For this year’s State of the News Media report PEJ has released a new interactive tool with data on the owners of the top media companies in the U.S. For the largest radio companies, users can compare financial information, most popular stations, ratings and general information on the companies themselves.
Here we discuss the major events of the year, which in 2009 focused on developments in two of the largest U.S. radio companies, Clear Channel and Cox Enterprises.
After going private in 2008, Clear Channel continued to face serious revenue problems. Its revenue was down about 22% in the first six months of 2009 compared with 2008.
In April, the company responded by cutting nearly 600 jobs in its radio division and suspended its 401k pension-matching program. The cut in employees came on top of another larger job cut in January of 1,850 jobs. All told, through April this was a 12% cut across the board at Clear Channel.1
In spring 2009 there were reports that Clear Channel wanted to shift some of its debt from its radio division to its more profitable outdoor advertising division, but lenders in the projected deal to buy Clear Channel blocked the company’s move.
As the deal was completed in 2009, some lenders attempted to pull out as the economy worsened, but they had signed binding agreements in 2006 to finance the deal. The lenders’ solution was to block this attempted shift in debt, allowing the company to go into debt and allowing the lenders to pick up assets at a discount.2
Cox Enterprises, which was already a majority shareholder in Cox Radio Inc., made a $69 million offer to take Cox Radio private in May 2009 by buying the final 22% of the company that Cox Enterprises did not already own.
While the offer is a 15% premium over the share price for Cox Radio at the time of the deal, it is a 70% discount from the price a year ago.3
1. James Calla, “Clear Channel Communications Cuts 590 Radio Workers” Bloomberg, April 28, 2009.
2. Dave Hendricks, “Is the Bell Tolling for Clear Channel?” San Antonio Express News, June 27, 2009.
3. Kevin Kingsbury and Sarah McBride, “Cox Enterprises Launches Cash Tender Offer for Cox Radio Shares,” Wall Street Journal, March 24, 2009.