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Welcome to RBR's Daily Epaper
Volume 23, Issue 11, Jim Carnegie, Editor & Publisher
Tuesday Morning January 17th, 2006

Radio News ®

ABC Radio still
waiting for sale decision

Disney CEO Bob Iger had originally promised investors a decision by Thanksgiving whether or now ABC Radio would be sold. We've now also gone past Christmas, New Year's and Martin Luther King Day as well - - still without a decision. But that doesn't mean a sale is less likely, or more likely, to happen. Rather, it's a very complicated process and Iger has been busy on another front as well. Rumors have been circulating in recent weeks that Disney is working on a deal to re-establish itself as the distribution agent for Pixar Animation Studio. If Iger succeeds in wooing Steve Jobs back into the Disney folks, it would be seen by Wall Street as a big feather in the cap of the new CEO - - reversing one of the most painful failures of Michael Eisner (1/30/04 RBR #20).

RBR observation: For months now, the grapevine has been saying that the bidding for ABC Radio is down to two suitors - - Entercom and Kohlberg Kravis Roberts (which doesn't seem to have aligned with an operator, but has former Jeff-Pilot radio head Clarke Brown as a consultant). Bidding has apparently gone beyond the 12 times cash flow multiple of Susquehanna Radio. This too must be structured as a tax-free transaction for Disney, so the multiple will end up being a couple of turns below what a cash deal would bring. Our sources say ABC Radio has about 205 million in cash flow, with most of it coming from the radio stations group. The math then is simple once we get a price. 13 times = 2.67 billion, 14 times = 2.87 billion, 15 times = 3.08 billion, and etc. But it was only a few years ago that these assets would have brought a price with a high teens multiple, even in such a tax-advantaged deal. Is Iger convinced that multiples are down to stay?

VNU negotiating with suitor
About a month after announcing that it had received multiple buyout offers (12/15/05 RBR #244), VNU announced Monday that it is negotiating exclusively with one equity buyout consortium which has made a non-binding proposal to buy the company for 28.00-28.50 euros per share. At the top end that's a bit shy of nine billion US bucks. The price range disappointed European investors. VNU had closed Friday (1/13) at 28.25 euros and fell 1.2% Monday (1/16) on the Amsterdam exchange to close at 27.90. If VNU is bought and its pieces sold off, as is likely if the equity consortium succeeds in its bid, the assets most likely to go on the auction block are in the publishing division, the least profitable part of the company. In the US, the division includes such titles as Billboard, Adweek and The Hollywood Reporter. American businessman Frank Maggio recently told RBR/TVBR that he wants to bid for Nielsen Media Research and its related businesses (1/13/06 RBR #9), which are VNU's most profitable businesses. The equity group now in negotiations to buy VNU includes AlpInvest Partners, The Blackstone Group, The Carlyle Group, Hellman & Friedman, Kohlberg Kravis Roberts & Co., Permira and Thomas H. Lee Partners. VNU said it expected to provide an update on the talks in three to four weeks.

RBR observation: Investors obviously didn't like the bid price. Is that just a starting point? A columnist in the Financial Times suggested that if the group raises its bid to 30 euros it will seal the deal.


MD Wal-Mart battle may spread
The success of the Maryland legislator forcing retail giant Wal-Mart to make a minimum investment in the health care of its in-state workers is expected to spread to other states. Even though it's unknown whether the MD legislation will withstand court muster is in question, and despite the fact that it may be a difficult feat to reproduce elsewhere, the battle is expected to move into many other states. What will be of interest to broadcasters is that the hotly disputed program was waged, in part, on the airwaves. Wal-Mart has been a regular presence across the television dial for years, but only as a seller of goods. After developing a reputation for being a difficult sell for radio stations, it is heard frequently these days. Image ads promoting its promotion potential as an employer that hires from within are being run, and in the Maryland situation, it ran specific ads objecting to being singled out by the legislature in that state. It was responding to aggressive advertising from union-backed WakeUpWalMart.com.

RBR observation: In Maryland the legislature not only passed the Wal-Mart measure, they overrode a governor veto to make it the law of the state. That will bolster union forces elsewhere. However, the Maryland legislation was narrowly crafted so it would force Wal-Mart into line with similarly-sized employers in the state. Since all of them already have acceptable health-care packages in place, it was effectively a Wal-Mart only bill, leaving the retailer without any effective allies other than the governor. This is not necessarily going to be the case in other states. However, if the battle comes to your state, alert your sales force and traffic manager.

Watchdog says Delay attack ads are factual
FactCheck.org, a nonpartisan organization which positions itself as an aribiter on the factuality of claims made in political ads, has said that the content of ads attacking Rep. Tom DeLay (R-TX) sponsored by Campaign for America's Future and the Public Campaign Action Fund, are in fact factual - - precisely, it said that they contain "...nothing that is strictly false," and that complaints from DeLay's representatives "mischaracterized" their content. Nevertheless, the watchdogs have been unable to get the ads onto Houston television airspace. FactCheck, a project of the Annenberg Public Policy Center of the University of Pennsylvania, said the citations of reporting from Associated Press and the Washington Post were on target.

RBR observation: FactCheck does indeed have nonpartisan credentials. It's previous target was a liberal group which it said ran an ad against Samuel Alito which took some of the Supreme Court nominee's past statements out of context. The question now is, have the stations which turned down the CAF/PCAF ad placed themselves in an awkward position the next time DeLay wants to place a message with them?

Bonneville seeks to draw younger listeners to news
Bonneville International says it is launching a major initiative to recruit new talent to create radio news content that appeals to young listeners. The talent search comes after the company's decisions to expand its All News offerings, moving WTOP to FM in Washington, DC and preparing to launch a new News/Talker with the Washington Post (1/5/06 RBR #3), and having added an FM simulcast to flagship KSL-AM last fall in Salt Lake City. "We're very proud of our history of innovation in radio broadcasting and we're equally pleased with the early results of our strategic moves to make news and information available to our listeners on an FM signal," said CEO Bruce Reese. Now the company says it is out to recruit on-air talent, reporters, producers, production personnel, and website developers for its new initiative. "The company's new venture will seek to deliver a product that entertains, provides needed depth that currently might be found only on some public-radio stations, and provides news through the perspective of Generations X and Y," Bonneville said in a statement.


Ad Business Report TM

CBS, Pontiac try new ad approach
with "The Courier"

In a bid to keep viewers more glued to their TV sets during commercial breaks CBS is about to air an unusual drama series whose episodes are 60 seconds each. Each episode will air during an ad break in the 9 p.m. hour every night for a week. The seven-episode series, called "The Courier," premieres 1/24, reported The Wall Street Journal. Sponsored by Pontiac, "The Courier" tells the story of a mystery man who races against time to uncover clues and rescue his kidnapped wife. Pontiac signed on to promote its new Torrent SUV, which will be featured in three episodes. Under terms of the deal, a Torrent commercial will play immediately after each episode. Extra content will be available on the network's website, with episodes also available on video-enabled mobile phones. The effort is partly designed as an antidote to devices such as TiVo that allow viewers to skip commercials. Because each installment of "The Courier" will have a cliffhanger, CBS thinks viewers will get hooked and keep coming back throughout the week.

"We're trying to keep viewers engaged in any way we can," Mark-Hans Richer, marketing director for the Pontiac brand, told the paper. Indeed, Richer had promised us more new ideas were to come, after the Oprah-G6 hit (9/20/04 TVBR #183): "We strive for cultural impact. And cultural impact is--some people might call it buzz. There are a lot of ways to try to get buzz that aren't really culturally impactful. They don't become part of the dialogue. They don't have credibility. It's more like a sugar-rush buzz, it's not real substantial. But cultural impact, you can get in lots of different ways and that's what we seek to do. So I think when you see more of this from us, you're going to see many different ways of getting at the same strategy. I think you see the same types of, hopefully, impact....there are more surprises on the way. It took us a year to work this out, it might be a little while before we're having another conversation. But I can promise you we will."

RBR observation: Richer called it "product fusion," rather than integration-a strategic guideline he likes to follow in creative advertising. Anything that's different and unexpected will stick in people's minds. "The Courier" is sure to do so and including the vehicle during as well as after in the adjacent spot will cement the memory of the vehicle paired with it. Another win-win: CBS gets more people sticking around during commercial breaks.

ABSOLUT launches new advertising
ABSOLUT vodka is introducing a new multimedia campaign that reasserts the leadership of ABSOLUT Vodka as "The ABSOLUT Vodka" and celebrates other classics that are "absolutes" in our culture. "The Absolute" campaign marks the first time that ABSOLUT will advertise its base brand with two 30-second television spots debuting on Comedy Central, Fox Sports Net, TBS, Spike and E!. The campaign also features online and print, with online media and print rolling out in February magazine issues and websites. The broadcast spots illustrate a collage of "absolute" moments and icons that define modern culture. Images include "The Absolute Morale Booster" (Marilyn Monroe singing for U.S. troops) and "The Absolute Road Trip" (first manned trip to the moon). The print advertisement features an ABSOLUT bottle levitating over a color-block table with copy that reads "The ABSOLUT Vodka" the image connotes an exclamation point. The print ad illustrates the originality of ABSOLUT Vodka and succinctly delivers the single message that ABSOLUT is "The Absolute Vodka." The campaign was created by AOR TBWA/Chiat Day. The buying agency is OMD NY.

Integrated campaign
to launch Crest's entry
into anti-aging category

Procter & Gamble's Crest brand announced its entry into the anti-aging arena, a first in the oral care category, with the introduction of new "Crest Whitestrips Renewal." The launch will be supported by a fully integrated campaign including television, print and online, in-store displays, consumer promotions, PR and interactive elements all themed to "keep them guessing." National print and television advertising, targeted to women, broke yesterday and will feature bright, white smiles on everyday women and how that makes their ages hard to guess. The TV spots titled "Judy" and "Anne" incorporate pop culture references from different decades intended to keep people guessing about the subjects' ages. Print ads with the same themes will accompany the TV spots encouraging readers to guess the subject's age via check-boxes and will run in various women's magazines including Good Housekeeping, Redbook and InStyle. The integrated marketing campaign also includes Crest Whitestrips' first ever micro-site, http://www.keepthemguessing.com/. The site will feature a dynamic celebrity pair who keeps people guessing about their ages to kick-off an age-defying photo contest. Further supporting the launch campaign will be in-store displays mirroring the theme and look of the new sleek, silver packaging, PR efforts highlighting the photo contest and celebrity duo, coupons set for release on 1/22 in local papers across the country and an advertorial in the January and February issues of Shape magazine.


Media Markets & Money TM
DLJ goes to radio school
DLJ Growth Capital Partners has reached an agreement with Connecticut School of Broadcasting founder Dick Robinson to buy his business and its assets, which include 12 east coast campuses teaching students the ins and outs of radio and television. DLJ traces to an affiliation with DLJ Merchant Banking Partners (DLJMB), which in turn is a leading private equity investment affiliate of Credit Suisse First Boston. Also in on the deal are Brian Stone and Scott Knight, who, through their KNIGHTSTONE Media, will manage the schools. The Ted Hepburn Company also had a hand, initiating the deal and representing the seller. CSB has locations in Massachusetts (Wellesley Hills), Connecticut (Pawcatuck, Farmington, Stratford), New Jersey (Hasbrouck Heights, Cherry Hill), New York (Westbury), Virginia (Arlington), Georgia (Atlanta), and Florida (Tampa, Davie, and Palm Beach).

RBR observation: Terms were not revealed. However, CSFB's Alternative Capital unit says its managing over 33.8B in assets worldwide, so we peg the deal at something a little less than that (heh heh).


Washington Media Business Report TM
Debate clips banned
from mock newscasts

Political debates are a prime source of news. And mock news. While clips from such encounters may be used on legitimate news and news analysis programs, they are now off limits for satirical programs. Before you call your constitutional lawyer, this is all going down in Canada, where the big networks have teamed with the big political parties to enforce the ban, said by the New York Times to be targeting shows such as 26-year-old "The Royal Canadian Air Farce," which has providing Canada with "The Daily Show" type programming long before the birth of the US satirical production. The producers of that show were said to have considered contending that the show is in fact a news program, but opted for other measures instead. Another satirical program, "This Hour Has 22 Minutes," said it was quite able to poke fun at the parties without resorting to the footage. But none of three such shows much cared for the measure.

RBR observation: The bad news, or the good news - - depending on your perspective - - is that attempts to get in the way of free speech are inevitably doomed to failure. "Air Farce" simply resorted to its gifted on-air impersonators to do a mock debate. The same could be done with dolls, sock puppets or crude animated or still drawings - - the possibilities for enhancing reality are endless. Just as radio's shock jocks have become past masters at inventing their own languages to get around US indecency and obscenity laws, restricting access to what should be considered news footage open to fair use will no doubt backfire on the would-be speech squelchers. They weaken themselves by appearing to fear the use of the spoken word (in this case, words they have spoken themselves), and get tarred and feathered anyway, thus becoming two-time losers.


Entertainment Media Business Report TM
Sally Jessy Raphael still not officially signed
While rumor continues since last summer that Sally Jessy Raphael has been signed for a radio talker, Lifestyle TalkRadio Network and Business TalkRadio Network EVP Jeff Weber says they have no deal: "Your report was erroneous," he said. We reported a source had told us the deal was all but done and she was to launch 2/6 (1/11/06 RBR #7) on Lifestyle Talk Radio.


Transactions
475K WSRP-AM Greenville-New Bern-Jacksonville NC (Jacksonville NC) from Eastern Broadcasting Inc. (Ronald Benfield) to Estuardo Valdemar Rodriguez & Leonor Rodriguez. 23,750 deposit, 201,250 cash at closing, 250K note. Duopoly with WLNR-AM Kinston NC. LMA between seller and La Invasora will terminate at closing. [File date 12/28/05.]

150K WWTE-FM CP Cape Cod MA (Wellfleet MA) from Living Proof Inc. (Daniel McClenaghan) to Horizon Christian Fellowship (George Small, Norton Smith, Christopher Smith, Donald McGrath, Jimmie Monroe). 50K deposit, 100K note. Horizon will loan seller 80K to construct station. Noncommercial. CP is for Class A on 90.7 mHz with 2.5 kw @ 80'. [File date 12/22/05.]


Stock Talk

US markets were closed Monday in observance of the Martin Luther King holiday.

Below are Friday's closing numbers.


Radio Stocks

Here's how stocks fared on Friday

Company Symbol Close Change Company Symbol Close Change

Arbitron

ARB

39.25

-0.01

Hearst-Argyle

HTV

23.76

-0.22

Beasley

BBGI

13.97

+0.24

Interep

IREP

0.39

unch

CBS CI. B CBS

25.48

-0.51

Jeff-Pilot

JP

58.24

-0.23

CBS CI. A CBSa

25.53

-0.50

Journal Comm.

JRN

13.71

-0.07

Citadel CDL
13.13 -0.03

Radio One, Cl. A

ROIA

10.27

unch

Clear Channel

CCU

31.73

unch

Radio One, Cl. D

ROIAK

10.31

-0.05

Cox Radio

CXR

14.06

+0.13

Regent

RGCI

4.72

+0.02

Cumulus

CMLS

13.40

-0.11

Saga Commun.

SGA

10.02

-0.05

Disney

DIS

25.70

+0.06

Salem Comm.

SALM

15.90

-0.07

Emmis

EMMS

17.93

+0.02

Sirius Sat. Radio

SIRI

6.28

+0.08

Entercom

ETM

30.01

-0.24

Spanish Bcg.

SBSA

5.37

-0.03

Entravision

EVC

7.14

+0.08

Univision

UVN

31.59

-0.22

Fisher

FSCI

42.43

+0.33

Westwood One

WON

16.06

+0.03

Gaylord

GET

42.93

-0.23

XM Sat. Radio

XMSR

28.92

-0.07

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Below the Fold

Ad Business Report
CBS, Pontiac team up
Try new ad approach called "product fusion,"...

Media, Markets & Money
DLJ goes to TV school
Reached an agreement with Connecticut School of Broadcasting...

Washington Media Business Report
Taking the stock out of mock
Debate footage banned...




Stations for Sale

WOLF Call Letters For Sale
WWOF-AM/WWOF-FM
AM-$10,000 FM-$50,000
Both-$54,000
Contact [email protected]

Houston 50 kW AM
New transmitter site
& transmitting equipment
John W. Saunders
(713) 789-4222 or e-mail
[email protected]

Northern NewEng
AM & FM stations. Separate
operations. Gross 450K+-.
Good upside. 850K.
[email protected] or
lv msg @ 781-848-4201

NYC Prime Radio
Time for Lease

7 days a week available p/t-f/t Business, Foreign language, religious, Health, Infomercials accepted. 212-769-1925 [email protected]
TV & Satellite time also available. Station Inquiries welcome


More News Headlines

CNN kicked out of Iran
Iran has barred CNN reporters from working in the country until further notice after the news network mistranslated comments made by Iran's president. CNN acknowledges that it mistakenly quoted the Iranian leader Saturday as saying his country had the right to pursue nuclear weapons, rather than nuclear power, and apologized for the error.

KCRW-FM
personality arrested

The LA Times reports Chris Douridas, 43, a KCRW-FM LA personality, was arrested 1/6 outside The Circle Bar, a Santa Monica nightclub, after witnesses saw him put a substance in an unidentified 14-year old girl's drink and carry her out of the club. The girl became ill and was treated at a local hospital before being released. Douridas was released on 1 million bail after being arrested later at the nightclub for investigation of drugging and attempting to kidnap. The LA district attorney's office, which is still gathering evidence in the case, is awaiting toxicology results before deciding whether to file charges. KCRW stood behind Douridas, who will remain on the air as host of "New Ground," a two-hour program that showcases new musical talent. A second man, whose name was not released, was also arrested as a possible accomplice to Douridas.


RBR Radar 2005
Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.

PPM with agencies are
Rock'n & Roll'n
IPG, which announced its agreement to use the PPM service when it becomes available WPP, Publicis Groupe and Aegis have also signed similar intent-to-use agreements with Arbitron. Note the observation from our story last week: "This is a great vote of confidence from IPG. When more agencies make similar proclamations of intent-to-use, the case should become easier to make with broadcasters and Nielsen. Bottom line, agencies want reliable data to make their clients the most ROI.

RBR observation: This will become one of the main marching tunes to down load for '06 - Technology waits for no one. It will be interesting to listen what key ad agency executives have to discuss in coming weeks at the annual 4A's conference, which RBR will be there to give you the full and complete RBR observation. Only words of encouragement - move forward with technology and do not wait for anyone or company for a second or alternative ratings services to displace Arbitron - It will not or can not happen.
01/16/06 RBR #10

RIAA threat to HD Radio
NAB President & CEO David Rehr has written to RIAA, seeking cooperation on a way to address RIAA's concerns about content and copyright protection - - without scrapping everything that's been done to date to roll out HD Radio. Rehr complains that some of the proposals put forth by RIAA would simply be unacceptable to broadcasters.

RBR observation: Move forward with HD now.
01/13/06 RBR #9

IPG signs for PPM
The Interpublic Group (IPG), which represents more than 30% of all of radio's national spot dollars, has committed to using the ratings provided by the PPM to plan and buy radio once Arbitron deploys its electronic measurement service. However, this does not commit Arbitron to a specific timetable for PPM deployment. Jean Pool, EVP/Director of North American Operations, Universal McCann "Wonderful. It's simply better research. And God only knows we are so far behind Europe and much of the rest of the world in the research product that we value our inventory on."

RBR observation: This is a great vote of confidence from IPG. When more agencies make similar proclamations of intent-to-use, the case should become easier to make with broadcasters - - and Nielsen. Bottom line - - agencies want reliable data to make their clients the most ROI. PPM may not be proven as perfect yet, but it's much, much more accurate than diaries.
01/12/06 RBR #8

NBC looking to
lighten O&O portfolio
TVBR sources confirm that NBC Universal is shopping four of its smaller market O&O stations - - not so much for the 600 million or so that they're expected to bring, but so that NBC can look to buy and build NBC/Telemundo duopolies in growth markets with large Hispanic populations. Birmingham, AL, Columbus, OH, Providence, RI and Raleigh, NC don't fit that profile, so NBC is looking for buyers. UBS is said to be handling the sell-off. News of NBC's plans to sell the four stations

TVBR observation: If you are a buyer in TV, there are plenty of tires to kick on the lot. In the December 2005 issue of Radio & Television Report, we noted that 20 stations had been publicly been put on the auction block by Emmis, Raycom and Nexstar. Since then Raycom has announced one station sale, so these four from NBC put the count at 23. How many more are being shopped more quietly? Here's the NBC shopping list of stations and their stats -
01/12/06 TVBR #8


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