STATIC: Clear Channel: Profits of doom

By RANDY DOTINGA - For the North County Times | Wednesday, May 7, 2008 2:05 PM PDT ∞

Editor's note: This is the first of two columns about the company Clear Channel and how it changed radio in San Diego and across the country.

About eight years ago, the host of a local morning show told me about a new technological wonder that had appeared at his station.

The host ---- not the brightest bulb in the chandelier, if you know what I mean ---- thought it was called the Profit System. It was actually the Prophet System, a computerized gizmo that made it easier to pre-tape radio shows and then skedaddle. Radio personalities didn't even have to be in the same hemisphere when their shows ultimately aired.

It wasn't called the Profit System. But it might as well have been. Clear Channel Communications, which owned the station, wanted to make more money. And if a radio host could tape his on-air bits from a four-hour show in 45 minutes, well, all the better. And if you didn't need to pay DJs to sit behind the microphone 24 hours a day, well, great!

Neither of us knew it then, but Clear Channel's drive for profit would soon turn it into one of the most despised companies in America.

The critics, the intelligentsia and any hipster under the age of 30 were in the vanguard of the I-hate-Clear-Channel brigade, but the monolithic company developed a vaguely disreputable reputation even among those who didn't pay much attention. The only notable exceptions were on Wall Street, where Clear Channel shareholders watched the prices of their stock go through the roof.

Now, all that history is, well, history. Clear Channel still exists and still owns 1,200 stations, but it's trying to shrink its holdings and go private.

Unfortunately for the company, legal and financial snags are stalling the deal. Meanwhile, the unbelievable is happening: Clear Channel seems to be losing its reputation as the corporation from hell. Last year, Clear Channel made it into only the top eight in consumerist.com's Worst Company in America survey. (Visitors to the site named the Record Industry Association of America as the very worst; it's the one that goes after digital music thieves.)

Only the top eight? In the olden days, Clear Channel people would have been fired for allowing such a low ranking! Well, maybe that's an exaggeration. But still, Clear Channel ---- which owns eight stations with listeners in San Diego ---- has definitely lost some of its mojo.

What happened? Freelance journalist Alec Foege tries to answer that question in his new book, "Right of the Dial: The Rise of Clear Channel and the Fall of Commercial Radio."

Foege goes all the way back to the beginning and finds the dark side of Clear Channel's roots. Back in the 1970s, the company owned a low-rated station in San Antonio, Texas. A station executive wanted to bring in more money, and he came up with a plan. He'd tell a news reporter to go rustle up a story about a local business and put it on the air. Then the business would get a call from the station. Perhaps it might be interested in buying some commercials? Clever!

"We were in the business of sales; we were not in the business of programming," the executive helpfully explained.

"Of course all businesses are in business to make money," Foege said in an interview. "The difference in the radio business was that in the '70s and early '80s, a lot of radio stations were mom-and-pop operations, kind of a vicarious way for people to feel like they were in the entertainment business. Clear Channel never looked at it that way."

Instead, the company thought its advertisers were its most important customers, with listeners bringing up the rear.

"They started to regard content as not having any value, other than as what played between the commercials," Foege said.

The tiny Clear Channel company grew and grew over the years. Eventually, it encompassed 1,200 radio stations plus sidelines in television, billboards and concerts. In San Diego, Clear Channel managed to control an eye-popping 14 of the 30 most high-rated stations.

Clear Channel was riding high in the late 1990s and the early 2000s. But live and local programming started to disappear, the victim of the Profit, er, Prophet System. And Clear Channel started becoming a villain as commercial radio seemed to decline in quality.

Stay tuned next week for the rest of the story.

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Conservative talk-show host Glenn Beck is on the rise at KFMB-AM, while Bill O'Reilly got the bum's rush to a less desirable time slot.

The 44-year-old Beck, one of the rare conservative talk-show hosts who's not eligible for AARP membership, is now heard from 9 a.m. to noon. O'Reilly has moved to the 6 to 8 p.m. shift, when fewer people tune in. Both hosts are nationally syndicated and veterans of cable TV.

Randy Dotinga is crumbling under the pressure of having to write something amusing down here every week. E-mail your condolences to NCTimesRadio@aol.com.

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