Clear Channel evil, or merely monopolistic and rapacious?
- Federal regulations prohibit any broadcaster from owning more than eight radio stations in a single market. But here along California’s southern border, industry giant Clear Channel Communications Inc. has figured out a way around the rules–and that has left its smaller competitors fuming.
By cutting deals to take over programming of five Mexican stations, including two in May, Clear Channel has grabbed nearly 50% of the San Diego market’s radio advertising dollars, according to estimates from research firm BIA Financial. The Federal Communications Commission exempts foreign-owned stations from being counted toward the maximum of eight.
Altogether, the exemption and other loopholes have allowed Clear Channel to take control of 13 stations beaming signals into San Diego. The San Antonio-based company–the nation’s biggest radio broadcaster–has more market share here than in any other top-20 market, according to BIA.
With antennas within sight of the U.S.-Mexico border and signals directed north, Clear Channel’s so-called X stations (the Mexican outlets’ names start with X) have become the key to a power struggle in San Diego radio.
Smaller radio companies protest that the media conglomerate has not only sidestepped federal law by taking over the Mexican stations, but that it is using its size to muscle advertisers. Critics say Clear Channel is throwing its weight around with advertisers in dozens of other markets where it has concentrated power.
Jefferson-Pilot Communications, a small broadcaster that owns four San Diego radio stations, said in a complaint filed with the FCC in March that the exemption Clear Channel is exploiting “has resulted in a serious competitive imbalance” in San Diego and permitted “the very market dominance Congress sought to preclude” by establishing station-ownership caps.
Jefferson-Pilot has asked the FCC to revise its rules and count any station that places a signal into a U.S. radio market and directs significant programming and sales efforts there.
In its basic pitch, Clear Channel tries to sell advertisers on the idea that, if they spend all their radio dollars on the company’s stations, they would receive bonuses, such as free spots on its lower-rated stations.
Even if they reject the idea of handing their entire ad account to one company, some media buyers in San Diego say they must buy spots on Clear Channel’s stations because it has tied up control of certain coveted demographic groups, including men ages 18 through 34. Some advertisers say that means they must pay Clear Channel’s price–or stay off the air….
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