Radio's big bully

Together, Michaels and Zell banked on their belief that legislators would soon ease ownership restrictions on radio owners. Back in 1995, station owners, represented by the mighty lobbying arm of the National Association of Broadcasters, found lots of friends in Washington busy drafting the telecommunications bill.

"The problem was the Republican Congress wanted not to rewrite the rules but eliminate them," recalls former FCC chairman Reed Hundt, who, along with the Clinton White House, opposed such drastic action. "The question was, 'Who's your constituency, the listener or the owner?' There was no question of who the Republican constituency was."

Hundt and President Clinton favored easing ownership restrictions, but at a more go-slow pace. In the end, says the former FCC commissioner, "the White House position on radio got rolled."

Corporate broadcasters were jubilant. Others in the business were not: "They gave the forest to the clear cutters," says one.

The ink on the Telecommunications Act was barely dry in January 1996 when Jacor, which at the time owned just 25 stations, started scooping up properties. Three years later Jacor had added 425 more stations to its roster.

In the meantime, another aggressive company, Clear Channel, was buying up stations as well. The company was built by Lowry Mays, a Texas A&M graduate who studied petroleum engineering and later got a degree from Harvard Business School. Mays fell into the radio business in 1972 when he guaranteed a bank note for a friend buying a San Antonio station. When his friend bailed, Mays, then an investment banker, took over the station himself. Over the years he continued to grow the company with acquisitions.

Like Zell at Jacor, Tom Hicks at Chancellor Media and Mel Karmazin at Infinity Broadcasting (he's now president of mighty Viacom), Mays went on a post-deregulation buying spree. With his bold $24 billion move in 1999 for AMFM, the deal that essentially marked the end of the consolidation spree, Clear Channel reigned as king of radio's hill. "Nobody in Vegas would have handicapped that -- Clear Channel finishing in the No. 1 position," notes one radio pro.

Along the way, Clear Channel fixed its eyes on the smaller Jacor. Zell sold his company to Clear Channel in 1998 for $3.4 billion; his Jacor investments reaped a $1 billion profit.

But as part of the deal, Michaels and his cliquish team were put firmly in control of the new operation's radio properties. If they hadn't been, it would have cost the new owners more than $100 million in executive payouts.

"What's amazing is that Jacor swallowed up Clear Channel," says Levine at Galaxy Communications. "Older Clear Channel guys are still scratching their heads. They can't figure out how it happened."

Almost overnight Clear Channel's corporate culture changed. "It's really a Jacor company," notes one radio syndicator. "Even though it's called Clear Channel, it's just the Jacor mentality."

"Clear Channel before Randy [Michaels] was not hated," says Jerry Del Calliano, publisher of Inside Radio. (Del Calliano and Michaels have had a running range war for years. The two are currently facing off in court.) "But with the addition of the Jacor boys, Clear Channel became another company entirely," Del Calliano says.

What buttoned-down Clear Channel inherited, says Unmacht, were "basically good ol' boys from the frat house. They want to see who can be the rudest and crudest. Everything is done with the attitude of 16-year-olds in gym class, but with modern-day business smarts. They're definitely a rough lot." A few years ago Unmacht had dinner with an entourage of Jacor executives, including Michaels, at a Cincinnati restaurant, where they pointed out the still-visible stains from butter patties they had thrown at light fixtures.

That corporate culture extends down to the stations in various ways. It was given national exposure in the '90s when Jacor jock Liz Richards, working out of WFLA in Tampa, Fla., sued the company, including Michaels personally, for sexual harassment.

Interviewed on ABC's "20/20" program in 1992, Richards alleged that male co-workers dubbed her president of the "Cunt Club," that on the employee sign-in board someone drew a caricature of her with a penis ejaculating in her mouth and that a station manager falsely bragged to colleagues at a business dinner about getting head from Richards in a limousine.

Gary Kelly, a friend of Richards', appeared on camera to tell about the time he showed up at a station event to meet Richards and was told by her boss that the single mother of two was busy giving blow jobs in the parking lot.

At the time, Michaels was vice president of programming and an on-air personality at WFLA. Richards said he had a hand in setting the station's tone -- she told ABC he once roamed the station halls with a flexible rubber penis tied around his neck, accosting female employees.

Michaels would not be interviewed on the show, and rejected the charges.

Jacor's response? "We are going to be forced to make public certain things about [Richards'] behavior which are going to further tarnish her reputation," Dave Reinhart, WFLA station manager and close friend of Michaels, told the St. Petersburg Times. Richards' suit was settled out of court in 1995.

More recently, Jacor's Tampa stations were back in the news in February, when WXTB morning man Todd Clem, who has the on-air handle "Bubba the Love Sponge," broadcast the killing of a live boar from the station's parking lot. WXTB posted pictures of the blood-soaked stunt on its Web site. It was the third time in a year that an animal was killed or tortured on-air at a Clear Channel station.

"They are not the most original people in the world, so if something works and gets a reaction they'll do it all over the place," notes Greg Mull, who programmed WXTB before Jacor bought the station.

Next Page: Now Michaels has to answer to a boss

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