year, 12 percent consolidation tax on their radio advertising.”11
Revenues from the “consolidation tax” were hardly enough to satisfy the analysts on Wall Street. So Mays accelerated a trend that the Hicks brothers had started in Austin, consolidating its local stations into one or two central locations, downsizing staff, and using its own properties, such as Prophet (the digital automation system) and Premiere Radio Networks (the syndicator), to substitute voice-tracked or national programs for live, local broadcasts. At Capstar, the Hickses justified their extensive use of voice tracking by arguing that the “hub and spoke” digital programming system helped them bring top talent to small and midsize markets that otherwise could not afford it. Clear Channel made similar claims, only it was now using voice tracking to replace live talent in the nation’s largest cities, including Chicago, where, according to a report by the Cornell University Labor Studies Center, “six radio stations are run from one building,” and Washington-Baltimore, where “eight stations are operated from one building and are programmed by just one employee.”12
It’s impossible to know exactly how many radio jobs Clear Channel eliminated or how much it saved in labor costs. The American Federation of Television and Radio Artists (AFTRA), the national labor union representing journalists, broadcasters, and artists, estimated that the company eliminated between 1,500 and 4,500 positions between 2000 and 2004, and Todd Spencer, the former managing editor of the radio trade publication Gavin, reported that industry pressure from consolidation resulted in a net loss of 10,000 radio-related jobs between 2000 and 2002. In Salon Eric Boehlert claimed that cyber jocking saved Clear Channel “tens of millions in salary.” In addition to the layoffs, AFTRA’s national director of legislative affairs, Tom Carpenter, told me, Clear Channel reduced labor costs by paying cyber jocks a fraction of the standard DJ salary. “In Chicago during 2001, they were paying people at the KISS station as little as three thousand dollars, and usually six to eight thousand dollars a year to do a voice-tracking shift for a show that would have cost them at least forty thousand dollars [a year] to do live.” Moreover, Carpenter explained, Clear Channel treated its employees and its union so badly that labor organizers dubbed it “the Wal-Mart of the radio industry.” The Cornell study, for example, cited union leaders who complained that Clear Channel had introduced “business and employment practices that effectively dilute [collective bargaining] agreements and undermine pay standards.”13
Sweeping labor cuts dramatically, if also inevitably, changed the company’s programming. With digital editing, Clear Channel took fake local broadcasting to new levels, running phone contests in which listeners didn’t know that they were competing with a national audience or employing DJs who fabricated experiences in places they had never been. Clear Channel’s radio hosts were hardly bashful about the process. In 2002 the Wall Street Journal reported that “Cabana Boy Geoff” Alan had been staging local shows for Boise, Idaho; Medford, Oregon; and Santa Barbara, California from Clear Channel’s San Diego studio; and Salon revealed that “a DJ named Randi West has aired simultaneously on Clear Channel stations in Cincinatti; Louisville, Ky.; Des Moines, Iowa; Toledo, Ohio; Charleston, S.C.; and Rochester, N.Y.”14Months later, the Clear Channel personality Jon Ballard told Knight Ridder about the challenges of recording his commentary and banter with local reporters (who talked back to the recordings) in Detroit from his base studio, WWDC in Rockville, Maryland. “It was a little wild at first because I had never even been to Detroit until April. I had to rely on the Internet to know what the hot spots in town were so I could talk about them on the air.”15 As word about voice tracking spread through media circles, critics—especially those inside the industry—dubbed the radio empire “Cheap Channel” and warned that its short-term profit seeking would ultimately devalue the medium. Clear Channel, they insisted, was chipping away at its own pot of gold.
LISTENERS COULD HEAR THE DIFFERENCE THAT AUTOMATED PROGRAMming makes during regular conditions. In disasters, however, the consequences of Clear Channel’s dependence on voice tracking and syndication were devastating. On August 14, 2003, roughly 50 million people across the Northeast, Midwest, and Ontario, Canada, experienced a prolonged blackout after a series of mishaps that began in Ohio. Coming just two years after 9/11, the breakdown provoked widespread anxiety: Had the United States been attacked? Was something even more dangerous about to happen? At the local level, however, the loss of electricity generated more immediate problems, shutting down street lights, elevators, subway systems, air conditioners, fans, refrigerators, television sets, computers, and electrically charged telephones. Cities faced elevated public health risks, particularly for the elderly and infirm, as well as the threat of public looting and violence. Residents rushed to their radios, as they always do during crises involving power outages, because most other communications technologies were useless.
David Rubin, the dean of Syracuse University’s S. I. Newhouse School of Public Communications, was on campus when the electricity went out, and he immediately went to his car and turned on WSYR 570-AM to learn what was happening. As the local news leader and a leading local station since 1922, WSYR had won considerable praise for its on-the-ground coverage of a major storm during Labor Day weekend in 1998, and it retained loyal listeners even after Clear Channel acquired it, along with six other Syracuse stations, in 1999. Lowry Mays singled out his pride in the Syracuse operations during the Senate testimony he delivered while sitting next to Robert Short Jr., from WRDS. “In Syracuse,” he gloated, “Clear Channel saves appoximately $200,000 a year by operating its stations as a unit instead of as stand-alone properties.”16
Driving home from campus, the dean realized that instead of reporting on conditions in Syracuse, the city’s leading news station was providing information about the subways in New York City. “What got me really upset is that WSYR kept using the feed from CNN to get news about New York City and other parts of the Northeast. The local coverage was weak and sporadic. WSYR didn’t have reporters in place, so it was vamping to cope with it. I only heard one local reporter on the air, and she was on the air only once.” Rubin was so upset by the absence of local coverage from Clear Channel that he wrote an editorial about the problem for the Syracuse Post-Standard. “When the power goes out, as it did on Aug. 14, local radio is the public’s information lifeline,” Rubin explained, adding that, in exchange for their licenses to use the airwaves, radio companies pledge that they will become part of the nation’s security system when disaster strikes. In 1998, WSYR had responded aggressively to an unusually powerful storm. Rubin praised the station for providing “information, reassurance and a sense of community,” and called its coverage “heroic.”
During the blackout, Rubin presumed that WSYR would provide a similar level of disaster reporting, calling in additional personnel, assigning journalists to beats in key city agencies, and bumping paid advertisements off the air. He expected WSYR to offer some national reporting, too, but like most other listeners he tuned in primarily for local news and reliable information about what was happening in Syracuse and how he should respond. “I heard almost none of this (except the ads, which kept on coming as usual),” the dean complained. “News Director Bill Carey was in the anchor seat and seemed to be all alone, without a local reporting staff to turn to. He was a general without any troops in the field. After brief local segments, he switched to a CNN feed that had a national, not local, focus.”17
Clear Channel responded immediately to Rubin’s op-ed, with an explosive letter written by Bill Carey, then its Syracuse news director. “As a listener,” Carey wrote, Rubin is entitled to complain about WSYR’s disaster coverage. But Carey argued that the dean “was decidedly not … an expert in journalism” qualified to comment on his station’s reporting. According to the Clear Channel executive, Rubin’s job was “primarily an administrative position and a fund-raising post,” and not one that required teaching about the media. Moreover, Carey alleged that Rubin was “a search committee’s third choice for the job,” that he had not “worked in the trenches of broadcast or print journalism,” and that the only publicly available writing by the dean “involves reviews of chamber music.” His closing lines packed a stronger punch: “I have always made it a policy to immediately return the calls of ‘respected’ members of the Newhouse faculty. That, Mr. Rubin, is why you have not heard from me.”18
Rubin, in fact, had been a magazine writer for thirty years, authored a major textbook on the media, edited a journalism review, worked on the PBS program The Inside Story, and—as the university was quick to point out—been its top choice for the deanship. But Clear Channel’s managerial blunder was even more significant than those editorial mistakes. Even after its failure to issue warnings during the toxic crisis in Minot, the conglomerate’s response to serious criticism of its disaster coverage was to impugn the critic rather than to improve its news reporting. Flabbergasted, Rubin wrote another article for the Post-Standard, sharpening his argument about the extent to which Clear Channel had decimated the news department, then confronted the company to back up the “community service” rhetoric that it came by so cheaply. “I challenge Mr. Carey to compare the number of journalists employed at the station fifteen years ago with the number employed now. I challenge him to compare news budgets. I challenge him to compare the amount of local material on the air, as opposed to the cheap, syndicated talk-show filler that the station airs constantly.”19 Carey did not respond.
LITTLE WONDER THE PROBLEM REPEATED ITSELF ELSEWHERE JUST A FEW weeks later, during the heart of hurricane season. In September 2003 Hurricane Isabel came ashore in Henrico County, Virginia, where about 260,000 people live on the outskirts of Richmond. Newsradio WRVA 1140-AM in Richmond is the official emergency broadcaster for Henrico County, where it had operated its high-power signal since 1925. It was purchased by Clear Channel in 1992. Robert Orndorff, a local radio enthusiast who ran the Richmond Radio Web site, reported that between 2000 and 2001, just after the AMFM merger, Clear Channel downsized the staff, eliminating the local morning show and several on-air personalities and replacing them with syndicated content. Tamra McKinney, the county’s director of public relations and media services, tried to work out a plan for postdisaster public-service broadcasting with Clear Channel, but no one at the company office was available to help. “With a hurricane you know it’s coming. We called all the radio stations in town and requested a back-up emergency number, but Clear Channel never responded. They just didn’t call us back. Clear Channel owns seven stations, and if you can’t get through to one, you can’t get through to seven.”
According to Patricia O’Bannon, an elected official on the local Board of Supervisors, and then-chair of the Virginia Association of Counties’ Telecommunications and Utilities Steering Committee, the hurricane hit early in the evening, and WRVA broadcast the official emergency alert as it is required to by law. The problem with its disaster coverage became apparent after the hurricane ended and thousands of local residents needed basic information about how to protect themselves. Clear Channel, having dramatically reduced the local reporting and in-studio staff at its fleet of Richmond stations, had neither the personnel at its stations or in the field to cover the crisis, nor the public-service commitment to suspend its regular programming for the good of its listeners.
O’Bannon said that the hurricane took out the area’s water system, the back-up system for its water-pumping system, the electricity, and telephone service in most of the county. Communications lines were down, and even driving through the streets to issue warnings with a bullhorn was difficult, because so many trees were down in the roads. “We needed to put an announcement on the radio not to drink the water,” she explained. “Because if you allow the water to settle into the pipes, it can pick up corrosions and grow new bacteria.” The treated water had indeed settled in the pipes for two days, and residents needed to know that they had to flush out the contaminated water after the pumps were restored. O’Bannon told me: “About one hundred thousand people didn’t have phone service, and we needed to get that information out right then. We tried to reach out to Clear Channel, but they were playing Rush Limbaugh, a guy out of Pennsylvania, some guy out of Atlanta. It wasn’t local. Tamra kept calling Clear Channel, and she was told that she had to call a remote location. When she did that, she got a message that said the offices were closed. But she needed the information on the radio right then. She called and called, but got nothing.”
McKinney got through to Clear Channel the next morning, when the water had been flowing for a few hours. According to O’Bannon, “They told her that she was too late to get on the news for that morning. She then asked if she could purchase ad time [to use for publicservice announcements], and she was told no, that it was all booked up and that even if they could, they would have to broadcast it all over the region. [The ads] they were going to put on Rush Limbaugh [were] going to be all over the region, and they would have a few minutes of local news. They didn’t keep up with the reporting after the storm had passed, even though we were left with nothing and in crisis.”
After the hurricane, McKinney returned to Clear Channel to arrange a better system for future emergencies. “We tried to work out a contract where we would purchase time on each of the stations during crises. We were talking money, and we offered to put down a retainer. We wanted a guarantee that we would have a minute or two, every hour on the hour, to get information out. But they weren’t interested in that. They said no. That’s because they would then have to have someone there [in the studios], and they don’t.”
O’Bannon acknowledged that Clear Channel met its legal obligation to broadcast an emergency alert, but she questioned whether the company also met the loose public-interest standards that the FCC seldom enforces. The problem, she insisted, was that Clear Channel refused to do anything beyond what was required by law. “Our radio stations reneged on their responsibilities” to Virginians, proving Clear Channel cared about the money in local markets but not about the people who lived in them. “We still haven’t come up with a new policy to deal with this kind of problem. We need to be ready right now, in case something happens. And we can’t rely on Clear Channel.”
BY THE TIME OF THE HURRICANE, HOWEVER, AMERICAN RADIO LISTENERS did know that they could rely on Clear Channel to deliver familiar products wherever they operated. The company had built up big-brand radio formats to an unprecedented scale, establishing KISS-FM stations in forty-seven markets, MIX-FM stations in two dozen others, and a variety of MAJIC oldies, country, and classic-rock outlets that always sound the same. Even the commercials, which approached twenty minutes per hour on some Clear Channel broadcasts, compared to approximately ten to twelve before consolidation, took on similar tones.
Clear Channel, like most other media conglomerates, did not like to tell listeners that it owned so many stations, but as concerns about its homogenous programming spread throughout the country, citizen groups, media critics, and other Big Media companies began complaining that the radio giant was destroying diversity, competition, and local coverage in the airwaves. “Fingers are pointed at the alleged misdeeds of Clear Channel,” testified Lewis Dickey Jr., the chairman, president, and CEO of Cumulus Broadcasting, which operates more than three hundred stations and has to scramble to avoid being tarnished by Clear Channel’s reputation, “and assumptions are incorrectly made that every radio company engages in the same practices.”20 When Randy Michaels, chief of the radio division, announced that Clear Channel was working to apply the business principles of McDonald’s to the radio industry, he helped create a public relations crisis for everyone in the industry.
Jenny Toomey, the executive director of the Future of Music Coalition (FMC), led one of the earliest and most effective campaigns to protest the way Clear Channel and other leading consolidators were polluting the cultural environment. Toomey, a disarmingly cerebral musician, entrepreneur, and firebrand activist in her early thirties, joined with colleagues Kristin Thomson and Peter DiCola to produce a technically sophisticated research report, Radio Deregulation: Has It Served Citizens and Musicians? which she presented while sitting beside Lowry Mays at the Senate hearing on media ownership in January 2003.21 “Bear Stearns, the investment bank, had published a study showing that the format variety had gone up after consolidation,” Toomey told me. “The National Association of Broadcasters and all the big radio companies cited it whenever they could as proof that the deregulation was good for programming diversity. But when we looked closely at what they meant by format variety, we realized that they were actually using the term to cover up how much their programs overlapped.”
Testifying before the Senate, Toomey made a strong distinction between format variety, which refers to the number of program formats available in a typical market, and genuine format diversity. Citing recent playlist data and charts, the FMC documented substantial overlaps among the new formats, which meant supposedly distinct formats were actually playing the same songs. “For example,” Toomey explained, “Urban and CHR/Rhythmic overlap at a 76 percent level. 38 of their top 50 songs are the same. Then there’s the rock cluster. Rock, Alternative, and Album-Oriented Rock overlap considerably, between 36 percent and 58 percent depending on which pair among those three you consider … Adding a CHR/Rhythmic station to a market that already has an Urban station adds format variety. But it doesn’t add any programming diversity.”22 The UCLA sociologist Gabriel Rossman had demonstrated this in his scholarly research. Using playlist data for a national sample of FM music stations, Rossman had compared independent stations and stations owned by chains of different sizes. His main finding: “The larger the station’s owner, the less diverse its play, both internally and relative to its peers.”23 Armed with such fine-tuned analysis, Toomey charged that “the radio industry has measured itself—and encouraged policy makers to measure it—with an inadequate statistic.” While promoting its commitment to “new music” and “more variety,” Clear Channel was actually delivering more of the same.
JUST HOW CLEAR CHANNEL AND OTHER LARGE RADIO CONSOLIDATORS selected the music to play for their listeners was also generating suspicions. In 1960 Congress passed prohibitions against payola—derived from pay and Victrola (the brand name for a line of phonographs)—because major record companies had been paying radio stations to play their songs, at once gaining publicity, marginalizing independent and small producers, and creating unfair conditions for market competition. Although racial discrimination, anxiety over the growing popularity of rhythm and blues music among whites, and threats to the market position of leading recording companies motivated the crackdown on payola, the legislation did help to limit open corruption in radio programming.24 By 2001 reports of widespread “legal payola”—in which “independent promoters” representing record labels were bribing DJs and programmers with cash and gifts to get their clients on the air, and with no admission of the practice by radio stations—began to attract attention from Congress and the FCC.
According to Eric Boehlert, who authored a series of articles describing the $150-million annual business in legal payola that developed after deregulation, “Most listeners don’t know it, but virtually every song they hear on FM commercial radio has been paid for—indirectly—by five major record labels.” Independent promoters, or indies, have moved into the market to fill the legal gap that forced a separation between radio stations and record companies. “Indies pay for the right to exclusively represent radio stations. The up-front fee is roughly between $100,000 and $400,000, depending on the size of the market. Once that deal is signed, the indie sends out weekly invoices to record companies for every song added to that station’s playlist … Roughly $800 per song in middle-sized markets and $1,000 and more in larger markets, up to about $5,000 per song.” To get around the indies, Clear Channel offered record companies the chance to have their bands play before its programmers—for $35,000 a shot. Boehlert reported that the company was also negotiating an exclusive contract with one of the largest indie promoters, Cincinnati-based Tri State Promotions and Marketing, to form an alliance of independent promoters on which every label would become dependent when it tried to produce a hit.25 Paying for airtime would by no means be sufficient for making a hit record, since many heavily promoted albums fail miserably. But in a consolidated radio landscape, it was increasingly necessary.
Under pressure from critics and regulators, in 2003 Clear Channel announced that it would stop using independent promoters. Yet in 2005, when Attorney General Eliot Spitzer of New York State began releasing results from his investigation into the practice, it was clear that traditional payola—with record labels making direct, illegal payments to stations—had become rampant. Spitzer’s investigation established that major labels were paying powerhouse radio companies such as Clear Channel and Infinity to get airtime for top artists who, an outsider might believe, would not need the extra push. Among his many findings: in 2002 Sony BMG gave a San Diego station director a thirty-two-inch plasma TV to put Jennifer Lopez’s album This Is Me … Then on the radio; and in 2003 a Sony employee wrote a Clear Channel programmer to ask, “What do I have to do to get Audioslave on WKSS this week?!!? Whatever you can dream up I can make it happen.”26 Sony BMG reached a $10-million settlement to end the investigation in the summer of 2005, but weeks later the FCC—prodded by the Democratic commissioner Jonathan Adelstein, an amateur musician who made payola one of his main priorities—announced that it would open its own payola inquiry. “The FCC staff is working with voluminous evidence right now,” Adelstein said, because the case is “potentially the most widespread and flagrant violation of FCC rules in the history of American broadcasting.”27
Of course, most musicians and record labels cannot afford to pay for the chance to get on the air. Both legal and illegal payola penalize aspiring and independent artists, especially those whose creative music does not fit neatly into a standard pop format. Payola also penalizes top artists, because labels take a share out of their proceeds to pay the promoters. In 1999 Don Henley and Sheryl Crow cofounded the Recording Artists’ Coalition to help musicians regain collective bargaining power in a field where consolidation had weakened their position. Speaking before Congress, Henley complained that “a recording artist has a much better chance of getting radio airplay if the promotional budget for a record is large, than if the record is good. And then adding insult to injury, the promotional fees paid to the independent promoters are recouped either in whole or in part against the artist’s royalties … This unprecedented control over the music industry by the conglomerates is hurting the music business and the culture. It is preventing talented, new artists from emerging and is generally casting a pall over [the] industry.”28
Other critics and musicians went farther, arguing that consolidation inflicted “cultural damage” on everyone because it blocked an important process through which new music percolates up from the local to the national scene. Clear Channel is hardly the only source of the bottleneck. Viacom owns CBS Radio (formerly Infinity Broadcasting), as well as MTV, VH-1, and BET, the three leading outlets for music videos and music promotion on television. At the Museum of Television and Radio forum, “The Rise of Rock FM,” the DJ Jim Ladd expressed his contempt for radio consolidators and the consultants on whom they rely for programming: “If you listen to any radio station in Los Angeles, California, you are listening to a pre-programmed list. People with great talent … have been reduced to loading machines in an assembly line. It’s the most sickening thing in the world. I can’t listen to the radio station I work for … After 25 years, after working at KMET, after being number one in my time slot … when I go back to work on Monday I will have a confrontation with someone who has never worked in that market telling me I don’t know what I’m doing and if I would only follow the format things would be great at the station … Now, I don’t want to at all give the impression that I don’t like consultants. But if we could all get together as a mob after this, arm ourselves with automatic weapons and go find these bastards … Tomorrow, radio would be different.”29
Michael Guido, a music industry attorney, whose clients include Velvet Revolver, said on the PBS television series Frontline that consolidation and standard formatting had deeply eroded the influence of local DJs. “In the early days of the music business, the record business, you could find a DJ in Cleveland, like Alan Freed, or in Buffalo, who would fall in love with a record, start playing it, people would react to it, and you could start a record off that way. It’s much more difficult to do now with two or three conglomerates controlling all the radio formats.”30
Simon Renshaw, the manager for the Dixie Chicks and a board member of the Recording Artists’ Coalition, testified before Congress that “the possibility of an act ‘breaking out’ on a singular station or singular market has been severely diminished because of consolidation … In addition to the problems that consolidation and centralized playlists have brought to individual artists, one should not overlook the cultural damage [that] is inflicted by these practices. One has to wonder whether any of the great musical trends in contemporary music could have happened in today’s radio environment. Would the Motown or Stax sounds ever have been heard, would the Beach Boys have exploded out of Southern California, would the grunge sounds from Seattle ever have ignited a new generation of music lovers? Many of the most important musical styles have been ones that developed and matured locally and were brought to the forefront by local radio stations, championing their local music.” According to Jon Rintels, the executive director of the Center for Creative Voices in Media, “If Clear Channel had controlled radio during the Fifties the way they control it today, we’d still be listening to Frank Sinatra.”31
CLEAR CHANNEL ALSO TAKES A HEAVY-HANDED, TOP-DOWN APPROACH to its political programming. According to prominent musicians and talk show hosts, the company’s partisan projects (both on and off the air) had a chilling effect on free speech during the early days of the War on Terror, and many musicians worried that they would be punished—banned from playlists at major music stations, condemned by syndicated personalities, or canceled from concert schedules—if they did what artists have always done: speak their minds, especially if they oppose the war or the sitting president.
There was no mistaking the allegiances of Clear Channel’s executives and board members, since the Mays and Hicks families had been backing President Bush since he entered Texas politics, and they remained major contributors to conservative causes. According to the Center for Public Integrity, 63 percent of Clear Channel’s political donations went to Republicans, including $667,550 to the Republican National Party Committee and $116,870 to Bush, making it one of the most partisan givers among media conglomerates, which typically hedge their political bets to maintain good standing with both parties.32 There was also little question that hard-core right-wing commentators such as Rush Limbaugh, Dr. Laura Schlessinger, and Michael Savage anchored Clear Channel’s AM offerings and helped establish its public image as a partisan corporation. So after 9/11, when a list of about 150 songs deemed inappropriate to broadcast—including John Lennon’s “Imagine,” Neil Diamond’s “America,” and anything by Rage Against the Machine—went out to Clear Channel’s stations, critics cried censorship. When I spoke with Lisa Dollinger, who parlayed her service doing PR for the Hicks brothers at Capstar into an executive job as chief communications officer at Clear Channel, she insisted that a regional programmer, not Clear Channel’s central office, circulated the list as a suggestion, and that there was never a corporate ban.
The charges that Clear Channel engaged in political censorship after 9/11 and during the 2004 elections transcend what’s on the company’s playlists. On October 1, 2001, Clear Channel fired the veteran Bay Area radio personality and community affairs director David “Davey D.” Cook, soon after he broadcast one long and widely discussed interview with Barbara Lee, the lone U.S. congressional representative to vote against authorizing war in Afghanistan, and another with the politically progressive musician Boots Riley, on his KMEL-FM public affairs show Street Knowledge.33 Cook, who also hosted a KMEL music show called the Local Flava Hour and wrote the Beats ‘n’ Breaks column for the San Francisco Bay Guardian, had worked his way up through the KMEL hierarchy to become a leading figure in the local music scene and a nationally recognized authority on hip-hop culture. His strong ties to local artists and commitment to getting their work on the air helped KMEL, which launched the careers of Bay Area musicians such as Tupac Shakur and MC Hammer, earn the nickname “the people’s station.” Clear Channel claimed that his termination was part of a routine station cutback. But his dedicated listeners found that hard to believe, given his popularity and long history with the station, not to mention the absence of another community affairs director at KMEL. According to the local music writer Jeff Chang, “Cook’s firing seemed to symbolize the end of an era in which community input, local music, and progressive politics had a place at KMEL, and it triggered thousands of e-mails, faxes, and … rowdy picket lines at the station.”34
Cook was so outraged by the apparent politics of his firing that he began looking into Clear Channel’s conduct in other cities where it had bought out minority-owned stations and targeted young African American audiences with an urban format. When we met in Berkeley, he denounced Clear Channel for abdicating its public-service responsibilities to black communities that had been better served under previous management, scaling back its civic projects and firing community affairs personnel, reducing airtime for local artists and flooding the airwaves with negative messages. Speaking before an FCC hearing, Cook complained that “in San Francisco, after 9/11 Clear Channel put up a dozen posters on all their billboards that had public affairs advertisements about giving to the Clear Channel Fund, being patriotic. Did you notice that they didn’t tell you about one voter registration campaign, they didn’t interview one candidate on any of the stations, didn’t do any sort of election coverage or encouragement to a community where you have 70 percent of the people not voting?” Cook is one of the few radio personalities willing to openly criticize the industry’s dominant employer, and he has been off commercial radio ever since.
The list of Clear Channel radio personalities who claim that the company punished them for airing political views grew during the build-up to war in Iraq, and again during the 2004 presential campaign. Both Roxanne Walker, who won the South Carolina Broadcaster Association’s 2002 Radio Personality of the Year award, and the generally conservative Charles Goyette, named best local talk show host by the Phoenix New Times in 2003, said that Clear Channel penalized them (Walker was fired; Goyette was moved out of his prime airtime) for their antiwar positions. Walker, who sued Clear Channel for illegally terminating her employment at WMYI-FM in Greenville due to her political opinions, (the case was settled in April 2005) told the Greenville News that, after being pressured to tone down opposition to the war in Iraq during conversations with her conservative cohosts, “[she] was forced out because [she] would not comply with their orders to be silent.” In the American Conservative, Goyette wrote that his program director told him, “With you, I feel like I’m managing the Dixie Chicks,” and that the company wanted to fire him but found it difficult because of his “well-drafted contract.”35 During the same period, Clear Channel’s syndicated radio personality Glenn Beck—who famously called Michael Berg, the father of Nicholas Berg, the American businessman who in May 2004 was kidnapped and beheaded in Iraq, “despicable” and a “scumbag” after he criticized President Bush and the war—received tremendous corporate support to organize eighteen “Rally for America” events in cities throughout the country.36
By far the most vocal, and most famous, radio personality to charge Clear Channel with political censorship is Howard Stern. Clear Channel dropped Stern from its stations after the FCC fined it $495,000 for airing programs on which he violated indecency regulations. But Stern, who was retained by Infinity’s stations, insisted that Clear Channel axed him for political rather than economic reasons. On his program Stern said, “There’s a lot of people saying that the second that I started saying, ‘I think we gotta get Bush out of the presidency,’ that’s when Clear Channel banged my ass outta here. Then I find out that Clear Channel is such a big contributor to President Bush, and in bed with the whole Bush administration, I’m going, ‘Maybe that’s why I was thrown off: because I don’t like the way the country is leaning too much to the religious right.’ And then, bam! Let’s get rid of Stern. I used to think, ‘Oh, I can’t believe that.’ But that’s it! That’s what’s going on here! I know it! I know it!”37
Though Clear Channel’s exact motivations for taking Stern off the air are impossible to discern, its aggressive moves to keep antiwar content off its radio and outdoor billboards have been readily apparent, especially after members of Congress complained that they too had been censored by the media giant. In April 2003 U.S. congressional representative Jan Schakowsky, the ranking Democrat on the House Commerce Consumer Protection Subcommittee, announced on the floor that Clear Channel had refused to accept paid advertisements that were critical of the war from herself and fellow Illinois representative Danny Davis.38 And in July 2004 the public-interest group Project Billboard sued Clear Channel for refusing to put up its political ad, an image of a bomb with the text “Democracy Is Best Taught by Example, Not by War,” on a Times Square billboard during the Republican National Convention. Clear Channel, which had used its billboards throughout the country to post patriotic messages supportive of the president and the war, announced that it had rejected the ad because it was “distasteful” and “politically charged.” Yet it also refused to put up an alternative Project Billboard poster, with the same text alongside a dove.39 Ultimately the two sides settled, and Project Billboard displayed its ad at a different site.
Six months after the controversy, Clear Channel announced that it would partner with another media giant with a zeal for partisan political activism: Fox News. Under terms of the five-year deal, the News Corporation would provide an hourly five-minute newscast at the top of the hour and a one-minute segment at the bottom of the hour to more than one hundred of Clear Channel’s talk stations, including outlets in major metropolitan markets. “Working this closely with a premier national news provider for the majority of our news/talk stations makes overwhelming sense,” said John Hogan, then CEO of Clear Channel’s radio division.40 For once, not a single media critic disagreed with the company’s promotional spin.
TODAY, DISTRUST OF CLEAR CHANNEL RUNS DEEP, AND UNDER ITS LEADership the broadcast radio industry has dug itself into a hole from which it may never emerge. Ask radio enthusiasts what makes the medium special, and they’re likely to respond similarly: Done well, radio is personal, intimate, edgy, and local. It helps build communities and supports subcultures, with each station contributing distinctive sounds to the chorus on the dial. It entertains, delivering new music and fresh ideas. It provides essential news and information. It is a lifeline when disaster strikes. Ask most anyone—listeners, musicians, DJs—whether commercial radio is doing any of these things in the age of Clear Channel, and, again, the answer is an emphatic, often angry, no. “Radio Sucks” has become a catch phrase of our time, getting nearly 12 million Google hits as of April 2006.
Eventually Clear Channel got the message, and as the FCC prepared to rule on another round of proposals for further media deregulation, the conglomerate began a high-profile campaign to appease its critics—especially inside the Beltway, where even congressional leaders and FCC staff who had supported the Telecomunications Act of 1996 were embarrassed by what had happened to radio. In early 2003 Lowry Mays transferred the controversial radio chief Randy Michaels (who soon left the company) and replaced him with John Hogan. Hogan quickly brought on Lisa Dollinger (formerly of Capstar) to spearhead the division’s new PR campaign, and within two years she was promoted to chief communications officer for the entire conglomerate. Lowry Mays retired in October 2004, after suffering from a cerebral blood clot. His older son Mark became CEO and president, positions he held until February 2006, when his brother Randall, who was already the company’s chief financial officer, took over as president while Mark remained CEO.
Clear Channel’s new leaders were determined to listen to their critics and understand their language and core concerns, lest they drive even more listeners off the dial. The radio division scaled back its use of voice tracking, added new local music programming, and built up an online New Music Network that invites registered musicians to upload songs on its Web site. Although its political contributions and radio programming continue to weigh heavily in favor of the Republicans, Clear Channel responded to complaints about its partisan agenda by launching an hourlong weekly talk show with Jesse Jackson (albeit typically on an early morning weekend hour when listeners are scarce), and converting several of its stations to the liberal Air America political-talk format. In July 2004 the company announced that it would reduce the number of commercial minutes per hour after too many dissatisfied advertisers complained that their spots were lost amid the “clutter” of long commercial breaks. “We heard you,” its PR campaign said. “Less is more.”41 Tom Carpenter, of AFTRA, reports that the company had even become a more fair negotiator. “We now have a pretty productive relationship with Clear Channel,” he told me in the summer of 2005. “They say that they’ve learned a lesson that voice tracking is not necessarily the best way to run their stations.”
Under Dollinger’s leadership, the communications office began issuing regular press releases to promote the company’s local coverage, news reporting, and community involvement. It also added a “Local Spirit” Web site, featuring an interactive map along with text reporting that “community service is the core of our culture” and that “Clear Channel people embody the local spirit of giving that is transforming, bringing people together, and working to give hope and assistance to those in need.”
CLEAR CHANNEL RESERVED ITS LARGEST PR CAMPAIGN FOR HURRICANE Katrina, in August and September of 2005, when it set out to selfconsciously demonstrate the depth of its public-interest commitments. The conglomerate owns seven stations in New Orleans and six in Baton Rouge, and its state-of-the-art facilities, including a central studio space in Baton Rouge and many of its broadcast towers, survived the storm. So, too, did the facilities at Entercom, a big television and radio company whose six radio stations in New Orleans, including the conservative talk station WWL-AM, are part of its fleet of roughly one hundred national outlets. WWL, which also runs a broadcast television channel, is one of the few local radio stations to employ a sizable reporting staff, and it was the only New Orleans station that broadcast through the hurricane, when residents, lacking electricity or phone service, depended on the medium. But after its downtown office began flooding, WWL had to evacuate its staff to an emergency studio, where its operations would be limited. Ken Beck, an Entercom national news and talk programming director, called Gabe Hobbs, who has a similar position at Clear Channel, to ask if they could help each other during the crisis. According to the Wall Street Journal, Beck offered to share WWL’s programming with Clear Channel, which “didn’t have the same news resources as Entercom.” Hobbs had another idea: the rival groups could merge temporarily, moving their staffs to Clear Channel’s Baton Rouge complex. Beck “jumped at the opportunity,” and soon the competitors were working together as the United Radio Broadcasters of New Orleans.42
It was an ingenious arrangement. Clear Channel was resource rich: the powerful conglomerate secured helicopters to transport staff members to Baton Rouge and trucks to deliver fuel for the backup power generators. Clear Channel called in its expert engineering teams to repair damaged broadcast systems, and it maintained excellent working conditions in its high-tech studios. All Clear Channel lacked were radio reporters, the living, breathing, locally connected broadcasters who could do what both national and New Orleans newspaper and television journalists were doing with such enthusiasm: hitting the streets to cover the catastrophe and provide scared and stranded residents with vital information about the state of their city. Fortunately for the people of New Orleans, that’s what Entercom, with one-twelfth the number of national outlets, could offer, and as a result they got the kind of news coverage that citizens in places where Clear Channel is the only major operator do not.
Clear Channel’s communications office immediately publicized the successful collaboration, and within days leading national newspapers, television stations, and trade publications ran glowing stories about United Radio Broadcasters. Dick Lewis, Clear Channel’s regional vice president, told the Los Angeles Times that as a teenager he decided to go into radio after his family drove into a tornado, and “it was the radio that gave us our sense of calmness, our touch with the outside world.” At Clear Channel, he explained, “We provide entertainment to fill up the time … All we’re doing is filling up the time, to be here until something of significant magnitude happens.”43 (His comment, at least, helps explain Clear Channel’s belief about the value of regular radio programming, and it shows why the company had no problem replacing original local broadcasts with voice-tracked programs and syndicated content that “fill up the time.”)
The Times reported this self-serving rhetoric without a hint of skepticism, leaving out any mention of the controversies surrounding Clear Channel’s failures during previous catastrophes. At its San Antonio headquarters, the conglomerate saturated its online “Local Spirit Press Room” with dozens of press releases touting the fund-raising initiatives sponsored by its stations: “Clear Channel Radio-Duluth Collects Life-Saving Supplies for Gulf Coast Region.” “Clear Channel Radio’s Mullins in the Morning Inspires Listeners to Help Devastated Hurricane Region.” “Clear Channel Radio Encourages Nurses to Volunteer in Stricken Gulf Coast Region.” “Clear Channel Radio Listeners Donate Almost 10 Tons of Cash.”44 The stream of self-congratulatory public statements continued through September, October, and November. Clear Channel had worked hard to hide the problems with its broadcasts during other disasters, so its remarkable efforts to get and take credit for its contributions during Katrina raised eyebrows among critics who suspected ulterior motives. But the radio giant was desperate for good publicity and for respect from federal regulators: it was about to launch another political campaign to expand its local radio holdings.
IN OCTOBER, JUST ONE MONTH AFTER KATRINA, THEN PRESIDENT AND CEO Mark Mays called for Congress to further increase local radio station limits (which remained capped at six in midsize markets and eight in large markets) to ten in midsize markets and twelve in metropolitan areas with more than forty-five stations. “Specifically free radio needs Congress to relax outdated restrictions on our operations,” Mays declared. “Free radio is not asking for much more room.” The bold public call for lifting radio ownership caps represented a tactical shift for Clear Channel, which in previous years had advanced its regulatory activism backstage. Between 2002 and 2003 the company’s lobbying expenditures soared from $68,675 to $1,860,000, and in 2004 it invested $1,720,000.45
Financial analysts understood why the company was spending so aggressively. In late 2005 Bloomberg News Service warned that Clear Channel may fall into the junk bond market, while Moody’s, Fitch Ratings, and Standard &c Poor’s warned that Clear Channel stock could lose its investment grade rating because of the conglomerate’s debt, then $6.6 billion, and its difficulty raising advertising revenues in the medium it had done so much to damage.46 Yet citizens and officials charged with serving the public interest saw little reason to throw Clear Channel a lifeline. “We already have too much concentration in ownership,” said North Dakota senator Byron Dorgan, who has been a leading voice for media reform since he learned how Clear Channel mismanaged the Minot disaster in his state. “How much bigger does one need to get?”47
Even for Clear Channel, the answer is mixed. While lobbying to eliminate ownership limits, during 2005 Clear Channel joined media conglomerates such as Viacom and Time Warner in deciding that its experiment in corporate synergy had failed. Market analysts considered its outdoor advertising a growth business because digital technologies allowed billboard owners to sell rotating ad space to multiple clients and increase traffic on expensive sites. But both the radio division, despite annual profit margins of around 40 percent, and the entertainment division, with margins of 6 percent, were experiencing declining annual profits that dragged down the company’s overall market value. In response, during 2005 Clear Channel announced plans to break its radio/television, entertainment, and outdoor advertising units into three separate publicly traded companies. Clear Channel would continue to control the broadcast and advertising companies, but it pledged to spin off 100 percent of Clear Channel Entertainment and create a new board of directors for the corporation.48
Clear Channel had hardly given up on broadcast radio. In fact, its executives expressed confidence that the autonomous radio corporation will become even more profitable once the advertising market rebounds and the broadcast signal converts from analog to digital—a change that will allow each station on the FM dial to multicast (or transmit at least two separate streams of programming)—effectively multiplying its available commercial time. “Right now,” said Carpenter, of the labor union AFTRA, “they’re planning to take their broadcast signal and split it into multiple streams with digital. They’ll staff live broadcasters on the primary channels and use a lot of cyber jocking on the others.” But the conversion to digital broadcasting also gives the FCC a chance to support innovation in radio, just as it did some forty years ago by forcing AM stations to offer new content, rather than simulcasts, on their FM outlets. If, for example, the FCC required broadcasters to air original, locally produced programs rather than voice-tracked and syndicated shows on the new digital frequencies, the policy could, once again, bring bounce back into the airwaves and usher in a radio renaissance.
CLEAR CHANNEL IS BIG ENOUGH TO HEDGE ITS BETS ON ITS BROADCAST holdings, however, and in recent years it has quietly become a major investor in the new media that threaten the future of traditional radio. In 1999 Clear Channel made a $75-million investment in XM Satellite Radio, one of the two leading providers, and it is already a leader in Internet radio as well.49 Although Clear Channel’s most ardent critics once hoped that the conglomerate would be crippled by threats from new technologies, it has staked out so much property in the emerging media market that John Hogan said, “The Internet and iPod are not challenges—they are business options for us.”50
Clear Channel investors may be well served by the company’s new media strategies, but there is little evidence that listeners who care about what is happening in their own communities will be. Local content is conspicuously absent from satellite radio.51 On a recent cross-country driving excursion, the writer Walter Kirn enjoyed national programs from CNN, FOX, NPR, and an “Old Skool Rap” station while he drove, without warning, directly into a tornado with winds up to 180 miles per hour. “The new technology connects you to the world—but not the one outside your window,” Kirn reported. Satellite radio “often makes me feel as though America were a high-tech hologram and I were a futuristic ghost … Having passed through the canyonlands of Utah while listening to Caribbean pop and having crossed the Black Hills of South Dakota immersed in a disco channel called the Strobe, I feel after a year of nonstop driving (50,000 miles in all) that I haven’t, in fact, gone anywhere except deeper and deeper inside my radio.”52 After a decade of consolidation, Americans in all parts of the country know exactly what that sounds like.