Becker to exit CCE; joint-venture in the works.
In a surprising move, Clear Channel Communications has announced that it will spin-off 100% of Clear Channel Entertainment, the radio giant's live concert division it purchased as SFX in 2000 for $4.5 billion.
After separation, CCE will be a separate, publicly-traded company in which Clear Channel Communications will not retain any ownership interest.
In a parallel development, Brian Becker, who has served as CEO of Clear Channel Entertainment, has decided to pursue alternative entrepreneurial opportunities. Michael Rapino remains as CEO/president of global music.
As part of this decision, CCE and Brian Becker have agreed to form a joint venture company to pursue entertainment content opportunities through acquisition and development.
"I have tremendous admiration, respect and friendship for Lowry, Mark and Randall Mays and the entire Clear Channel family, and am very excited about the next phase of my relationship with them," Becker tells Billboard.biz. "Clear Channel is a fantastic company, with the best of the best in terms of people and assets, and I look forward to CCE's continued and greater success as the announced changes are implemented."
CCC executive VP/CFO Randall Mays is serving as interim CEO during CCE's transition to an independent company.
CCE, far and away the largest concert promoter, amphitheater operator and live entertainment producer in the world, will consist of entertainment operations throughout North America, Europe, South America, Asia and Australia, with annual 2004 sales of approximately $2.75 billion.
A CCC statement says "as a separate and largely unregulated public company, [CCE] will enjoy enhanced flexibility to pursue initiatives that can maximize its strategic and operating potential and will be poised to more effectively enhance shareholder value than under the current structure."
It adds, "this public currency will also enable [CCE] to better attract, retain and reward management and employees in alignment with its performance." Moreover, it says the spin-off will "help investors more clearly evaluate the inherent value of CCE by highlighting its strong leadership position and growth profile."
The CEO of CCE will report to a separate board of directors to be comprised of a majority of independent directors not overlapping with CCC's directors. It is anticipated that CCE's corporate headquarters will remain in Houston, Texas.
Prior to the spin-off, the company expects to submit a request to the Internal Revenue Service seeking a letter ruling regarding the tax-free nature of the spin-off.
As part of the announcement, CCC also says it will arrange an initial public offering of 10% of its outdoor division, a $3 per share special dividend, and a 50% increase in the company's recurring quarterly dividend.