Clear Channel has stake in auto industry’s bailout, radio vets say
San Antonio Business Journal - by W. Scott Bailey
The big-three U.S. automakers are seeking a multibillion-dollar bailout from Congress. And at least one of them, General Motors, is seeking radio industry support for such assistance.
Clear Channel Communications Inc. won’t comment on the potential bailout or whether it supports such a plan.
But more than one veteran radio industry expert says the San Antonio-based broadcaster has a vested interest in the auto-industry bailout talks.
The Radio Advertising Bureau (RAB) is the sales and marketing arm of the radio industry, representing some 6,000 stations.
It tracks industry ad revenues on a monthly basis.
RAB’s most recent report shows that local radio ad revenues were down 11 percent nationally in October, while national spot revenues were down 1 percent.
Clear Channel says its third-quarter 2008 radio revenues were down nearly $66 million from the same period in 2007. And company officials attribute the decline to an overall weakness in advertising — with decreased automotive spending as one of the key areas of concern.
While Clear Channel is tightlipped on the auto-bailout talks, veteran industry insider Tom Taylor of Radio-Info suggests the company has a dog in the fight.
“I think Clear Channel and all radio operators have a stake in this,” Taylor says.
Another longtime industry expert — iN3 Partners Inc. co-founder Robert Unmacht — says what’s best for the auto industry is what’s best for radio.
“Auto advertising is a big part of radio,” he says.
Seeking support
RAB recently posted on its Web site a letter from GM seeking support for its efforts to obtain federal financial assistance.
In that letter, GM warns that U.S. automakers now face “the worst economic downturn since the Great Depression and the worst car sales since World War II.”
The missive, according to a RAB official, went to other organizations, too. And it was signed by Betsy Lazar, executive director of advertising and media operations for GM, who writes: “Because car makers are so tightly woven into the fabric of the U.S. economy, the collapse of this industry would reach far beyond Detroit.”
RAB President and CEO Jeff Haley posted his own note online above the GM letter.
“As you know, it is a challenging time for the auto industry. One of our great partners, General Motors, has reached out and asked for our help,” Haley writes. “I appreciate you giving this matter your attention.”
Taylor says the auto sector has “historically been the largest single advertising category for radio.”
He says auto has traditionally accounted for as much as 15 percent or more of the ad revenues for some radio markets and formats.
“There are literally markets where auto is 20 percent or more of the revenue,” Taylor adds.
So do Clear Channel and its competitors stand to gain from a bailout of troubled U.S. automakers?
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