Clear Channel

UNCLEAR CHANNEL

By MICHAEL RIEDEL


IT was the corporate giant that theater people feared would gobble up Broadway.

Clear Channel Communications, the global broadcasting and music company, became a powerful presence in the theater industry just five ago years after it snapped up SFX, an entertainment company that produced Broadway musicals and owned theaters around the country, including the Ford Center (now the Hilton Theatre) on 42nd Street.

Clear Channel expanded the SFX empire, opening theaters in Europe and America and pouring money into nearly every Broadway show of the last five years.

Independent producers chafed under Clear Channel's rule, complaining that the company, with its near total control of the lucrative road business, pretty much dictated the terms by which Broadway shows toured the country.

"They were bullies," one producer says.

"Thugs, actually," says a theater executive.

All that is changing.

After a rough couple of years, Clear Channel, whose stock price has sunk from a high of nearly $100 five years ago to around $30 today, is preparing to spin off its live entertainment unit, which includes its theater empire.

One of the chief architects of that empire - a shrewd, tough, colorful visionary named Miles Wilkin - has been pushed out of the company.

In the 1980s, Wilkin helped transform a small Texas company called Pace, which specialized in tractor pulls, into what eventually became Clear Channel's global theater empire.

In a twist worthy of "All About Eve," Wilkin has been replaced by an underling he brought into the company and groomed - Michael Rapino.

Somewhat snobbishly, theater people note that Rapino comes from the world of rock concerts (which will be a big part of the Clear Channel spinoff company), not Broadway.

"I don't think he's very interested in what we do," says a theater producer.

Last week, Clear Channel laid off several people in its theater division.

More layoffs are expected.

Producers are buzzing about what all this means for Broadway.

The general view is that while the spinoff company (as yet unamed) will still have plenty of clout in the touring business (it still controls all those theaters), its presence and influence on Broadway will be greatly diminished.

"They were poised to really run things here," says an industry executive. "That never happened, and it's not going to now."

Clear Channel is being tight-lipped about the changes; executives in the theater division were not available for comment.

But theater sources say the spinoff company is going to cut back drastically on the amount of money it invests in Broadway shows.

In part, that's because the return on that investment hasn't been very impressive of late.

Clear Channel took big positions in a slew of money-losers, including "All Shook Up," "Dracula" and "Lennon" (which will close Sept. 24) as well as revivals of "La Cage aux Folles," "Wonderful Town" and "Sweet Charity."

It invested in hits, too. But its stake in shows like "Hairspray" and "Spamalot" hasn't been big enough to offset its losses elsewhere, theater people say.

One bright spot was Billy Crystal's "700 Sundays," which Clear Channel co-produced with the comedian.

The company made a tidy sum on that one, although a one-person show is not nearly as lucrative as a smash Broadway musical that spawns productions around the world.

Theater people think the Clear Channel spinoff company will produce more family-friendly extravaganzas like "Barbie" and "Dora the Explorer," which gross millions of dollars in giant arenas around the country, rather than Broadway musicals.

And there is a lot of speculation that the Clear Channel spinoff company may eventually unload its theater empire altogether.

"If the price is right, I bet those go on the block one day," says a New York theater owner.

But other observors think that after a period of retrenchment, the spinoff company may be able to claw its way back to a position of influence on Broadway.

It's developing a one-man show with Martin Short as well as musicals based on Bob Marley songs and the movies "Get Shorty" and "A Fish Called Wanda."

As one veteran Broadway producer notes, "All you need is a hit, and you're back in the game."

Copyright 2005 NYP Holdings, Inc. All rights reserved.