House Subcommittee Probes Media Company Buyouts
March 11, 2008 at 11:43 AM (PT)
A House Energy and Commerce subcommittee on TUESDAY examined whether recent private buyouts of telecommunications and media companies serve the public interest. The subcommittee was particularly interested in looking at whether the interests of the local community are being met or rolled back after such a buyout. It also examined diversity, disclosure requirements and other issues.
BOSTON-based private equity firms THOMAS H. LEE PARTNERS and BAIN CAPITAL are leading a group of investors to buy CLEAR CHANNEL COMMUNICATIONS INC. for $19.5 billion. The deal, which was approved last month by the Justice Department, is expected to close by MARCH 31st. Although the market has been nervous about the buyout closing as the credit turmoil made financing large leveraged deals tough to do, THOMAS H. LEE Managing Dir. RICHARD BRESSLER told theTelecommunications and Internet subcommittee, "We continue to be confident that the CLEAR CHANNEL deal is going to get done."
We continue to be confident that the Clear Channel deal is going to get done.
CLEAR CHANNEL is among several high-profile buyouts of communications companies. UNIVISION COMMUNICATIONS INC., which was bought by a group of private equity firms a year ago.
Another witness, JOSH LERNER, a HARVARD Business School professor specializing in private equity, discussed the investments that private equity firms make in companies they acquire, particularly in spurring innovation. "It's not that they're investing more in innovation, but they're investing smarter and, as a result, getting a lot more bang for the buck," he said.
He expects firms will continue to buy or invest in communications companies, such as radio and newspapers, which present an opportunity to invest in the Internet and other technologies.