The street is abuzz with news that parent company Clear Channel Communications is ready to unload Clear Channel Entertainment, its concert promotion arm. CCC's recent 3Q fiscal reports again showed CCE performing poorly–revenues declined 17.7 percent and cash flow was down 20 percent–from last year.
The New York Post has reported that CCC has had talks to sell off its entertainment division and even lists two potential buyers: Anschutz Entertainment, the parent of Concerts West, and Robert Sillerman, who sold SFX to CCC in 2000. Sillerman even told the paper that he heard his old company might be for sale but feels it is just a rumor.
"I don't believe it's for sale," Sillerman told the Post. "I think it's just wishful thinking from potential acquirers. Investment bankers get paid to cook up ideas. I've always believed that the proper home for the company is part of a larger enterprise."
"For the first eight-plus months of 2001, the entertainment business performed quite well (in
fact, it was our best performing business for the first nine months of 2001), " Randy Palmer, VP of Investor Relations for CC Worldwide, said in a statement. "We were seeing
positive signs in 2001. However, the events of 9/11 cut the knees right out from under
the entertainment business. During 2002, many artists entered the year concerned
about their security/welfare and were concerned about the overall U.S. economy. There
is no secret that 2002 has been a recovery year for the entertainment group (as you
know other entertainment groups have experienced the same). We feel, based on our
current discussions with artists and overall performance at the end of 2002, that there
are positive signs for 2003. Clear Channel continues to invest in venues, innovative
products and new ways to drive revenue aside from our portion of ticket sales. It is still a
business that we are excited about and believe has promise for 2003 and future years."
Clear Channel says it has not had any discussions with potential buyers nor is the division up for sale. However, sources told the Post that investment bankers have had informal discussions with potential buyers.
Wall Street insiders feel CCE is valued at about $2 billion or roughly half of what Sillerman sold SFX to CCC for.