The Telecommunications Act of 1996 substantially changed the rules concerning ownership of the public airwaves because the FCC eliminated most ownership restrictions on radio. As a result, 2,100 stations and $15 billion changed hands that year alone. From 1995 to 2005, the number of radio station owners declined by one-third, from 6,600 to about 4,400.²⁰

TABLE 5.3

TOP TEN RADIO COMPANIES (BY NUMBER OF STATIONS), 2013

Sources: The 10-K annual reports for each radio company.

Once upon a time, the FCC tried to encourage diversity in broadcast ownership. From the 1950s through the 1980s, a media company could not own more than seven AM, seven FM, and seven TV stations nationally, and only one radio station per market. Just prior to the 1996 act, the ownership rules were relaxed to allow any single person or company to own up to twenty AM, twenty FM, and twelve TV stations nationwide, but only two in the same market.

The 1996 act allows individuals and companies to acquire as many radio stations as they want, with relaxed restrictions on the number of stations a single broadcaster may own in the same city: The larger the market or area, the more stations a company may own within that market. For example, in areas where forty-five or more stations are available to listeners, a broadcaster may own up to eight stations, but not more than five of one type (AM or FM). In areas with fourteen or fewer stations, a broadcaster may own up to five stations (three of any one type). In very small markets with a handful of stations, a broadcast company may not own more than half the stations.

With few exceptions, for the past two decades the FCC has embraced the consolidation schemes pushed by the powerful National Association of Broadcasters (NAB) lobbyists in Washington, D.C., under which fewer and fewer owners control more and more of the airwaves.

The consequences of the 1996 Telecommunications Act and other deregulation have been significant. Consider the cases of Clear Channel Communications and Cumulus, the two largest radio chain owners in terms of number of stations owned (see Table 5.3 above). Clear Channel Communications was formed in 1972 with one San Antonio station. In 1998, it swallowed up Jacor Communications, the fifth-largest radio chain, and became the nation’s second-largest group, with 454 stations in 101 cities. In 1999, Clear Channel gobbled up another growing conglomerate, AMFM (formerly Chancellor Media Corporation). Due to the recession, Clear Channel shed some of the 1,205 stations it owned at its peak in 2005. Today, it owns 840 radio stations and about 750,000 billboard and outdoor displays in the United States and around the world, and an interest in about 140 stations internationally. Clear Channel also distributes many of the leading syndicated programs, including The Rush Limbaugh Show, The Dan Patrick Show, On Air with Ryan Seacrest, Delilah, and The Bob & Tom Show. Clear Channel is also an Internet radio source, with iHeartRadio. (See “What Clear Channel Owns” at right.) Cumulus became the second-largest radio conglomerate when it merged with Citadel in 2011 in a $2.5 billion deal and bought radio network service Dial Global (now Westwood One) in 2013.

Townsquare Media, launched in 2010 with the buyout of a 62-station group, grew to 312 stations by 2013 by focusing on acquiring stations in mid-sized markets. Another major radio group, CBS Radio, is also one of the leading outdoor advertising companies in the nation, competing with Clear Channel. CBS streams all of its stations on the Internet through its Radio.com site. It also owns Last.fm, a popular music streaming site.

Combined, Clear Channel, Cumulus, Townsquare, and CBS own roughly 1,700 radio stations (more than 11 percent of all U.S. stations), dominate the fifty largest markets in the United States, and control about one-half of the entire radio industry’s $16.5 billion revenue. As a result of the consolidations permitted by deregulation, in most American cities just a few corporations dominate the radio market.

A smaller but perhaps the most dominant radio conglomerate in a single format area is Univision. With a $3 billion takeover of Hispanic Broadcasting in 2003, Univision is the top Spanish-language radio broadcaster in the United States. The company is also the largest Spanish-language television broadcaster in the United States (see Chapter 6), as well as being the owner of the top two Spanish-language cable networks (Galavisión and Telefutura) and Univision Online, the most popular Spanish-language Web site in the United States.