Clear Channel to sell its entertainment arm

Clear Channel, America's largest radio group, yesterday said it intends to spin off its entertainment unit into a separate business, including almost 30 venues in Britain such as the Sheffield Arena.

The move will be welcomed by Clear Channel's critics in the music industry, who have accused the group of abusing its dominance in the market.

The group also plans to sell about 10% of its outdoor advertising business in an initial public offering. It is the world's biggest owner of billboards and operates the Adshel and More O'Ferrall brands.

The decision to break up Clear Channel underlines a growing trend among the media conglomerates in the US. After years of empire building, some of the biggest companies are discovering promised synergies have failed to materialise, while differing growth rates of various businesses are depressing share prices.

Viacom last month said it is considering breaking up the faster growing cable business and the slower growth network television and radio divisions. Liberty Media is spinning-off the Discovery cable business while Time Warner last year sold its music operation and is seeking a separate listing for its US cable division.

Shares in Clear Channel have fallen by about 26% in the past year as its core radio business, which has 1,200 stations, loses listeners and advertising dollars. The company yesterday reported a 59% drop in first-quarter profits to $48m on lower radio ad sales.

"We're seeking to unlock the considerable value in our company, and create a strong foundation for future growth, by improving the strategic, operational and financial flexibility in our leading business units," said Mark Mays, chief executive and president.

The music industry has been rife with rumours that Clear Channel threatened to keep artists off the airwaves unless they sign with the company's promoters and venues - something the company has always denied.