Just three weeks after closing the $4.7 billion, tax-free stock-for-stock swap purchase of SFX Entertainment, Clear Channel Communications says it's $16.6-$23 billion* stock swap for radio broadcaster AMFM could be completed sometime next week. The completion of the AMFM deal will cap a year of corporate acquisition that included the transfer of ownership of SFX Theatrical.
Clear Channel is selling off certain stations as a condition of requisite FCC approval of the deal.
A Clear Channel spokesperson told Playbill On-Line that, "The stations that we are currently divesting are required by the FCC and the DOJ as part of our agreement to merge with AMFM. We are doing that as we speak. It's roughly 120 stations that we are going to have to divest in total." The spokesperson said the 120-station figure include previous agreements that AMFM had "originally stated before we announced the merger with them."
"Once we have completed those requested divestitures," the spokesperson said, "we will provide that list to the Department of Justice and hopefully [they will] be able to sign off on it by early next week and we'll be able to close our deal with AMFM by the middle of next week." Once Clear Channel finalizes its $16.6-$23 billion AMFM deal, the company will operate a total of 874 radio and 19 television stations in the United States and will have equity interests in over 240 radio stations around the world. In its other significant business, Clear Channel operates more than 700,000 outdoor advertising displays, including billboards, street furniture and transit panels.
The theatre angle here involves Clear Channel's SFX, which bought up many of the theatres and theatrical properties once owned by Livent, which went up for sale when the latter dissolved in the wake of alleged financial improprieties on the part of former Livent head Garth Drabinsky. Clear Channel's investment in SFX represents the increasingly corporate climate of Broadway theatre. As reported on Feb. 29, the multi-billion dollar SFX stock-swap calls for "each SFX class A share to be traded for 0.6 of a Clear Channel common share and each SFX Class B share to be swapped for one Clear Channel share."
On Aug. 1, Clear Channel reported that its shares closed at 78-1/4, up 2 1/16 for the day on the New York Stock Exchange. On Aug. 4, Clear Channel was trading at 77 15/16. The company's 52-week range is 57 7/8 - 95 1/2. At the time, SFX was trading at 47 1/16, based on a 52-week range of 25 - 49 3/16.
On Aug. 25, Clear Channel was trading at 75 5/16, based on a 52-week range of 57 7/8 - 95 1/2. SFX was trading at 47 1/16, based on a 52-week range of 25 - 49 3/16.
After an aggressive acquisitions campaign in sports and entertainment, SFX Entertainment established an early lead in marketing “live experiential” events. SFX develops and manages touring Broadway shows, and sells Broadway subscription series and individual productions in 55 markets. An integrated franchise that promotes and produces a broad variety of live entertainment events locally, regionally and nationally, SFX has 122 venues overall, and owns or operates venues in 31 of the top 50 domestic markets.
The growth of Clear Channel and SFX continued Aug. 25 with the announcement that Clear Channel had "signed an agreement to acquire KUUL-FM, KMXG-FM, KCQQ-FM, WLLR-FM, WLLR-AM, AND WOC-AM in Davenport, Iowa from Mississippi Valley Broadcasting, Inc., an affiliate of Sconnix Broadcasting, LLC, for the purchase price of $85 million."
Like similar deals over the past year, this transaction is subject to regulatory approval. In past weeks, Clear Channel has acquired other radio station assets in Maine, Texas and North Dakota representing a total investment of roughly $214.8 million. According to Clear Channel's quarterly report issued Aug. 14, "The company did not sell any stations during the first six months of 2000."
* [Reports vary on the exact value of the AMFM stock-swap deal; the current range goes between $16.6 and $23 billion.]
-- By Murdoch McBride