The company began with the 1972 purchase of a struggling San Antonio, Texas, FM station for $130,000 by L. Lowry Mays and B.J. "Red" McCombs. Station KEEZ (later KAJA) operated for a number of years under San Antonio Broadcasting, the original company name. Three years later, Mays purchased WOAI-AM, a pioneering operation that had first gone on the air in 1922. (McCombs retains a 2.5% ownership in Clear Channel Communications. As of early 2003 he owned a number of car dealerships as well as the NFL Minnesota Vikings.)

     Clear Channel Communications was incorporated in 1974 and grew quite slowly at first, becoming a publicly traded firm in 1984 and owning a dozen stations in several markets a year later. Clear Channel used a simple formula: buy low-priced stations, build up their revenues while controlling costs, and operate conservatively. By 1990, the company had expanded into television station ownership as well, but it was still just one of a host of group owners of broadcast stations.

     Federal Communications Commission (FCC) deregulation of limits on radio station ownership after 1993 fueled the first burst of Clear Channel station purchases, but the 1996 Telecommunications Act provided the key for the huge expansion of Clear Channel. By June of that year, it became the first company to own more than roo stations. Many of its takeovers involved one or two radio stations at a time; bigger multi-sta­ tion deals would come late in the decade. By 1997, CEO Mays was about halfway up Forbes magazine's list of the 400 richest Americans.

     The October 1998 takeover of Jacor Communications (then the second-largest owner of radio stations with 230 outlets) in a h.8 billion stock deal moved Clear Channel toward the front of the radio owner pack. The transaction made Clear Channel the country's second-largest owner in number of stations and the third in total radio revenues. By 1999, radio provided 53 percent of total company revenue; billboards brought in 47 percent. Clear Channel also held equity interests in about 240 foreign radio stations, including outlets in Australia, Denmark, Mexico, and New Zealand.

     In an agreement announced in October 1999, Clear Channel paid $23.5 billion to take over AMFM Inc. which owned 444 stations-320 FM and 124 AM stations. Combined with what Clear Channel already owned, this deal made it the largest group owner of stations in terms of numbers of outlets and revenues. But the deal also required the sale of about 210 stations collectively worth $4.3 billion to meet government limits on station ownership in individual markets. Early in 2000 the first 88 stations were sold to 17 companies, seven of which were minority-controlled. Early in 2000, Clear Channel Communications also purchased SFX Entertainment (a concert and sports producer and owner of a number of arenas) for $3.3 billion. The 19 March 2000 issue of The New York Times noted that "the company will have operations in 32 countries, (including] ... 550,000 billboards and 110 entertainment venues. It will also own all or part of 1,100 radio stations, though some are being sold to satisfy regulators."

     Clear Channel's brand of advertising synergy-selling combined advertising packages across radio, television, aad billboards, especially in markets where it owns stations and billboards (virtually all of the cities where it also owns theaters and arenas)-has clearly played a major factor in its success. Company business strategy, as stated in its 1999 10-K filing with the Securities and Exchange Commission, makes clear the value of growth through acquisition and ownership of multiple stations in the same market:

We believe that clustering broadcasting assets together in markets leads to substantial operating advantages. We attempt to cluster radio stations in each of our principal markets because we believe that we can offer advertisers more attractive packages of advertising options if we control a larger share of the total advertising inventory in a particular market. We also believe that by clustering we can operate our stations with more highly skilled local management teams and eliminate duplicative operating and overhead expenses. We believe that owning multiple broadcasting stations in a market allows us to provide a more diverse programming selection for our listeners.

 

     While the company's very size (1,214 stations, of which 485 are in the 100 largest markets, with a total weekly audience of nearly 105 million as of mid-2002, generating $8.4 billion in annual revenue) attracted criticism and not a little carping from industry competitors, Clear Channel attracted further attention early in 2003 when it co-sponsored more than a dozen political rallies supporting the American incursion into Iraq. Stories criticizing these "Rally for America!" events first appeared on the internet and soon broke into general press reports. They argued the company was supporting the Bush administration just as the FCC was considering changes in radio ownership rules. They also felt Clear Channel stations were programming in similar fashion-a criticism the company firmly denied.