A Cloud Over Clear Channel
Petition says it controls stations through 'fronts,' including Ohio FM it seeks to buy
By Paige Albiniak -- Broadcasting & Cable, 11/25/2001 7:00:00 PM
According to a complaint filed at the FCC, Clear Channel, the country's largest owner of radio stations, has been using "front" companies to hold radio stations for it, operating and controlling the stations while waiting for ownership rules to loosen enough so Clear Channel can buy them. Clear Channel occasionally omits these holding companies and their stations from its ownership totals, according to the petition.
For those reasons, the petition asks the FCC to deny Clear Channel's attempt to buy WKKJ(FM) Chillicothe, Ohio, part of the Columbus market. The petition alleges that the station is a case in point, that Clear Channel has controlled the station for two years through other companies.
The petition suggests that Clear Channel is deceiving the FCC and the Department of Justice by not being clear about what stations the company owns and controls.
"To avoid antitrust prosecution, Clear Channel has been playing an elaborate shell game with its radio-station assets," the petition says. "Not only should the FCC deny this assignment application, but also the FCC and the Justice Department should seek to uncover and remedy the anticompetitive actions of Clear Channel."
The charges touch on some ownership/control issues unresolved at the FCC, including how to measure radio markets and when LMAs become de facto control.
David Ringer, a businessman in Chillicothe and a former broadcaster, filed the petition because he is concerned that, if Clear Channel buys WKKJ, he would have "only one broadcast company from which to purchase advertising," the petition says.
"Clear Channel's purchase of WKKJ will eliminate all radio competition in the Chillicothe market and will likely result in businesses in Chillicothe paying higher prices for radio advertising."
Clear Channel owns the other commercial radio stations in Chillicothe—WCHI(AM), WBEX(AM) and WFCB(FM)—according to the FCC.
The Justice Department ordered Jacor Communications to divest WKKJ and several other stations when Jacor acquired Nationwide Communications in August 1998. Clear Channel announced it was buying Jacor in October 1998. WKKJ was then purchased by Secret Communications, which is owned by former Jacor President Frank Wood.
In August 1999, Secret signed a time-brokerage agreement with Concord Media that allowed Concord to program WKKJ and take the station's ad revenue in return for paying a fee to Secret. Although Secret was required to inform the FCC of the agreement, the partnership was in place two years before the FCC learned of it. Secret's notification arrived Sept. 17, 2001, three weeks before Clear Channel applied to purchase WKKJ—on Oct. 9.
Clear Channel officials and lawyers would not comment on the petition, but one source close to the company acknowledged that Clear Channel took over Concord Media's local marketing agreement on Sept. 16 and now programs WKKJ.
The petition includes other evidence of Clear Channel control of Secret and Concord Media. One document filed at the FCC in June 2000 says the legal name of the licensee and operator of all four Chillicothe stations, including WKKJ, is "Citicasters Co./Clear Channel Broadcasting Licensing Inc./Secret Communications II." (Citicasters Co. is a subsidiary of Clear Channel.) It lists as contact Kenneth Wyker, Clear Channel's senior vice president and general counsel. The phone number is Clear Channel's.
Employment documents filed for stations owned by Concord Media in Hudson, N.Y., list Clear Channel's corporate headquarters as the address and Clear Channel Vice President Rick Wolf as contact. Stations supposedly run by Concord Media in Jacksonville and Pensacola, Fla., are labeled Clear Channel stations on their Web sites. Concord Media's president, director and sole shareholder is Mark Jorgenson, president of Jorgenson Broadcast Brokerage. Jorgenson has brokered deals for Clear Channel, the petition says, and no Concord station has been sold to anyone but Clear Channel.
The petition also alleges that Clear Channel has similar setups in Youngstown, Ohio; Jacksonville, Fla.; Pensacola, Fla.; and upstate New York.
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