Billion-Dollar Deal Shows Entertainment
Clear Channel Communications, Inc.’s purchase of New York-based SFX Entertainment Inc. last week could tighten marketing ties in San Diego, where both companies have solid footholds.
Nationally, the $4.4 billion, mega-entertainment deal marks the entrance into the concert business for San Antonio-based Clear Channel, which is dominant in the media advertising industry.
In San Diego, Clear Channel owns eight stations, and programs and sells advertising for three others. It also owns outdoor advertising giant Eller Media Co., which has a large local presence.
SFX, considered the largest diversified concert promoter and producer with 120 live entertainment venues, signed an exclusive booking agreement with the San Diego Sports Arena last month.
The companies’ mingled resources in San Diego could make for lucrative advertising and programming deals.
“It makes it a little nicer for us when it stays in the family,” said Mike Glickenhaus, vice president and market manager for the FM stations Clear Channel owns in San Diego.
Among them are alternative station XTRA-FM, called 91X, KIOZ Rock 105 and KHTS Channel 933, with a Top-40 format. Nationally, Clear Channel operates 867 radio stations, 19 TV stations, and Premiere Radio Networks, which produces syndicated programming such as “The Rush Limbaugh Show.”
The “family” already works together in multiple ways. SFX’s radio division, called SFX Network, sells syndicated programming that sometimes appears on local Clear Channel stations, Glickenhaus said.
For advertising concerts, Glickenhaus expects to deal with all concert promoters. He describes the issue as “cut and dry,” based on a station’s demographics rather than its corporate connections.
SFX announced a few weeks ago that it is bringing pop-phenom Britney Spears to San Diego in August. KHTS, which has younger listeners, held a promotional weekend for it last month.
“Obviously Channel 933 is the station that makes sense to be involved in a Britney Spears show,” Glickenhaus said. “Whether it was an SFX or House of Blues show,” he continued, referring to another major concert company, “Channel 933 would still be the right station. We wouldn’t sell the spot to SFX any cheaper.”
The marketing possibilities are still being discussed by Clear Channel and SFX management, Glickenhaus said.
“You never say never, especially in this day and age,” he said. “There’s all kinds of ways to compound the sponsorship opportunities for an advertiser.”
One way could go beyond an advertiser simply sponsoring a venue and getting commercial airtime, Glickenhaus said.
A more involved package could be advertisers sponsoring a concert and having a certain amount of radio advertising on multiple stations, signs at the venue and tickets for the advertisers to entertain their own clients, he said.
Sponsorship packages for concerts at the 13,700-person capacity Sports Arena are possible. The two-year booking agreement between SFX and the venue’s management company, Arena Group 2000 LLP, has them finding sponsors for the concerts and dividing the revenue, said General Manager Ernie Hahn II. Representatives from SFX did not return phone calls.
SFX’s Avalon Attractions currently handles the Sports Arena concert bookings from its Los Angeles headquarters.
For his part, Hahn is bullish on the merger.
“It can do nothing but enhance the relationship that we’ve already entered into (with SFX),” he said. “It just seems like it’s taken the relationship to the next level.”
Before his deal with SFX, Hahn’s company booked and promoted concerts in-house, buying advertising space on radio and other media.
Now, when SFX brings a concert to town, they buy the airtime, he said. Hahn expects that SFX will work with Clear Channel when possible, not that they didn’t before.
SFX will have more incentives than ever to work with Clear Channel, he said.
“They’re part of the same organization now,” he said.