iHeartMedia 2002 Annual Report Download - page 7

To support our strategy, we have decentralized our operating structure in order to place authority, autonomy and accountability at the market
level. We believe that local management is best able to respond to local customers’ needs. We provide local managers with significant
resources and tools to allow them to better serve their clients and their local communities. We believe that one of our strongest assets is our
unique blend of highly experienced corporate and local market management.
Radio Broadcasting
Our radio strategy centers around providing programming that is relevant to our communities. We operate in a competitive marketplace and
compete with all advertising media including television, newspaper, direct mail, cable, yellow pages, Internet, satellite radio and other forms of
advertisement. Therefore, our radio strategy entails improving the ongoing operations of our stations through effective programming, reduction
of costs, and aggressive promotion, marketing, and sales. The effort spent on programming and content across our geographically diverse
portfolio of radio stations allows us to deliver targeted messages for specific audiences to advertisers on a local, regional, and national basis.
We believe owning multiple radio stations in a market allows us to provide our listeners with a more diverse programming selection and a more
efficient means for our advertisers to reach those listeners. By owning multiple stations in a market, we are also able to operate our stations
with more highly skilled local management teams and eliminate duplicative operating and overhead expenses.
Outdoor Advertising
Our outdoor advertising strategy involves expanding our market presence and improving the operating results of our existing operations to
help us compete across all advertising media in the marketplace including radio, television, newspaper, direct mail, cable, yellow pages,
Internet, satellite radio and other forms of advertisement. We do this by acquiring additional displays in our existing markets, expanding into
new markets and helping our outdoor advertisers creatively use our outdoor advertising inventory. We focus on attracting new categories of
advertisers to the outdoor medium through significant investments in sales, marketing, creative, and research services. We take advantage of
technological advances and the growing and dynamic possibilities advertisers have to display unique, engaging, creative advertisements. Our
talented management team is committed to sales force productivity, improved production department efficiency, and further developing the
quality of our product. Finally, the fragmented outdoor advertising industry in our international markets presents us with opportunities to
increase our profitability both from our existing operations and from future acquisitions.
Live Entertainment
Our strategy is to deliver quality entertainment products, from music concerts, Broadway and touring shows, specialized motor sports
events, museum exhibitions, family shows, and venue operations. We then monetize this investment in creativity by increasing the utilization
of our entertainment venues, the number of tickets sold per event and by effectively marketing the variety of sponsorship opportunities we
offer. We strive to form strategic alliances with top brands for marketing opportunities. This connection builds brand loyalty and consumer
affinities, thus helping our advertisers succeed with their marketing efforts and helping us compete with all advertising media including radio,
television, newspaper, direct mail, cable, yellow pages, Internet, satellite radio and other forms of advertisement.
Recent Developments
The Ackerley Group Merger
On June 14, 2002, we consummated our merger with The Ackerley Group, Inc. (“Ackerley”). Pursuant to the terms of the merger
agreement, each share of Ackerley ordinary and Class B common stock was exchanged for 0.35 shares of our common stock. After canceling
1.2 million shares of Ackerley common stock that we held prior to the signing of the merger agreement, approximately 12.0 million shares of
our common stock were issued to Ackerley shareholders. We also assumed all of Ackerley’s outstanding employee stock options, which at the
time of the merger were exercisable for approximately 114,000 shares of our common stock. The merger was valued at approximately
$493.0 million based on the number of our common shares issued, which were at the average share
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