Clear Channel has been hit by a fall in listeners

The firm, which announced the move as it reported a 59% drop in first-quarter profits, is also selling shares in 10% of its outdoor advertising unit.

The company is giving shareholders a special $1.7bn (�890m) payout.

Its first-quarter net profit fell to $48m from $117m a year ago, after a drop in radio advertising revenue.

News of the changes pushed Clear Channel's shares up 4% in early trade.

However, they fell back to stand 0.2% lower, at $31.94, by the close of trade on Wall Street.

Losing listeners

Clear Channel said the spin off of its entertainment unit, Clear Channel Entertainment, and the share issue at its outdoor advertising subsidiary, would result in greater financial muscle for future acquisitions.

"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 each of our leading business units," said Clear Channel chief executive and president Mark Mays.

The company, which is the largest US radio station chain, has seen the amount of money it can raise from radio advertising decline after its listener numbers have fallen across America.

Its first-quarter radio advertising revenue fell by 7% to $773.6m, compared with the same period last year.

Analysts have blamed this, in part, on the growth in digital music players, whereby users download specific songs from the internet rather than listen to the radio.

Clear Channel's share price has fallen by 26% over the past year.

The company's overall first-quarter revenues were down from $1.97bn a year ago to $1.88bn, below Wall Street expectations.

The unit being sold off - Clear Channel Entertainment - recently announced a joint plan to buy UK concert promoter Mean Fiddler for �37.9m ($71.3m).