November 26, 2015

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First Mediaworks

09/29/03 Is There Hope For “The Evil Empire”?

Watching Radio’s epic struggle between the forces of good and evil is like watching a Star Wars movie. In the minds of many industry onlookers, Darth Vader rules The Evil Empire from the Deathstar, an office building in San Antonio, and his Evil Empire is Clear Channel Communications.

Here is a reality show that, a few years ago, no one in Radio would have believed: A small San Antonio company becomes the world’s largest Radio consolidator almost overnight. Looming in the shadows is Jacor, operated by a madman who thrives on breaking rules and making controversy. Despite their radically different cultures, these companies merge. The madman, Randy Michaels, is appointed to run the newly combined organization, while the good ol’ boys from Texas cringe.

A couple of years ago, I asked Clear Channel CFO Randall Mays how he — a good, church-going man with high standards and ethics — could face his neighbors, knowing of the in-company activities that were counter to his own values. Silence was the only answer I received. My guess is that putting the devil in charge was the only way Clear Channel could accomplish the merger, so Randall was biting his tongue, waiting for the contractual obligation to end.

The press is almost always negative in its Clear Channel reports, likely because of Clear Channel’s frantic decisions while melding 1,000+ stations into a single organism, good decisions the press simply didn’t understand, poor decisions later regretted, and split decisions made in a boardroom as two operating styles clashed.

When Randy Michaels “stepped down,” I wondered whether Clear Channel would continue to be the bad egg that the press portrayed, or would it return to the high standards for which it once was known?

When John Hogan was appointed president/CEO of Clear Channel Radio, I felt that Clear Channel had made the wrong decision. After all, Hogan came from Jacor and was one of Randy Michaels’ team.

Now, I am cautiously optimistic, although we’re not seeing the drama we saw when John Sykes burst onto the scene at Infinity and immediately canned three VPs. Hogan, by contrast, appears to be methodically and carefully crafting a plan while slowly gaining credibility and the support of his board. I believe he will change the company in a relatively short period of time. He not only wants to change the public perception of Clear Channel, but he also wants to do it through actions that will make a difference. It’s a tricky balancing act to meet quarterly earnings, keep the Mays guys happy, and implement meaningful change, but I think he may be successful. By all appearances, he has the support of his employees, which is an indicator that they respect and trust him. He has already overturned some of the bad decisions of early consolidation, eliminating pay-for-play contracts and doing some light housecleaning.

Hogan seems genuinely concerned about the quality of service in local communities. If his actions follow his words, you’ll see a plan to overcome bad Radio and introduce a new era of innovation. There’s hope that The Evil Empire may someday be recognized as a completely different company.

We can only hope.

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