When Clear Channel expanded from 520 to more than 1,100 stations in 2000 the company became, almost overnight, the largest force in traditional radio. Clear Channel was seen as the unquestionable leader in the marketplace, influencing everything from innovations of technology to radio playlists. The media giant fueled fierce debates over the effect of consolidations on content and communities served, but the strictly financial strategy was mostly unquestioned. But heading into 2006, the industry seemed less sure whether bigger is the smartest financial move.

Number of Stations Owned by Top Broadcasting Companies

Rank	Owner	# of Stations	# of News Stations
1	Clear Channel Communications	1,190	136
2	Cumulus Broadcasting Inc.	303	33
3	Citadel Broadcasting Corp	225	24
4	Infinity Broadcasting	178	19
5	Educational Media Foundation	143	0
6	American Family Association Inc.	120	0
7	Salem Communications Corporation	104	22
8	Entercom	103	14
9	Saga Communications Inc.	86	13
10	Cox Broadcasting	78	6
11	Regent Communications, Inc.	74	8
12	Univision Communications Inc.	72	0
13	ABC/Disney	72	5
14	Radio One Inc.	69	3
15	NextMedia Group	59	6
16	NRG Media LLC	59	5
17	Entravision Holdings LLC	52	0
18	Nassau Broadcasting Partners LP	52	3
19	Family Stations Inc.	49	1
20	Three Eagles Communications Inc.	46	4

Source: BIAfn Media Access Pro
Number of News Stations based on number of stations including News as their primary format.

In 2004, there were some signs the answer might be no. Some radio groups further down the line in sheer physical size enjoyed overall ratings gains and, thanks to market positioning, greater revenues than some of their larger counterparts.

By 2005, one of the U.S.’s leading media companies appeared to be moving on the idea that smaller might be better. In June 2005 Viacom announced it would divide its massive cross-media holdings into CBS Corporation and a new Viacom. Infinity radio network would join UPN, Viacom Outdoor, Viacom Television Stations Group, Paramount Television, King World, Simon & Schuster, Showtime, Paramount Parks and the CBS Television network under the banner of CBS Corporation. The other company, operating under the Viacom name, would include the MTV Networks and their associated stations (VHI, Nickelodeon, Spike, TV Land), BET, Paramount Pictures, Paramount Home Entertainment and Famous Music. The divisions tailor Viacom into two more distinct entities. CBS Corporation is made up mostly of prominent, older technologies — book publishing, network television and radio, billboards, TV syndication. Viacom is made up, though not exclusively, of newer technologies — cable, video and music, with film thrown in.

Change in Stations Owned by the Top Companies

1999-2005

Design Your Own Chart [1]

Source: BIAfn Media Access Pro, unpublished data

* Top companies by number of stations whose holdings include news format stations.

The Viacom split by no means signaled a clear pattern. Other owners, particularly those more clearly invested specifically in radio, pushed to acquire a greater number of stations. Cumulus Broadcasting joined with other investors (Bain Capital, Blackstone Group and Thomas H. Lee Partners) to form Cumulus Media Partners and purchase the 33 radio station holdings of Susquehanna Radio.1 [2] In February 2006, Citadel finalized a $2.7 billion deal with Disney to purchase 22 Disney-owned radio stations and ABC Radio Networks (Disney kept Radio Disney and ESPN Radio).2 [3] In early October 2005, Clear Channel’s Mark Mays was similarly in the news for renewing his call for Congress to loosen ownership regulations. Mays, in a speech to the Progress and Freedom Foundation, reportedly proposed that “broadcasters be able to own 10 stations instead of eight in markets where there are at least 60 stations and up to 12 stations in markets where at least 75 radio outlets operate."3 [4]

A single company able to program multiple stations in a given geographic area, the reasoning goes, would be able to coordinate content to such a degree that it could capitalize on audiences seeking the same highly defined formats as they can currently find online or on their satellite receiver. Don’t just program a Spanish music station in Dallas ; program a Tejano station and a Spanish pop station and a Spanish-language sports station. With enough stations, an ownership group could do all this without having to lose the audience listening to the station that plays jazz or adult-contemporary English-language programming.

The question is whether size or diversification are important qualities in determining how well positioned a company is to survive the transformation from radio to audio. The new landscape is also leading some to seriously investigate, for the first time in a number of years, alternative programming.

Infinity’s4 [5] response to the approaching departure of Howard Stern,5 [6] which would leave slots to fill on 27 stations, offered one such kind of experiment. It announced in late October 2005 that it would create a pair of shows — one East Coast, one West Coast. The eastern show would be hosted by the former Van Halen star David Lee Roth and the western version by the comedian Adam Corolla (former star of “The Man Show” on cable’s Comedy Central and later of a comedy home improvement show on cable’s TLC). Other stations would fill in with several other, less nationally profiled programs.

The targeted or regional programming is a component of Infinity’s experiment with a new kind of radio content that it has dubbed “Free FM,” which the company describes as stations that “ will feature an eclectic mix of local and national personalities on a hybrid of provocative, political, pop culture, news, music and lifestyle formats.”6 [7]