Clear Channel Unit Is Set to Name CEO
Clear Channel Entertainment, one of the nation’s top concert promoters, is expected to announce today the appointment of Michael Rapino as chief executive.
Rapino had been president of the corporation’s world music group. He is expected to oversee the spinning off of the concert unit from parent Clear Channel Communications Inc., the U.S.’ largest owner of radio stations.
Sources familiar with the negotiations, who requested anonymity because of the delicacy of the talks, said Clear Channel had been close to giving the job to Ron Bension, who formerly ran the Universal Studios theme parks and the Tickets.com service.
But some of the concert promoters that Clear Channel Entertainment depends on for venues said they told the company that they were comfortable with Rapino, adding that they did not want to work with a new executive.
“My contract is up, and when I heard they were going to name an outside CEO, I had reservations about staying with Clear Channel,” said Larry Magid, a concert promoter who operates the Electric Factory in Philadelphia. “Rapino brings stability.”
Stability is particularly important to Clear Channel as it proceeds with previously announced plans to spin off the entertainment unit.
Executives at the San Antonio-based company believe that Wall Street undervalues the unit and that detaching it will boost its worth.
Clear Channel Entertainment was born five years ago after a $4-billion acquisition of SFX Entertainment Inc. But recent profits have been disappointing, and the unit’s former chief executive, Brian Becker, was forced out last April after revenue fell.
Rapino faces a number of issues at the concert division. They include renegotiations with Ticketmaster, which sells most tickets to Clear Channel events, and facing off with the powerful concert promoters who make up the backbone of the company.
Competitors said the new chief executive would have a difficult time turning around the company, which owns, leases or exclusively books more than 125 venues in North America, South America and Europe. Many of those are aging amphitheaters, which have been declining in popularity among music fans.
“Whoever comes into that job is faced with tremendous challenges because the business model of amphitheaters is outdated,” said Randy Phillips, chief executive of AEG Live.
A Clear Channel representative did not return phone calls seeking comment.