Fox Radio Deal Sends Signals: Is It Politics, or Just Business As Usual?

Television and radio broadcasters have always been strange bedfellows. And the latest TV/radio alliance - Fox News, which is getting into bed with radio giant Clear Channel Communications - may be strangest of all. Why? Because it's difficult not to read something beyond simple business into almost anything Fox News does.

If Clear Channel had struck an alliance with almost any other TV newscaster - say CNN, Reuters, or even the BBC - it might have been seen as a simple cross-media story about two logical players aligning for a common purpose. But when Fox News announced a deal to become the primary news provider to Clear Channel's radio stations, it got the attention of some other news organizations: the people who cover the media business.

"The teaming of Fox News and Clear Channel is sure to raise eyebrows among some media-watchdog groups," wrote Wall Street Journal reporter Joe Flint, pointing out that, "With about 1,200 radio stations, Clear Channel of San Antonio has become a lightning rod for concerns about consolidation in that industry. Fox News, for its part, often is accused of having a conservative bias."

Never mind that Flint went on to quote Clear Channel Radio CEO John Hogan ("We don't have a political agenda; what we have is an agenda to get the greatest number of listeners for the longest period of time."). The deal nonetheless seemed politically suspect because of Fox News' reputation for political conservatism and its desire to expand its reach beyond cable and satellite TV. In fact, Fox News Executive Vice President Jim Abernathy told Variety it was more of a defensive act than an offensive one, and was done in response to research that showed a large number of "talk radio" listeners watched Fox News Channel once they got out of their cars.

"We are looking to bring the flavor and personality of Fox News to radio," he said. "We want people to leave their home and get in the car and continue listening to Fox News Channel."

But according to the Associated Press, the deal may have had more to do with a simple advertising marketplace development than it does with any of Clear Channel's political aspirations.

"Experts also speculated that Fox might have won the deal by taking cash instead of barter. Often in the radio industry, providers such as Fox get advertising spots that they can resell," speculated the AP in a story that also pointed out how Clear Channel has been reducing its advertising time in an effort to curb clutter and boost its ad rates and that its dwindling supply of advertising inventory may simply have become too valuable for a conventional barter deal.

"Cash makes sense" for Clear Channel, David Bank, an analyst with RBC Capital Markets told the AP. "Rather than give away inventory that is getting more scarce, (Clear Channel) preferred to pay cash."

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