Clear Channel Spins Off Units

WASHINGTON Clear Channel today said it would spin off its outdoor and entertainment divisions from its radio and TV groups, resulting in three separate publicly traded companies: Clear Channel Communications, Clear Channel Outdoor and Clear Channel Entertainment.The San Antonio-based media giant, which disclosed the realignment in conjunction with reporting its first-quarter earnings, will continue to hold a 90 percent controlling interest in the outdoor company, but will not retain any ownership in the entertainment company.The remaining radio and broadcasting company, Clear Channel Communications, which had 2004 revenue of $3.75 billion, will include 1,200 radio stations, international radio interests, Premiere Radio Networks, Katz Media, the TV station group and a 90 percent stake in the outdoor company. Clear Channel's board of directors has already approved the plan. The company expects to complete the spin-off of its outdoor and entertainment businesses by the end of the year.Clear Channel's news comes just weeks after another multimedia goliath, Viacom, announced it was exploring a split of its media businesses into two companies. Like Viacom, Clear Channel believes a split will allow each of its three business segments to have more flexibility in pursuing strategic growth initiatives and a more focused management. "Each business will have sharpened management focus and an improved ability to attract, retain and reward employees in a way that's aligned with shareholders," said Mark Mays, president and CEO of Clear Channel. The outdoor division, which grew revenue 11 percent in the first quarter, had 2004 revenue of $2.5 billion. Clear Channel intends to sell 10 percent of stock in Clear Channel Outdoor in an initial public offering. Because Clear Channel will retain a controlling interest in the new outdoor company, Mark Mays will remain CEO and Randall Mays will continue as CFO of the outdoor company. Paul Meyer, currently CEO of outdoor, has been promoted to global president and COO of outdoor operations. Roger Parry will continue to oversee international outdoor operations.The Clear Channel Entertainment company will consist of entertainment operations domestically and internationally with 2004 revenue of about $2.75 billion. Brian Becker, who has served as CEO of CC Entertainment, will no longer remain with the spun-off entertainment company, but instead will form a joint venture with Clear Channel to pursue entertainment content opportunities through acquisition and development. In the interim, Randall Mays, CFO of CC, will serve as CEO of the new entertainment company. The entertainment division's revenue dipped 17 percent in the first quarter.For the quarter, Clear Channel revenue fell 4 percent to $1.9 billion. Due to the company's initiative to reduce commercial inventory by 20 percent across its radio stations, broadcasting revenue dipped 7 percent. Still, the company is determined to stay the course with its plan. "We're seeing improvement in pricing and sell-out, but it's a slow progression," CC's Mark Mays told analysts during Friday's conference call. "We're bullish on the long-term aspects of radio. We're doing what we're doing today to enhance the long-term growth rate."

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Clear Channel Spins Off Units

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