Dallas -- Chancellor Media Corp., the radio
broadcaster under fire from investors, on Monday replaced its CEO, Jeffrey Marcus, and two
other senior executives Marcus had brought over from Marcus Cable.
Chancellor also scrapped a planned merger with LIN
Television Corp., which is owned by Hicks, Muse, Tate & Furst Inc., a big investor in
Chancellor. Some institutional investors in Chancellor were down on that merger,
preferring that Chancellor remain focused on radio and outdoor advertising, the company
said. LIN owns and operates eight network-affiliated TV stations.
Chancellor had hired investment bankers to seek possible
buyers for the company, and its share price shot up after that was disclosed in January.
Since then, the stock has drifted down to where it was before that announcement.
After acknowledging interest from just one suitor, Clear
Channel Communications Inc., Chancellor said on March 15 that it decided to make
management changes instead of selling assets.
Chancellor chairman Thomas O. Hicks, who is also chairman
of Hicks, Muse, replaced his friend Marcus as CEO. Marcus will remain on Chancellor's
board and will also serve on LIN's board.
Chancellor Radio Group president James de Castro was named
president of the new Chancellor Radio and Outdoor Group.
Chancellor also said chief financial officer Thomas P.
McMillin, who was brought over as CFO after filling the same role at Marcus Cable,
resigned. He was replaced by D. Geoffrey Armstrong, formerly of Capstar Broadcasting
Corp., another Hicks, Muse radio broadcaster that is being merged with Chancellor.
Another Marcus hire, Richard Gleiner, also resigned, as
general counsel. He previously was Marcus Cable's general counsel.
Marcus joined Chancellor last May, after he, Hicks and
other investors agreed to sell Marcus Cable to Paul Allen. Marcus hired Gleiner and
McMillin at Chancellor last October.
Hicks, Muse also said it will invest another $500 million
in Chancellor through open-market or other negotiated purchases. That should get the
leveraged buyout firm's stake in Chancellor up to 29 percent.