The Rise of Clear Channel Radio: A Media Powerhouse Story

Clear Channel Radio, or Clear Channel Communications, is one of the most iconic radio powerhouses in broadcasting history.

Today, the company is better known as iHeartMedia Inc – the most prominent radio parent company in the United States.

In fact, iHeartMedia is responsible for more than 850 stations. That’s several times the number of stations owned by any other major media conglomerate.

The current iHeartMedia brand specializes in radio broadcasting, live and digital events, and podcasting. It’s known not only across the US but in regions worldwide.

But where did the Clear Channel Radio story begin? How did Clear Channel Communications become such a significant player in the audio industry?

Here’s everything you need to know about the history and evolution of the incredible Clear Channel Radio brand.

The Start of Clear Channel Communications: Early Days

A hand adjusts a dial on a shortwave radio transceiver
Lowry Mays took a big chance on the station that became Clear Channel Communications, now known as iHeartMedia.

Lowry Mays, one of the founders of Clear Channel Communications (iHeartMedia), changed history forever by saying yes to a straightforward request.

In his early years, Mays pursued a career as an investment banker, building on his degree from Harvard University.

Then, one day, two men walked into his office and asked for help raising $175,000 to purchase a struggling FM station.

Mays agreed to assist in purchasing the station, known as KEEZ, and began researching the radio landscape, exploring the potential profitability of the landscape.

As he prepared to help with the radio project, the two men who originally proposed the purchase decided to back out of the deal.

However, Mays was already emotionally invested in owning a radio station. So he decided to pursue the opportunity independently, enlisting the help of BJ (Red) McCombs.

After borrowing $175,000 from a bank, he purchased KEEZ as an investment, with no intention of joining the broadcasting business.

Within a year, Mays helped to transform KEEZ into a highly profitable business. By this point, he was hooked.

With the cash flow generated by his new station, Mays and McCombs decided to purchase some additional stations. The brand purchased a “clear channel” AM station in 1975, WOAI.

A year later, in 1976, they branched outside of San Antonio, purchasing KMOD-FM and KAKC in Tulsa. All stations were acquired under the San Antonio Broadcasting name.

In the years to follow, Mays began investing more heavily in the radio industry. He focused primarily on purchasing distressed stations in mid-sized markets like New Orleans, Louisville, and Memphis.

Each station was subject to a strict vetting process before it joined the Clear Channel fold.

The 1980s and Clear Channel’s Public Offering

Microphone in a radio studio with equipment in the background
As the FCC relaxed radio ownership restrictions in the 1980s, Clear Channel Communications grew, then slumped.

In 1984, developments in the broadcasting landscape began unfolding, offering new growth opportunities.

The Federal Communications Commission started reducing restrictions on television and radio ownership. Clear Channels Communications was given the green light to purchase new stations, and they jumped into action.

Mays prepared for a new era of rapid expansion by publicizing the Clear Channel Communications company.

The company earned $7.5 million in funding and began acquiring broadcasting properties to exploit the relaxed ownership restrictions.

However, the purchasing process was initially slower than expected, thanks to the company’s stringent buying process.

By 1987, acquisitions slowed to a halt in the radio space, and Clear Channel began looking at the television space instead.

They purchased a station in Mobile, Alabama–an affiliate of the Fox TV network–and Mays also purchased numerous other Fox affiliates.

The decision to dive into the television landscape proved an excellent opportunity for Clear Channel Communications. The Fox TV network developed into one of America’s most extensive television networks.

All the while, Mays’ radio acquisitions were thriving. By 1991, the company’s six television stations and 18 radio stations produced over $1 million in earnings.

The 1990s and Continued Expansion

Blurry close-up shot of radio levels and dials
The 1990s saw a decrease in the price of radio stations and a huge expansion for the Clear Channel brand.

In 1992, Mays switched his focus back to the radio industry, motivated by the changing conditions in the landscape.

In the 1980s, an economic recession hit the landscape, making it difficult for many companies with radio stations to continue managing debt.

As a result, the price of stations dropped dramatically, and Mays began taking advantage.

By 1993, Clear Channel Communications had purchased 31 radio stations and seven television stations, totaling a price of $110 million.

In 1994, Clear Channel merged with one of its competitor companies, Metroplex Communication. It began purchasing stations outside the US, acquiring a 50 percent interest in the Australian Radio Network.

Thanks to May’s careful planning, Clear Channel was in a fantastic position to purchase more companies by the time the FCC relaxed rulings again.

In addition, a new Telecommunications Act took place in 1996, allowing companies to own even more broadcasting brands.

By June of the same year, Clear Channel had acquired $581 million worth of television and radio stations.

The company rapidly moved forward, benefiting from soaring stock prices and an excellent reputation in the industry.

By the end of 1996, Clear Channel owned 11 television stations and 121 radio stations. It became the second-largest radio group in the US.

Meanwhile, Capstar Broadcasting was founded in 1996 and quickly became the largest owner of radio stations in the country.

With 243 stations already under their belt, the company announced plans to purchase SFX broadcasting in 1997.

A year later, Capstar and the Chancellor Media Corporation merged, creating a company with 463 stations.

Eventually, in 1999, Clear Channel purchased the merged company, which later became AMFC Inc. The result left Clear Channel Communications with 19 television stations and 830 radio stations throughout the US.

Evolving in the 2000s: Buyouts and Bankruptcies

A hand adjusts a dial on a shortwave radio transceiver
Unfortunately, the 2000s were not the best period for Clear Channel, although the brand bounced back.

In 2006, Clear Channel announced a plan to go private after being bought out by two private equity firms for around $26.7 billion.

At the same time, Clear Channel began selling its television stations and over 500 smaller radio stations, as the private equity buyers weren’t interested in those properties.

However, due to the credit market crunch in 2007, Clear Channel struggled to sell some of its stations, and the termination date of the buyout was extended.

In early 2010, the company faced the possibility of bankruptcy due to significant debt. Mays eventually stepped down as CEO and president of Clear Channel in June of the same year.

In 2013, Clear Channel got rid of its minority stake in the competing Sirius XM company, and many Clear Channel stations were subsequently removed from the other brand’s service.

In 2014, Clear Channel Communications decided to update its branding.

The company felt its name needed to be revised based on its innovative approach to the broadcasting market. Clear Channel radio was still associated with the AM radio landscape.

Clear Channel radio is used for an AM channel on which only a single station transmits.

At the time, Clear Channel Communications had already moved heavily into the digital and FM landscape. The new name, iHeartMedia, was chosen for its broader appeal.

The iHeartMedia brand continued to evolve. However, it was still struggling with significant debt. Many of the company’s media outlets were claiming an impending bankruptcy was likely.

In 2017, publications reported that creditors had rejected the iHeartMedia debt-restructuring proposal. In 2018, the company went on to file for Chapter 11 bankruptcy.

The Resurgence of iHeartMedia

Despite a host of challenges, iHeartMedia emerged from bankruptcy and began making strategic acquisitions once again.

The HowStuffWorks podcast was purchased in 2018, and the company also announced its intent to purchase Jelli, a programmatic advertising platform.

In 2019, the US Bankruptcy Court approved a plan to help iHeartMedia exit bankruptcy once and for all. The plan also included a spin-out strategy for iHeartMedia’s advertising company, Clear Channel Outdoor.

In the same year, the media brand proposed an initial public offering to help build new revenue for the years ahead.

Rather than pursuing the IPO, iHeartMedia was approved for a direct listing on the Nasdaq and began looking for investors.

In 2020, the brand announced a significant restructuring effort to modernize the company and take advantage of new growth opportunities.

This included restructuring the market groups into three different divisions for different markets.

Additionally, a multi-market partnerships unit was added.

The restructuring was accompanied by a significant round of layoffs and displacements, affecting various on-air personalities and staff members.

Since then, iHeartMedia has grown again, finding new ways to connect with its audience across the various media outlets it invests in.

Despite significant turmoil, the company remains the biggest owner of radio stations in the United States landscape today.

The Fall and Rise of Clear Channel Communications

Like many major companies over the years, Clear Channel Communications saw its fair share of ups and downs.

After an extremely successful start in the radio landscape, the company branched out rapidly into new forms of media and accelerated its growth.

However, it wasn’t immune to the issues caused by economic downturns and subsequent debt.

After filing for bankruptcy and laying off some of its staff members, iHeartMedia has remained relatively strong.

The company continues to act as the number-one parent brand of radio stations throughout the US. The brand is also invested in advertising and television networks across multiple channels.

Similar Posts