Clear Channel Communications owns seven San Francisco radio stations, a massive concert business, and many of the city's billboards. In fact, it's one of the largest – and most criticized – media companies in the United States. And soon, a Clear Channel subsidiary called Adshel may also control the street distribution of newspapers in much of San Francisco.

Four years ago Mayor Willie Brown jammed through city hall a law that would ban freestanding news racks in parts of San Francisco, replacing them with larger multibox racks called "pedmounts." Around the same time, the city entered into a 20-year contract with Adshel to place and maintain those pedmounts. In exchange, the company gained the right to place illuminated ads as large as 18 square feet on the backs of the pedmounts.

In January 1999 a group of newspaper publishers – New Times, the San Francisco Newspaper Printing Co., Gannett Satellite Information Network, the New York Times, the San Jose Mercury News, and the Los Angeles Times – filed suit to block the law. The Bay Guardian, Dow Jones, and United Advertising Publications later joined the suit. The legal challenge stalled the implementation of the law, but a yearlong mediation process has led to a settlement, and now the Board of Supervisors is poised to kick the program into gear.

Some say there's no way out of the contract with Clear Channel, which was approved by the previous Board of Supervisors. And the city hasn't done much to research its options. The three-piece legislative package that makes up the news-rack deal went before the Board of Supervisors' Finance Committee April 17 without so much as a report from the board's budget analyst.

Sup. Chris Daly said that while the publishers' settlement has improved the deal, it remains a bad one. "What's going to happen to new publications [that are forced to compete with existing papers for limited space in pedmounts]?" he asked.

Daly proposed changing the ordinance so that freestanding news racks would be allowed to exist alongside the pedmounts. His amendment was rejected by Sups. Aaron Peskin and Tom Ammiano, who voted to forward the matter to the full board, citing a request from the court that the city approve the settlement before the end of May.

At the board's April 22 meeting, Peskin asked the board to postpone voting on the legislation for one week while the budget analyst updates the four-year-old report on the deal. No one objected to the continuance request.

Many concerns

Putting a single conglomerate in charge of dispensing papers isn't the only aspect of the Clear Channel deal that has prompted concern. Because the publishers are legally considered a third party, they have no rights under the contract. Still, they were able to negotiate some changes in the news-rack ordinance and the program guidelines.

The settlement calls for a scaled-down program – one that will encompass a smaller physical area and allow fewer advertisements. Under the settlement, the publishers will be given the opportunity to craft a plan for where to place the pedmounts, and publications currently distributed near each unit will have priority for a cubicle. Implementation of the program will also be slower, and Clear Channel will be responsible for meeting stricter standards for pedmount maintenance.

"When you look at the old [deal] and the one that's proposed, it's night and day," Gordon Reynolds of San Francisco Downtown Magazine and the News Rack Fairness Coalition told the Finance Committee, stating his support for the deal. Hearst attorney Alan Freeland and San Francisco Beautiful's Dee Dee Workman also asked the committee to approve it.

But even with the changes negotiated by the publishers, there are several questionable provisions in the Clear Channel contract, Bay Guardian publisher and editor Bruce B. Brugmann explained at the meeting. The contract allows the company to make an unlimited – and likely unknown – amount of money from pedmount advertising. The city won't get any portion of that money – even to cover its administrative costs, Brugmann said. The contract allows Clear Channel several opportunities to back out of the deal, which could leave city papers stranded without any means of distribution.

And while the settlement would give the publishers greater say in pedmount placement, the director of the Department of Public Works still has wide discretion over the program (see Editorial, page 11).

The news-rack contract establishes a 20-year relationship between the city and Clear Channel, which has in recent years become a media behemoth on par with Viacom and NBC – and has stirred up much criticism in the process. Clear Channel's mission is aptly summarized in the company tagline: "How many ways has Clear Channel reached you today?"

In addition to the street-furniture company Adshel, the San Antonio-based Clear Channel owns more than 1,200 U.S. radio stations (about 1 in 10), 19 TV stations, and an expansive concert promotion business. It also controls more than 770,000 outdoor advertising displays.

In San Francisco alone, Clear Channel runs seven radio stations (KKSF-FM, KYLD-FM, KABL-AM, KIOI-FM, KISQ-FM, KMEL-KM, and KNEW-AM). The company's billboard subsidiary, Clear Channel Outdoor, controls an estimated half of the city's billboards. And since buying SFX and Bill Graham Presents, Clear Channel Entertainment has owned the exclusive right to promote shows at a dizzying list of venues, including the Fillmore, the Warfield, and Shoreline Amphitheatre. The company also places ads atop local taxis and in hundreds of malls across the country, according to its Web site. Clear Channel representatives did not return our phone calls before deadline.

Clear Channel has been heavily criticized for stamping out competitors and homogenizing media sources. The online magazine Salon has meticulously documented complaints about the company, specifically the incessant cost-cutting and brash anticompetitive tactics of its radio division (for a guide to Salon's stories go to www.salon.com/ent/clear_channel). The Federal Communications Commission is investigating Clear Channel for violating its rules by setting up shell companies to "warehouse" some radio properties. That way it can hold on to stations in case limits on station ownership are relaxed.

In March the FCC denied Clear Channel's petition to take over a radio station, citing concerns about media concentration. It was the first time the FCC has turned down such a petition since 1969. Two members of Congress – Rep. Anthony Weiner (D-N.Y.) and Rep. Howard Berman (D-Calif.) – have asked the U.S. Department of Justice to join the FCC in investigating Clear Channel.

One manager of a local advertising firm that competes with Clear Channel, who asked not to be named, told us he sees Clear Channel's news-rack contract as another market-clearing stunt. With a lock on hundreds of exclusive downtown ad spaces, as well as its radio and promotion holdings, Clear Channel will be able to offer ad packages smaller firms can't match – and that might be the nail in the coffin for some competitors.

E-mail Tali Woodward at tali@sfbg.com.

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