Taking on the Empire

A local lawsuit against the world's largest radio/concert firm threatens to expose the dark side of the entertainment business.

The Telecommunication Act of 1996, a bill that businessmen love and folks who oppose monopolization see as an absolute calamity, changed all that. The legislation, signed into law by President Clinton, doubled the limits of station ownership in a single market from four to eight (Clear Channel is at the cutoff point in Denver) and lifted the barrier on the number of stations a company could possess overall; just ten years ago, the maximum number of stations one company could own was 28. With the sky suddenly the limit, Clear Channel went on a spending spree. At the end of 1997, following the acquisition of a 43-station group owned by Paxson Communications Corporation, the company owned 173 stations -- a number that had grown to 870 by 1999, when Clear Channel picked up AMFM Inc. for $23.5 billion.

Subsequent purchases have continued at such a dizzying pace that the present 1,200-station figure is only an estimate. Tomorrow there may be more -- a point underlined by a news parody floating around the Internet titled "Clear Channel's Heavenly Acquisition," which reports that the company will take over "the popular afterlife destination sometime in the early fall." In the piece, an executive calls the deal "a great achievement for a great company. We're pleased with Heaven. However, there will be a few changes taking place in the next couple of years."

Such as? "The Pearly Gates have been replaced by a plastic shower curtain."

Chris Swank, Doug Kauffman and Jesse Morreale of Nobody in Particular Presents are standing up to Clear Channel.
John Johnston
Chris Swank, Doug Kauffman and Jesse Morreale of Nobody in Particular Presents are standing up to Clear Channel.
Clear Channel's FleetBoston Pavilion is the model for a planned Denver venue whose tent was previously used at Boston's Harborlights Pavilion.
Clear Channel's FleetBoston Pavilion is the model for a planned Denver venue whose tent was previously used at Boston's Harborlights Pavilion.

As this one-liner implies, Clear Channel was initially known less for its brutality than for its stinginess. Radio observers did and do call it "Cheap Channel," in tribute to its zeal for cutting costs to the bone -- and sometimes beyond it. An oft-cited example is Clear Channel's fondness for voicetracking, a technique that allows a DJ in one city to seemingly host local shows in as many as half a dozen others ("Live From Denver -- Almost," December 16, 1999). Clear Channel executive Sean Compton defended voicetracking earlier this month at Morning Show Boot Camp, an annual radio convention staged this year in Las Vegas, with this statement: "It makes too much sense to take the best resources in our company and spread them out to all our stations."

Radio & Records, the music-industry publication and Web site that reported Compton's remarks, was accused of being in thrall to Clear Channel in an August 6 Salon article. The Web site hinted that when R&R reduced the number of stations it surveys to determine its playlists from 200 to 140, it did so at the behest of Clear Channel, which gains even greater sway under the new system.

Ron Rodrigues, R&R's editor-in-chief, denies this charge -- but he also thinks it's unreasonable to blame Clear Channel for voicetracking's proliferation. As he points out, plenty of companies now use the technique, which was innovated by Capstar Broadcasting, a onetime AMFM subsidiary that Rodrigues says set up de facto boiler-room operations he calls "voicetracking farms," which were manned by DJs who never had to set foot in the radio stations that broadcast their shows. Still, he concedes, Clear Channel "is the biggest practitioner of it simply because, in terms of scale, they're the biggest at anything they do. After all, they own around four times as many stations as their nearest competitor. That's why they're such a target of people who don't like consolidation -- because they're kind of the ultimate representation of what happens when industries consolidate. Much as we hate our banks and our supermarkets, we're starting to hate our radio stations."

Perhaps -- but within the industry, Clear Channel wasn't widely loathed until 1998, when it agreed to merge with Covington, Kentucky's Jacor Communications, the company that previously owned all the stations named in NIPP's suit plus three others in Denver (KOA, KHOW and KTLK, all on the AM band).

Over and over again, sources contacted for this story emphasized that Clear Channel didn't traffic in the behavior for which it's now reviled until after the Jacor merger and the installation of Jacor head man Randy Michaels atop Clear Channel's radio division. "It's a Randy Michaels culture," says one. "Back in the Jacor days, some of the things they did, the personal attacks, were so beyond business it was crazy, and that's the way it is in Clear Channel today."

Adds another source, "They're worse in Denver than anywhere else in the country. Compared to anywhere else, Denver is absolutely Vietnam."

Terry Jacobs, the founder of Jacor, incorporated the company in late 1979 and bought his first three radio stations in early 1981; that these outlets specialized in religious programming is an irony radio historians appreciate. Jacobs bought more stations as the decade wore on, including those encompassed by the 1986 purchase of Republic Broadcasting, a Cincinnati chain. Michaels, a former shock jock who'd risen in the executive ranks of another company, Taft Broadcasting, came aboard at the same time.

The next year, in April, Jacor moved into Denver, buying news-talk specialist KOA and KOAQ, an adult-contemporary station, from the A.H. Belo Corporation for $24 million. Cincinnati native Don Howe was soon hired to oversee the sales department at KOAQ, which limped along for two years until the station's format was flipped to classic rock, its call letters were switched to KRFX, and its nickname became the Fox. When stand-up comic Michael Floorwax was made the co-host of the Fox morning show, success followed.

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