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Friday, April 29, 2005

Clear Channel Announces IPO

Today, the Clear Channel Communications radio conglomerate announced plans to spin off their entertainment division as well as 10% of their outdoor advertising business through an IPO. Clear Channel, despite their previous iron grip monopoly of the concert and radio industries, got on the nerves of certain artistic and consumer sectors (let’s call them ‘people of discerning musical taste', shall we?) by inflating concert ticket prices and dictating radio station airplay lists right into the territory of true homogeneity. Of course the ‘American Idol and Britney Spears loving’ pure vanilla crowd weren’t bothered by the shift – you never go broke pandering to the masses – but the name Clear Channel has grown synonymous with mass manufacturing and marketing of watered down musical entertainment.

Be that as it may, Clear Channel is offering a special one time $3 dividend to current shareholders as well as a 50% increase in its annual dividend. At market close on Thursday Clear Channel shares were trading at $32 per share (the company’s 52 week high is $43.44 and during 2000 the pps was closer to $80). The stock dropped 25% in the last year due to a ‘radio advertising slump’, and profits for the first quarter were down 59%. The company also just came off of one of the weakest years in terms of concert attendance revenues, and has begun to revert branding of live music presentations back to local promoters. The popularity of subscription based digital radio services such as XM Satellite Radio and Sirius Satellite Radio, as well as the amazing growth of the iPod and downloadable music solutions can probably take credit for a lot of the company’s decrease in revenues.

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