March 19, 2000
What? A Quiet Texas Billionaire?
By ROBERT BRYCE
hen it comes to Texas billionaires, L. Lowry Mays doesn't seem eccentric enough. Sure, he has a ranch or two, and he takes some nice vacations with
a little hunting and fishing thrown in. But he just doesn't live as large as some of his peers. No monstrous mansions, helicopters or yachts. And no trophy wives or stop-and-start presidential campaigns.
Indeed, Mays, 64, is among the richest but least-known media tycoons in the land.
As chairman and chief executive of Clear Channel Communications, however, Mays has provided his stockholders with gaudy returns, averaging 64 percent a year over the last decade.
The company, based in San Antonio, is already the world's largest owner of billboards and, with its agreement last October to buy AMFM Inc. for $17.4 billion, it will be the world's largest owner of radio stations,
too. The deal-making continued on Feb. 29, when Clear Channel agreed to buy SFX Entertainment, a concert producer, arena owner and sports promoter, for $3.3 billion.
The two deals are the latest of the media acquisitions that began in 1972, when Mays and Red McCombs (now owner of the Minnesota Vikings) bought a struggling San Antonio radio station. For Mays, buying media properties was
always more about considerations like free cash flow than a chance to hang out with celebrities. He soon saw the efficiencies, and the attractiveness for advertisers, to be gained from consolidation.
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Susan Greenwood for The New York Times
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At Clear Channel Communications, L. Lowry Mays has built a vast collection of radio, billboard and other media properties.
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Mays now oversees a media empire upon which the sun never sets, from gospel radio in Greensboro, N.C., to billboards in Beijing. Including pending acquisitions, the company will have operations in 32 countries and will own
or have stakes in 19 television stations, 550,000 billboards and 110 entertainment venues.
It will also own all or part of 1,100 radio stations, although some are being sold to satisfy regulators. For dessert, it will use SFX's agents to handle elite sports figures like Michael Jordan and Andre Agassi.
Even so, Mays presents himself as a modest sort. "I'm not concerned with how big we are," he said. "I'm not even sure I know what big means." Of course, in expanding the company, he has proceeded
with a good deal of calculation.
He buys radio and TV stations and billboards in the same market, then cuts costs and sells advertising packages across the three media. With radio stations in most major markets, Mays can deliver audiences that were once available
only on prime-time television.
But Mays is starting to hear some static. Media buyers have begun complaining about the company's advertising rates, which, they say, have risen in recent months. The higher tariffs have led some advertisers to desert.
Kevin Gallagher, the media director at Starcom Worldwide, a unit of the Leo Group, the ad agency based in Chicago, said he recently advised a client to switch to television. Although Gallagher would not criticize Clear Channel's
rates, he said, "at a certain point radio isn't worth it."
Despite his reservations, Gallagher said Clear Channel offered an attractive one-stop-shopping option combining outlets like billboards and the Internet.
Other criticism comes from outside the industry. Andrew Jay Schwartzman, president of the Media Access Project, a public interest law firm that promotes broad access to electronic media, says Clear Channel's economies
come at a cost. "They are done at the expense of local news and public affairs programming," he said.
Mays says those objections are misplaced. "We are doing more public service work within our communities than we ever have before," he said.
While Clear Channel's growth has caused some controversy, Mays' personal exploits are unlikely to stir much attention. A Dallas native who speaks with just a hint of a twang, he received a petroleum engineering degree
from Texas A&M and an MBA from Harvard. He has been married to his wife, Peggy, for 40 years.
They live in a comfortable, if not lavish, five-bedroom house in San Antonio. On weekends, they often retreat to a 2,000-acre ranch near Spring Branch, 40 miles north of San Antonio, where they raise registered longhorns. They
spend much of their free time with their four children and 10 grandchildren.
Mark, 36, is Clear Channel's president and chief operating officer. Randall, 34, is its chief financial officer and Kathryn Mays Johnson, 39, is director of communications. Linda Mays McCaul, 38, doesn't work at the
company.
As the owner of 30.3 million shares of Clear Channel stock worth about $2.08 billion, Mays plans to give away much of his fortune. So far, his pet causes have been local or regional, including gifts to Texas A&M and to
the M.D. Anderson Cancer Center in Houston.
He and his wife have started a foundation that now has $25 million in assets; he hopes it will grow to $250 million. But Mays isn't ready to focus full-time on philanthropy just yet.
Instead, he is preparing Clear Channel for an assault on the Internet. By the end of next year, Mays predicted, all the Web sites of the company's radio stations will have streaming audio. That, combined with SFX's
concerts, could let it offer pay-per-view concerts over the Web.
Mays says the Internet will become a growing source of advertising revenue for the company. "We have 110 million people a week listening to our radio stations," he said. "That's damn near half the nation.
If we can move a portion of those listeners to our Web sites, we have the power to create more traffic than anyone else on the Net. We will have the most active Web sites in the country," he said.
Given investors' frenzied embrace of Internet stocks, Mays hopes the company's recent and future moves will help buoy Clear Channel's stock. It slumped after the SFX announcement, as some analysts questioned
whether the deal would pay off.
And for Mays, the chance to hang out with rock stars is not much of a payoff, either. Nor with most of the sports stars. "I'd be embarrassed to play tennis with Andre," he said, but conceded: "I wouldn't
mind playing golf with Jordan."
