NAB 2005: Mays’ Formula for Growth

Apr 18, 2005  •  Post A Comment

By Brad Pomerance

Lowry Mays, the chairman and CEO of Clear Channel Communications, who is being honored today by the National Association of Broadcasters with a Distinguished Service Award, combined his shrewd business sense with a reliance on local operators to build a vast media empire from the ground up.

Along the way, Mr. Mays foresaw and supported the government’s relaxing of its rules governing big media. This changing policy helped him parlay a borrowed investment in a single San Antonio FM radio outlet into TV holdings that include seven CBS stations, seven NBC affiliates, six ABC outlets, five Fox stations, eight UPN stations, three WB stations, two independent stations, one Pax affiliate and a Telemundo station-not to mention the dominant ownership position in U.S. radio today.

“Mr. Mays moved into television as an asset move,” said his partner Red McCombs, the Clear Channel co-founder, who helped scrape together the initial $125,000 investment that the nascent company used to purchase a lone San Antonio FM station in 1972. “We bought television stations that were independents, were not performing and were available at fire sale prices. They were value purchases.”

The creation of the Fox Network in the mid-1980s allowed Clear Channel to take some of those TV station castoffs, which had been running a hodgepodge of inexpensive programming, and turn them into a virtual gold mine under Rupert Murdoch’s umbrella.

“Mr. Mays flipped many of those ‘video jukeboxes’ into Fox affiliates,” said William Moll, president and CEO of Clear Channel Television.

When the Telecommunications Act of 1995 permitted duopolies for the first time, Clear Channel scooped up still more failing stations, bolstered them economically by tying their operation to strong sister stations in the same market, and in some cases accepted affiliate agreements with the emerging UPN and WB netlets.

“Mr. Mays was a believer in the duopoly long before most others,” said Steve Spendlove, regional VP, Central Coast, for Clear Channel Television.

His financial ties to the Republican Party and his appetite for growth have made Mr. Mays a controversial figure, at times criticized by members of Congress and public interest advocates, but Mr. Moll said, “Mr. Mays does not take the attacks [against him] personally. He believes that people of good will can disagree.”

Clear Channel is now one of the largest media companies in the world, but its management philosophy has stayed the same. “Some things will never change,” Mr. Spendlove said. “Mr. Mays has always allowed local operators to run their television stations. He has always said that we should not look to San Antonio [Clear Channel’s corporate headquarters] for answers. Look to the local market for the answers,” he said.

Mr. Mays suffered a stroke last year but by all accounts is doing well. “His health is excellent,” Mr. McCombs said. “He is in the office every day. He is in a wheelchair half the time, but he makes decisions and still barks orders.”