The announcement today that Clear Channel Communications has accepted an $18.7 billion buyout offer from a group of private-equity firms, including Thomas H. Lee Partners LP and Bain Capital Partners LLC, is apparently one of the largest bids ever by private investors for a media company. A similar group comprising of Bain and Lee previously acquired the Warner Music Group for around $2.6bn before taking it public.
This is the first time, for many years that one of the world’s major music companies was also owned by the same folks who also own one of the world’s largest radio station companies. In several countries such a tie-up would not be allowed.
Now, at this stage, they’re separately managed businesses and are not being brought together under the same operational control. But isn’t there something curiously old media about the slight feeling of discomfort this evokes for some reason, which I can’t quite put my finger on?
Payola? Well there’ll be no need for that now! On the other hand, however… a closer examination of both these businesses would suggest that the internet is having a major damaging impact on both and that neither has a clearly defined strategy for responding.
The slide of advertising away from tv and radio and onto social networking sites and other internet locations has been well documented, and advertising is one key to Clear Channel’s revenues. And I hardly need to mention what has happened to the music side.
So there is something curiously nostalgic about this takeover bid (which is billed rather quaintly as a merger in the press release). Of course some of the smart folk are saying let’s look at old media opportunities while all the trendy money in looking online. Whichever way you look at it though, the Channel is far from Clear and surely the regulators ought to be looking at this one?