Tough company

Clear Channel is as big as NBC or Gannett. Chances are it owns a half-dozen radio stations in your town. And it's fighting employee suits alleging everything from broken contracts to sexual harassment.

By Eric Boehlert

May 30, 2001 | When word got out three years ago at a radio station in Florida that the news-talk operation was being taken over by Clear Channel Communications, staffers began to fret.

"I started hearing all about 'Cheap Channel,'" says Jack Cole, a veteran talk-show host at WJNO in West Palm Beach, referring to the radio giant's reputation for implementing salary and budget cuts.

Still, Cole was taken aback by his first encounter with the new Clear Channel general manager, Skip Schmidt, who arrived to tour the facilities, shake some hands and greet the staff.

"I said, 'Hi, I'm Jack Cole,'" the host recalls. "He looked at me and said, 'Jesus you make a lot of money.'"

On the day that Clear Channel officially took control of WJNO, Cole was called into his boss's office and fired. Worse, he says, the company did not honor his $120,000-a-year contract -- even while enforcing a non-compete clause for six months in the market by threatening potential employers with legal action.

"They're ruthless," says Cole, who is now an announcer for Florida's Money Watch Radio Network. His breach-of-contract suit is still pending against Clear Channel. (Schmidt did not return a call for comment.) Cole says he's not alone. "There must be a hundred guys just like me across the country."

Like John London, a longtime Los Angeles morning man. He's suing Clear Channel for several million dollars in unpaid salary and stock options. Last fall Clear Channel closed on its $24 billion purchase of AMFM Inc. and its 460 radio stations nationwide, including KCMG, where London was a host. Within 60 days of the purchase London was terminated, and despite what London says were assurances to the contrary, Clear Channel refused to honor his two-year written contract.

At the same time, according to London, Clear Channel demanded he exercise his AMFM stock options within 90 days, even though London accumulated the options under his former employer, not Clear Channel.

When he consulted a broker, London was informed restrictions had been put on those options, which were valued at approximately $1 million. Three days later he received a letter informing him he had forfeited the options at the time of his termination.

"That's unheard of, but it's just indicative of how they operate," says London, who has three lawsuits pending against Clear Channel, seeking back pay as well as damages. (Clear Channel executives declined to comment for this story.)

"I've never seen anything like it in 28 years in radio," London says.

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But, of course, radio has never seen anything quite like Clear Channel, which has swallowed up nearly 1,200 radio stations while putting its unique -- and some say nasty -- stamp on the business. In a series of recent Salon reports, insiders from the radio, record and concert industries have voiced concerns about the juggernaut's unmatched power, and how the company uses it. (You can find out the Clear Channel stations in your area by searching the company's Web site.)

That was the view from Clear Channel's competitors. What about a glimpse from the inside? In interviews with dozens of industry professionals, including past and present Clear Channel employees, an unflattering portrait emerges of a Fortune 500 company devoted to cost-cutting and wrapped up in a macho corporate culture.

Employees say that company morale has plummeted, with some openly referring to Clear Channel stations as "radio sweatshops."

"When I think of Clear Channel," says a jock who used to host a morning show on one of the company's Southeast stations, "I think vicious, malicious and salacious."

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