Radio News ®

Saga's President/CEO Ed Christian
comments on re-inventing radio
Keynoting at the 54th annual convention of the Arkansas Broadcasters Association last Friday in Little Rock, Ed Christian urged his Arkansas colleagues to take steps to eliminate examples industry critics cite attempting to show that broadcasters aren't adequately serving the public: "I'm not saying we're doing a bad job, because I think we're good. I think we can re-invent ourselves, bring ourselves into the next decade and the next century, and do the things necessary to super-serve our communities. People talk about the glory days of radio, why can't now be the glory days of radio? It can if we will do what it takes to make it happen." Christian referred to examples of tried-and-true community service activities to illustrate that the industry needs to change. "Any station can rent a Mayflower truck on Thanksgiving, fill it up with food, and donate the food to the food pantry," Christian said. "But, how about the radio station that's helping put parents and foster kids together for adoption. That's a new idea. That's thinking out of the box. New ideas, that's what we have to do." Christian was introduced by Trey Stafford, VP/GM of Saga's Triple FM Radio Group in Jonesboro, AR.

Senators step up to the plate for Adelstein
A bipartisan group of Senate Commerce Committee members are making a third attempt to shake the proposed nomination of FCC Commissioner Jonathan Adelstein out of the White House cubby hole wherein it is entrenched, and get it to the floor for a vote. 17 members of the committee signed a letter asking that President George W. Bush submit his name, as requested by Tom Daschle (D-SD) way back in February 2003. "During the Executive Session held on Thursday, July 22nd, the Members of the Senate Commerce, Science and Transportation Committee expressed support for Commissioner Jonathan Adelstein's re-nomination to the Federal Communications Commission," reads the letter. "As a result, we are writing together to urge you to nominate Commissioner Adelstein to an additional term at the FCC. His term expired last year." Byron Dorgan (D-ND) said at that Executive Session that he had discussed the matter with the White House and that Adelstein's nomination was being held up for political reasons. Since his seat belongs to the Democrats, and he has wide support among Republicans, Bush's refusal to submit his name was seen as outside the normal way the executive and legislative branches do business with one another.

RBR observation: Who's FCC it will be? - will be determined after November. A piece of history as RBR has the letter, dated last Thursday (8/5/04), showing the who's who inside the beltway. Have an open space on your office wall then you probably should print it out, frame it, and hang it - just to say you have a piece of political history.
Here's the letter.

Bloomberg sees bounce back
for radio stocks
Radio stocks have been taking it in the teeth all year - - Bloomberg.com says on average, 22 such issues they follow have dropped 16% this year compared to a 2% drop in the S&P 500. But the good news is, Bloomberg also says it sees signs of a turnaround. The key factor analysts are looking at is growth in employment. Employment numbers are finally growing after three straight years of losses. This is key for radio, which relies on local advertising for its own financial well-being. Local advertisers need to see people with money coming in the door - - otherwise, they aren't going to open their own wallets. They aren't going to spend money to make a pitch to people who don't have any money of their own to spend. The political category is expected to heat up, too, especially for radio. A $1B political pot is predicted by November. Of course, location is everything, as national campaigns stay out of sold red and blue states to what RBR is now officially dubbing the "purple" states - - states with enough red and blue to go either way. Although some say that the Internet may be taking a bite out of radio's pie, at least one venerable analyst, Universal McCann's Robert Coen, is expecting the two media to grow in tandem, at least for the remainder of this year. RBR Closer Look recommends a click look back last week to our Winds of Naples, FL--Bending the Palm Trees 08/03/04 RBR #149.

RBR observation: A prism through which Bloomberg spied radio's silver lining was an expected announcement that the economy produced 240K new jobs in July. The actual number turned out to be 32K, fueling a Wall Street sell-off, and possibly putting off radio's recovery by at least another month.

Proxies waging campaign ad wars
Groups not affiliated with neither the campaign of George W. Bush nor John Kerry have been, and are continuing to be particularly active this year. And while the candidates must appreciate the support, the support is not without a certain amount of danger. Several groups, most importantly the Democratic National Committee, are carrying John Kerry's message into the battleground states. It comes at a time during which Kerry has elected to sit on his war chest, riding out the month-long gap during which the Bush campaign can spend freely while he cannot. This is because both candidates have agreed to accept $75M in federal campaign funding, conditioned on their pledge to spend no more than that. Kerry is nominated so he has to either save the money or spread it more thinly over time. Meanwhile, Bush can spend at will until he's nominated in the beginning of September.

RBR observation: Show you the money the problem with the proxy or surrogate campaigns is control. Read it to fully understand where the money is. | More... |

The Terra Lycos most-like list
Internet group Terra Lycos has put out its latest list of radio personalities in terms of who is being searched for the most. The rankings are based on search requests from the beginning of the year through 7/31/04. Holding his position at the top of the list is Howard Stern.

Here's the complete list (last ranking in parens):
1: Howard Stern (1); 2: Rush Limbaugh (3); 3: Bob & Tom (unranked); 4: Art Bell (8); 5: Sean Hannity (13); 6: Michael Savage (unranked); 7: Tom Joyner (2); 8: Dr. Laura (10); 9: Mancow (12); 10: Al Franken (unranked); 11: Paul Harvey (11); 12: Tom Leykis (unranked); 13: Bill O'Reilly (6); 14: Larry King (14); 15: Clark Howard (7); 16: Opie & Anthony (9); 17: Glen Beck (unranked); 18: George Noory (4); 19: Jim Rome (20); 20: Lionel (unranked).

The biggest gainer was said to be Savage. Terra Lycos' Dean Tsouvalas said a lot of that had to do with putting Iraq beheading footage on his site. Stern's traffic has been fueled by his "jihad" with the FCC. Dropping off the list are Don Imus, Click & Clack, Laura Ingraham, Don & Mike, Neal Boortz, and Dr. Drew & Adam Corolla.

Conference Calls, Q2 2004

Entravision supports guidance
with strong Q2
Hispanic radio and TV operator Entravision Communications Corporation brought home a pro forma Q2 gain in net revenue of 8%, meeting the high end of its prior guidance for the quarter. Overall, it picked up a 7% gain in net revenue, a 17% gain in broadcast cash flow, and a 50% gain in free cash flow. "Our company generated improved results in the quarter as we capitalized on our growing ratings and an aggressive effort by our sale teams," said Chairman/CEO Walter Ulloa. "As we continue to capitalize on the significant growth of Spanish-language media, we are making inroads into attracting new advertisers who wish to penetrate our fast growing audience." Ulloa said the company has its eyes peeled for further strategic station investments, continuing to focus on markets with a high-density Hispanic population. Looking ahead, Entravision is aiming for a Q3 net revenue gain in the 9%-10% range. It expects television to lead the charge with a 12% gain, while radio and outdoor hit in the vicinity of 7%-8%. This guidance is pro forma, taking into account the sale of assets in Chicago and Fresno.

Skies are blue for Gray
Gray Television posted impressive gains in Q2 2002, and its comps look even better on a YTD basis. For the quarter, total broadcast revenue is up 12%, producing a whopping 73% gain in net income. The numbers for those two categories YTD are 15% and 146%. Gray sensibly broke out the on-again, off-again category of political advertising in breaking out some of its numbers. Doing show yields a 9% gain in local advertising for the quarter and an 11% gain YTD. Political has nonetheless been a healthy source of income. The group brought in $5.4M in Q2, and has banked $9M so far this year, thanks primarily to Mr. Bush and Mr. Kerry. The numbers above are for broadcasting and newspaper operations combined. Pure broadcast revenues, fueled by political, are up 15% YTD. Otherwise, local advertising is up 11%, with a modest 2% gain in national.

Adbiz ©

"Visible World" getting some attention at PHD
Pat McNew, PHD's EVP/Local Media Network Director of Operations, was invited last week to learn more about Visible World's digital IntelliSpot technology which was introduced to the marketplace last year. "There's a pretty large creative element involved in it, so I've got to have a drill-down with the creative guys and with the media people to decide what we're going to do with it. As soon as we get our heads around it, we'll have more to say." IntelliSpot is a customization solution for TV advertising that brings the ability to target demographic or geographic segments of the viewing audience to a whole new level. The technology allows advertisers to customize their messages and make them directly relevant to their target viewers by dynamically updating and automatically assembling television commercials specific to the audience. Advertisers are able to create and send hundreds of variations of a single campaign to different viewers with one media buy and without creating multiple ad versions. As a fully automated and streamlined process, IntelliSpot also enhances advertiser's ROI by reducing many of the costs associated with creating and distributing multiple versions of commercials while providing more timely ads by allowing spots to be quickly updated or modified. Current include New York Interconnect, National Cable Communications and Los Angeles-based interconnect Adlink.

Gaming integration boosts brand awareness
at DaimlerChrysler
Jeff Bell, VP of Chrysler/Jeep Marketing, talked up the effects of product integration in gaming for Chrysler brand awareness during his keynote address last week at the Jupiter Media Advertising Forum in NYC. The "Race the Pros" game garnered a 27.6% lift in Dodge brand awareness; a 19.6% purchase intent and a 24.7% rise in overall brand awareness for DaimlerChrysler among users who played/downloaded the game. It was promoted online at MSN and FoxSports.com and on Fox TV. The "Jeep 4x4 Trail of Life" game drew 383,403 participants. 39% of those who played expressed interest in purchasing a Jeep. Bell told attendees Jeep sold more than 1K 4WDs to people who had registered for the game over the last 18 months. "Chrysler Golf" drew 124,732 registrants; each was required to give geographic as well as car preference information prior to playing. Bell reportedly said the result was a 33% rise in purchasing intent over the next six months.

Pat McNew, PHD's EVP/Local Media Network Director of Operations, talks about the phenomenon in RBR/TVBR Solutions Magazine October issue. An excerpt: What non-traditional advertising have you explored with success? "Gaming has become a big initiative for us. We have developed several games with product integration. The response has been great, and there is considerable measurement of actual sales coming from users. Jeep has done several interactive games. Jeff Bell, VP of Chrysler/Jeep Marketing, is very much interested in trying to embed the brand at a much younger age if possible. So he feels that integration with video gaming is the way to go."

Bush campaign unveils new Spanish ad
President George Bush's re-campaign has launched a new Spanish TV spot, "Our Country, Our President, and "showing that"all the Latinos are together, no matter where we come from," said Lionel Sosa, an advertising adviser in the Bush re-election campaign. Nearly 40M Hispanics live in the US, making it the country's largest minority group. The ad begins with Bush, wearing a shirt without a tie, saying in Spanish: "I am President George W. Bush, and I approved this message." The spot, which features the flags of such countries as Cuba, Venezuela and Mexico, will be broadcast in the key states of Florida, New Mexico, Nevada, Arizona and Colorado, all with large Hispanic populations. During the ad, a voice-over says in Spanish: "We live in a country that has opened up its heart to us and has given us a real opportunity: the United States, our country; George W. Bush, our president."

Media, Markets & Money tm

Washington Beat

Programming

PTC's new best and worst TV lists are out
The Parent's Television Council has put out its 2004 Top Ten lilts for the 2003-2004 TV seasons, listing the best family-friendly shows and the worst. In fact, the degree of propriety for children is the basis for the rankings. Here are the top winners and losers:

Best shows:
1. Joan of Arcadia (CBS); 2. Doc (PAX); 3. Sue Thomas F.B. Eye (PAX); 4. Reba (WB); 5. 7th Heaven (WB); 6. Extreme Makeover (ABC); 7. Everybody Loves Raymond (CBS); 8. American Idol (FOX); 9. American Dreams (NBC); 10. Bernie Mac Show (FOX).

Worst shows:
1. Everwood (WB); 2. That 70s Show (FOX); 3. Fear Factor (NBC); 4. Two and a Half Men (CBS); 5. C.S.I. (CBS); 6. The Surreal Life (WB); 7. Girlfriends (UPN); 8. Las Vegas (NBC); 9. Will & Grace (NBC); 10. Cold Case (CBS).

How'd the networks fare? Here are the rankings: 1. PAX (2-0); 2. ABC (1-0); 3. FOX (2-1); 4. WB (2-2); 5. CBS (2-3); 6. NBC (1-3); 7. UPN (0-1).

RBR observation: We disagree on two of the PTC's worst - Las Vegas is good entertainment and Cold Case is solid programming growth content.

Monday Morning Shakers & Makers

Deals: 6/28/04-7/2/04
Did somebody say doldrums? Yeah, Saga's Ed Christian used that term to describe the current trading environment. This week barely made it into the eight-figure threshold. Of the paltry nine stations traded, two were FM CPs, for a total of $10,601 total (one was sold for a buck) and two were swapped noncoms we couldn't assign any value to at all. Yawn....

Transactions

$16.5M KVTT-FM Dallas-Ft. Worth (Dallas TX) from Research Educational Foundation Inc. (Harry Reever) to Covenant Educational Media Inc. (A. Fletcher Anderson, Beatrice H. Ward, Bradley G. Wetherell). $500K escrow, balance in cash at closing. Buyer has right of first refusal to acquire seller's KVRK-FM Sanger TX, which serves north Dallas portion of the market. [File date 7/13/04.]

$2.65M KUBC-AM/KKXK-FM Montrose CO, KBNG-FM Ridgway CO from Woodland Communications Corporation (J. Stephen Glasmann) to CCR-Montrose IV LLC, a subsidiary of Cherry Creek Radio LLC (Joseph Schwartz et al). $100K escrow, balance in cash at closing. $10K allocated to non-compete. Existing duopoly. [File date 7/12/04.]

Stock Talk

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