Clear Channel Seeks Radio Station Sale FCC Regulations Push the Company to Shed 1of 7 Local Stations Before Its Buyout.

By MARK BASCH

Clear Channel Communications Inc., which has already put its two Jacksonville television stations up for sale, is now looking to sell one of its seven area radio stations as it prepares for a $26.7 billion buyout by private investors.

The San Antonio-based media giant announced last month that its group of 42 television stations, including WAWS TV-30 and WTEV TV- 47 in Jacksonville, is up for sale. Clear Channel also said it would sell 448 of its 1,150 radio stations as part of the buyout, but all of those stations are outside of the top 100 U.S. radio markets.

But in a filing last week with the Federal Communications Commission, Clear Channel indicated it will have to sell a number of other stations in larger markets, including Jacksonville, to get FCC approval for the buyout.

FCC rules allow a company to own up to eight radio stations in larger markets, but only five of them can be in the same “service,” meaning AM or FM. Six of Clear Channel’s seven Jacksonville stations are FM, so the company is one station over the FM limit.

Clear Channel has been allowed to exceed the limits in Jacksonville and other markets because of waivers and grandfather clauses in FCC regulations. But when ownership of Clear Channel is transferred to the private investor group led by Thomas H. Lee Partners LP and Bain Capital Partners LLC, the waivers cannot be transferred to the new owners. So Clear Channel will be required to meet the FCC mandate of only five FM stations in one market.

“Clear Channel has agreed not to fight the grandfathered stations and will probably divest one,” said Norman Feuer, who recently retired as general manager of the company’s seven Jacksonville stations.

The FCC filing does not indicate which station is up for sale, and Feuer said he has no information about possible sales.

A Clear Channel spokesman said Tuesday that the company is not commenting beyond what’s in the FCC filing.

In a research report last week, Banc of America Securities analyst Jonathan Jacoby said Clear Channel will likely have to divest 80 or more additional stations to meet FCC requirements, including stations in top markets New York and Los Angeles.

He estimates Clear Channel could get $5 million to $10 million by selling a Jacksonville station, without specifying which one. The total value of stations for sale could exceed $1.1 billion, the report said, and Jacoby said a number of companies could be interested in buying the stations.

“Large-market radio stations tend not to come on the market very often, and several groups could be interested either in filling out their existing clusters or in entering new large markets,” Jacoby wrote.

Potential buyers include Atlanta-based Cox Radio Inc., Jacoby said. But Cox already owns five Jacksonville FM stations (and one AM), so it couldn’t buy an additional FM station.

Another potential buyer on Jacoby’s list is ABC Radio, which owns Disney Radio station WBWL (600 AM) in Jacksonville.

Clear Channel once owned 11 radio stations in Jacksonville. It had six local stations before merging in 1999 with Jacor Communications Inc., which owned five. The FCC forced Clear Channel to divest four of the stations as a condition to approving the merger, but it did allow the company to keep six FM stations in Jacksonville.

Clear Channel has not given any additional information about the sale of the television stations since announcing the buyout of the company on Nov. 16. A company spokeswoman said at the time that Clear Channel intended to sell all 42 stations together as a group.

The 448 radio stations outside of the top 100 markets that have been up for sale are being marketed to several different buyers.mark.basch@jacksonville.com, (904) 359-4308ON THE AIRCLEAR CHANNEL’S HOLDINGSJacksonville radio stations– WFXJ 930 AM (sports)- – WJBT 92.7 FM (urban contemporary)– WROO 93.3 FM (country)– WFKS 97.9 FM (pop contemporary)– WQIK 99.1 FM (country)– WSOL 101.5 FM (urban adult contemporary)– WPLA 107.3 FM (alternative)Jacksonville television stations– WAWS TV-30 (Fox)– WTEV TV-47 (CBS)Source: Clear Channel Communications Inc.

(c) 2006 Florida Times Union. Provided by ProQuest Information and Learning. All rights Reserved.