Everyone’s favorite bogeyman, Clear Channel Communications, may be no more. According to the Wall Street Journal (subscription required – sorry, folks), spokespeople declared that the company, which owns more than 1,200 radio stations, including ten in the Bay Area, was “evaluating various strategic alternatives to enhance shareholder value,” which industry observers speculate is code for: “Make us an offer.”
As profits dropped ten percent in the third quarter, buyers are already circling the communications behemoth. But before you drink a tall glass of schadenfreude, consider this: one of the main prospective buyers is a consortium that includes Kohlberg Kravis Roberts and Co., the notorious firm that essentially invented the leveraged buyout in the 1980s. KKR’s strategy of borrowing billions to acquire undervalued companies, and then selling off chunks of the firm and slashing workforces to recoup its investment, was immortalized in the book Barbarians at the Gate and lay behind Safeway’s red-lining binge in the 1990s, which deprived low-income neighborhoods around the country of cheap food. If you think Clear Channel is terrible for local radio programming, wait till Henry Kravis sinks his talons into KMEL.
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