Clear Channel-AMFM Merger Gets Approval
The Justice Department approved the $23.8-billion merger of Clear Channel Communications Inc. and AMFM Inc. into the U.S.’ largest radio broadcaster after they agreed to sell part ownership of a billboard company.
On July 20, Clear Channel and AMFM agreed under government pressure to sell 99 radio stations in 27 markets, the largest radio divestiture ever. So far, the companies have sold 85 of the stations.
Tuesday’s agreement with the Justice Department requires them to sell 14 more stations in five markets within 150 days.
After merging with AMFM, San Antonio-based Clear Channel will be the largest U.S. radio broadcaster, owning or operating about 900 stations, the department said.
In the agreement filed in U.S. District Court here Tuesday, the companies promised to sell AMFM’s 29% interest in Lamar Advertising Co. to resolve concerns that the original deal would have resulted in higher prices and lower quality service to radio and billboard advertisers.
If approved by the court, the agreement would settle a lawsuit the government filed simultaneously Tuesday to block the original deal.
“The transaction, as originally structured, would have harmed advertisers who rely on radio or out-of-home advertising,” said Assistant Attorney General A. Douglas Melamed of the department’s antitrust division. “The divestitures required by the consent decree ensure that customers of both types of advertising will continue to enjoy the benefits of competition--low prices and high quality.”
Lamar sells out-of-home advertising space, such as billboards, to local and national businesses. A direct competitor to Lamar, Eller Media Co., is owned by Clear Channel.
The government lawsuit said the original merger would have seriously reduced competition in out-of-home advertising and in five radio markets in Pennsylvania, Colorado, Texas and Florida.
The stations to be sold are: WEEX-AM and WODE-FM in Allentown-Bethlehem, Pa.; KVOD-AM in Denver; WNCE-FM, WNNK-FM, WTCY-AM and WTPA-FM in Harrisburg-Lebanon-Carlisle, Pa.; KJOJ-AM, KJOJ-FM, KQUE-AM, KSEV-AM and KTJM-FM in Houston-Galveston, Texas; and WMEZ-FM and WXBM-FM in Pensacola, Fla.
For 1999, Clear Channel reported net television and radio revenue of $1.4 billion. Its Eller subsidiary, also based in San Antonio, reported revenue of $1.3 billion. Dallas-based AMFM reported 1999 radio net revenue of $1.7 billion.
Lamar, headquartered in Baton Rouge, La., reported net revenue of $444 million in 1999.