Wednesday, June 7, 2023 Jun 7, 2023
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By D Magazine |

Tom Hicks Sets Me Straight on His Day Job

Just minutes after 1 reported the blockbuster story on TV that Tom Hicks was getting out of the radio business, I got a call. A public relations firm was asking if I’d like to interview Hicks about the merger of AMFM and Clear Channel. Of course. I did. Hicks called a few hours later, and after 1 thanked him for calling, he said, “I wanted to so I could set you straight.” Uh-oh. Not a great start, I thought. At least he corrected me in a firm but friendly way. Yes, his AMFM was being folded into San Antonio-based Clear Channel, but he hastened to add this only meant that Hicks Muse Tate & Furst’s $1 billion investment would now be worth $4.5 billion and was well on its way to growing to between S12 and $ 15 billion in five years. The point was thai Hicks is definitely not getting out of the business, as I had reported earlier that morning. Hicks Muse Tate & Furst will become Clear Channel’s single largest shareholder with a 10 percent stake. The new combined company is massive, even after selling 125 stations to comply with federal regulations. Clear Channel will own 830 radio stations, 19 television stations, and an astounding 425,000 billboards. Aren’t about 200.000 of those right along Lemmon Avenue?

Toughing It Out at Lennox

John Norris, chairman and CEO of Lennox International (“Atta boy, Dave!”), has a big job ahead of him. Since going public in July at $18.75 a share, he watched the stock spike shortly thereafter at $19.87 and then drop below the IPO price, where it has been ever since. The Street thinks Lennox is a cyclical business tied to housing starts, and when the boom dies, as it eventually will, so too will Lennox and its good earnings. But what analysts forget is thai 75 percent of Lennox’s business is replacement. It’s unlikely that in the middle of July, when your air conditioner breaks down, you’re going to say, “Let’s just gut it out until the next housing up-cycle.”

Builders Should Go ’Dot Com’

Pessimism about the housing cycle is also hurting DR Horton and Centex. Horton’s stock is trading at only 4.6 times earnings, and Centex stock is at six times earnings. Compare that to Yahoo at 670 times earnings, I’m thinking and maybe . They don’t have to be on the Internet. They can still build houses just like they do now. But it couldn’t hurt.

Would You Rewind Them, Too?

Blockbuster Chairman, President, and CEO John Antioco says he’s tired of hearing that his business is old technology. Still, the idea of driving to a store, hoping that something you want to sec i s there, waiting in line to pay for it, bringing it home to watch it. and then having to bring it back is a little antiquated. Antioco counters that Blockbuster is about to roll out on-line browsing, so you can see what’s available at your local store. If you see something you like, you can reserve it and even prepay for it. All you have to do is go pick it up. By the time streaming video becomes something worthwhile, he says. Blockbuster will be there, too. The company is good at tracking what you’ve rented before and the types of movies you like, so it’s no big stretch to think they could bring that marketing savvy to the Internet. Now, if they could just rewind the darn things for us.

Good News for Dr Pepper

The best news about American Bottling’s acquisition of Dr Pepper of Texas is that Jim Turner will continue to head operations. The former truck driver and Horatio Alger Award recipient is a good guy in a people-friendly business. Stores have limited shelf space for soft drinks, and with all those new diet, caffeine-free, diet-caffeine-free, cherry, and whatever brands of Coke and Pepsi dominating that space, you need a folksy, well-liked guy like Turner to keep retailers happy and product on crowded shelves. If Delaware Punch had Turner, maybe you’d still see it on shelves.