Volume 21, Issue 114, Jim Carnegie, Editor & Publisher
Friday Morning June 11th, 2004

Radio News ®

Jim Pastor named GM of WZZN-FM,
WMVP-AM Chicago after shake-up
Jim Pastor, an ABC Radio exec since 1993, has been named President and GM of both WZZN-FM and WMVP-AM Chicago. Pastor assumes his new position as part of a management restructure involving all four ABC Radio stations in the Windy City. The restructure was announced after ABC reportedly fired WMVP station manager Bob Snyder, and Zemira Jones resigned as President and GM of WLS-AM, WZZN and WRDZ-AM (Radio Disney). He announced he's taken a great position at a yet-unnamed company. Snyder, before working for ESPN Radio, was GM of Sports WTEM-AM DC. Pastor previously served as VP/Sales and Marketing for Radio Disney since 2000. He has also held positions as Director of Sales for Radio Disney and an AE for ABC Radio Networks. No word yet who takes the reins of WLS or WRDZ.

King of horror sounds off
on King of All Media
Stephen King was interviewed by Infinity/Viacom's WZGC-FM Atlanta recently, and sounded off on the FCC's indecency crackdown. The horrormeister's comments of 6/8/04 included the following: "I think it's nonsense. What I think about it is a word that I don't want to use on the radio or I'll get you guys in trouble. It makes me angry and its silly and what happened to Howard Stern is silly." He continued, "I don't listen to him - - I think he's silly - - but at the same time I think he ought to have the right to be silly on the radio. This is America. It's a free country and we're supposed to have the right of free speech. "The way that works in America, or the way it's supposed to work in America, if he's saying stuff on the radio that you don't like, if it offends you, you got a hand, you reach out, take hold of the knob, turn it off. He's gone - - good bye. You don't need a politician in your living room to say you got to put a band-aid over that guy's mouth." Kings's Zone Corp. owns a pair of radio stations in the Bangor ME market.

Broadcast, print news consumption trending downward
Local TV news leads all categories when it comes to regularly used news sources, according to the latest study by the Pew Research Center for the People and the Press. However, it has been eroding over the past decade. 77% of Americans used it regularly in 1993, a figure which has dwindled to 59% in 2004. Newspaper, second with 42%, has also dropped - - it stood at 58% as recently as 1994. Radio is in third place as a regular source at 40%. It too has declined since 1994, but not as severely as newspaper - - it stood at 49% back then. Online has been the one of the big gainers - - it is now a regular source for 29% of the population, and cable news has been making major strides as more and more services take to the wires. Here are the current rankings: (1) Local TV news (59%); (2) Newspaper (42%); (3) Radio (40%); (4) Cable TV news (38%); (5) Nightly network news (34%); (6) Online news (29%); (7) Network TV news magazines (22%); (7) Network morning news (22%); (9) Call-in radio shows (17%); (10) NPR (16%); (11) News magazines (13%); (12) Business magazines (4%); (13) Literary magazines (2%); (13) Political magazines (2%).


Roy Disney sues for Eisner pay disclosure
Dissident ex-director Roy Disney has gone to court in an effort to win public disclosure of board of director documents about how Disney CEO Michael Eisner's level of compensation was determined. Roy Disney and fellow ex-director Stan Gold have already been allowed to look at the documents in question, but they are bound by a confidentiality agreement not to disclose their contents. The two dissidents have now asked a Delaware judge to void that confidentiality and allow public disclosure. Roy Disney and Gold have charged that the board of directors didn't' exercise sufficient oversight of how much Eisner was paid. For its part, Disney notes that the two former directors voted to keep such documents out of the public view when they were on the company's board.

Parmer retires from SBS board
The just-filed proxy for the annual shareholders' meeting at Spanish Broadcasting System reveals that veteran broadcaster Carl Parmer - - who was a co-founder of Heftel Broadcasting Corporation, which became Hispanic Broadcasting Corporation, which became Univision Radio - - is leaving the SBS board of directors, effective with the June 30th annual meeting. Also stepping down is Jack Langer, former Managing Director and Global Co-Head of the Media Group at Lehman Brothers Inc. Nominated to fill the two seats are Antonio S. Fernandez, founder and former head of the International Investment Banking Department at Oppenheimer & Co. Inc., and Jose A. Villamil, CEO of The Washington Economics Group Inc. If you're keeping track of how the International Church of the FourSquare Gospel is doing with the kicker from its $250 million sale of what's now KXOL-FM Los Angeles, the proxy shows that the church is still holding 2.7 million warrants to purchase shares of SBS at $9.77 each. The stock has lately been trading below that strike price. The church had received the warrants for being patient in collecting the record-breaking sale price.

Political air war driving rates
An article in the St. Louis Business Journal notes that broadcast advertising rates are rising fast, for all categories, thanks to the early intensity of the political matchup. Missouri is a battleground state, and the pressure being put on inventory is kicking in ancient supply/demand scenarios which are resulting in increased rates for everybody. "The prices are now rising not only for politicians but for everything - - soft drink advertisers and car dealers - - because of the demand," professor Haim Mano of the University of Missouri-St. Louis told the Journal. "This is pure economics here - - supply and demand." It's not just the presidential campaign, either. The article mentions a 58% increase in CPP being reported by candidates for governor and the US House of Representatives. But clearly the presidential campaigns are primary causes of the rise. One local sales manager noted that with the state's battleground status has come attention not only from the candidates themselves but also from a slew of 527 organizations. One said it started in February and seems likely to run clear through to November.


TVBR News Analysis

The war is over at the NAB
Back at the NAB convention in Las Vegas, it looked like a battle royale was shaping up for next week's NAB Radio, TV and Joint Board meetings. But in the two months that have intervened, NAB Joint Board Chairman Phil Lombardo, President of the Citadel Communications TV group, has been mending fences and it now looks like he will be easily re-elected next Tuesday. Eddie Fritts is getting a two-year renewal as NAB President and CEO, with the search now beginning for a successor as he heads into retirement. | More... |


Adbiz ©

BBDO taps David Lubars as Chairman, CCO
Omnicom has hired David Lubars, from Publicis' Fallon Worldwide, as chairman and chief creative officer of its BBDO North America. At the same time, BBDO announced that Ted Sann is leaving the agency. These are first big moves for BBDO under Andrew Robertson, who became CEO BBDO Worldwide on 6/1. BBDO is Omnicom's largest agency and serves such clients as Pepsi, FedEx, NYSE and Office Depot. Lubars, 45, had been President of Fallon Worldwide and Executive Creative Director of Fallon North America. He was head of BBDO West before joining Fallon in '98. Sann's career at BBDO stretched 34 years, with the last 11 with direct responsibility for the creative work at BBDO NY.

JWT scores with Jenny Craig
J. Walter Thompson has won creative on Jenny Craig Weight Loss Centers' $45M account after a review that reportedly included Gotham, Heil-Brice Retail Advertising and Bartle Bogle Hegarty. Incumbent Johnson + Ukropina Irvine, CA did not participate in the review.


Media, Markets & Money tm

Clear Channel spins off Chico cluster
Clear Channel will be able to settle its FCC indecency count almost three times over when it converts its Chico CA cluster into a $5.1M payday later this year. And it was probably one of the easier deals for broker Elliot Evers of Media Venture Partners - - he had to look no further than his own mirror to find a buyer. The stations are KPAY-AM/KMXI-FM Chico, KEWE-AM/KHHZ-FM Oroville, and KHSL-FM Paradise CA. As best we could determine, it appears that under the contour method of market determination, there is no single point which could be called a superduopoly (where all three FMs overlap). The buyer is Deer Creek Broadcasting LLC, a consortium headed by Elliot Evers, Greg D. Widroe and John McSorley, with additional backing from Duff Ackerman & Goodrich II L.P. DA&G has an interest in television stations in Montgomery AL, Cheyenne WY and Scottsbluff NE.

Banks bail out EuroDisney...again
Things may be looking up for the Disney empire in the US, but not so in France. The Paris banks have agreed to refinance EuroDisney's $2.9 billion debt to keep the theme park outside Paris from going into default. As part of the deal, though, the US-based Walt Disney Company, which owns about 39% of the European venture, is having to kick in another $100 million. EuroDisney had faced a similar financial crisis in 1994, when it was rescued by an investment from a Saudi prince.


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Washington Beat

FCC preps video competition report
The FCC is soliciting information and comment on the state of competition in the video delivery arena. As required by Congress, the FCC's annual report takes into account all forms of delivery, the big three of which are broadcast, cable and DBS. The primary issue, as outlined in the comments of Commissioner Michael Copps, is the rapid rise of cable rates since the 1996 Telecom Act was passed. "Cable rates have soared by more than 50% since passage of the 1996 Act," said Copps, "with substantially higher increases for customers in some areas." Copps said that a similar call for outside input last year yielded disappointing results. "So I'm asking here for more and better input from outside the Commission and then an intensified effort from within." In addition to broadcast, cable and DBS, the FCC is looking for input from any form of delivery system for video material.


Transactions

$73.5M WXNT-AM/WTIP-FM & WZPL-FM Inidanapolis (Indianapolis, Greenfield IN) from Mystar Communications Corp. (Michael S. Mauer) to Entercom Indianapolis License LLC, a subsidiary of Entercom Communications Corp. (David J. Field et al). $5M escrow, balance in cash at closing. Existing duopoly. LMA 6/1/04. [File date 5/5/04.]

$43.25M WGBA-TV from Aries Telecommunications Corp. (Mary A. Dean) to Journal Broadcast Corp. (Douglas G. Kiel et al). N/A. Includes LMA of WACY-TV Appleton, owned by Ace TV Inc. [File date 5/6/04.]

$63K WYTH-AM Madison GA from Central Georgia Broadcasting Co. (James F. Small, Annie Lee Small) to Craig Baker and Debra Baker. Note. [File date 5/4/04.]


Stock Talk

Radio Index sinks to year-to-date low
Stock prices were mostly higher on Thursday, except for the radio sector, with prices rising for most stocks despite a government report of higher unemployment claims, as traders prepared for and unscheduled three-day weekend. US stock markets are closed today for the funeral of former President Ronald Reagan. The Dow Industrials gained 42 points Thursday, or 0.4%, to close at 10,410.

Radio stocks were mostly lower, with no particular news to account for the weakness. The Radio Index declined 1.476, or 0.6%, to 242.634 - - it's lowest point thus far this year. Cumulus was down 1.7% and Citadel 1.6% as the poorest performers. Viacom's Class B stock was the best stock of the day, up 1.5%.


Radio Stocks

Here's how stocks fared on Thursday

Company Symbol Close Change Company Symbol Close Change

Arbitron

ARB

$39.40

-$0.56

Jeff-Pilot

JP

$50.78

+$0.06

Beasley

BBGI

$15.23

+$0.05

Journal Comm.

JRN

$18.25

-$0.29

Citadel CDL $14.80 -$0.25

Radio One, Cl. A

ROIA

$16.14

-$0.09

Clear Channel

CCU

$37.83

-$0.19

Radio One, Cl. D

ROIAK

$16.01

-$0.15

Cox Radio

CXR

$18.02

-$0.24

Regent

RGCI

$5.74

-$0.04

Cumulus

CMLS

$16.92

-$0.29

Saga Commun.

SGA

$18.66

+$0.18

Disney

DIS

$24.72

+$0.14

Salem Comm.

SALM

$31.61

-$0.27

Emmis

EMMS

$21.34

+$0.11

Sirius Sat. Radio

SIRI

$3.16

-$0.10

Entercom

ETM

$39.44

-$0.11

Spanish Bcg.

SBSA

$9.34

-$0.06

Entravision

EVC

$8.39

-$0.05

Univision

UVN

$33.17

+$0.18

Fisher

FSCI

$49.47

-$0.02

Viacom, Cl. A

VIA

$38.24

+$0.32

Gaylord

GET

$30.06

-$0.24

Viacom, Cl. B

VIAb

$37.97

+$0.55

Hearst-Argyle

HTV

$25.78

+$0.12

Westwood One

WON

$25.91

-$0.19

Interep

IREP

$1.86

-$0.04

XM Sat. Radio

XMSR

$23.60

-$0.05

International Bcg.

IBCS

$0.03

unch

-

-

-

-


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Upped & Tapped

Dielectric announces changes in two leadership positions
Dielectric Communications announced the following changes at their Raymond, ME HQ. Jay Martin has been promoted to VP/Sales and Marketing. Jay has been with Dielectric, in positions of increasing responsibility, since 1985. Dan Ozley has accepted the position of VP/International Business Development. Prior to joining Dielectric in 2000, he worked in domestic and international sales with Lockheed Martin, Scientific-Atlanta and Harris Corp.


Competing Media

Univision sues
to block LA LPMs

You had to see this coming. As one of four broadcasters who tried unsuccessfully to get Nielsen to further delay its Local People Meter (LPM) roll-out in New York, Univision has now gone to court in California to try to block the LPM roll-out in Los Angeles, which is scheduled for July 8th. Univision claims that Nielsen's sample undercounts key Hispanic demos and that the Spanish TV giant will be harmed if the ratings company distributes data which shows Univision's audience to be smaller than it really is. | More... |


Stations For Sale

START UP OPPORTUNITIES
Gallup, NM 100kw: $550K / EZ Terms
Spokane, WA City Grade:
$2M Negotiable
Brett Miller - MCH Enterprises, Inc.
(805) 237-0952 Direct
www.mchentinc.com




RBR Radar 2004
Click on these issues for Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.

Network comp slowly slips away
It's been a fact of life in television for the past several years, but hardly anyone talks about it - - at least not in public. TV networks have been insisting on drastic cuts in network compensation payments to affiliates and eventual complete elimination of comp in affiliation contract renewals. Editor's note: TV affiliates got to learn to live without it. Got to see the chart to prove it. 06/10/04 TVBR #113

XM could team with Sirius
for shock jock channel
The idea was floated by XM Satellite Radio CFO Joe Euteneuer - - sure, his company would be interested in having a channel with personalities such as Howard Stern and Opie and Anthony. But because of the high cost, it might make more sense to launch it jointly with Sirius as a way to boost the satellite radio industry. 06/10/04 RBR #113

Indecency: Clear Channel
settles with FCC
Is set to make a $1.75M payment to the US Treasury in order to lay to rest its indecency fine vulnerability with the FCC. That would be in addition to $755K paid earlier to settle indecency tab run up by Bubba the Love Sponge, bringing total payment to over $2.5M. RBR observation: Clear Channel once again is playing it safe. But we're waiting for the other Stern shoe to drop, and when it does, it's expected to land squarely on Infinity, now owned by Viacom. Even with Karmazin out of the picture, FCC vs. Viacom promises to be a much more spectacular fireworks show than this one, fiery though it is in its own right. 06/10/04 RBR #113

Radio companies warn
Wall Street about Q2
No one is yet lowering their official guidance for the quarter, but radio companies are telling Wall Street investors that Q2 revenues aren't proving to be as robust as had been anticipated. Entercom CEO David Field: It's not as robust as we would perhaps like to see it. Radio One, CFO Scott Royster: Q2 isn't proving to be as strong as hoped in radio. Emmis CEO Jeff Smulyan: that radio has been "challenging" this quarter. Editor's note: Embrace technology, invest in local and be local.
06/09/04 RBR #112

Pure-play radio companies
on the way out?
Consolidation was the name of the game, being a pure-play radio company made you a Wall Street darling. In fact, Emmis got hammered by investors for expanding into television. The future is cross-platform, words of wisdom of Radio One, CFO Scott Royster.
Editor's note: Royster is right if you do it correctly! 06/09/04 RBR #112

NBC pulls in 2.9B in the upfront
All but concluded its upfront sales efforts, pulling in a reported $2.9B for the new season, at 7% CPM increases. The big draws were "The Apprentice" and Friends spinoff "Joey." CBS is expected to be the only network to increase its share of the ad market, with its take expected to rise 9% to $2.4B. CBS, still asking for 10% CPM increases, is holding firm with the buying community with 60% inventory sold and dangling the CSI carrot. Editor's note: Who will blink first? 06/09/04 RBR #112


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