Clear Channel expects to complete the spinoff of its entertainment division and offer 10% of its outdoor division as an initial public offering before the end of the year.
The moves, say those familiar with the father-son businessmen, mirror their professional personalities. Lowry was always the deal maker and Mark, a Columbia University business-school grad who cut his teeth in investment banking, is the strategy wonk, the one who's spent the last year devising a plan to better grow the businesses organically. (Younger brother Randall is the company's chief financial officer.) Breaking off entertainment will create a more focused company-and offer stockholders a dividend at a time when Clear Channel's revenue has struggled, mostly due to its dropping inventory at its 1,200 radio stations in an attempt to de-clutter radio.
Even with the assets technically separate, the younger Mays said, "we realized we can still have all the benefits of being one company because of the relationships we've built across company lines."
The deconsolidation comes at a time when other major media companies are exploring similar tactics. Yet despite all the changes at his company, Mark Mays has been adept at staying away from the spotlight. That's due partly to the fact Clear Channel calls the low-key San Antonio home and partly to the fact he regularly lets his deputies step up and introduce major company initiatives.
At the radio group, for example, John Hogan has largely been the public face of "Less is More," the name Clear Channel gave its advertising inventory reduction plan. But Mark Mays has stood by and backed Mr. Hogan's plan even as radio revenue struggles while the market place adjusts to the change.
In third quarter, for example, Clear Channel's radio revenue was down 4.3% and on a recent earnings call the younger Mr. Mays acknowledged that Clear Channel's fourth-quarter revenue was also trending down by about 5% to 6%. He said, however, a crude analysis stripping out the $30 million in fourth-quarter 2004 political revenue shows radio trending down about 1% to 2%.
Mark Mays also sees an upside in terms of how consumers are embracing the initiative. In the 30 markets whose summer ratings books are complete, Clear Channel's share for listeners aged 12 and higher improved 4%. The gains in the 18-to-34-year-old demographic proved to be more dramatic, rising 6%. Regardless of revenue, his commitment to the strategy remains unwavering.
"The good news ... is that we're such big shareholders in the company and we plan on being here for more than three months," he said. "This was a five- to 10-year strategy, not a six- to nine-month one."
"Mark was visionary with the inventory decision," said Peter Smyth, CEO of Greater Media. "It took a lot of courage to take that to Wall Street. ... I'm encouraged that a guy like that is running a company like that at this time in the radio industry."
The brightest spot in Mark Mays' company these days is the outdoor business, which swelled 11% during third quarter. The company is in the midst of executing its first global media buy-running a worldwide campaign for UNICEF's AIDS initiative-and has more than doubled the amount it initially estimated the IPO would reap, to $885 million.
In the world of media, where he said radio competes with computers, cellphones and satellite services, "the only TiVo button for outdoor is the accelerator pedal in your car."
What was your first job within the company? First job was at age 14 when I built out a radio station working as a construction worker. After that I spent a summer cleaning and carding up tapes and machines. But I don't think I got paid for any of those jobs. My first job on payroll was in 1989 when I came on as treasurer.
Talk or music radio? About 60% to 70% of the time it's talk, about 20% of the time I listen to country and about 20% of the time my kids have control of the dial and I have no idea what is on.
Best concert you've ever been to? The Rolling Stones has been one of my favorite artists. Brooks and Dunn is another favorite. I'm a big believer in live entertainment; you can't replace it.
Best thing about living in San Antonio? My wife lives here. Also, it's a big enough city to have everything you need but small enough that you know everyone. It's a great place to raise a family.
This Thanksgiving, will the talk be all about work? As soon as we get around the Thanksgiving table my mother gavels it down and said there will be no discussions of work anymore. ... At least for two hours she tries to quiet us up.
Hobbies outside of work? I've got six kids. Between them and work, I don't have any time for hobbies.