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Volume 22, Issue 123, Jim Carnegie, Editor & Publisher

Thursday Morning June 23rd, 2005

Radio News®

Guild takes a pay cut
With his company facing competitive challenges and a major dissatisfied investor, Interep CEO Ralph Guild has taken a pay cut to help the company's bottom line. According to an SEC filing, Guild's annual salary will now be 500,000, rather than the 825,000 called for by his contract. That cut runs through the end of 2007. However, if there's a change of control at Interep, Guild's salary will be restored to 925,000 (he'd previously taken a 100,000 reduction). In return for the pay reduction, Guild received 200,000 new stock options at an exercise price of 51 cents and the exercise price on his previous options was reduced to 69%.

Publisher observation: Going by CEO example to win was the publisher perspective and recommendation on 05/16/05 RBR #96 I stated then for all CEO's to look into the mirror and follow by example. Your company is in trouble, losing cash by the tons, bleeding badly and your company needs cash to survive. Conclusion - CEO don't take your big bucks paychecks and perks. That's what Ford's Bill Ford is doing and will forgo all compensation until his family's company returns the profit page of the ledger books. Now we add a media Chairman and CEO Ralph Guild to that honor role short list. Yep, I've been there done that and many times. Welcome to the club Ralph.

House panel refuses to vote down pay-for-say
Rep. Maurice Hinchey is up in arms over a 34-24 vote in the House Appropriations Committee which doomed an amendment of his which would have prohibited the use of paid journalists or "fake news" pieces by any government agencies. The bill was the "Transportation, Treasury, HUD Appropriations bill for Fiscal 2006. "By voting to allow secret contracts between federal agencies and journalists, Republicans on the House Appropriations Committee are allowing for this and future administrations to manipulate the media in order to promote its policies," said Hinchey. "It is absurd." Hinchey cited several examples, including that of a freelance writer paid "...at least 7.5K to write articles touting federal conservation programs and place them in outdoor magazines." He said at least three such articles made it into print, and none disclosed the government payout. Hinchey said he'll be back with his amendment when the bill hits the House floor.

Gannett sees no improvement in Q2
Q1 2005 wasn't all that impressive, but Gannett Company executives warned investors at the Mid-Year Media Review in New York that Q2 will be more of the same. While the company's broadcast division is expecting strong performance in its news results, Broadcast Division President Craig Dubow - - set to become CEO of the entire company next month - - said the two most important categories, auto and retail, face challenges in several local markets. He's looking for Q3 auto spending to be in negative territory. All in all, Gannett is expecting Q2 earnings per share to be about the same at Q1, up 5%. Prior to the presentation, the Thompson/First Call consensus had been more than 8%. Outgoing CEO Doug McCorkindale told the gathering that the second half of 2005 now looks to bring slower ad growth than previously anticipated. But Gannett still likes the broadcasting business. Bloomberg quotes McCorkindale as saying that the company is looking to be a bidder for the Emmis TV group that's currently up for sale.

RBR observation: Glad to see their interest in TV grows as the medium is on shaky ground. But one thing we have to mention for those who may have forgotten or never knew that Gannett was a power house in radio. Now I bet they wished they never sold. TV owners need radio to cross market. Gannett there are a number of fine radio properties that can be had all it takes is money, a long term commitment with a solid business and programming plan. Radio needs a few Gannett's back into the radio business because the radio business needs new Fresh and Experienced media blood pumped into its veins.

Kehlbeck retiring
Veteran New York radio sales exec Bill Kehlbeck has announced plans to retire from WSKQ-FM in mid-August to run a family company in Massachusetts, bringing to an end a 28-year career in radio sales. "I've been fortunate to have managed sales for great broadcasting companies, including two number one stations in New York. WCBS-FM, a New York icon, reigned as the number one billing FM station in the area for many years. Next came an opportunity to move 'south of the border' and turn up the heat at WSKQ-La Mega, where our morning team constantly vies for #1 in ratings with [Howard] Stern," he noted, then added that La Mega remains the top billing Spanish speaking radio station in the country. During his time at Infinity, Kehlbeck established the record for breaking all local, national and total sales records at WCBS-FM. During his time at WSKQ, his team consistently outpaced the New York market with double digit growth for the past 14 months by attracting general market advertisers. And SBS noted that the station anticipates a record billing year.

Torch passed at Media General
With Marshall Morton set to take over as CEO at Media General on July 1st, J. Stewart Bryan III passed on appearing at this week's Mid-Year Media Review in New York to let Wall Street become better acquainted with his successor. Since reporting a small decline in Q1, Media General's broadcast division has reported a 1.4% revenue gain year-to-date. "We have offset the absence of six million in political revenues, and we have done so in a much softer selling environment than we had expected. Gross time sales increased 0.6% through May. While both local and national sales increased, local transactional sales led the growth, and new business development has been the key," said Morton. But tougher comps lie ahead. CFO-to-be (succeeding Morton) John Schauss said the broadcast division has revised its full year expectations to a decline of 3%, rather than only 1%. "This change is due primarily to lower-than-expected spending by automotive, department stores and telecommunications advertisers," he told the investors' gathering. Meanwhile, the newspaper division is expecting 2005 revenues to be up 4.5-5.5%, rather than the previous forecast of 4-4.5%.

Adbiz©

Pontiac G6 giveaway
scores Cannes Gold Lion
Procter & Gamble scored the Media Lions Grand Prix at this year's Cannes Lions International Advertising Festival, while Oprah's Pontiac G6 stunt won a gold media lion (the sole U.S. Media Lion) for the giveaway of more than 200 Pontiac G6 cars to Oprah Winfrey's studio audience, engineered by GM Planworks, Detroit (9/17/04 RBR #182), (9/20/04 RBR #183), (9/21/04 RBR #184), (9/22/04 RBR #185), P&G's Grand Prix was for the launch of Biomat laundry detergent in Israel, aided by two insights by MediaCom Tel Aviv: 15% of Israel's population are conservative Jews who don't watch TV, and everyone loves a mitzvah, or good deed. MediaCom planned a newspaper, magazine and outdoor effort encouraging people to donate old clothes, which were washed using Biomat in mobile washing machines taken around local communities on the back of trucks. Biomat now has a 40% market share in Israel, reported AdAge. Japan won four Media Lions, more than any other country. A favorite from Japan was "Frosty Window" for Knorr soup in which stickers were affixed to Japanese train windows. The images were made to look like the passengers' breath had fogged up the glass in cold weather, and messages like "Are you cold?" which appeared to have been traced on the window, were meant to put commuters in the mood for soup. With two Media Lions from Colombia and one from Poland, OMD picked up the most trophies this year by a media agency. The total number of entries in the media contest rose to 1,076 from 875 last year.

General Mills launches kids effort
General Mills is launching a major TV health initiative targeting children. "Choose Breakfast" is actually its largest kids effort ever in terms of reach, according to the company. The year-long campaign is anchored by 10-second spots that will be paired with 20-second versions of General Mills kid advertising. The unbranded spots will run in rotation on brands including Cinnamon Toast Crunch, Lucky Charms, Cocoa Puffs and Trix. The ads show kids in "aspirational, fun settings with the health benefits of breakfast articulated in kid terms of 'think fast,' 'have power' and 'get going,'" according to General Mills. The effort, via Saatchi & Saatchi, NY will include health and fitness-related messaging on more than 300 million boxes of cereal this year and on the company's websites. General Mills spent more than 680 million on advertising last year, about half (324 million) for its cereal brands, according to Nielsen Monitor-Plus.

Jean-Marie Dru leaving TBWA Worldwide
Jean-Marie Dru, TBWA Worldwide, is reportedly finalizing negotiations to leave the agency and join Havas as CEO. If the deal closes, he will succeed Alain de Pouzilhac, who resigned 6/21 as chairman-CEO of Havas. Dru is widely reported to be the first pick of Vincent Bollore, Havas' largest shareholder and the force behind de Pouzilhac's ouster this week. de Pouzilhac was under pressure to step down to avoid a split board since losing a showdown with Bollore. Pouzilhac plans to remain a director and an adviser.

Media Markets & MoneyTM

Watermark puts a price on Liberty
How much is an AM-FM combo in Liberty NY? 1.7M this time around - - that's what Scott Kaniewski's Watermark Broadcasting is paying for WVOS AM & FM. The seller is Mountain Broadcasting Corporation, headed by Shirley Blabey. The mountains referred to in the seller's name are the Catskills - - Liberty is in an unrated portion of New York state just south of Catskill park. It will join Watermark's WSUL-FM Monticello to form a one-AM, two-FM cluster.

Close encounters in Boston, Altus OK
WallerSutton has completed a 9M deal for a pair of AM stations in Boston, and Educational Media Foundation has taken over at a FM in unrated Altus OK. According to Kalil & Co., who handled the Boston deal, Mega Communications is the recipient of the 9M from WallerSutton, a New York financier - - however, folks on the ground in Beantown will be dealing with licensee J Sports Boston. The stations are WAMG-AM and WLLH-AM. Broker Glenn Serafin was also involved in the deal on behalf of the buyer. In Oklahoma, noncommercial Educational Media Foundation will be taking over at a station it's been LMAing since last December, according to broker Greg Guy of Patrick Communications. The seller is Altus Educational Broadcasting Foundation, which if it is doing nothing else is at least keeping alive the name Bat Masterson - - he's the group's president. Although EMF is known for its forays into the unreserved portion of the FM dial, this one - - KKVO-FM - - is comfortably in noncom left-of-dial territory at 90.9 mHz.

CKX prices stock sale
Bob Sillerman's CKX Inc., which owns the rights to Elvis Presley and the "Idols" TV brand, has priced a public offering of 20 million shares of stock at 11 bucks each. CKX plans to use about 150 million of the proceeds to pay off its debt. Bear Stearns and Lehman Brothers handled the stock sale.

Washington Beat

For Clear Channel, bride goeth before the fall
Clear Channel's WKSS-FM Hartford has been hit with a 4K dollar Notice of Apparent Liability for failure to fully and accurately specify the details of a contest. The station was running a game called "I Do Island" which pitted five brides-to-be against one another in a contest inspired by TV's "Survivor" reality series. The contestants spent a week at center court of a local shopping mall, with one voted out daily. The winner was to receive a "wedding package" which included dresses, rings, a honeymoon package and other items. The winner said that she was put off for over three months when trying to collect her prizes, and that when she finally did, they were worth only about 20K, not the 35K she said had been broadcast as the package value. WKSS said in a flawed response to the FCC that they only offered a 30K package, then in a corrected response, said that the value was never broadcast. Both the bride and WKSS agreed that the written rules of the contest said 30K. WKSS eventually gave the bride a 5K cash settlement. Nonetheless, the FCC said that failure to accurately describe the value on the prize constituted a violation of the rules, with or without a settlement with the aggrieved bride.

Ensign looking to ease cable regs
A key element of the revisions Sen. John Ensign (R-NV) has in mind as he reviews the 1996 Telecommunications Act is the establishment of a national regulatory regime for cable and telecommunications companies, replacing the current system which includes some 30K local franchising authorities. Local franchising was viewed as a necessity since cable companies have traditionally been set up as a local monopoly. According to Ensign, this is no longer necessary, with two satellite video services competing already and with telecommunications firms champing at the bit to enter the market. He said failure to provide regulatory relief may well make US companies vulnerable to competitors which provide services over the Internet from overseas. One big hurdle are the franchising authorities themselves, who wonder just where they're to turn to replace lost revenues if the local fee structure is legislated away. Ensign said that addressing that issue is still a work in progress, but that localities may have to get used to the idea of collecting revenue some other way. Ensign's comments were delivered at a session sponsored by the Progress and Freedom Foundation. Also appearing was Rep. Chip Pickering (R-MS), who agreed in general that local franchising had to be done away with, but left it open as to whether there should be one set of rules for both cable and telecom companies. He suggested franchising could become either a state of a federal responsibility.

Ratings & Research

Arbitron revises cell phone-only estimate
Arbitron VP/Domestic Radio Research Dr. Ed Cohen has new data to report on cell phone-only households - - and it may be even worse than before (5/10/05 RBR #92). Although Cohen reported more detail on Arbitron cell phone research to an ARF/ESOMAR Worldwide Audience Measurement Conference in Montreal, it's still an area of basic research, with a lot of questions remaining. By one way of crunching the numbers from Arbitron's research, adjusting for voicemail contacts at cell numbers, Arbitron says the cell phone-only universe may be as high as 11.6%. That's the worst case scenario, since Arbitron's previous estimate stands that the total cell phone-only penetration is at least 6.7%.

Transactions

1.127M WDUR-AM Raleigh-Durham (Durham NC) from Clear Channel Licenses Inc., a subsidiary of Clear Channel Communications (Mark Mays) to Triangle Sports Broadcasters LLC (Katherine Armbrecht, Robert J. Zarzour). 56K escrow, balance in cash at closing. Duopoly with WTSB-AM Selma NC. Clear Channel retains WDCG-FM, WRDU-FM, WRSN-FM & WRVA-FM. LMA 5/2/05. [File date 5/12/05.]

390K KYCX-FM/KRQX-AM Mexia TX from MJ Communications Inc. (Susan M. Cholopisa) to Simmons-Austin LS, LLC, a subsidiary of Simmons Media Group (David E. Simmons). 9K escrow, balance in cash at closing. [File date 5/12/05.]

Stock Talk

No relief on oil prices
With oil prices remaining near record highs, Wall Street traders are hesitant to make any big commitments. The Dow Industrials slipped 12 points on Wednesday to 10,588, while the S&P 500 and Nasdaq Composite were up slightly.

Radio stocks were slightly higher. The Radio Index rose 0.586, or 0.3%, to 204.614. Emmis rose 2.3% and Salem gained 1.8%.

Radio Stocks

**Here's how stocks fared on Wednesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		43.07	-0.77	Jeff-Pilot	JP		50.52	+0.31
Beasley	BBGI		14.50	+0.12	Journal Comm.	JRN		16.79	+0.05
Citadel	CDL		12.01	+0.10	Radio One, Cl. A	ROIA		13.12	-0.06
Clear Channel	CCU		31.11	+0.51	Radio One, Cl. D	ROIAK		13.10	-0.04
Cox Radio	CXR		15.96	-0.02	Regent	RGCI		5.90	+0.04
Cumulus	CMLS		12.22	+0.02	Saga Commun.	SGA		14.34	-0.34
Disney	DIS		26.69	-0.04	Salem Comm.	SALM		20.09	+0.35
Emmis	EMMS		18.08	+0.41	Sirius Sat. Radio	SIRI		5.92	-0.04
Entercom	ETM		33.06	-0.14	Spanish Bcg.	SBSA		9.65	+0.07
Entravision	EVC		7.75	+0.07	Univision	UVN		27.45	+0.49
Fisher	FSCI		48.76	+0.42	Viacom, Cl. A	VIA		33.47	+0.02
Gaylord	GET		44.15	+1.63	Viacom, Cl. B	VIAb		33.21	+0.09
Hearst-Argyle	HTV		25.02	+0.07	Westwood One	WON		20.19	-0.11
Interep	IREP		0.46	unch	XM Sat. Radio	XMSR		33.74	+0.50
International Bcg.	IBCS		0.01	unch	-	-	-	-	-

Bounceback

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Arbitrends

Upped & Tapped

New GM in St. Louis
Radio One has named Linda O'Connor General Manager of WFUn-FM St. Louis. She had been a manager of Charter Advertising's Real Estate Network and had previously worked in Urban radio in the St. Louis market.

Westwood One
realigns Metro's
ops management
Westwood One's Co-COO Chuck Bortnick announced the appointment of four EVPs in Metro Networks' Broadcast Operations Division, effective immediately:
* John Frawley, EVP/Broadcast Operations, from SVP/Broadcast Operations * Jeff Brown, EVP/Broadcast Operations - East, from managing the Boston operations center. * Mike Haake, EVP/Broadcast Operations - West, from VP/GM of Metro Networks' Operations is Houston, Austin and Kansas City. * Bill Yeager, EVP/News Operations

Infinity taps Oliviero
Chris Oliviero has been named VP/Original Programming, Infinity Broadcasting. In the new position, Oliviero will play a key role in Infinity's talent search and new format development and continue to oversee and coordinate execution with all the company's stations.

Stations for Sale

Class A FM in Carolinas
Fulltime AM in Top 160 Market
Florida Panhandle 2 FMs, 1 AM
Louisiana AM-FM, Ranked Market
Gordon Rice Associates
(843) 884-3590 or Email
[email protected]

Upgradeable 1kw
Growing suburban
Albany, NY AM -- 199k
New solid state transmitter
New studio & automation
877-541-5250
NO BROKERS!

International

It's pretty grim out there
"Radio operations have been hit hard by the consumer spending slowdown..." So it goes in Great Britain, where a top commercial radio group says its revenues have plunged 14% in May 2005 compared to the same month last year according the an article in British publication The Guardian Unlimited. Top executives at that and a competing group see no improvement thoughout the summer. One said that consumers are not spending, so neither are advertisers, describing the advertising climate as "pretty grim."

May Digital Magazine
Now Available

May Radio & Television Business Report focuses on One-On-One interviews with the money Ad Players: David Verklin, Steve Grubbs, Harry Keeshan, Jon Mandel, Ray Warren, Ira Berger, Jean Pool, Julie Roehm and others that read TVBR religiously. They're participating because they want you to know what they need to help make informed decisions. They comment on programming that they view promising for this upfront; they examine thoroughly the real issues that affect the marketplace as all are getting busy. This is a large story already and getting bigger.

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RBR Radar 2005

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

Journal stalking acquisitions
No doubt about it, Journal Communications is still trying to make acquisitions as other public companies sit on the sidelines. Their target are mid-market properties in both radio and television. No secret a strong interest in Emmis TV stations since Journal already has radio stations in Wichita, Omaha and Tucson. Outlook on TV pacings Journal describes the forecast as "spotty" impacted clearly by the fact that they have three NBC affiliates...and their performance in primetime is causing us some issues on pricing. Journal taking the local serious and has been focusing on news, adding some more news inventory, to make up as much of that shortfall as we can as they go through this year.
RBR observation: In TV you can't change what the networks program but what affiliates fail to remember they do have a voice into decision making process. Problem is affiliates very rarely speak up until it is too late. 06/22/05 RBR #122

Self proclaimed King
of All Media gone
Howard Stern has split with E! Cable TV after 11 years with 2,000 episodes. E! retains the rights the Stern library. Talk in Hollywood has Stern in talks with Spike TV the cable channel branded as TV for men especially young male demo. Stern's website clock is ticking with 6 months left until he is gone from Infinity Broadcasting and on Sirius radio. 2006 will be an interesting year for satellite radio and cable TV with "The Howard". RBR observation: 2006 the year to see who can compete. 06/22/05 RBR #122

General Manager
Small-market radio cluster in the beautiful Northwest. Dominant stations with a fantastic team with excellent benefits. If you have genuine passion apply.
See Radio Careers

President/General Manager
Schurz Communications, Inc. is seeking President/General Manager candidates for one of its network affiliated television stations. Demonstrable success required in leading strong news & sales efforts. See TV Careers

Seeking Challenge
Professional communications executive with strong international media background seeking a new challenge. Prior experience includes: CEO& COO. See Positions Wanted

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