Bob Pittman had no intention of putting lipstick on a pig. The native Southerner and C-suite veteran, who was semi-retired a few years ago and overseeing private equity firm Pilot Group, was looking for a canny investment, a hidden gem with undiscovered value and untapped potential. He didn’t want a flabby firm that he’d need to dress up to hide its inherent flaws.
So Pittman ended up staking $5 million into radio behemoth Clear Channel, with its 850 local stations around the country—including top-rated KIIS-FM in Los Angeles and Z100 in New York—as well as a global outdoor advertising division and digital properties.
That investment turned out to be the first step in yet another phase of his long and distinguished media career. Pittman went from investor to consultant—as in, “I told them I’d help out part-time”—to chairman and CEO of Clear Channel Communications. The move came as a surprise to many industry watchers but was a homecoming of sorts for Pittman, who, at 15, started his long media career as a small-town radio announcer in Mississippi.
“I wasn’t going to do this again,” Pittman—who this year was selected as the first ever Adweek Hot List Media Visionary—says of his 2011 return to a top corporate gig. “But I just thought, Oh my God, look at these assets. Think of what you can do with all that.”
It didn’t matter that Clear Channel, syndicated home to right-wing commentators Rush Limbaugh and Glenn Beck, suffered from an image problem and had none of the sex appeal of music streaming services like Pandora and Spotify. In fact, that was a major draw to Pittman, a media pioneer who, in his 20s, led the original team that launched MTV. He later spearheaded turnarounds at Century 21 real estate and Six Flags theme parks before becoming COO at the ill-fated AOL Time Warner. That exotic résumé prompted his former MTV colleague Tom Freston to describe him as a “jack of all trades” who’s been “reincarnated so many times he’s like Buddha.”
Since radio in general and Clear Channel in particular have been contented “to sit at the kid’s table for no good reason,” Pittman says he felt it was high time to lead the charge, becoming a cheerleader for a medium that was vital at its core but rough around the edges. “Many businesses have a better reputation than the facts would suggest,” Pittman argues. “Clear Channel had better facts than reputation. I love a business like this.”
Evangelism came with the territory and, coincidentally, has always come easily for Pittman, the smooth-talking son of a Methodist minister. Lately he’s been spreading the radio gospel at trade conferences, tech gatherings and investor groups, hammering home its value as an advertising tool and trying to snag a bigger share of marketers’ budgets. Calling it “the last real-time, mass-market medium” and “America’s companion,” Pittman preaches about radio’s reach (92 percent of Americans listen to the radio, the same as in 1970), its return on investment (which he calls “spectacular”) and its future (hint: it’s multiplatform).
Even Clear Channel’s $20 billion debt load, from a leveraged buyout in 2008, didn’t dissuade him. The company, which generated $6.3 billion in revenue in 2013, recently negotiated a multiyear extension on its debt payments.
One of Pittman’s lieutenants, John Sykes, says the energy at Clear Channel these days is familiar to him, but from a completely different context. “I feel the same spirit, the same drive to carve out a brand-new business as I did with him at MTV 34 years ago,” explains Sykes, brought in by Pittman to run the newly created Clear Channel Entertainment Enterprises. “Only this time, it’s on top of a very old, traditional one, an incredibly powerful medium.”
They had no wind at their backs at MTV, Sykes remembers, still they fervently believed the music channel would catch on. Clear Channel’s advantage is its scope and reach. Its owned stations cover 100 cities, and Premiere Radio Networks blankets 100 more on some 5,000 stations. Talent like Ryan Seacrest and Elvis Duran draw millions. Its rapidly growing iHeartRadio audio service, free app, live events and TV business all expand the audience. “Bob has said, ‘Don’t think of it as 850 radio stations, towers and transmitters—think of it as 240 million consumers a month,’” says Sykes.
Pittman, whom Freston years ago dubbed “the boy wonder of branding,” is busy doing for Clear Channel what he did for MTV: building iHeartRadio into a vital spoke in the music business wheel. “The card tricks that he used at MTV—breaking new artists, promoting music and tours, bringing excitement back to the business—he’s using again,” Freston says. “And he’s creating a national brand out of a collection of seemingly disparate pieces.”
Bob Pittman |
In the ’80s, everybody wanted to latch onto MTV—bands, agents, labels, promoters—and Pittman is working to put iHeartRadio in that league. There are encouraging results. IHeartRadio’s concert business has gone from zero to millions in revenue in just three years. Though its launch might have seemed counterintuitive in a troubled economic market, Pittman’s mandate for the weekend-long iHeartRadio Music Festival was to go big, with A-list artists against a flashy Las Vegas backdrop. “He talked about putting together Live Aid without the charity,” Sykes says. “I said, ‘Let’s make it a destination.’ We wanted to turn some heads.”
The gamble proved to be an out-of-the-gate success, becoming a significant player in the industry and a social media flashpoint. It couldn’t have hurt that Miley Cyrus made her first post-twerking Video Music Awards appearance at iHeartRadio’s third annual event in September, along with a formidable cross-genre lineup including Paul McCartney, Katy Perry and Bruno Mars. The show sold out in 10 minutes and generated Super Bowl-level heat on Twitter and other platforms.
The iHeartRadio app, which lets users listen to any Clear Channel over-the-air or digital station, boasts it reached 20 million registered users faster than any other app. It now tops 40 million users and 260 million downloads, putting it in the company of Instagram, Pinterest and Facebook. While that’s still a fraction of Pandora’s audience, the company continues to push in new directions like talk shows, comedy and custom playlists. However, it will avoid digital music sales, à la Apple’s iTunes.
Additionally, IHeartRadio’s televised CD-release parties have aired to small but younger audiences on the teen-skewing CW network. While they serve as stepping-stones for more TV development, the shows are cementing the audio service as a go-to partner for shilling new music. Ditto Clear Channel’s groundbreaking revenue-sharing deals with record labels like Warner Music Group and Big Machine and artists like Fleetwood Mac. “The magic had gone out of radio so long ago. It was a financially engineered creative wasteland,” Freston says. “It’s nice to see it striking back. And if anyone can make it hot again, it’s Bob.”
Radio wasn’t his first stop on his teenage job hunt in Brookhaven, Miss.—coveted spots at the local grocery chain were filled—but it became Pittman’s entrée into a bustling industry. (It also paid for flying lessons, an early passion that’s turned into a lifelong hobby.) Moving swiftly from DJ at a tiny AM station to management roles in Pittsburgh and Chicago, Pittman landed as the program director of New York’s WNBC-AM before his 24th birthday.
Recruited into the budding cable television world, Pittman assembled the young guns who would put MTV on the map. From the start, Freston recalls, Pittman realized the value of carving out a distinct identity when no one else in the TV landscape did. “We needed to make the network stand for something,” says Freston. “Bob was an early believer in media branding.”
Pittman has always been agnostic in his career choices. The field has mattered less than the challenge, he notes, which explains his stints running Six Flags (which, before he became CEO, was valued at $600 million but sold for $2 billion after his tenure) and Century 21 (under Pittman, gone were the distinctive if tacky gold jackets worn by local agents while cash flow grew tenfold).
He logged time at AOL in its nascent days when “the connected home” was all the talk and growth for the service was exponential. He became COO of AOL Time Warner but eventually resigned in the fallout of the failed merger of the two media giants. He co-founded Pilot Group, seeing early promise in companies like Zynga, Thrillist and DailyCandy and investing in tequila brand Casa Dragones.
A common thread through all these gigs is Pittman’s willingness to take risks, but Freston is quick to note that his friend is not a seat-of-the-pants decision maker—everything is grounded in research and reality. Still, Pittman says he did learn under the wing of the late Time Warner chief Steve Ross, one of his most important influences, that there is value in risk. Ross told Pittman he’d never be fired for going out on a limb—while stagnation would be fatal. Pittman has made that a guiding principle and tried to instill it in his team. “The biggest risk is complacency,” he says. “I lay awake at night worried that we’re not doing enough, that we won’t up our game constantly.”
His version of Clear Channel, for example, may see the outdoor division burst out of the standard billboard business to become more daring, mirroring the innovation of out-of-home displays in Europe. Sykes’ unit could expand into any number of pop culture-connected businesses, Pittman believes.
The company recently announced a content development and sharing deal with cable channel CMT to dig further into the country genre, the most popular radio format in the U.S. It also locked in the ubiquitous Seacrest for three more years of spokesman duties and hosting gigs, to the tune of a whopping $60 million. Seacrest says Pittman being at the helm of Clear Channel was “definitely instrumental in my decision to extend our partnership.” Seacrest, a fellow son of the South (he was born in Dunwoody, Ga.), says he and Pittman have bonded over their geographic roots and mutual love of radio. He sees Pittman as a mentor, saying, “When I spend time with Bob, I learn things. He’s taught me the inevitability of mistakes.”
Whether ultimately good or bad, Pittman tries to make decisions quickly. Some call it impatience. Pittman sees it as a complete lack of interest in dithering. “He’s not a vague individual,” Sykes says. “He’s one of the clearest communicators you’ll ever meet.”
As someone who walks the walk, he is as steeped in Taylor Swift’s music as any teenage girl, though his personal taste runs more toward Led Zeppelin. He’s a voracious student of consumer behavior, carefully watching trends and trying to anticipate what the public will want next. His sense of adventure explains his dedication to Burning Man, an annual Woodstock-for-artists in the Nevada desert. He has a decade’s worth of notches on his burner belt, usually flying himself there in one of his private planes. Pittman sees it as a way to stay engaged and fight against a narrow focus that age sometimes brings.
The fact that he’s turning 60 this month makes no difference in his ability to hang with the cool kids. Launching MTV, Pittman could deal with the highest-powered veteran execs. Today, he easily communicates with twentysomething radio personalities and artists. “Age is a meaningless factor to him,” says Sykes. “That’s how he can build a cutting-edge, energetic company.”