Nearly a year in the making, Clear Channel Communications could settle its $23.5 billion merger with AMFM Inc. by the end of this week.
The final hurdle in creating the world's largest radio company-some 850 stations strong-was FCC approval, which came last Tuesday (Aug. 15) after the stock market closed. Clear Channel's share price quickly reached a six-month high of $85.81 during trading the next day.
Once the FCC issues its final order, Clear Channel could close on AMFM within a week, says Randy Palmer, a spokesman for San Antonio-based Clear Channel. If the order is issued first thing today (Aug. 21), that could mean the deal will be closed by the end of this week, or, at the latest, by the end of next week. Clear Channel executives at one time hoped to close the merger by the end of June.
In the meantime, Clear Channel is looking for new buyers for seven radio stations, as the Justice Department requested. The department apparently thought the stations' would-be owners would control too large a share of the radio advertising revenue in the affected markets, Palmer explains. A Justice Department official could not provide further detail.
Also per Justice, Clear Channel plans to sell its 30% interest in the outdoor firm Lamar Advertising, Palmer adds. The Justice Department required the divestiture of 108 radio stations in 27 markets as well. So far, 101 of those stations have been sold for a total of $4.2 billion, according to Clear Channel's Securities & Exchange Commission filing on Monday. Clear Channel announced last October that it would acquire AMFM's then-443 radio stations.
To meet Justice and FCC concerns, some $1.3 billion worth of stations are going to minority-owned Radio One Inc. and Inner City Broadcasting Corp. "We're delighted to see [that]," says James L. Winston, executive director/general counsel of the National Association of Black Owned Broadcasters. But "everything is a two-edged sword," he says. "The public interest is not well-served when any company owns 1,000 of the largest radio stations in the country."
The FCC's final order could come out this week, according to FCC spokeswoman Linda Paris. She did not know why the agency's approval process took longer than expected. Clear Channel executives were counting on the FCC's OK immediately after the Justice Department signed off on the deal on July 20.
While Commissioner Gloria Tristani will release a separate statement about the merger, it was not her office that delayed the deal at the FCC, as was reported, says William J. Friedman IV, Tristani's senior legal adviser. The commissioners had voted to approve the deal "substantially before the press release yesterday [Aug. 15]," although Friedman says he can't "recall exact dates."
Tristani was said to be concerned about language revolving around the definition of a radio market; past deals have given a group more stations than she would like ("Closed Circuit," Aug. 7). In fact, according to Friedman, "that subject really hadn't come up."