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Rough on Rivals
Clear Channel's antitrust woes.
By Arlyn Tobias Gajilan

(FORTUNE Small Business) – Clear Channel has long been accused of using its size, success, and political clout to the detriment of small competitors. The company's critics aren't hard to find. Online tirades pop up on websites such as Clearchannelsucks.org. And on Capitol Hill, Senator John McCain has expressed interest in a Ma Bell-style breakup of the company, whose programming--on radio, TV, billboards, websites, and live events--reaches about 75% of U.S. adults.

Clear Channel founder Lowry Mays, 69, and his sons, Mark, 41, and Randall, 39, together donated $115,000 to President Bush's reelection campaign. A former Clear Channel attorney, Charles James, ran the U.S. Justice Department's antitrust division in 2001-02. Clear Channel officials declined FSB's requests for interviews, but in the past they have denied antitrust allegations and characterized Clear Channel's legal troubles as normal for a company its size. Those troubles include the following.

» As FSB (owned by another large media company, Time Warner) went to press, Clear Channel was in a Chicago courtroom defending a $10 million lawsuit filed in 2002 by JamSports, a Chicago-based dirt-bike-racing promoter. The suit claims that Clear Channel threatened to pull all its concerts and other shows from stadiums that booked JamSports events.

» The Justice Department is pursuing two separate antitrust investigations into Clear Channel. One looks into complaints that the company limited radio airplay of artists who did not use its concert and promotion services. The other focuses on Clear Channel's extensive radio network in San Diego, where it controls 45% of the market, owns eight stations, and has operating agreements with three others. The Justice Department is examining whether Clear Channel used anticompetitive tactics to achieve and maintain its dominant position.

» Spanish Broadcasting System, a network of 19 radio stations headquartered in Coconut Grove, Fla., was set to merge with Dallas-based rival Hispanic Broadcasting Corp. in 2002. But at the last minute HBC called off the deal and announced that it was being acquired by Univision instead. SBS filed an antitrust suit against HBC and Clear Channel, which owned 26% of HBC's stock. The suit alleged that Clear Channel and HBC had hurt Spanish Broadcasting's reputation and ability to raise capital, depressed its share price, and interfered with business opportunities. The case was dismissed in January 2003.

» Nobody in Particular Presents, a tiny, 25-person local-concert promoter in Denver, struggled to compete with Clear Channel, which owns eight of the city's radio stations and most of the nearby arenas. In 2001, NIPP filed suit, alleging that Clear Channel violated antitrust laws by leveraging its radio playlists and promo airtime to freeze out competing promoters. The case was settled out of court last year for an undisclosed sum.