Clear Channel hires executive to lead company beyond radio
Looking to expand its foothold beyond the AM-FM dial, radio giant Clear Channel has tapped entertainment industry veteran John Sykes to lead a push into television, digital and live events.
Clear Channel, the nation’s biggest owner of stations with 850 outlets across the country including KIIS-FM, KOST-FM and KBIG-FM in Los Angeles, wants to leverage its strength in radio across a wide range of platforms.
“We can use that horsepower to create new products,” said Bob Pittman, chief executive of Clear Channel parent company CC Media Holdings Inc.
The hiring of Sykes is the first major move by Pittman since becoming chief executive of CC Media last November. Pittman and Sykes have a long history together going back to the early days of MTV when they were part of the executive team that launched the groundbreaking music cable television network in 1981.
In an interview, Sykes said he wants to use the “muscle and reach” of Clear Channel to turn it from “850 independent shops” to a “large scale media company.”
The moves are part of CC Media Holdings’ overall plan under Pittman to reposition itself as more than a radio company. Last week, CC Media Holdings officially changed the name of Clear Channel Radio to Clear Channel Media and Entertainment.
Americans listen to about 15 hours of radio a week, according to research company Arbitron Inc. However, increased competition from satellite radio and new online services such as Pandora have put a cloud over the traditional radio business. Much of the industry has become more consolidated over the last decade in an effort to appease Wall Street by cutting costs.
“There is nothing wrong with radio,” said Pittman, who while growing up spent some time behind the microphone of a station in his hometown of Brookhaven, Miss. “In 1970, radio reached 92% of the people every week; in 2012, it’s 93%.
But changing how radio reaches those people is where Pittman sees opportunity. Last year, Clear Channel launched the iHeartRadio application that enables consumers to listen to its stations on computers and tablets. To hype the effort, the company held a two-day music festival in Las Vegas featuring Cold Play, Jay-Z and Lady Gaga. Clear Channel has also struck partnerships with Facebook and Zynga to promote its properties.
Sykes, who was first recruited by Pittman as a consultant last year, wants to create more events like the iHeartRadio festival, which was also streamed on the Web and carried by Viacom’s VH1 cable channel.
“We can partner with a TV network or producer and create properties with a tremendous amount of promotional power behind them, Sykes said.
Clear Channel is not planning to go on an acquisition binge as part of its efforts to broaden beyond its comfort zone of radio. The company, which had a loss of $74 million on revenue of $1.6 billion for the three months ended Sept. 30 is saddled with $20 billion in debt from when it was taken private by Bain Capital and Thomas H. Lee Partners.
“This is not meant to create a giant overhead within the organization,” Sykes said of Clear Channel’s promotional efforts. “It is to partner with people already in the business and use our deep talent pool to actually create a very powerful entertainment platform.”
Sykes, 56, has spent much of his career in and around the music industry. After leaving MTV in the late 1980s, he became president of Champion Entertainment, where he managed John Mellencamp and Mariah Carey. He went on to become a president of Chrysalis Records as well as CBS Radio and VH1.
Most recently, he was affiliated with Pittman’s Pilot Group, a private equity firm where he worked on the restructuring of MGM. He also serves on the board of Shazam, a company that put a modern spin on the game “Name that Tune” by creating an application that enables its users to readily identify songs for purchase after hearing just a few notes.
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