The new owners of radio giant Clear Channel Communications will next week begin implementing a massive restructuring plan that seeks to cut $400 million in costs at the company, The Post has learned.
According to three sources with knowledge of the plan, the restructuring will include layoffs across the company’s radio, outdoor advertising and international divisions as well as cuts to programming budgets and consolidation of back-office operations.
A precise headcount for the layoffs could not be obtained. Clear Channel has about 30,000 employees worldwide.
The company is also likely to move toward a “national programming” model that would require less local-level staffing, despite being criticized in the past for a similar action using centralized disc jockeys that made it appear as though they were broadcasting from local stations.
Sources said an initial round of layoffs is expected to commence next Tuesday – not coincidentally the same day President-elect Barack Obama is to be sworn into office. Clear Channel managers are hoping they can slip in the layoffs while the press is preoccupied with Inauguration Day festivities, sources said.
A Clear Channel spokeswoman declined to comment.
“Clear Channel was built through a series of acquisitions that generally weren’t consolidated very well,” said one source, alluding to the late ’90s buying spree that put more than 1,000 stations under the Clear Channel umbrella, making it the nation’s largest radio company.
To be sure, Bain Capital Partners and Thomas H. Lee Partners took a hard look at Clear Channel’s expense base in the due diligence phase of their $17.9 billion acquisition, and identified hundreds of millions of dollars of costs that could be taken out of the company. While they always planned to restructure the company, sources said that the soured economy forced them to expedite the timeframe for the cuts.
“Nothing about our plans have changed except for the speed and timing of them,” said the source. “There’s no doubt we are in a horrible advertising environment, and we can’t just sit there and take it.”
The numbers bear out that argument. Radio ad spending fell almost 9 percent through the first three quarters of 2008, the second worst-performing category after newspapers, according to ad-spending tracker TNS Media Intelligence. Fourth-quarter ad-spending numbers have yet to be tabulated, but many are expecting a low- to mid-double-digit decline.