DOJ probing company's biz practices
NEW YORK — At a congressional hearing last week, the Justice Dept. officially acknowledged for the first time that it is conducting a long-rumored inquiry into the business practices of radio giant Clear Channel Communications.
Assistant attorney general for antitrust R. Hewitt Pate told the House panel, chaired by California Democrat Howard Berman, that it had begun reviewing complaints from people who say they’ve been harmed by the company’s allegedly predatory business tactics.
Clear Channel, which operates more than 1,200 radio stations nationwide, has been accused by Berman and others on Capitol Hill of using its heft to muscle both smaller rivals and record labels and, in the process, reduce the diversity of content on the airwaves.
Andrew Levin, Clear Channel’s senior VP for government affairs, downplayed the significance of the government investigation.
“When you run a big company, engaging in complex transactions, inquiries of this sort become fairly routine,” Levin said in a statement. “We are cooperating fully with all DOJ requests, and we are confident the DOJ will find, as it has in the past, that our company is managed with the highest degree of integrity.”
Nevertheless, the congressional pressure does seem to have had some effect in recent months.
Severing promo ties
Clear Channel is in the process of severing its ties to the independent-promotion industry, which for years had acted as a gatekeeper between stations and the radio-promotion departments at labels, collecting millions in fees for getting music onto the airwaves.
Separately, Clear Channel said last week that it had declared a quarterly cash dividend of 10¢ per share in a move to return some of its healthy cash balance to shareholders. Debt-rating agency Standard & Poor’s noted that the move shouldn’t affect the company’s credit ratings at all.
Clear Channel stock eased by 0.6% to close Friday’s trading at $40.40.