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Welcome to RBR's Daily Epaper
Volume 22, Issue 113, Jim Carnegie, Editor & Publisher
Thursday Morning June 9th, 2005

Radio News®

Randy Michaels and Stu Krane
buy The Ed Schultz Show
Former CC Radio/Jacor CEO Randy Michaels and former ABC and Premiere Radio Networks VP Stu Krane have formed "Product 1st," or "P1" (Michaels is also President of Radioactive LLC). Their first acquisition is Democracy Radio's Ed Schultz daily talker, now cleared in 95 markets, including 8 of the top 10. Expect more talent and expansion out of P1 soon. Founded in 2002 by Democracy Radio CEO Tom Athans and Paul Fiddick to combat the right-wing dominance of talk radio by launching progressive voices on America's airwaves, Democracy Radio recruited Ed Schultz to host its first nationally-syndicated program. Ed hosts the 3:00 p.m. to 6:00 p.m. daily show from his hometown of Fargo, ND. Democracy Radio retained Jones Radio Networks to handle affiliate relations and ad sales. Said Democracy Radio CEO Tom Athans: "Democracy Radio has accomplished its first mission, now we will return to our core mission, to incubate and launch new progressive voices on America's airwaves. Ed is a remarkable talent. With Randy Michaels taking the helm, we have no doubt that Ed will continue to be the standard by which other progressive hosts are measured." "My hat is off to Democracy Radio for not only helping to grow The Ed Schultz Show to a position of national prominence, but also for helping to establish the dynamic new category of Progressive Talk," said Michaels. "Ed will continue to build on the foundation that Democracy Radio helped establish, and we will continue to recruit even more stations to broadcast his show."

RBR observation: We hear Air America's Randi Rhodes is hitting the ceiling about this. Why? She hated it before when Ed Schultz's program was repped by MediaAmerica because she thought there was a conflict of interest. Ron Hartenbaum, being a bondholder and former CEO at Jones MediaAmerica, is also an advisor for Democracy Radio. Jones MediaAmerica also reps Air America. Rhodes' concern was which of these two entities - - Democracy Radio or Air America - - would benefit most by Jones MediaAmerica selling for them? Now with Randy Michaels and Stu Krane adding more muscle to Ed Schultz, how will that sit with the Air America/Randi Rhodes contingent? Also, Stu Krane used to use MediaAmerica as a rep when he was VP at EFM (Rush Limbaugh and Dr. Dean Edell).

NBC Uni cashes out Barry Diller
All is forgiven and all lawsuits withdrawn. NBC Universal is paying 3.4 billion for the stake in Vivendi Universal Entertainment (VUE) held by Barry Diller's IAC/InterActiveCorp. VUE will be 100% owned by NBC Uni, which in turn is owned 80% by General Electric and 20% by Vivendi Universal. The long battle over Diller's stake goes back even before GE cut its deal with Vivendi to acquire control of VUE. The settlement is no less complicated than the long, drawn out negotiations and legal wrangling. Diller's IAC will receive about 1.4 billion worth of its own stock and the rest in cash, including 865 million from the sale of US Treasury bonds that had secured IAC's preferred interest in VUE. As part of the deal, Vivendi Universal has agreed to delay by a year, until January 2007, the earliest date that it can sell its 20% stake in NBC Universal and GE has delayed a year, until May 2010, the earliest date that it can exercise an option to buyout Vivendi's stake and become 100% owner of NBC Universal.

RBR observation: Diller has been a shrewd player with a strong hand throughout this corporate soap opera. In retrospect, it was Diller's sale of IAC's entertainment assets, including the USA Network and SciFi Channel, that forced Vivendi to take on the huge debt load that led to its financial collapse. But Diller had some pretty good safeguards built in to protect his company's interests. He refused to sell out cheap when GE/NBC stepped forward to acquire a controlling stake in VUE, with those cable assets as the main attraction. Now, after playing hardball for years, Diller is walking away - - but only because he's getting a strong payoff for no longer being a pain in the butt for GE/NBC to have to deal with.

Radio blips onto WSJ radar
The Wall Street Journal has noticed. Although radio M&A activity has been dormant since the new millennium kicked off, at least in the bigger markets, whispers - - and even a few louder noises - - are being heard again, all the way up to and including the editorial offices at WSJ. Its list of potential sellers and buyers contained no surprises for broadcasters in the know. Prominent among the spinners were Viacom/Infinity, Disney/ABC and Pfaltzgraff/Susquehanna. Buyers mentioned included Cumulus, Cox, Citadel and Emmis. Clear Channel speculation is, of course, a non-starter since it's already maxed out in the big markets, for the most part. WSJ notes stagnant advertising revenue growth as a reason for selling: Conglomerates may feel that the radio station portfolio is acting as a sea anchor, putting a drag on the company as a whole.

RBR observation: In the real world, stations are being traded, but most of the action is taking place in small markets. And while large markets are heard from on occasion, the properties involved are usually one of four types: niche operations, move-ins, fringe stations or non-coms. The stations we're talking about here are a completely different story. But if revenues remain sluggish, it may be some time before asking prices are congruent with the kind of numbers suitors are willing to put on a signed check. Stay tuned.


eBay spot wins Mercury Grand Prize
Goodby, Silverstein & Partners has again won the 100K Radio-Mercury Awards Grand Prize - - this time with a spot created for eBay called "Abbreviated." The awards, totaling over 160K in cash and prizes, were awarded yesterday in a luncheon ceremony at Cipriani in New York City. Entercom's KIRO/KTTH Seattle won in the station-produced category with a spot for James Hardie Siding Company and (pictured) Russ Cimber received the award from NAB's John David. Zimmer Radio, which won in the station-produced category in 1999, won this year in the new category for 30-second spots, beating out all entries by both agencies and stations. The winning entry was "Ants," created for Alert One Pest Control. The first-ever student award went to a spot from Portfolio Center, a communications arts school in Atlanta. | Here's the full list of winners |

As predicted:
Product placements up for scrutiny
In his recent policy statement on broadcasting and payola, FCC Commissioner Jonathan Adelstein focused much of his attention on the increasing use of product placements - - weaving a product or service into the plot of a television show, whether it be fictional, reality-based or whatever. Adelstein shed a bit more light on his viewpoint, and all we can say is "we told you so." Here is what RBR wrote in an observation: "It may soon come to pass that disclosure in the form of text scrolling down on third of the screen at the speed of light while a promo for a future show is occupying the other two thirds may be seen as inadequate (5/16/05 RBR #96)." Now contrast that with what Adelstein told the Wall Street Journal in a 6/8/05 interview: "Currently, our rules require that they disclose it [commercial sponsorship] sometime during the course of the broadcast. We don't spell out how that's done, but I don't think it's adequate to just have it quickly run by on a scroll so that someone would need to pause their (digital video recorder) and get out a magnifying glass to read it. That's not real disclosure."

RBR observation: On 5/16, we also wrote, "Watch for this issue to come up big in the next few years." Needless to say, we continue to stand by that prediction.

Political windfall in NJ?
Primary results are in for one of the few big odd-year elections this time around: New Jersey governor. And based on those results, we can safely predict that broadcast cash registers will be ringing as November approaches, since the match-up pits one millionaire against another. Both have a history of contributing heavily to their own campaigns. Sen. Jon Corzine (D-NJ) is the frontrunner, and is famous for spending tens of millions of his own money to put that "Sen." in front of his name. His opponent will be Doug Forrester, who while not in Corzine's league, spent 7M of his own money in a failed 2002 bid for the US senate, according to the Associated Press. The only other state with a governorship up for grabs is Virginia - - TVBR's neck of the woods - - which is already seeing modest activity in the political category in advance of primary elections.


Adbiz©

CCTVi strikes web deal with Coupons Inc.
Clear Channel Television Interactive has partnered with Coupons Inc. to deliver advertisers' coupons to consumers via the websites of Clear Channel's 40 TV stations, which cover 12% of U.S. households. CC TV CEO Bill Moll tells RBR/TVBR: "The internet is one of the fastest growing segments of our business. It's exactly this kind of service from Coupon's Inc. that helps our TV station websites to become even more relevant to viewers and advertisers." With Coupons, Inc.'s Digital FSI platform powering the coupon section, CCTVi's community of viewers will be able to print money-saving coupons from leading consumer-goods manufacturers off their favorite station's website. Consumers can select and print the coupons they want for use at retail stores. Other Coupon Inc. clients and licensees include Johnson & Johnson, General Mills, Kimberly-Clark, Masterfoods, S.C. Johnson, Pfizer, Wyeth, Valassis, and News Corp's News America Marketing.


Media Business Report
#1 in media? (It's a trick question)
What's the most valuable media company in the world? If you answered Time Warner, you were right last week, but no more. As its stock price soared to a record high this week, Google claimed the title. The new media company - - which sells advertising, but doesn't actually produce any content of its own - - is now worth 80 billion, based on stock value, while Time Warner is at 78 billion. Others that you might consider media giants, such as Viacom and Disney, are another 20 billion or so back. Google's stock only began trading 10 months ago. After debuting on Nasdaq at 85 bucks a share, its stock is now flirting with the 300 level.

MBR observation: Why does this have us thinking back to the 1980s, when Home Shopping Network was valued by Wall Street as being worth more than CBS? That, as we all know now, was silly, and HSN's bubble eventually popped. Now, it seems that every financial article you read about Google questions when its bubble will burst. Yes, it's a fine company with strong growth, but its stock price is way out of line with reality. But, for now, it's the most valuable media company in the world.


Radio & Television Business Report

Coming in the July issue:
Media Business Report:
"People Make the Difference" -- We've asked our readers to give recognition to the people that are making a difference in today's business environment.
GM Talkback:
Who in your company or stations deserves
a pat on the back and why?
AdBiz:
Carat Americas CEO David Verklin: "Mastering a digital future" from advertising in a digital convergence world to improving metrics to the TV upfront and more.
Special Report:
Part II: "Going Private" - time to loose that chain around your neck. We show you how.
Media Markets & Money:
Mid Year Report -- "Going independent": Not many have taken this road, but in recent years Post-Newsweek's WJXT-TV Jacksonville, FL and Young Broadcasting's KRON-TV San Francisco have gone from being major network affiliates to being independent. RBR/TVBR looks at how they did it.

Reserve your Ad Marketing Space today. Advertising space is limited, contact:
June Barnes [email protected] -- or -- Jim Carnegie [email protected]


Media Markets & MoneyTM
And the Morrell of the story is...
Pamal Broadcasting, using its 6 Johnson Road licensee moniker, is picking up WNYQ-FM Queensbury NY from Bruce Danziger's Vox New York for 5.25M. Broker Dick Foreman assisted the seller. The deal will set off a chain reaction thanks to the new Arbitron-based radio market definitions. Queensbury is just north of Glens Falls NY, on the southeast edge of Adirondack Park and about 30-40 miles north of very-much-rated Albany-Schenectady-Troy. The latter market will be brought into play by executing a CP which will move the station to Malta as a Class B1, within 10-15 miles of the city. It will be considered part of Albany at that time (as are a number of other stations which behave more like Glens Falls stations). The problem for Pamal is that it has stations in both markets - - and the Glens Falls stations are listed by BIA under Albany. That means to buy WNYQ-FM, which will form a superduopoly with WROW-AM, WKLI-FM, WFLY-FM, WYJB-FM and WAJZ-FM, it must break off the Glens Falls stations, which include WKBE-FM Warrensburg, WENU-AM South Glens Falls, WENU-FM Hudson Falls, WFFG-FM Corinth, WMML-AM Glens Falls and WZMR-FM Altamont. They will be tied up in a nice neat package and sent off to Glens Falls Trust, managed by Mark Hubbard under a five-year contract. He will run the cluster at arms length from Pamal. He is not to sell it unless so instructed by Pamal during that time, and Pamal will reclaim the cluster should the rules change to allow such a move. It's Hubbard's second such active arrangement - - he's performing the same function for Frank Osborn's Qantum Communications for a three-FM Cape Cod cluster, although in that case we understand he is actively trying to peddle the stations.


Washington Beat
NAB, CEA exchange salvos over DTV
The Consumer Electronics Commission (CEA) and the National Association of Broadcasters (NAB) are duking it out before the House Committee on Energy and Commerce. In contention: just how many people rely exclusively on over-the-air broadcasts for their television service. CEA pegs the number of TV households without cable or satellite service at 86%. It further claims that only 33.6M of a total of 285M TV sets (12%) are used to pull programming off-air. NAB said that CEA is trying to duck DTV tuner mandate rules, and argued that better numbers were produced by the Government Accountability Office. It says 73M TVs are non-cable or non-satellite, and that 21M homes rely on over-air broadcast service (19%). NAB President/CEO Eddie Fritts said, "CEA has proven today it can manufacture bogus DTV numbers along with millions of soon-to-be-obsolete analog television sets. The undeniable fact is that the Government Accountability Office has testified before Congress that 21 million U.S. households rely exclusively on broadcast television, or 19% of all homes. That is more households than are located in the states of Texas, Michigan, Massachusetts, Mississippi, Nebraska, New Mexico, Oregon, Tennessee and Wyoming, combined. CEA has no credibility when compared to the highly respected, non-partisan GAO."

FCC channels energy toward DTV transition
DTV channel election is on the front burner at the FCC. It says 1,628 stations picked one or the other of their side-by-side analog/digital assignments during Round One. 50 elected to wait for round two, and 62 participated in 37 Negotiated Channel Arrangements (NCAs). Of those, 25 were accepted and 12 not. Another 155 stations that picked there old analog or NTSC channel over their digital were determined by the FCC's engineers to be facing interference problems. They have 60 days to resolve such conflicts. Looking ahead, licensees need to file conflict decision forms with the Media Bureau in August, and Round Two elections and notices on any new NCAs in September. Another round of FCC releases and licensee filings will lead to Round Three elections in February 2006. The goal is to wind up with a new and complete DTV Table of Allotments during August 2006.


Transactions
12.5M WAIB-FM/WUTL-FM, WEGT-FM & WHTF-FM Tallahassee FL (Tallahassee, Lafayette, Havana FL) from Monterey Licenses LLC, a subsidiary of Triad Broadcasting Company LLC (David Benjamin) to Opus Broadcasting Tallahassee LLC, a subsidiary of Opus Media Holdings (Richard Linhart). 625K escrow, balance in cash at closing. Existing superduopoly. LMA 5/1/05. [File date 5/4/05.]

650K WHTO-FM Iron Mountain MI from Todd Stuart Noordyk to Results Broadcasting of Iron Mountain Inc. (Bruce D. Grassman). 8K down payment, balance in cash at closing. Buyer will also cover 1.7K in seller attorney fees for prior WHTO-FM sale negotiations. Superduopoly with WJNR-FM Iron Mountain MI, WOBE-FM Crystal Falls MI. [File date 5/2/05.]


Stock Talk
A flat day
Stock prices were pretty much flat, with the blue chips giving up small gains and ending up in negative territory after the White House issued a forecast of slower growth than previously anticipated. The Dow Industrials fell six points to 10,477.

Radio stocks were pretty much flat as well. The Radio Index edged up 0.114, or 0.1%, to 206.877. Emmis was the day's best gainer, up 2.4%. Regent fell 4.2%.


Radio Stocks

Here's how stocks fared on Wednesday

Company Symbol Close Change Company Symbol Close Change

Arbitron

ARB

42.10

+0.06

Jeff-Pilot

JP

49.95

-0.07

Beasley

BBGI

15.35

-0.03

Journal Comm.

JRN

16.89

-0.07

Citadel CDL
12.21 +0.11

Radio One, Cl. A

ROIA

13.59

+0.16

Clear Channel

CCU

30.26

+0.29

Radio One, Cl. D

ROIAK

13.60

+0.20

Cox Radio

CXR

16.60

+0.13

Regent

RGCI

5.81

+0.25

Cumulus

CMLS

12.93

-0.11

Saga Commun.

SGA

13.91

+0.06

Disney

DIS

27.41

+0.12

Salem Comm.

SALM

18.71

-0.05

Emmis

EMMS

19.10

+0.45

Sirius Sat. Radio

SIRI

5.83

-0.01

Entercom

ETM

34.33

+0.46

Spanish Bcg.

SBSA

9.15

+0.03

Entravision

EVC

7.40

-0.16

Univision

UVN

27.33

+0.44

Fisher

FSCI

50.39

-0.11

Viacom, Cl. A

VIA

33.53

-0.57

Gaylord

GET

42.16

-0.05

Viacom, Cl. B

VIAb

33.41

-0.49

Hearst-Argyle

HTV

24.99

+0.03

Westwood One

WON

20.45

-0.04

Interep

IREP

0.50

+0.05

XM Sat. Radio

XMSR

31.83

-1.14

International Bcg.

IBCS

0.01

unch

-

-

-

-

-



Bounceback

Send Us Your OpinionsWe want to
hear from you.

This is your column, so send your comments to [email protected]

Jim, I gotta take you to task on this one (6/6/05 RBR #110 Publisher comment).

First of all, I AGREE with your sentiment (not just from a business point of view but from a professional one) that the format should survive in New York. Oldies music remains a viable format, business-wise and personal-wise, despite what the pundits over at Viacom/Infinity are sayin. Having said that, however, I cannot support your suggestion that WOR 710 AM switch itself to an oldies-based format. Because that switch would basically be affecting the older demographic (55-64) in the same way that CBS-FM's switch to Jack on June 3 affected those in the 25-54 demo (with STRONG emphasis on the upper end - - 45 to 54; they're the ones that lost out)

Andrea D. Wiener
New York City

Publisher's note: The key point is the consumer and the personality with community involvement who brings out the entertainment. Remember, WCBS-FM picked up the once WABC-AM format and transformed it into oldies - - Dan Ingram, Harry Harrision. WCBS-FM was in common language with the late, great WABC MusicRadio 77. The key is the SIGNAL - - besides serving NYC, think of the Night Signal. WOR will never beat WABC in the talk format business. The key to success is the PD, as I would reference what former WCBS-FM PD Joe McCoy wrote in Monday's RBR. 06/06/05 RBR #110


Arbitrends

Arbitron
Market Results
| Albany |
| Greenville |
| Memphis |
| Raleigh |


Upped & Tapped

Tilden to extend
Air America brand
Beverly Tilden has been named Director of Marketing for Air America Radio, including the network and its flagship station WLIB-AM New York. Network President Gary Krantz said Tilden will help solidify the WLIB brand for liberal talk in New York as well as extend the brand nationwide. Tilden currently works with stations across the country specializing in loyalty and database marketing programs. She had been Entercom Boston's cluster marketing director.

New co-hosts for CCM
Wade McShane and Elizabeth Grattan have been named co-hosts of the "CCM Radio Magazine" weekly show on Salem's Today's Christian Music network. McShane will continue as the show's producer. Grattan formerly worked at Salem's WHFM-FM Cleveland.

Hunnicutt
heading Country
Clay Hunnicutt has been named Vice President of Clear Channel Country Programming. Clay, formerly Vice President of Programming for Clear Channel's Mid-South Region, holds over 15 years of industry experience under his belt. His takes over the position from Alan Sledge, Senior Vice President of Programming who will now be dedicated fully to regional responsibilities.


Stations for Sale

More News Headlines





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

SBS charges Emmis with
FCC violation

Emmis Communications may be the tower landlord of KXOL-FM Los Angeles, but Spanish Broadcasting System (SBS) says that doesn't give it the right to say what the station can broadcast. SBS has gone to the FCC with a complaint, charging that Emmis is guilty of anticompetitive behavior by going to federal court with a lawsuit to force KXOL to drop its new Reggaeton/Hip-Hop "Latino 96.3" format, which Emmis claims competes with KPWR-FM in violation of KXOL's tower lease. "The Commission must stop Emmis's attempt to limit competition in the Los Angeles market. It should impose sanctions and rule that certain language in the Lease Agreement between the parties is unenforceable," attorney Bruce Eisen of Kay Scholer LLP wrote to FCC Chairman Kevin Martin on behalf of SBS. RBR sought a response from Emmis, but hadn't received one by deadline. 06/08/05 RBR #112

Latest RAEL study:
Radio ROI higher than TV
The Radio Ad Effectiveness Lab (RAEL) has released its third study, concluding that radio campaigns show significantly better ROI for advertisers than national television campaigns, and that radio moves products a full 49% better than television. The study looked at 30-second spots on both radio and television. All the television campaigns in this test had received favorable advance testing; none of the radio ads were pre-tested. For the complete findings see
06/08/05 RBR #112

Disney CEO-to-be Bob Iger downplays radio spin-off
The company (Disney/ABC) has done a good job of outpacing the marketplace in those businesses the last few years. Iger said there's no balance sheet need to divest anything. Still, he didn't rule out exiting some non-core businesses. "We're going to continue to look at divestiture possibilities...a spin-off of some sort or some other financial arrangement creating more value, we will do that with a non-core business. We talk about radio in that respect. No urgency, but under the right circumstances it's obviously something we feel we should consider seriously."
RBR observation: There is a big confidence builder for any employee or client to strive to ultimate success or doing business with Disney/ABC especially in radio.06/08/05 RBR #112

Infinity to spin fewer stations
Viacom Co-President/COO Les Moonves confirmed what's already been pretty well known in the radio industry - - that Infinity has cut back on plans to sell most of its radio stations outside the top 20 markets but currently having some conversations about getting rid of some of the smaller radio stations right now. "The 'Jack' format is something that we've used in LA and a few other markets. In LA, it went from 15th to third in total listeners in about a six-month period of time, so obviously this is a format that works exceedingly well. It's sort of like your own iPod. It does not have DJs. It has 1,200 of your top songs and the format has worked extraordinarily well. 06/07/05 RBR #111


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