Ackerley: It was time to buy or be bought

As Barry Ackerley sees it, a decade of mega-mergers and consolidation in the media industry left his billboard-advertising and broadcasting company with two choices: get bigger or join forces with an industry giant.

The Ackerley Group chose the latter option, as the Seattle-based outdoor advertiser and owner of TV and radio stations announced yesterday that it has reached a deal to sell the company.

San Antonio-based Clear Channel Communications has agreed to buy The Ackerley Group in a stock deal valued at $483 million. Clear Channel also will assume $294 million of The Ackerley Group's debt, bringing the total value of the deal near $775 million.

"We were faced with the choice of buying more or selling what we had," Ackerley, chairman and chief executive of the company, told analysts yesterday during a conference call. "We're not that big a company. It was time for us to consolidate, and I think we've chosen well and wisely."

Under the agreement, Ackerley Group stockholders will receive 0.35 Clear Channel shares for every Ackerley share once the deal closes early next year.

The deal, which still needs approval from federal regulators, would allow Clear Channel to boost its presence in three metropolitan areas long dominated by The Ackerley Group: Seattle/Tacoma, Portland and Boston, where Ackerley has a combined total of more than 6,000 billboard displays.

Clear Channel also will acquire The Ackerley Group's 18 television stations, mainly in upstate New York and California, and five radio stations in the Seattle/Tacoma market.

Clear Channel operates about 1,220 radio stations nationwide, and its arrival in Seattle is sure to raise some eyebrows, said Christopher Wheeler, senior vice president at Seattle-based Fisher Communications, which owns 26 radio stations in Washington, Oregon and Montana.

"Undoubtedly, it's going to make it more competitive," Wheeler said. "Clear Channel is large, but also a very good operation. They know what they're doing, and they march right along."

The deal is subject to a 30-day window in which The Ackerley Group can field competing offers, although the company cannot solicit bids. Analysts said it's likely that other media conglomerates will make a pitch for the company.

"It would be almost inconceivable that Viacom wouldn't think about (a competing bid) very hard," said Mario Cibelli, an analyst for Robotti & Co. in New York, which owns Ackerley shares.

The Seattle and Boston billboard markets in particular have long been coveted by media companies, and "once they go to Clear Channel, they're gone forever," Cibelli said.

"Those are the type of assets that come up once in a lifetime," said Keith Fawcett, an analyst for Merrill Lynch Global Securities in New York.

The deal is the second blockbuster transaction this year for The Ackerley Group, which sold the Seattle SuperSonics and Seattle Storm pro-basketball teams in January to a group led by Starbucks Chairman Howard Schultz. President Chris Ackerley said family members will remain active in the community and will try their hand at new business ventures once the sale closes.

"Even though our family is sad to be leaving the business that has been the center of our lives for 26 years, this transaction makes good business sense," Chris Ackerley said. "We will return, and we will call Seattle home for both our personal and professional relationships."

Clear Channel stock fell $1.01 yesterday, closing at $39.30. The Ackerley Group, meanwhile, climbed $2.40 to $13.40.

At yesterday's closing price, Barry and Ginger Ackerley would make $274 million on the deal.

Facts: The Ackerly Group

• Founded 1975 as Northwest Communications, renamed Ackerley Communications in 1976

• Chairman and chief executive officer: Barry Ackerley

• President: Chris Ackerley

• 2000 revenues: $224.6 million

• Major holdings: AK Media, owner of more than 6,000 outdoor advertising displays in Seattle/Tacoma, Portland and Boston

• Owns or operates 18 television stations nationwide

• Owns or operates 5 radio stations in the Seattle/Tacoma area, including KJR-AM Sports Radio 950 and KUBE-FM

Seattle Times business reporter Drew DeSilver also contributed to this article.

Jake Batsell can be reached at 206-464-2718 or jbatsell@seattletimes.com.