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Volume 24, Issue 131, Jim Carnegie, Editor & Publisher
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Friday Morning July 6th, 2007
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Radio News ®
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 RBR First
WCBS-FM coming back
to The Big Apple!
As we mentioned first in yesterday's Media Business Report (7/5/07 MBR): Word on the street is that WCBS-FM NY is heading back to Oldies next week and dropping "Jack FM." An RBR source says CBS Radio CEO Dan Mason mentioned this was one of the first things he'd do, after flipping 92.3 K-Rock back to Alternative, from "Free-FM." We assume all of the imaging and liners will return as well, hopefully along with as much of the original talent as possible. CBS Radio had no official comment. Needless to say, the move to switch the station from its original Oldies format to "Jack FM" was met with a lot of criticism.
RBR observation: When they flick the switch they should just say "We're baaaack! WCBS-FM: "Just Great." We estimate the format will be a bit updated - maybe hits and deeper cuts from the 60's, 70s and 80's? New Yorkers are forgiving if you just admit the mistake. Now when this flip happens the key will be the talent, execution, marketing etc. then wait and see if the 36 million in ad revenue returns.
KCRW reveals hidden details in SoundExchange offer
KCRW-FM LA's weekly music commentary, On The Beat, revealed that the new SoundExchange offer to webcasters concerning internet music royalties includes quid pro quos that the organization did not disclose in its press release. KCRW commentator Celia Hirschman reports that webcasters would have to agree to cease their lobbying efforts on behalf of the Internet Radio Equality Act. Currently, 124 Representatives are co-sponsoring the Act, which would overturn the Copyright Royalty Board ruling mandating new higher royalty rates and per channel charges. More Senators are needed to co-sponsor, for the Senate version to gain traction. Hirschman discloses that the SoundExchange offer only extends for 18 more months. She points out that webcasters would then be forced to "fight all over again" to cover 2009 and 2010, the period included in the CRB decision. Sound Exchange has offered to cap the 500 dollar per channel fee at 2,500 dollars. KCRW has since learned that, as part of the agreement, webcasters would also have to withdraw their legal motion for a stay on the per channel minimum issue. An Appeal and Request for Emergency Stay is currently before the U.S. Court of Appeals for the D.C. Circuit. Webcasters are asking the Court to stay the new royalties until the appeal is heard. Hirschman notes that the CRB decision would have disastrous results on major music webcasters. "Live 365 would face 10 million dollars in royalty fees. Yahoo, Real and Pandora collectively owe over a billion dollars in royalties. None of these organizations generate a fraction of income from streaming to possibly pay these fees." The deadline for paying the 2006 and 2007 royalties is 7/15.
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 The allure of LUR
and the remainder biz
If you put unsold inventory up for auction on the Internet, does that count when you are calculating lowest unit rate (LUR) when charging a politician for airtime? 41 state broadcaster associations (and one from Washington DC) want to know. The use of three internet services to peddle unsold inventory is a process that is off the rate card, and the coalition of associations wants a declaratory ruling on whether they should be considered, and also wants to know if there are any other pertinent issues involved with the use of internet services of this type. Three are mentioned specifically: Bid4Spots, SoftWave Media Exchange and dMarc Broadcasting. The FCC is opening the issue for public comment under MB Docket No. 07-137, on an ex parte permit-but-disclose basis.
RBR observation: If in some parallel universe, political campaigns are entitled to buy carpeting at lowest unit rate for its portable campaign stage, it should not be expected to pay the going rate for carpet remnants unless it is willing to buy the remnants and sew or glue them together itself. Likewise, broadcast inventory remnants have no business being considered in a calculation of this type. If politicians want to troll the internet for cheap airtime in an unsold daypart, fine, they should be welcome to do so. But a station's documented standard business procedure should be the sole determining factor for LUR.
 Fairness Doctrine revival
still alive?
That's what one industry watchdog says. Accuracy in Media's Cliff Kincaid (pictured) called the bill just passed in the House and pending before the Senate is largely symbolic and would in no way prevent reinstatement of the Fairness Doctrine after the 2008 elections are in the books. This even though the bill passed the House by a 309-115 margin. It's simple, really. The bill, sponsored by Mike Pence (R-IN), prevents the FCC from putting any cash into reinstatement of the Doctrine. In 2008. It doesn't say a word about what the FCC may do after that. Kincaid points out that a Democratic administration, backed by a Democratic Congress, with a new Democratic majority at the FCC, could very easily put the Fairness Doctrine back into effect. Being prevented from doing so in 2008 is utterly meaningless, since Democrats will not have access to the critical White House and FCC portions of the formula any earlier. Kincaid believes the Pence effort, which Pence knew was temporary, may have had the adverse effect of giving Democratic congressmen cover, and that once the 2008 ban expires, a new Democratic FCC could reimpose it without the need for congressional action. He is calling for a more permanent legislative fix. Pence has offered such a standalone bill, the Broadcasters Freedom Act, but it's fate is still very much up in the air.
RBR observation: We suspect that if Democrats are able to hold Congress and take over the White House and use this platform to reinstate the Fairness Doctrine, a serious court challenge will follow in short order. Given the current Supreme Court's decision on Wisconsin Right to Life, which favored freedom of speech over efforts to moderate the flow of special interest cash into the political process, we suspect it'll take a major makeover at that venue to Frankenstein the Fairness Doctrine back to life.
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Wicks affiliate buys trade pubs
NewBay Media, an affiliate of the Wicks Group of Companies private equity group, has expanded into the broadcasting trade publishing arena, buying IMAS Publishing on undisclosed terms. IMAS publications include Radio World, TV Technology and a number of related titles, as well as the show dailies for NAB and NRB. NewBay, headed by CEO Steve Palm, already owned some titles in the pro audio/music field and Television Broadcast, so this acquisition expands it into the heart of radio and television engineering. The company said it will retain the IMAS headquarters in Falls Church, VA, along with the international offices in the UK and Italy.
RBR observation: The Wicks folks are definitely bullish on broadcasting and lots of businesses related to broadcasting. Principals Craig Klosk and Matt Gormly had plenty of involvement in radio and TV companies before Wicks and the original Wicks fund owned both radio and TV groups. In addition to NewBay, the two current Wicks funds have broadcast and related investments in Marketron Broadcast Solutions (broadcast software), Allegiance Communications (cable TV) and Wilks Broadcast Group (radio stations).
 Broadcasting below presidential radar
Sometimes when you're inside the Beltway, you can't help but think that issues surrounding communications in general and broadcasting in particular are of vital importance and interest to just about everybody. Hearings on the topic often pack in wall-to-wall audiences, and the politicians and witnesses heap on massive piles of rhetoric about influence on the democratic process, our children, our waste lines, our morals - in short, you name it. We still remember Fred Upton (R-MI) the first time he introduced the Broadcast Decency Enforcement Act calling it the most important bill before Congress. Although perhaps he can be forgiven - such hyperbolic language is thrown about casually all the time in Washington - but we couldn't help thinking that dozens of issues were facing the nation at the time that easily eclipsed the importance of raising fines on broadcasters for saying naughty words on the air. But given all this, an RBR survey of the websites of all 19 announced presidential candidates revealed that only three figured broadcast issues were important enough for them to list a position on it. The lone Democrat was Dennis Kucinich (D-OH), pictured, who wants free air time for politicians, more public broadcasting, public involvement in license renewals and more LPFM, among other things. On the Republican side, Sam Brownback (R-KS) touted his introduction of the aforementioned Broadcast Decency Enforcement Act (he carried Upton's torch through the Senate), and let it go at that. Tom Tancredo (R-CO) noted that he voted for the same Act. And that, ladies and gentlemen, is it. Note that John McCain (R-AZ), who has a lengthy track record of dealings on communications issues, is among the 16 who left it off the website.
RBR observation: So once again it is obvious that as hot as communications issues can get in Washington, it is extremely unlikely to be an issue that makes or breaks anybody's candidacy on either side.
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Slouch in Your Chair!
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Master Messagecasting
Free webinars July 10 & 12. How to engage listeners and advertisers using text over HD Radio, FM RDS and your website. Stuff your station can use today. Seating is limited. Learn more.
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Ad Business Report TM
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Coca-Cola sponsoring 2007 Essence Music Festival
Coca-Cola announced today that it will celebrate the New Orleans homecoming of the 2007 Essence Music Festival Presented by Coca-Cola with the help of Comedian/actor Steve Harvey of the Steve Harvey Morning Show, actor/choreographer Darrin Henson and R&B starlets Cherish (400 artists will be there, in total). Harvey broadcasts live from the Coca-Cola Booth yesterday and today, from 5am to 9am. The events and activities, running from 7/3-7/7 include "Breakfast with Steve Harvey" at the Coca-Cola Booth; messages of education and empowerment at the Youth Outreach Program; the "Refreshing Faces of Essence" will be chosen from photographs taken of women at the Coca-Cola booth; aspiring "cover girls" can sign up throughout the week for a chance to meet Essence's editor-in-chief, Angela Burt-Murray. Stomp the Yard star Darrin Henson will show off his latest and greatest moves during Coca-Cola Hip-Hop dance class today and tomorrow from 1:30pm to 2:30pm. The Coca-Cola Super Lounge features American Idol's Ruben Studdard, Common, Kenny Lattimore & Chante Moore, Rahsaan Patterson and MC Lyte and more.
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| Media Markets & Money TM |
Close encounter in Detroit
Davidson Media Group has left Detroit in its wake and Rich Kylburg and his Communicom are in with WDRJ-AM. Broker John Pierce reports the transaction, which weighed in at 3.8M, is now a done deal. The sale was part of a portfolio pruning project for Peter Davidson's group, which has been active on both sides of the negotiating table of late.
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| Washington Media Business Report TM |
 Consumers to foot the bill
for new set-top boxes
Cable companies are supposed to be using new set-top boxes that use a special security cards which can plug into boxes provided by competing manufacturers, freeing consumers from renting the boxes from cable services without option. Although competition is supposed to either drive down prices or increase quality, it looks like the first think this new rule is going to do is swell consumers' monthly bill. According to the Associated Press, cable customers may see as much as 2-3 dollars added to their bills per month to cover the new, more-expensive boxes, which translates to 24-36 dollars per year. Although subscribers with newer boxes may not need to make a switch, some cable operators may spread the cost of the new boxes across their entire subscriber base rather than inflict the entire bill only on those needing to make a switch.
RBR observation: Phones certainly have changed since consumers were freed from renting them from the phone company. The question is how fast viable alternatives to the cable company's box hit the market? Will they be cheaper? Will they offer outstanding new features worth paying for? Looks like all of us cable subscribers are going to have to pay well before there are any benefits materialize.
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| Entertainment Media Business Report TM |
Art Bell retiring
Art Bell recently announced his retirement from hosting the weekend version of Coast to Coast AM. "I really want to spend my time with my wife and newborn daughter," he explained, adding that his association with Premiere Radio will continue and he'll be back to occasionally fill in or host special shows. This is the second time he's retired from the show. The first was over personal matters and health issues. George Noory then took over for the weekday version of the show years ago and Bell kept weekends when he returned.
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| Internet Media Business Report TM |
 Facebook sees flood of new traffic
comScore released the results of a study on the visitation to Facebook.com, which showed the site grew to 26.6 million unique visitors in the U.S. in May 2007, marking an 89% increase versus the same month last year. The dramatic growth comes on the heels of Facebook.com's decision in 9/06 to open up registration to the general public, a change from the previous policy requiring a valid email address from a university or a selected group of secondary schools and businesses. In the months prior to allowing open registration, Facebook.com's traffic hovered at approximately 14 million visitors per month. However, after Facebook opened its doors to the general public, visitation accelerated to reach a level of 26.6 million visitors in 5/07, up 89% vs. the same month last year and 100% versus 9/06. Meanwhile, the number of pages of content viewed at Facebook.com in May 2007 increased to 15.8 billion, up 143% versus May 2006 and 121% versus September. Visitors averaged 186 minutes at the site in May 2007, which marked a 35% increase versus the same month last year. Interestingly, engagement levels peaked in 2/07 at 200 minutes per visitor, then leveled off slightly as the influx of new visitors (who tend to begin as lighter users) tempered the average.
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| Ratings & Research |
 Global entertainment, media spend
accelerated by convergent platforms
The global Entertainment & Media industry is experiencing sustained growth and will increase at a 6.4% compound annual growth rate to 2 trillion by 2011, according to PricewaterhouseCoopers Global Entertainment and Media Outlook. Digital and mobile spending in each territory during the next five years rising to 153 billion by 2011, says the report. And, spending related to the distribution of entertainment and media on convergent platforms (convergence of the home computer, wireless handset and television) will exceed 50% of global spend by 2011, reports The Center for Media Research. The study shows that within the next five years, nearly half of the total industry growth is expected to be generated through online and wireless technologies and, during the same period, broadband households will grow by 300 million to 540 million subscribers and wireless subscribers will increase by 1.1 billion to 3.4 billion. The migration to digital formats is having an adverse impact on competing revenue streams while consumer-generated media is accelerating content fragmentation. Global advertising will increase at a 5.4% CAGR during the forecast period, rising to 531 billion in 2011. Internet will remain the fastest-growing advertising medium, with a projected 18.3% compound annual increase to 73 billion in 2011. Advertising on the internet by 2011 will comprise 14% of the global advertising market. Out-of-home will be the second fastest growing ad medium, with a projected 6.5% compound annual increase.
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| Transactions |
1.1M WAVX-FM Burlington VT-Plattsburgh NY (Schuyler Falls NY) from Christian Ministries Inc. (Sean Troland) to Vermont Public Radio (Amy Hastings, Mark Vogelzang et al). 110K escrow, balance in cash at closing. Includes non-compete. Noncommercial station. [File date 6/11/07.]
1.05M KSNO-FM Snowmass Village CO from Cool Radio LLC (Thomas Dobrez) to Colorado West Broadcasting Inc. (Gabriel Chenoweth et al). 25K escrow, balance in cash at closing. Duopoly with KGLN-AM/KMTS-FM Glenwood Springs CO. [File date 6/8/07.]
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| Stock Talk |
Mixed day follows holiday
Wall Street traders returned after a day off, but mixed economic signals and higher bond yields produced a mixed market. The Dow Industrials were down 11 points to 13,566, but the S&P 500 and Nasdaq Composite were up a bit for the day.
Radio stocks headed lower. The Radio Index dropped 1.027, or 0.6%, to 158.429. Radio One, which had led Tuesday's advance, also led Thursday's decline. Its Class D stock was down 4.2% and its Class A fell 4%. Salem was down 3.3%.
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| Radio Stocks |
Here's how stocks fared on Thursday
| Company |
Symbol |
Close |
Change |
Company |
Symbol |
Close |
Change |
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Arbitron
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ARB
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53.52
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+0.31
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Google
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GOOG
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541.63
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+7.29
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Beasley
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BBGI
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9.00
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unch
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Hearst-Argyle
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HTV
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23.83
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+0.06
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| CBS CI. B |
CBS |
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34.12
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-0.11
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Journal Comm.
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JRN
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13.39
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+0.22
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| CBS CI. A |
CBSa |
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34.18
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-0.04
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Lincoln Natl.
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LNC
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71.23
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-0.49
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| Citadel |
CDL |
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6.33 |
-0.05 |
Radio One, Cl. A
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ROIA
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7.18
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-0.30
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Clear Channel
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CCU
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37.94
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+0.24
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Radio One, Cl. D
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ROIAK
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7.16
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-0.31
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Cox Radio
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CXR
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14.19
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+0.04
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Regent
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RGCI
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3.34
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+0.06
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Cumulus
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CMLS
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9.33
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+0.06
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Saga Commun.
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SGA
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9.72
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-0.12
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Debut Bcg.
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DBTB
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1.89
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unch
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Salem Comm.
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SALM
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10.93
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-0.37
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Disney
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DIS
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34.63
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+0.09
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Sirius Sat. Radio
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SIRI
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3.10
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+0.12
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Emmis
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EMMS
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9.17
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-0.01
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Spanish Bcg.
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SBSA
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4.36
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-0.04
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Entercom
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ETM
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24.77
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-0.26
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SWMX
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SMWX
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0.21
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unch
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Entravision
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EVC
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10.54
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+0.05
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Westwood One
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WON
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7.11
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-0.04
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Fisher
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FSCI
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51.05
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-0.56
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XM Sat. Radio
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XMSR
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12.39
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+0.67
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Bounceback
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 We want to
hear from you.
This is your column, so send your comments and
a photo to radionews@rbr.com
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Below the Fold
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Ad Business Report
Coca-Cola sponsoring
2007 Essence Music Festival...
Media Markets & Money
Close encounter in Detroit
Davidson Media Group has left Detroit in its wake...
Washington Media Business Report
Consumers likely stuck
With box fees customers may see 2-3 dollars added to their bills...
Ratings & Research
Global entertainment
Media spend accelerated by convergent platforms...
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Stations for Sale
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Hispanic Stations-Connecticut
Two full-time established AM stations serving the Hartford & Bridgeport Markets.
Contact Dick Kozacko,
Kozacko Media Services
607-733-7138, rkozacko@stny.rr.com
Full Power Maine FM's
2 FM's great cash flow with good upside, asking 1.5M.
Also offered individually.
Inquiries 781-848-4201 or
e-mail: salesgroup@beld.net
WEB: radiostationsforsale.net
 Market your Stations For Sale
in our daily epapers.
Contact
June Barnes
jbarnes@rbr.com
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Radio Media Moves
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Landing in Wichita
Former WNNS-FM Springfield, IL morning drivers Brian Pierce and Kellie Michaels will reprise their "Brian and Kellie" morning show in Wichita, joining Journal Broadcast Group's KFDI-FM on July 30th.
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More News Headlines
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Few takers
for EMI offer
The second acceptance deadline passed with hardly any EMI Group shareholders accepting the 4.7 billion bucks buyout offer from the Terra Firma private equity group, so it has been extended again - to July 12th. Shareholders appear to be holding out in hopes of a higher bid from Warner Music Group, which has yet to actually make a bid. Only 3.56% of EMI shares were tendered by the July 4th deadline, hardly up from the 3.53% of shares of the record company tendered by the original June deadline (6/29/07 RBR #127). So, Terra Firma has extended its offer for a second time to July 12th, noting in its announcement that there is the possibility of a further extension.
RBR observation: As the old adage goes, "A bird in the hand is worth two in the bush." In this case, the birds in the bush are former EMI CEO Jim Fifield - who lost his equity backer and doesn't appear to have found a new one, making it unlikely he will bid - and Warner Music Group - which didn't get its bid together during the formal bidding process and has not yet done so, except to say last month that it is still interested in bidding. At some point Terra Firma boss Guy Hands is going to decide that his bid isn't going to close and walk away, which would leave shareholders without the bird they now have in hand, nor either of the two in the bush. The Terra Firma bid also appears to raise no antitrust issues, while an EMI merger with Warner Music Group would face tough going, particularly with EU regulators. To switch metaphors, we have to wonder whether the reluctant EMI shareholders are overplaying the hand they have been dealt.
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RBR Radar 2007
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Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.
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No recovery seen soon
With radio revenues down 1% in May (7/3/07 RBR #129), analysts say they see no sign of any immediate improvement. "Our recent channel checks indicate the softness continued into June, which increases the risk that some operators fail to meet our 2Q revenue projections," Bank of America analyst Jonathan Jacoby.
07/05/07 RBR #130
TV brethren rewarded for selling out
Should radio companies be emulating TV companies and get out while the getting is good? TV stocks have been outperforming radio stocks, but it seems that the way for a television company to impress Wall Street appears to be to put itself up for sale. Through the first half of 2007, the top performing TV stocks were Ion, Nexstar and LIN, none of which expect to be around as public companies by the end of this year. A dozen of the stocks tracked daily by RBR's sister publication TVBR are up double digits or better year-to-date. See the TV chart for complete results in the special report page in RBR.
07/05/07 RBR #130
Tribune vote set for August 21
There's no indication when action may come on required regulatory approvals, but Tribune Company has set a special shareholders meeting for August 21st to vote on the deal to have Sam Zell and a new Employee Stock Ownership Plan finish buying out the public shareholders and take the company private. Shareholders of record on July 12th will be eligible to vote. The proxy is to be mailed out later this month. There is no known organized opposition, so it appears the vote will be a mere formality.
TVBR observation: Tribune's stock price has dropped a couple of bucks in recent weeks, so it appears traders are becoming concerned about whether the company will get the needed waivers of the newspaper/broadcast crossownership rule from the FCC - or, if so, when. The buyout of remaining shares for 35 bucks each can't take place without those waivers, since it would constitute a change of control of the company and void the existing waivers.
07/05/07 TVBR #130
Stocks improved in Q2
Have radio stocks finally begun to recover after hitting bottom? The RBR Radio Index ended Q2 in positive territory year-to-date, ahead 0.86%, and most radio stocks are now up YTD, improving over their Q1 performance. Still, it's not much of a trend to get excited about - at least, not yet. Seven radio stocks are now up double digits for the year thus far, an improvement over only three at the end of Q1. The best performer is one of the newest and smallest companies, Debut Broadcasting.
07/03/07 RBR #129
Revenues down 1% in May
There was no boost for radio in May. The RAB reported that May radio revenues declined 1%. Local was down 2%, but national flat, so total spot sales were down 1%. Not-spot was up a healthy 10%, but that didn't change the picture any. The grand total of revenues was also down 1%.
07/03/07 RBR #129
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Local Sales Manager
KFAN, Twin Cities, home of the Vikings and the leader in Sports radio has opening for a Sports Leader LSM. Minneapolis-St. Paul is a Top 20 Metro market (#16) and year after year, in quality of life studies, we are listed as one of the nation's best. Have what it takes to win when in the Red Zone then join our Sports Team and KFAN-AM 1130 as we go helmet to helmet. Qualifications and where to send resume, cover letter see Radio Careers
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