Radio giant Clear Channel has agreed to a $19 billion leveraged buyout by a group of private-equity firms -- a move that will take the company private and could spark significant change in how it does business. Clear Channel has continually fought for the relaxation of ownership rules that would allow it to own even more stations in particular markets, but it's unclear if its new owners will want to pursue the same type of strategy that's appeared focused on buying every radio station in sight, and making them all sound the same. When private-equity firms take over a company, the first thing many people think is that they'll break it into parts and sell it off at a profit. Clear Channel is already saying it wants to sell off its 42 TV stations and nearly half its radio stations (though these are all in smaller markets, and generate less than 10 percent of its total revenues) and there's been persistent talk that it would split off its outdoor advertising business as well. Further breaking up its radio holdings is possible, but seems rather unlikely -- but so does further large-scale expansion, given that the company will soon take on more debt to finance the buyout. We've slated Clear Channel in the past for a variety of reasons, but mostly because of the ham-fisted way it's tried to adapt to the changing media market. There's hope that new ownership could realize how badly the company's stumbled when it comes to technology and the internet, or even the effect its work to homogenize its stations and the music industry has had, and seek to make significant changes to deliver new revenue growth. However, current executives, including the CEO and chairman from the controlling Mays family, will stay on board -- so any real change would appear to remain a distant possibility. However, freed from the burden of having to try to satisfy public investors, or driven by the demands of its new owners, maybe something will change.
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