Lowry Mays knew nothing about the radio business when he purchased his first radio station in 1972. He had no experience in television when he bought his first TV station in 1988. He didn’t know much about outdoor advertising or live entertainment when he added those enterprises to his portfolio.
Mays, however, recognized a good opportunity when he saw one. With a loan from Frost Bank, he and auto dealer Red McCombs purchased San Antonio’s KEEZ-FM for $125,000. They bought two radio stations in Tulsa, Oklahoma, acquired WOAI-AM in 1975, and began the formation of an international media empire known as Clear Channel Communications.
In 2008, Mays and McCombs sold Clear Channel in a deal worth approximately $25 billion. At the time, Mays owned approximately 5 percent of the company. But the sale yielded an enormous windfall – he won’t disclose how much – for a man who entered the radio business as a neophyte.
“I was a pretty quick learner,” said Mays, who rolled a considerable sum from the sale of Clear Channel into the Mays Family Foundation.
Learning on the fly helped Mays build a company that dominated an industry. An astute understanding of business models and timing enabled him to amass a fortune. From that fortune, Mays became one of San Antonio’s leading philanthropists. He and the Mays Family Foundation have donated more than $50 million to the business school at Texas A&M University that bears his name, as does the 10,000 square-foot event center at the Witte Museum. The foundation recently gave $25 million to the UT Health San Antonio Cancer Center, which will be renamed after the family, and donates approximately $15 million a year to other nonprofits.
Meanwhile, the company Mays created, now known as IHeartMedia, hovers on the brink of insolvency. IHeartMedia has amassed crippling debt as a result of a 2008 leveraged buyout that took the company private and has been negotiating with its lenders and bondholders on restructuring its debt. Mays remains a small investor in the company and upbeat about its leadership despite the threat of bankruptcy.
“IHeart Media has a great management team and investor group,” Mays said. “We continue to be supportive of their efforts in any restructurings.”
At its peak, Clear Channel owned more than 1,200 radio stations in the U.S.; today IHeartMedia owns 858 stations. The Clear Channel name lives on in the form of IHeartMedia’s billboard subsidiary, Clear Channel Outdoor.
As Mays built his company, Clear Channel changed the radio landscape in the United States. The company acquired hundreds of radio stations in the late 1990s and early 2000s, many with talk-radio formats. Before its sale, Clear Channel owned or programmed most of the 50,000-watt AM stations in the U.S., which carried the syndicated shows of Rush Limbaugh, Sean Hannity, and other conservative hosts.
From his fourth-floor office near Alamo Heights, Mays reflects on an improbable journey – from teenage oil rig roughneck to billionaire businessman. Clear Channel’s expansion into television, outdoor advertising, and live entertainment in countries around the world generated approximately $7 billion in annual revenue in the early to mid-2000s.
“Lowry is the classic American story of taking expertise, determination, and an idea and willing it into a success,” said former mayor and U.S. Housing Secretary Henry Cisneros, who served with Mays on the Texas A&M Board of Regents in the 1980s.
Cisneros remembers when Mays was an investment banker and bought his first radio station. Mays remembers the uncertain beginning, the ignorance that preceded each entrepreneurial venture.
“Every business we got into, including the first one, I knew nothing about,” said Mays, a member of the National Radio Hall of Fame.
After researching decade-long business trends in radio and television, Mays felt certain he and McCombs could earn a substantial profit. But did he foresee a multibillion dollar empire?
“I had no idea,” he said.
Mays did not enjoy a silver-spoon childhood. In 1947, his father, Lester Mays, died in a car accident. Left with a widowed mother and older sister, 12-year-old Lowry became the man of the house.
Over the next 15 years, he worked on oil rigs, earned a petroleum engineering degree from Texas A&M, served in the Air Force, earned an MBA from Harvard, and joined an investment banking firm in San Antonio.
In 1972, Mays agreed to co-sign a loan for a friend who wanted to buy a radio station. The friend backed out, leaving Mays with the station. Unsure what to do, he called a car dealer friend, McCombs, who knew as much about the radio business as Mays did.
And so began Mays’ ascent from investment banker to accidental broadcaster to billionaire media mogul.
“We built the largest radio company in the world, the largest outdoor advertising company in the world, the largest seller of live entertainment in the world,” said Mays, 82. “We were in 65 different countries. It was a very big company – 20,000 employees. I had no idea that we’d get into the outdoor advertising business or the entertainment business.”
As Clear Channel grew, challenges multiplied. In the early 1990s, for example, Federal Communications Commission rules prohibited companies from owning more than two radio stations per market.
Unwilling to accept those restrictions, Mays lobbied Congress to create legislative change. In 1996, he prevailed, and the Telecommunications Act became law. As a result, the FCC deregulated media ownership, clearing the way for the explosive growth of Clear Channel.
“It was a big deal – changing the rules of media ownership at that time,” Mays said.
As Clear Channel expanded its reach and power, it drew both attention and critics. One of them, Alec Foege, wrote a 2009 book titled Right of the Dial, which criticized the company on numerous fronts. In the book, Foege asserted that Clear Channel alienated legions of radio listeners with bland programming, produced overpriced and poorly managed concerts, bullied artists into playing at Clear Channel-controlled venues, turned talk radio into “an inane shout-fest” and “littered” the U.S. with its billboards.
Nine years later, Foege stands by his previous conclusions. But he also notes the company’s positive impact and the respect he has for Mays. “Clear Channel brought a lot of professionalism to the industry, and, in fact, saved a lot of radio stations,” Foege said. “I don’t think [Mays] had any ideological aversion to quality programming. It wasn’t a focus of his. … I do have quite a bit of admiration for him and what he was able to build.”
Nearly a decade after Mays sold the company, criticism remains. Paul Begala, a Democratic strategist who advised President Clinton and contributes commentary on CNN, offers a biting, partisan view of Clear Channel’s impact.
“The consolidation of talk radio in the 1980’s and ’90’s truly weaponized ignorance,” Begala said. “Demagogues like Rush Limbaugh encouraged their listeners to be ‘Dittoheads’ – repeating the right-wing line and avoiding independent information.”
In his book, Foege noted that Mays made campaign contributions to numerous Democrats, including Cisneros, Texas Gov. Mark White, and U.S. Sens. Lloyd Bentsen of Texas and John Glenn of Ohio.
Foege also observed in his book, “Lowry Mays was not so strongly associated with the Republican Party that when his own name came up as a possible candidate for Texas governor, it was on the Democratic ticket in opposition to [George] Bush.”
McCombs understands the personal and political gifts of his partner. “Lowry’s greatest strength,” McCombs said recently, “is his ability to convince people that his view on something is right.”
Forbes magazine once called Mays “the accidental broadcaster.” Later, Fortune magazine called him and his sons, Clear Channel executives Mark and Randall, “the bad boys of radio.” The Fortune story recounted the enemies the company made among musicians, small radio operators, and members of Congress.
“They accuse Clear Channel of stomping on the competition, destroying artistic integrity, and making mush out of the little guy,” Fortune wrote. “In short, Clear Channel has become their Exhibit A for everything that’s wrong with media deregulation.”
If the criticism stung, Mays and his sons did not show it. Without apology, they continued building the company.
“A lot of people think big is bad,” Mays said. “We weren’t in the radio business. We weren’t in the outdoor advertising business. We were in the business of selling our customer’s products because that’s what rings the cash register.”
Under Mays’ leadership, Clear Channel focused on a conservative balance sheet, maintaining free cash flow, and pursuing additional investments.
“It’s incredible what he achieved,” said Bexar County Judge Nelson Wolff. “When the [ownership] law changed, he was smart enough to jump on it and build that company.”
Early success came by design and research. After considerable digging, Mays discovered that radio was a fixed-cost industry. With an exception or two, revenues increased every year. “And this was over a 30-, 40-year period,” Mays said. “So I looked at this trend and said, ‘This is a pretty good business model.’”
After acquiring KEEZ-FM in 1972, Mays and McCombs needed a strong leader to manage it. McCombs suggested the general manager at KTSA, the top-rated AM station in town. Mays offered the job to Doug McCall.
“Why should I leave the biggest radio station in town for the smallest?” McCall asked.
“Because I’m going to buy more stations,” Mays replied.
He does not recall if that was his original intent. Or if he delivered a reflexive reply to change the mind of a reluctant executive. Whatever the case, Kathy Mays Johnson says her father is a master of spontaneous persuasion.
“That’s how he does business,” said Johnson, president of the Mays Family Foundation. “He’s an on-the-spot thinker. A risk taker. Everything kind of happens.”
With McCall on board, Mays studied the success of Dallas’ KRLD-AM, which in the 1920s became the first radio station to sell commercials and later was the first to air continuous election returns. In 1975, he and McCombs purchased WOAI for $1.5 million and patterned the station after KRLD. As a result, WOAI switched from music to a news/talk format.
Years later, Mays recognized that key elements of the television industry – such as fixed costs and consistent profitability – closely mirrored those in radio. In 1988, the company bought its first television station – an affiliate of the Fox TV network – in Mobile, Alabama. Clear Channel followed with purchases of Fox affiliates in Jacksonville, Florida; Wichita, Kansas; Tulsa, Oklahoma; and Memphis, Tennesse; and a non-Fox affiliate in Tucson, Arizona.
“You could continue to increase the cash flow [in TV] every year,” Mays said. “Few if any industries are like that.”
Clear Channel went public in 1984, raising $7.5 million in an initial stock offering. A second stock offering was issued in 1991 and more offerings became a regular occurrence. The stock price grew from $2.72 a share in 1990 to $95 a share in 2000.
With the sale of stock – and loans from a consortium of banks – Clear Channel bought struggling stations, cut jobs and costs, increased the advertising sales force, made favorable deals with advertisers, and turned profits.
In the roaring ’90s, Randall Mays became president and chief financial officer, Mark Mays the chief operating officer. Later, Mark took over as CEO while his father remained the chairman and impressed his sons as a fine listener.
“The three of them would gather and talk about a decision, and it was always the best idea wins,” said Johnson, a former Clear Channel senior vice president. “It wasn’t, ‘I’m the dad’ or ‘I’m the CFO’ or ‘I’m running this organization.’ That’s where listening came into play. ‘Well, have you thought about this? Have you thought about that?’ One of our advantages was that all four of us were related, so there was this underlying trust.”
Nine years after selling Clear Channel, the retired billionaire CEO goes to the office every day. He visits with students from the Mays Business School and meets with an occasional reporter. But mostly, he attends to the business of his foundation.
“He wanted to really make a difference in San Antonio,” Johnson said. “So when he sold his share of Clear Channel, he took quite a lot of the money and turned it over to the foundation. All our lives, he has taught us to give back. It’s been ingrained in us. He’s less about himself and more about other people. And for me, that’s his biggest legacy.”