Clear Channel to spin off its concert, theater unit

Clear Channel Communications surprised the entertainment industry yesterday, saying it will spin off its sagging concert, theater, and outdoor event division, Clear Channel Entertainment, and sell off 10 percent of its outdoor advertising holdings in an initial public offering later this spring.

Clear Channel, a family-owned company that evolved into the nation's largest radio broadcaster and a multimedia empire during the late 1990s, has been suffering for the past year from a slump in radio advertising and a lackluster music and concert season that drove down its stock price 25 percent. Yesterday, the company said that for the quarter ended March 31, radio broadcasting revenue fell 7 percent to $773.6 million, and revenue from live entertainment dropped 17 percent to $424.5 million.

Meanwhile, outdoor ad sales, largely from billboards, grew 11 percent to $579 million, according to company figures.

''By allowing each business to actively pursue its strategic path, we believe shareholders will benefit and that these transactions will highlight the substantial value that is not currently reflected in our stock price," Clear Channel chief executive Mark Mays said yesterday.

However Clear Channel chooses to spin its latest corporate realignment, it is clearly abandoning its ambitious plan to corner and control the live music industry by dint of its size and reach, said Gary Bongiovanni, editor of the trade magazine Pollstar, and a veteran entertainment industry observer.

Clear Channel Entertainment is the largest producer, promoter, and presenter of live entertainment in the world.

In Greater Boston, Clear Channel operates the Tweeter Center and Bank of America Pavilion. It manages the Orpheum Theatre, and books acts such as Paul McCartney and U2 at the FleetCenter and smaller groups at Paradise, Avalon, and Axis.

Clear Channel Entertainment owns the newly renovated Opera House on Washington Street and the Charles Playhouse, and it leases, books, and operates the Colonial and Wilbur theaters.

Clear Channel made a highly leveraged entry into the live entertainment business in 2000, and for three years counted on the synergy of its radio stations, advertising platforms, and lucrative corporate sponsorships as strategies for cornering the live entertainment market, said Bongiovanni.

''We had the worst year we ever had in the concert business last year," said Bongiovanni.

What's more, he said, Clear Channel acts and arenas couldn't count on free advertising from radio stations and billboards owned by the same Texas conglomerate. ''And the kind of radio cross-promotion and sponsorship they counted on didn't come to fruition," Bongiovanni said.

Maureen Dezell can be reached at dezell@globe.com. Material from Globe wire services was used in this report.