RBR's Daily Morning Epaper

Volume 22, Issue 13, Jim Carnegie, Editor & Publisher

Wednesday Morning January 19th, 2005

Radio News®

Iger's CEO prospects improving
A few months ago, you probably couldn't have found anyone who would have been willing to bet a plug nickel that Bob Iger would ever become CEO of The Walt Disney Company - - maybe not even Iger himself. He was seen as damaged goods - - too close to Michael Eisner and given a lot of the blame for the poor showing of the ABC Television Network. How things have changed! Disney's financial results are improving, ABC has a couple of hit shows and Iger's star is rising. According to the Los Angeles Times, some big Disney investors and analysts are now calling his elevation to CEO "all but inevitable." As they search for a successor to Eisner, who is retiring next year, Disney directors have said that Iger is the only company insider being considered for the top post. But there have been quite a few names of outsiders floated around as possible successors, including News Corp. COO Peter Chernin, Time Warner Entertainment & Networks Group Chairman Jeff Bewkes and both Co-President/COOs at Viacom, Les Moonves and Tom Freston.

RBR observation: One thing's for sure, no matter how much performance has improved at Disney, if the board selects Iger as CEO, it had best be ready for another knock-down, drag-out fight with Roy Disney and Stan Gold. The dissident ex-directors who've led the move to oust Eisner have made it clear that they will not stand for the elevation of Eisner's deputy. "Iger is NOT an acceptable substitute," Roy Disney states bluntly on his savedisney.com website.

Forget satellite; worry about iPods
"Despite the buzz surrounding satellite radio, I believe iPods are a bigger threat, because you have a larger number of people with an alternative source of music," Emmis Communications CEO Jeff Smulyan says in a Q&Q distributed by the company which expands on his long-held position about which technology should worry broadcasters. "That said, I can remember when people were predicting the death of radio after 8-tracks came out. Despite continually evolving technologies, nothing has replaced the local information and local personalities we give our audiences. We know our communities, and we respond to their needs. Over the holiday season alone, Emmis radio stations raised 500,000 for charitable causes in their local communities - - I don't see how satellite radio can match that reach. Sirius and XM may or may not be viable businesses, but the reality is that two of Emmis' stations reach more people then the entire satellite industry, and those satellite subscribers still spend much of their listening time with terrestrial radio."

Indecency is in the eye of the beholder
Sometimes it seems like the only people who communicate with the FCC are those deeply opposed to any programming which even gets close to the line, wherever the line is. It has certainly kept the FCC hopping, finding one example unenforceable, another bad enough to hit it for 1M+, and leaving many scratching their heads in bewilderment. Anyway, it turns out that a lot of people write in to protest FCC Chairman Michael Powell. The SmokingGun.com has turned up a number of these missives. Here are excerpts from one anonymous commentator. "Sure your average body soap commercial shows more skin than those sinners at ABC dared to show. But those soap commercials aren't GASP sexual!...Well, except for that satan spawn Herbal Essences commercial with the woman moaning, that of course is utter trash." The writer continues, "I would like to thank you Mr. Powell. Your unrelenting tunnel vision and suffocating moral beliefs are just what America and its [stupid] kids need in these trying times. Thank you, Sir. (I understand that you see the whole world in black and white, Mr. Powell, but just to clarify the above letter is an example of satire. You see by pretending to agree with you I am actually whole-heartedly disagreeing with you. I realize that this requires more mental aerobics than you are accustomed to, but please try to get your head around it.)"

Senators gearing up for 2006
Broadcasters haven't even finished counting the money from the record-breaking Campaign 2004 advertising windfall (yeah, right) - - and already, the Senators up for reelection in 2006 are filling their warchests for the next go-around. 33 seats will be in play, and according to the Associated Press, 12 of the incumbents already have over 1M to spend. Leading the way is Kay Bailey Hutchison (R-TX), with over 6.5M - - although the jury is still out whether she'll use it to shop for a seat in Washington or an entire mansion in Austin TX. Another woman senator with possible alternate aspirations is Hillary Rodham Clinton (D-NY), who is currently sitting on over 5M. Of course, the speculation on her alternate office won't be settled until we get into the next presidential cycle. Rounding out the top 12 list are Edward Kennedy (D-MA), Dianne Feinstein (D-CA), Bill Nelson (D-FL), Richard Lugar (R-IN), Mike DeWine (R-OH), James Jeffords (I-VT), Debbie Stabenow (D-MI), Jon Kyl (R-AZ), Rick Santorum (R-PA) and George Allen (R-VA).

Marketing: Hard to beat word of mouth
BIGresearch used interviews with 14K consumers in an effort to determine which forms of inducement are most likely to lead to a purchase in four major retail categories. While TV holds its own top to bottom, it scored no first place mentions. The marketing research firm checked out four categories: electronics, apparel, grocery and home improvement; and studied the effectiveness of six information sources: coupon, news insert, broadcast TV, word of mouth, email and Internet. Info received via TV led to a purchase 23.6% of the time for electronics, 19.7% for apparel, 22.9% for grocery and 19% for home improvement. News insert was second in electronics with 26.4%, but the best medium was the one you can't buy - - word of mouth scored 35%. In apparel, news inserts edged out word of mouth 27.6% to 26.1%. TV was third again. Coupon was the hands-down winner in the grocery category with 52.2%, followed by news insert (40.2%), word of mouth (30.8%) and then TV. Results at the top of the chart in home improvement mirrored electronics - - word of mouth (26.4%) beat out news inserts (21.7%), followed by TV. The study showed that email and Internet still have a ways to go. They were competitive in electronics, with 16.7% and 19% respectively, but did not make much of a showing in the other categories. Both fell into single-digits in grocery and home improvement.

2005: Shaping up to be a tough year, Part 2
With the economy still trying to build some momentum, we asked some Wall Street analysts what they expect for radio and television this year. "Right now we've got plus 4% for the radio industry and we've got minus 4% for the television business," said analyst Victor Miller at Bear Stearn. "That just shows the agitation of about $1.2 billion in political that we think probably won't be around," he said of the TV figure. Wachovia Securities analyst Jim Boyle's view is also bearish. He's looking for 3.5% growth for radio and a flat year for TV. Boyle is in line with and Miller a bit more pessimistic than the Television Bureau of Advertising, which is predicting that spot TV sales in 2005 will be flat with 2004 (9/9/04 TVBR #176), with a push in local sales pretty much covering the lost political spending. This article appears in its entirety in the January debut issue of Radio and Television Business Report - The Real Business Magazine, see below to receive it - - or call April McLynn here to get your free copy: 703-492-8191.

Adbiz©

Telcom companies fastest growing online advertisers
Nielsen//NetRatings reports the telecommunications industry, the fourth largest industry to advertise online, was the fastest growing industry year-over-year in online advertising, increasing six percentage points in share of impressions. Growth in other industries, including financial services, retail goods/services and Web media, remained flat. The findings were reported by Nielsen//NetRatings' AdRelevance service, which tracks advertising activity. | More... |

Interpublic buys into Endeavor Marketing
IPG announced it has agreed to buy a minority stake in the marketing arm of the Hollywood talent agency Endeavor. A statement said Mark Dowley, principal of Endeavor Marketing and once CEO of Interpublic Sports and Entertainment Group, will also act as consultant to IPG, working closely with its Foote Cone & Belding. The move ends ongoing speculation about the fate of the firm and its leader, Dowley. The agreement forbids Dowley from working with any Interpublic rival, the statement said. Endeavor clients include AOL and AMEX.

Ad creatives may lose jobs to India
And you thought it was just software jobs...! AdRants reports just as many other industries outsource the bulk of their work, it's not surprising it's now being done in the advertising industry. Ad execs David Banjeree and Seema Trivedi have launched Banjeree & Partners, a New York-based agency which will outsource a portion of the creative process to India. Founder Banerjee says research and initial concepting will be handled in New York and then sent to 15 teams in India who will create the actual work. Banerjee claims his shop can do the work for 40 to 60% less than going rates.

Media Markets & MoneyTM

Border expands - - sorta - with three in two deal
Tom Castro in Texas reminds us of Randy Michaels in Ohio - - he seems willing to buy any stick that isn't nailed down. This time, the effects won't be all that noticable on the ground, though - - his Border Media Partners is simply converting San Antonio and McAllen-Brownsville LMAs into O&Os. The stations are coming from Arthur Liu's Multicultural Radio/Way Broadcasting. Liu picked them up in its 150M (or thereabouts) acquisition of the failed Radio Unica group back in the fall of 2003 (10/6/03 RBR #195). He'll get 5.75M of that investment back in this deal. In San Antonio, the stations are KZDC-AM, licensed to the city itself, and KFNI-AM Pleasanton TX. They are in a cluster which also includes KSAH-AM, KLEY-FM, KRIO-FM and KBUC-FM. KVJY-AM Pharr TX is the McAllen-Brownsville station. It's in a cluster that includes KILM-FM, KURV-AM, KSOX-AM, KJAV-FM, KESO-FM and KZSP-FM. Border also has a pending deal to acquire KJAV-AM.

Price revealed in Fresno
Jeff Wilks will pay 25M for the Cliff Burnstein FM trio in Fresno in a deal announced earlier this month (1/4/05 RBR #2). The stations are KJFX-FM, KTSX-FM and KFRR-FM, a combination which has been maintaining a hold on third place in the market behind Infinity and Clear Channel for the past several years, according to the Jim Duncan's "An American Radio Trilogy 1975-2004 Vol. 1." 3.25M of the total will be paid pursuant to terms of a promissory note. The contract also provides for an LMA rental period prior to closing at the rate of 25K/month, and includes a non-compete agreement.

XM buys live broadcast specialist
In its first move beyond being strictly a satellite radio company, XM Satellite Radio announced that it has acquired Effanel Music Inc., a company that specializes in live music, remote broadcasts and mobile recording services for radio and television. Past broadcast duties have included the Grammys, MTV Video Music Awards and the Lincoln Center Jazz Orchestra. Effanel's past work for XM included live broadcasts of the three-day Phish Coventry Festival and the Vote for Change Finale Concert. In addition to giving XM its own operation for producing more live remote broadcasts, the acquisition will also provide a new revenue stream. Effanel will continue to service its established roster of clients. Financial terms of the acquisition were not disclosed.

Washington Beat

Was something lost in the translation in translator battle?
Henry A. Solomon of Garvey Schubert Barer, and his client, Kodiak Island Broadcasting Company (KIBC) are not going to simply sit back and watch the Peninsula Communications fleet of FM translators spring back to life. The controversial small-town Alaska facilities were being run improperly and were ordered shut down by the FCC. To make a long story short, Peninsula was basically operating the translators as independent commercial stations, and at times was doing so in violation of orders to stop, which Solomon called "outrageous conduct." He specifically objects to an FCC Enforcement Bureau comment saying that the Congressional action appears to reinstate the translators. Here is the rider which seemingly puts that translators on Dr. Frankenstein's operating table and reinvigorates them: "Any broadcast license revoked or terminated in Alaska in a proceeding related to broadcasting via translator, microwave or other alternative signal delivery is reinstated." Solomon and KIBC argue that the Peninsula licenses were neither revoked nor terminated. Rather, Peninsula was ordered to cease unlicensed operations, and that the actual licenses expired in the year 2000. "The fog of litigation cannot obscure the fundamental fact that PCI had irrevocably lost its seven FM translator licenses early in 2000," concluded Solomon, "and the federal district court in Anchorage and the Ninth Circuit agreed when they approved the injunctive relief sought by the US Attorney's office in that city."

FCC advises patience for aggrieved
CA broadcaster
The FCC has already fined Uniradio Corp. 25K for its relationship with south-of-the-border XEMO-AM in Tijuana. It seems the station jacked up its power and moved its transmitter location without gaining the necessary international cooperation and approval, causing interference with KRLA-AM Glendale CA, one of the Salem Communications stations in Los Angeles. US corporation Uniradio figured in the equation because it was supplying broadcast of Major League Baseball's San Diego Padres to the Mexican station under permit. The terms of the permit specified XEMO's use of its legally-licensed broadcast parameters, and when the station went off the reservation, Uniradio went with it whether it was aware of the violation or not (and the FCC pointedly says it should have known). An international agreement has been reached since, and the station is said to be constructing a new two-tower facility which will return it to its original airspace home. Salem, however, wants more - - in a petition for reconsideration, it asks that Uniradio be stripped of its foreign country permit. The FCC denied the request, noting that it raised no new points, and that the grant of XEMO's new facility implied that it was also granted time to construct it. Uniradio's Padres broadcasts will resume in the spring, at which time Salem may have a case against Uniradio, if XEMO reverts to an unauthorized coverage pattern.

Engineering

Digital radio gaining ground in US and Europe
Digital satellite radio will have impressive growth in its subscriber base over the next several years in the US, with 3 million net new subscribers annually in the US alone through 2008, according to In-Stat. A recent survey of the high-tech market research firm's Technology Adoption Panel of US consumers indicates a growing awareness of digital satellite radio services. Half of the survey's respondents had heard of satellite radio, and felt they had a good idea as to what it offers. iBiquity's HD radio is less well-known. "However, price is still a barrier for many consumers, particularly with new HD radios," says Michelle Abraham, In-Stat Analyst. "Most consumers want to spend less than $200, and although satellite radio receivers are readily available for less than $100, HD radio receiver prices must decline before they are of interest to many consumers." In-Stat also found: The features offered by digital radio that were most appealing to survey respondents were the ability to receive news, weather, and traffic information on demand, along with more programming choices. Survey respondents who were familiar with satellite radio but did not own one, said the monthly subscription fee was the primary deterrent for purchasing a satellite radio. Declining DAB radio prices, unique digital radio stations, and a wide range of DAB radio products combined to propel the UK market to new heights in 2004. Other countries in Europe have taken note.

Transactions

KNOT AM & FM Flagstaff-Prescott AZ (Prescott AZ) from Payne-Prescott Broadcasting Companhy to Guyann Corporation.

WLBJ-AM Louisville KY (New Albany IN) from Mortenson Broadcasting Company of Louisville Inc. to New Albany Broadcasting Co. Inc.

| More... |

Stock Talk

Back-to-back gains
Monday's stock gains were nothing to write home about, but they did mark the first time in 2005 that the markets have put together back-to-back gains - - even if there was a three-day holiday weekend between Friday and Tuesday. Traders were said to be optimistic about corporate profits in the current round of quarterly reports. The Dow Industrials were up 71 points, or 0.7%, to 10,629.

Radio stocks were barely higher, but also up for the second straight session. The Radio Index inched up 0.160, or 0.1%, to 217.600. Viacom was the day's best performer, with its Class B stock up 2.3% and Class A up 2.2%.

Note: The stock table which ran yesterday was an error and contained outdated prices. US stock markets were closed on Monday for the Martin Luther King Jr. holiday.

Radio Stocks

**Here's how stocks fared on Tuesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		38.11	+0.78	Jeff-Pilot	JP		50.57	+0.73
Beasley	BBGI		16.37	-0.06	Journal Comm.	JRN		17.40	+0.18
Citadel	CDL		14.23	+0.08	Radio One, Cl. A	ROIA		15.57	-0.40
Clear Channel	CCU		31.90	-0.10	Radio One, Cl. D	ROIAK		15.58	+0.31
Cox Radio	CXR		16.51	+0.20	Regent	RGCI		5.40	+0.02
Cumulus	CMLS		14.13	+0.05	Saga Commun.	SGA		16.41	-0.15
Disney	DIS		28.74	+0.44	Salem Comm.	SALM		23.25	-0.07
Emmis	EMMS		17.77	-0.02	Sirius Sat. Radio	SIRI		6.24	-0.21
Entercom	ETM		32.10	+0.07	Spanish Bcg.	SBSA		10.10	-0.02
Entravision	EVC		7.71	-0.28	Univision	UVN		27.55	-0.37
Fisher	FSCI		48.65	-0.48	Viacom, Cl. A	VIA		39.15	+0.83
Gaylord	GET		41.32	+0.59	Viacom, Cl. B	VIAb		38.85	+0.86
Hearst-Argyle	HTV		25.72	+0.12	Westwood One	WON		25.02	+0.02
Interep	IREP		0.71	-0.04	XM Sat. Radio	XMSR		35.69	+0.02
International Bcg.	IBCS		0.01	unch	-	-	-	-	-

__UNSUB__ to this email service.

Bounceback

Send Us Your Opinions We want to
hear from you.
This is your column, so send your comments to [email protected]

The new PR campaign for terrestrial radio has struck a nerve with our readers. Ouch some of these comments cut right to the bone and some just fat. Got to read it to believe it and send your input along...
| More... |

Mark Coffey
Phoenix
Scott Harris
VP/GM NextMedia Lubbock
Scott Winchell
Account Manager
Clear Channel Radio
101.1 The Beat Jamz/WUBT FM, Nashville
Mike McBride, KUBL
Citadel Communications
Salt Lake City, UT

Arbitrends

Upped & Tapped

Sales boss for Entravision
Brian Reed has been named Vice President of Sales for Entravision Radio, overseeing local ad sales for all 21 markets. He had been VP and Director of Sales for Univision Television Group.

Metro Networks reorganizes broadcast operations
Westwood One COO Chuck Bortnick, announced the appointment of four SVPs in Metro Networks' Broadcast Operations Division. Effective immediately, Jeff Brown (East), Mike Haake (Midwest), David Baronfeld (West), and Larry Grant (Southeast) will become SVPs of their respective regions, reporting directly to John Frawley, SVP/Broadcast Operations. In addition, Bortnick announced the appointment of Christopher Leonard to VP/Regional Director for all Florida markets as well as his current market, Atlanta.

Champaign for Ginzkey
John Ginzkey, formerly with Union Broadcasting in Kansas City, has been named General Manager of AAA Entertainment's cluster in Champaign-Urbana, IL. He will report to AAA's VP/GM for the Champaign and Bloomington, IL markets, Patti Donsbach.

Mac attack in Fayetteville
Beasley Broadcast Group has promoted Fayetteville VP of Programming Mac Edwards to VP & Director of Operations for the six-station cluster.

Stations For Sale

SE Virginia - Sister AM Stations
Short Notice Sale of 2 Great AM Stations in the Virginia Beach Market.
Motivated Seller - All offers MUST be in by COB 1/21/05
atlanticremarketing.com
Billy or Richard - (757) 461-6867
[email protected]

25Kw FM Upgradeable to 100Kw
Upper Midwest single FM - group also available Good opportunity
Tim at AirTime Media
888-846-3472
[email protected]

West Coast Opportunities
Phoenix area FM
Central Valley CA LPTV
California "owner operator" FM stations, coastal and inland.
The Exline Team, Andy McClure, Dean LeGras, 415-479-3484, [email protected]

More News Headlines

LIM on the hotseat

Beasley renews Hurricane rights

Multi-anchors may replace Rather

TVBR - TV News

Nexstar undeterred by bad PR over retransmission fight
Judging by the letters to the editor in the San Angelo, TX Standard-Times, Nexstar is losing the PR battle in its fight with Cox Communications over retransmission consent payments (1/17/05 TVBR #11). The word "greed" is frequently used, along with references to the company's non-local ownership (although the same is true of Cox), and the newspaper itself has taken the editorial position that Cox is in the right and that "Nexstar's demands aren't reasonable." The Standard-Times is owned by E.W. Scripps Company. Nexstar Exec. VP/COO Duane Lammers tells TVBR he's not surprised. Since consumers obviously don't want to pay for something that had been free, he didn't expect retransmission consent payments to be embraced by the public. He and other Nexstar executives have spent long hours on the phone explaining the company's position to upset viewers - - and he thinks they're making some headway. "I don't think we are losing the battle," Lammers said. The clear winners in this fight are the satellite TV companies. The Joplin Globe reported that local installers have hired extra help and still can't keep up with demand from new subscribers to EchoStar's Dish Network - - the only service with local-to-local in that market, where Nexstar is demanding payments from Cable One. Both Dish and DirecTV offer local-to-local in Shreveport-Texarkana and while no local-to-local satellite is yet available in San Angelo or Abilene, Lammers says Nexstar is talking to Dish - - which can obviously see a revenue opportunity staring it in the face. "We're working with Dish as fast as we can to get the local service up and running." Echostar and DirecTV do pay local broadcasters for retransmission consent.

TVBR observation: TVBR stands with Nextstar to help educate television executives on the high level of importance of fighting now for this financial improvement by the cable MSO's or by 2006 it will be too late and the winds of Naples, FL will be at your back. Guess it's time TVBR gets the attention of the Editors at the San Angelo, TX Standard-Times. They can pick which hand they want TVBR to slap them with - Left or Right - doesn't matter. Yep, we have emailed them TVBR to educate them on the broadcasting business.

RBR Radar 2005

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

More radio "lovers"
promoting satellite as well
It turns out that Alicia Keys isn't the only artist who's been promoting satellite radio while recording spots for the new PR campaign that's supposed to boost terrestrial radio. A little digging by RBR has found that Ludacris made a live appearance just this month to promote XM Satellite Radio. He was one of the artists who appeared on the "XM Performance Stage" at the Consumer Electronics Show in Las Vegas.
RBR observation: You've read what we've had to say about the new PR campaign. Now check out our Bounceback section to see what broadcasters are telling us. We're still waiting for an email telling us that the new PR campaign is a great idea. 01/18/05 RBR #12

Congress gets behind FCC probe
Chairman Powell's probe will also encompass the more traditional music-related pay-for-play arena, on Capitol Hill the focus is almost entirely on Armstrong Williams.
RBR observation: We said it before and we'll say it again. This one isn't going away any time soon.
01/18/05 RBR #12

Reach Media, Inc.
A Dallas-based media, broadcasting, internet and entertainment company targeting the African-American community. The hub of 'The Tom Joyner Show' - Needs to fill key positions: Director Affiliate Sales, Director TV Affiliate Relations, Ad Sales Account Executives and Sponsorship Sales. Be on the ground floor of the next exciting TV syndication program plus work with really great honest people. For more information, contact Amy Bert.

See Radio Careers for more info.

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