NEW YORK — No divorce papers have been signed yet, but the trend toward voluntary media deconsolidation is no longer just a trend, it’s a full-fledged epidemic.

Clear Channel, the epitome of the mega-media conglom made possible by the deregulation-friendly 1996 Telecom Act, announced Friday it would spin off its live entertainment division and sell 10% of its outdoor advertising business in an initial public offering.

Surprise announcement came as the country’s largest radio broadcaster reported a steep decline in earnings, which fell 59% to $47.9 million in the last quarter, compared to $116.5 million a year ago. Revenue fell 4% to $1.88 billion.

“We are seeking to unlock the considerable value in our company and create a strong foundation for future growth by improving the strategic, operational and financial flexibility in each of our leading business units,” Clear Channel CEO Mark Mays said.

Like other media execs, Mays has been forced to reckon with the reality that all the consolidation in the world isn’t necessarily going to budge a sluggish stock.

It’s the same refrain being sung at Viacom, where chairman-CEO Sumner Redstone is leading the campaign to spin off “growth” divisions, including Paramount and almost all cable nets, from the “value” side — including CBS, Infinity Radio, Viacom Outdoor, Showtime and Simon & Schuster.

The Viacom board is expected to continue discussing the plan this week.

The spin they’re in

In addition to Viacom and Clear Channel, Time Warner intends to spin off Time Warner Cable in an IPO, while John Malone’s Liberty Media has said it plans to spin off Discovery Communications.

Wall Streeters, who have been generally amenable to Viacom’s plan, didn’t immediately buy the argument that Clear Channel would accomplish anything by dismantling.

And two leading ratings agencies, Moody’s and Standard & Poor’s, took the first step toward downgrading Clear Channel’s debt rating to junk, questioning the impact of the breakup on cash flow.

Clear Channel shares were down 6¢ to close at $31.94 in trading Friday on news of the restructuring and earnings.

Clear Channel’s most disappointing financial results in the first quarter of 2005 came from the concert entertainment division, with revenues falling 17% from the same quarter a year ago to $424 million.

Company, which owns 1,200 radio stations, said the downturn in live entertainment was due to fewer concerts and sporting events.

Last year, concert biz made up 29% of the company’s $9.4 billion in sales.

“Some shareholders prefer not to own Clear Channel Entertainment, so we’re giving them that choice,” Mays said during an earnings conference call. He also revealed that Clear Channel Entertainment chairman-CEO Brian Becker is ankling, to be replaced temporarily by Clear Channel chief financial officer Randall Mays.

In 2000, Clear Channel paid $4.4 billion for Robert F.X. Sillerman’s SFX Entertainment, saying the concert biz would be the perfect complement to the radio and outdoor advertising businesses.

Synergy never took off. Instead, Clear Channel has found itself being investigated by the feds for pricing and allegedly exerting undue influence on musicians and labels.

Dot-com disaster

And like Viacom’s Infinity, Clear Channel’s radio biz saw advertising dollars drop off when the economy turned south with the dot-com bust of the late 1990s. While television has seen ad dollars return, radio has remained hard-pressed.

On the radio side, revenues declined 7% to $773.6 million in the last quarter, although Mays said the company’s “Less is More” strategy of shorter ads is building strength.

Outdoor division fared better, with revenue up 11% to $579 million in the last quarter.

Clear Channel Outdoor is the largest outdoor advertising operation in the world.

Clear Channel proper will continue to hold a controlling stake in outdoor once the IPO is completed, although it won’t retain an ownership interest in Clear Channel Entertainment.

Mays tried to soften the blow of the restructuring by saying shareholders would get a special $3-per-share payout that will cost the conglom $1.7 billion. Quarterly dividend also will be upped 50% to 75¢ a share annually.

Clear Channel noted the overall revenue decline of 59% in the last quarter included gains related to the sale of certain assets and a charge associated with debt reduction. Minus these, conglom’s revenue would have come in at $100.3 million.

Mays said conglom hopes to complete the realignment by the end of the year.