PAC-ing a Punch

Clear Channel's formation of a political action committee shows it's ready for battle.

If a company can be said to have reached the big-time when it becomes the subject of jokes, then Clear Channel, the largest owner of radio stations in the known universe, has truly arrived. Here's an Internet favorite that needles the San Antonio-based enterprise for its aggressive use of voicetracking, a technique that allows disc jockeys to host different programs at outlets in numerous locations simultaneously:

Q: What's the difference between your neighborhood McDonald's and a Clear Channel radio station?

A: The voice behind the microphone at the McDonald's is live and local.

Thank you very much, ladies and gentlemen -- and don't forget to tip your waitress!

Gags like this aren't likely to get anyone at Clear Channel too upset, nor should they. But neither are such jabs wholly insignificant. Simply put, Clear Channel has ballooned so astoundingly -- and, critics say, behaved so dubiously -- that it's drawing fire from plenty of folks other than amateur comedians. Last summer, Nobody in Particular Presents, a local concert-promotion firm, charged the conglomerate with a number of "unlawful and anti-competitive practices" in a still-pending lawsuit filed in U.S. District Court ("Taking on the Empire," August 23, 2001). Since then, numerous politicians have expanded upon this theme and questioned whether Clear Channel's purchase of SFX (now Clear Channel Concerts), the country's pre-eminent presenter of live events, creates unfair, potentially illicit business advantages. And the murky financial relationships between independent radio promoters -- who largely control what songs are heard on commercial outlets -- and stations controlled by Clear Channel and its rivals are also receiving increased scrutiny.

In January, Representative Howard Berman, a California Democrat, wrote a letter to Attorney General John Ashcroft and Michael Powell, chairman of the Federal Communications Commission, in which he cited allegations that consolidation by Clear Channel "has negatively affected recording artists, owners of sound-recording copyrights, consumers, advertisers, and competitors in the radio and television industries." Representatives Rick Boucher and John Conyers, Democrats from Virginia and Michigan, respectively, have raised similar concerns. And Senator Russ Feingold, a Democrat from Wisconsin, is reportedly readying legislation that could potentially limit provisions in the Telecommunications Act of 1996 -- which allowed Clear Channel to mushroom in the first place -- and severely curtail the controversial tactics of indie promoters ("Playola," October 18, 2001).

Against this backdrop, Clear Channel tried to purchase House of Blues, pretty much the only concert promoter with a sizable national profile that it hadn't already swallowed. Back in 1999, SFX made a bid for Universal Concerts, which House of Blues later bought, but the merger never happened, partly because the U.S. Justice Department was sniffing around ("Peace and Love, Nineties Style," May 20, 1999). Of course, this took place during the Bill Clinton administration, and since George W. Bush has a more business-friendly reputation and is a buddy of chief executive officer Lowry Mays, Clear Channel types clearly felt Justice would be more receptive the second time around. But as reported on May 14 by the Rocky Mountain News's Mark Brown, who led the pack on this story, envoys from the department felt a proposed transaction violated antitrust laws, prompting the deal to collapse.

These governmental rumblings help explain the motivation behind correspondence sent to management-level Clear Channel employees late last month. According to a piece by media scribe Robert Feder that appeared in the May 29 Chicago Sun-Times, CEO Mays announced in the missive that the company was establishing a political action committee. PACs, as such entities are known, allow corporations and other groups to reward favored elected officials and candidates with contributions of as much as $5,000 per election, as well as to finance assorted fundraising and lobbying pursuits via the use of so-called "soft money."

"We have seen the need to have influence and impact on legislative issues in Washington, as well as at state and local levels," Mays wrote. "This becomes important particularly as Clear Channel grows. It is critical to tell our story and defend our positions."

And how does Clear Channel plan to pay for the PAC? Mays didn't spell out the specifics, but the letter was accompanied by a "membership application" suggesting that addressees tithe up to 1 percent of their annual salaries to the cause. (Those who choose not to comply have been assured that no one would be punished for failure to do so.) Presumably Mays will be among those to pony up, and he can certainly afford it. AdAge.com lists his compensation for calendar year 2000 at $4.179 million, including a base salary of $1 million and a $3 million bonus. Even though the San Antonio Express-News says his pay in 2001 was less than half that amount (approximately $1.16 million), owing to a downturn in Clear Channel's profitability, he probably hasn't had to lay off any housekeepers.

Budgeting contributions to the new PAC shouldn't be difficult, since Mays has been making regular donations to candidates and political parties for years. The Center for Responsive Politics, at www.opensecrets.org, documents thousands of dollars contributed by Lowry Mays and Clear Channel president Mark Mays, his son, during the last year or so; checks have gone to candidates and organizations such as the Outdoor Advertising Association of America. Clear Channel itself has been even busier: The Federal Election Commission Web site, www.fec.gov, lists $156,000 in contributions by the company since June 2000, with the lion's share going to the Republican National Committee.

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