NY Times Report: Regulators Watching Equity Firms?

Media May Not Be Wall Street's Favorite... But Equity Buyers Love It

THE NEW YORK TIMES reports in TODAY's edition that while media companies may be unloved on WALL STREET, they have found big fans elsewhere.

The latest example is CLEAR CHANNEL COMMUNICATIONS. Yesterday, the company agreed to be acquired for $18.7 billion by THOMAS H. LEE PARTNERS and BAIN CAPITAL in the largest buyout ever in the media and entertainment industry, according to THOMPSON FINANCIAL.

Just a few months ago, two private equity groups were locked in a bidding war for UNIVISION COMMUNICATIONS. The winning consortium agreed to pay $12 billion for the company. Even amid the flurry of media deals, CLEAR CHANNEL stands out for its size. In a statement yesterday, CLEAR CHANNEL put a total value of $26.7 billion on the transaction, including $8 billion in assumed debt. Three weeks ago, CLEAR CHANNEL put itself up for auction after 22 years as a public company.

...the Clear Channel deal may be the first in which regulators will have to consider private equity owners as established players in some media markets.

"The market was not appreciating the equity, and we didn’t see that turning around," CLEAR CHANNEL CEO MARK MAYS said in an interview yesterday.

THOMAS H. LEE PARTNERS is part of the consortium that owns UNIVISION. BAIN, THOMAS H. LEE and BLACKSTONE are investors in CUMULUS MEDIA PARTNERS, which bought the radio broadcasting business of SUSQUEHANNA PFALTZGRAFF in MAY for $1.2 billion.

So the CLEAR CHANNEL deal may be the first in which regulators will have to consider private equity owners as established players in some media markets.

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