Radio Rumble

Clear Channel takes on all comers, including the largest ratings service in the country.

The media mega-conglomerate Clear Channel has always been combative. But the bigger the company gets (at present, the firm owns approximately 1,200 stations nationwide, including eight of the most powerful signals in Denver), the more eager it seems to play rough.

The San Antonio, Texas, giant was blasted in two recent Salon.com pieces penned by journalist Eric Boehlert: "Radio's Big Bully," an April 30 assault that excoriated the firm for its "dirty tricks and crappy programming" (duh!), and "Tough Company," a May 30 sequel that focused on "employee suits alleging everything from broken contracts to sexual harassment." Boehlert and Chuck Philips of the Los Angeles Times have also reported on the murky relationships between record labels and independent promotion outfits they hire to get songs played on radio stations, which critics say smacks of payola. Along the way, the writers uncovered information suggesting that Clear Channel wants to purchase some promotion concerns -- a move that would allow the company to receive big bucks from labels for playing tunes on its own stations. Such transactions would seem to violate anti-trust regulations, but there's no guarantee of that. Remember, we're living in George W. Bush's America now. Or is it Dick Cheney's?

None of the aforementioned articles dealt directly with Clear Channel's Denver properties -- KOA, KHOW, KTLK, KISS-FM, KBCO, KTCL, KBPI and the Fox. But all of these stations are affected by the decisions of those piloting the mother ship, as is made obvious by two ongoing heavyweight fights. The first scrap pits Clear Channel against Arbitron, which establishes ratings for broadcasters nationwide; the second involves clashes over fees for Internet radio.

Although the Clear Channel-Arbitron quarrel has received scant attention in the media, it's been brewing since the first of the year, when Clear Channel allowed its contracts with Arbitron in 130 markets, including Denver, to expire. (Like virtually every other sizable radio player, Clear Channel paid the ratings company to provide it with ratings and demographic information.) Talks continued during the first quarter of 2001, a period that coincided with the development of plans for Arbitron to spin off from its parent, Ceridian Corporation. But these discussions apparently went nowhere, because on March 30, when Arbitron CEO Stephen B. Morris was slated to mark his enterprise's initial listing on the New York Stock Exchange by ringing the exchange's closing bell, Clear Channel sent a letter declaring that it had no intention of using Arbitron surveys for the markets in question. This screw-you gesture spooked potential Arbitron investors, and for good reason. After all, according to Daily Variety, Clear Channel stations account for 22 percent of Arbitron's total revenue, and the end of those 130 contracts would result in a loss of around 6.8 percent of its gross.

Despite this nastiness, Clear Channel and Arbitron are still in business together (stations in several markets hold Arbitron contracts that don't peter out until 2005), and they haven't given up on resolving their differences. But neither side is sharing many details. Notes Arbitron spokesman Thom Mocarsky, "We have no comment other than to say that negotiations are continuing."

Randy Palmer, San Antonio-based vice president of investor relations for Clear Channel, isn't much more loquacious, but he offers a few clues. When asked if the disagreement revolves around money, Palmer concedes that "price always comes into play. But it was also a matter of some of the services they provide to us. We wanted more services with our particular contract." As for when the situation could be resolved, Palmer says, "That might take a while" -- and he doesn't entirely reject a rumor that Clear Channel may dump Arbitron entirely and start its own rival ratings compiler: "There's been some speculation about that, but I can't really comment on it."

Thus far, the Denver stations haven't had to do without Arbitron info; the contract sported a six-month grace period. But that's set to run out at the end of June, and since ratings are what stations use to determine advertising rates, headaches could start as soon as August, when Arbitron's next ratings book is due. Lee Larsen, vice president and general manager for Clear Channel-Denver, downplays the possible impact, stating, quite accurately, that Arbitron will continue to collect data on his stations that will filter back from ad agencies even if Clear Channel isn't paying for it. However, the Denver stations would be put at a bargaining disadvantage in the long run. "Arbitron isn't just ratings," Larsen says. "They have a big menu of things to choose from -- computer reports and additional demographic data that can be very useful."

Does Clear Channel believe its long-term interests are best served by destroying Arbitron and replacing it with a ratings operation more to its liking? Larsen has no opinion on that, but, he says, there are "all kinds of alternatives" to Arbitron. "With the amount of money we're paying, we could start our own independent ratings company."

Of course, exercising this option might lead to a considerable credibility gap. As one radio insider points out, asking Clear Channel to monitor its own ratings is tantamount to trusting a baseball player to keep tabs on his own batting average. Perhaps that's why Larsen says, "The best alternative is a negotiated solution."

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