Exec Leaving Clear Channel Entertainment Unit

The second in command at Clear Channel Communications Inc.’s ailing entertainment unit is leaving his post amid a cost-cutting drive, according to people familiar with the matter.

The departure of Steve Smith, Los Angeles-based chief operating officer of the entertainment division, comes after a sluggish year in the live-event business. Smith is expected to remain with the company, possibly running a philanthropic project, sources said Tuesday.

Smith, a radio promotion veteran, is credited with championing a push to cross-promote Clear Channel’s live events on its radio stations. But insiders say the entertainment division’s regional bosses resisted reporting to him instead of to Clear Channel Entertainment Chief Executive Brian Becker.

Neither the executives nor representatives of the company or the unit could be reached for comment.

According to Clear Channel’s public filings, entertainment division revenue for the nine months ended Sept. 30 fell about 7.5% from the year-earlier period to $1.9 billion. But the division posted operating profit of $100.4 million for the nine months, up from a loss of $42.4 million a year earlier.

Despite the return to profitability, San Antonio-based Clear Channel’s senior executives have been dissatisfied with the unit’s performance.

Clear Channel has faced particular trouble in the concert industry, where this year it suffered from poorly performing tours by such acts as Guns N’ Roses, Peter Gabriel and Lenny Kravitz.

In an earlier shake-up, Clear Channel fired the entertainment division’s top marketing executive and briefly shifted the operation’s box-seat sales force to the conglomerate’s radio division, irking some insiders, people familiar with the situation said.

Clear Channel shares fell $1.12 to $38.34 on Tuesday on the New York Stock Exchange.