Clear Channel Communications has got a bad rap in the media and in Washington based on disinformation about the radio giant’s business practices and market dominance, exec VP and financial chief Randall Mays complained at a financial confab Monday.
Speaking at the Deutsche Bank Securities Media Conference in Gotham, Mays said the company has been unfairly maligned for not sufficiently serving local markets and for using its heft in the industry — Clear Channel owns more than 1,200 stations nationwide — to muscle smaller rivals.
“It’s very distressing to see people that have different political and business agendas take that information and distort it to serve their ends,” Mays said. “There is no question that we need to focus on the facts — and the facts are on our side.”
Exec’s comments came as the Federal Communications Commission proposed a retooling in the way it defines local radio markets for the purposes of consolidation, a move that could potentially close a loophole in the current law and tighten the ownership limits.
But industry observers said Clear Channel and other radio giants would be exempt from the new rules unless they sell stations in an affected market. They also noted that the big congloms could actually benefit, since the regulatory bar would be set higher for rivals’ acquisitions.
Street is happy
Investors reacted positively to the stock in Monday’s trading. Clear Channel shares rose by more than 3.4% to close the day at $42.09.
Mays also reiterated the company’s commitment to its flagging live-entertainment division, whose disappointing results over the past year have led some investors to speculate that Clear Channel may sell it off entirely.
He did concede, however that the business needed work — particularly in the area of maximizing the dollars earned per show.
“What we have to focus our efforts on is how do we drive profitability out of the venues, and the No. 1 way to do that is by affecting ticket-sellout ratios,” he said. “There is still 50% of tickets that go unsold on average. The ability to affect that will dramatically affect the cash flow that comes into the business.”
Exec added that the live-entertainment biz should see growth over the long term as more and more artists go on tour more frequently to generate income and compensate for declining record sales. Sales of CDs declined by almost 10% in 2002, according to Nielsen SoundScan data.