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Volume 23, Issue 154, Jim Carnegie, Editor & Publisher

Wednesday Morning August 9th, 2006

Radio News ®

Hogan insists that listeners
don't hear spots as units
Clear Channel Radio CEO John Hogan isn't buying the argument from Cox Radio CEO Bob Neil (8/3/06 RBR #150) and others that radio needs to hold down units per hour to attract listeners. Hogan told Wall Street analysts that listeners don't perceive each spot, regardless of length, as a unit - defending his company's move to running shorter length spots within limits on the number of minutes of commercials per hour. "I think that some of our competitors clearly understand that we need to be consumer-centric, that we need to be programming our radio stations so that we give people more of what they come to radio for - and that is content. That we need to be more creative and innovative in how we put commercials into the mix. And I think some of them are doing that. I think some others are less likely to have acknowledged that the environment has changed. We don't think that the old idea of a unit is a unit is a unit necessarily applies today. It certainly doesn't apply for listeners. It is hard to engage someone for 60 seconds. We think by offering a variety of spot lengths and spot positions that we're providing a better product," Hogan said in Clear Channel's quarterly conference call.

RBR observation: The jury is still out on whether Less is More accomplished all it was supposed to. Is clutter coming back by packing more, but shorter spots into each pod? Wall Street analysts are trying to get a handle on whether Clear Channel is succeeding in putting upward pressure on pricing now that Less is More has been fully implemented for over two quarters. Hogan insisted yesterday that rates were better in Q2 on :60s, :30s and :15s and that :30s now account for around 35% of all of the spots being sold by Clear Channel Radio stations, "which is very encouraging," he said. We noticed, though, that whenever an analyst asked a question about just how many units are airing vs. a year ago, Hogan and Clear Channel Communications CEO Mark Mays managed to talk a lot about other questions, without ever getting around to answering that one.

Clear Channel Radio pacing up
4.8% in Q3; still trailing 2004
"The Q1 and Q2 performance clearly demonstrates that the investments we have made in our businesses are paying off and we believe our momentum is carrying us into Q3 and beyond," Clear Channel CEO Mark Mays told analysts yesterday as he applauded Clear Channel Radio, post-Less is More, for outpacing the radio industry. Looking at the current quarter, Mays said radio is pacing up 4.8% after beating expectations with 6% growth in Q2. But while Clear Channel Radio is growing faster than its peers this year, it has still not caught up to where it was in 2004, before Less is More. Even with the 6% jump in Q2, radio revenues were at 983.5 million, still well below the Q2 2004 level of 996.8 million. A 4.8% revenue gain would bring in Q3 barely ahead of the quarterly results for 2004 (before a 4.3% drop last year), but still leave Clear Channel playing catch-up for the year-to-date versus 2004.

Ed Christian weighs in
It is THE topic in radio today: units vs. minutes. How many spots will listeners tolerate and how long should they be? Usually outspoken Saga Communications CEO Ed Christian was a bit of a fence sitter when quizzed by analysts yesterday. "I do believe there is a level of interruption - and I don't know exactly what that level is. And that is a problem when you start looking at units, minutes. Clearly you have to find a threshold level after which you [a phrase that might draw a 325K fine from the FCC] listeners...or, rather, irritate - and we're constantly looking for that - and I don't know the answer. And I think it's somewhere between the Less is More and using :60s as a barometer. And I also think it is format specific, because I think the younger people have a tendency - as we see with News/Talk stations, where you can run 18 minutes and not irritate your audience - that the younger stations have to have more inventory control," Christian said.

Michaels deal off for WLIB
It was indeed too good to be true. Talks never got to a final contract and Randy Michaels will not be programming WLIB-AM New York after the Air America LMA ends August 31st. When RBR broke the news in April that Michaels was set to take over programming and introduce new, mostly-local liberal talk shows, it appeared that an agreement had been reached with WLIB owner ICBC Broadcast Holdings, but that nothing could be signed because Air America Radio still had contractual rights under their LMA. But the devil is in the details. When it came time to work out those details, something - we don't know what - just couldn't be ironed out. Even so, the parties are leaving the door open to perhaps resuming talks at a future date. For now, the question is, just what will air on WLIB next month and who will be programming the station? We wait for word from ICBC.

Commissioner #5 weighs in
Robert McDowell held his first meeting with the press on the occasion of his 69th day in office...he called it a Q&D session (question and dodge). He introduced himself as a wireline person catching up on the many other areas of FCC oversight who believes in letting the free market do its work as much as possible. He thinks it's a good thing to clear out "unnecessary regulatory underbrush," let people make their own decisions, and free up entrepreneurs to give them things to decide on as rapidly and efficiently as possible. On specific issues, he said he did not believe the FCC has the power to mandate multicast must-carry, and opposed an attempt to regulate that in by Chairman Kevin Martin, and that it's the prerogative of Congress to codify such a mandate. He is approaching the ongoing rule-making on media ownership with an open mind. Asked where he stands on newspaper cross ownership, relaxed rules on in-market television combos and higher local radio caps, he said he wants to read the record and evidence that is currently being put together. He was, of course, a civilian in the wireline business back when the 6/2/03 rulemaking took place, and said he knew about it but had, and has, no strong opinion on its contents. He also noted that he has read the full Prometheus decision from the Third Circuit, and said what ever the FCC does this time will have to thread Third Circuit's needle. He thought it might be logical to break the proceeding into separate components rather than taking the omnibus approach, which he called "one big kidney stone to pass." He helped get the Comcast/MASN agreement done by providing a shot clock and a choice of venues. Asked if forcing a deal was odd fit with a free market philosophy, he noted that it gave consumers freedom to get the programming, putting the decision in their hands. He did say that the government should step in when there is a market failure of any kind, but that such intervention should be as narrow as possible and preferably come with sunset provisions.

Does televised wrestling lead to violent teens?
A study in American Pediatrics has found that frequent viewers of professional wrestling programs on television tended more towards violence, weapon possession and fighting on dates, and the trend held for both boys and girls. In fact, for girls, the results were almost off the chart. According to the Associated Press, 35% of girls in a 1999-2000 survey watched wrestling, 9% watched six or more times during a two-week stretch, and the heavy viewers were 170% more likely to start a date fight than non-wrestling watchers. More boys watch the programming. 63% watch, 25% meet the six-time/two week threshold, and they were 77% more likely to start a date fight. A World Wrestling Entertainment executive disputed the findings.

RBR observation: We'll dispute them too. Does the programming create the thug, or do the thugs find the programming? For this study to convince us, it would have to take a group of peaceful teenagers who do not tend to violence, do not carry weapons and do not get into date fights. Then it would have to expose some of them to wrestling, and show that wrestling changed them into violent, weapon-toting date-warriors. Otherwise, all they've managed to do is identify a component of the pro-wrestling audience, most of whom realize it is meant to be entertainment, not a lifestyle lesson.

Wall Street Media Business Report TM

Q2 2006 Conference Calls
Clear Channel outperforms on the top line, underperforms on the bottom line
Q2 revenues at Clear Channel Communications came in ahead of expectations, rising 7% to 1.85 billion. Growth was powered by 6% improvement for radio to 983.5 million and a 9% gain in outdoor to 748.4 million, not to mention 11% rise to 150.2 million for the small "other" category that includes TV and the Katz rep firm. Clear Channel management likes to emphasize the OIBDAN metric, which is relatively close to good old fashioned broadcast cash flow, where radio gained 6% to 401.5 million, outdoor rose 14% to 256.2 million and "other" shot up 31% to 36.7 million. Investors didn't seem to mind at first that Clear Channel missed the Thomson/First Call consensus for earnings per share, coming in two pennies shy at 39 cents. Rather, the stock gained in early trading after management indicated that growth was continuing in Q3, but reversed course late in the day and ended down 1.9%.

Saga up, but down quarter ahead
Saga Communications hasn't been giving Wall Street specific forward guidance, but company executives did tell investors yesterday to expect Q3 to be down - they just declined to say how much. Q2 net revenues did inch up 0.5% to 37.8 million, although same station revenues declined 0.7%. "We do not see a sea change for either radio or TV," CEO Ed Christian told analysts, so he said Saga must find new ways to replace the shortfall through such things as interactive media, a/k/a the Internet. Noting ratings gains in Saga's largest radio markets, he also said he hoped to see an end to the revenue malaise plaguing Columbus, OH, Milwaukee and Norfolk. For Q2 on a same station basis, radio revenues were down 1.9% to 32.7 million, but operating income rose 0.8% to 10.3%, while TV revenues gained 9.6% to 4.3 million and operating income shot up 50.7% to 918K.

Cumulus sees slightly better Q3
Cumulus Media CEO Lew Dickey says Q3 is pacing ahead 1%, despite a July decline of 2%, with August up 3% and building and September ad sales also building. Cumulus had given Wall Street flat guidance for Q2 and barely beat that, with revenues up 0.1% to 87.3 million. Lew said national and local were about even for the period. Q2 station operating income (SOI) was down 1.7% to 32.2 million. On a pro forma basis, revenues were up 1.6% and SOI declined 1.9%. Like other CEOs, he was asked about the impact of Clear Channel's Less is More initiative pushing shorter spots and fewer total minutes of advertising. Lew said Cumulus had observed a net reduction in inventory in markets where it competes with Clear Channel. He also said that demand for :30s has not caught up with the inventory at Clear Channel and that Cumulus is still primarily selling :60s.

Management Business Report TM

The Art of the Interview: "Hiring the Best"
By Julie Ballard-Lebe, a 19 year veteran of CBS Television Stations and former Senior Vice President/Director of Sales managing 7 of their 10 national sales offices. She's now running Ballard Executive Search in LA (www.BallardExecutiveSearch.com). Yesterday, Julie gave more tips in the process (08/07/06 RBR #153). Today she finishes out the list.
| Read More Tips... |

Tomorrow: Group Owners "Another run for Yager"
Long-time TV veteran Jim Yager is back again, building another new company from scratch. What does he see in the business that the Wall Street guys don't? And where is he looking for acquisitions to keep filling out the station portfolio of Barrington Broadcasting?

Ad Business Report TM

Network radio + new media buys
As many are learning, a lot of media departments are have been changing their names lately from radio to audio. Many business cards on the buying side are now saying, "VP Audio Investment," rather than "VP/Radio Investment." Does this mean new media buys are more and more being worked in conjunction with network radio buys? "When it makes sense, yes," says Matt Feinberg, SVP/National Radio, SVP/Director, Interactive Broadcast, Zenith Media Services. "Because for any media outlet to survive in the 21st century they must exist on two planes. Radio stations that don't understand this, or aren't prepared to learn and invest in the new frontier, will play second fiddle to the more progressive media vendors."
| Read More... |

So what about Snapple and WFNX?
We recently interviewed Jay Coleman, EMCI President, on the campaign this summer that he arranged with WFNX-FM Boston to have Snapple as the sole sponsor on the station for six weeks (5/25/06 RBR #104). He tells us the effort has gone well. It was originally slated to for the whole summer, however, budgetary considerations shortened the effort to six weeks: "I think if there's one thing we've learned from this is that in planning ahead I would recommend if anybody were to do this in the future that I believe six weeks is probably a little short. I think a whole season is what you really want to do - whether it's the fall or the summer, but 100-days." The "brandcasting" model works well for certain types of products - ones that the consumers buy on a regular basis - if not every day, multiple times a week. As well, a major retailer or fast food restaurant where there's a high frequency of visits. Coleman says once a station makes the decision to go into something like this they need to carefully integrate the brand in a way that it's done in a fun, clever way. "So if you cut your commercial load down from 15-minutes an hour to four or five minutes with one brand, I think you need to weave the brand through in a way that can add some fun and excitement to the station. What we did in Boston to stay within what we believe are 'commercial free' is we stayed away from any thematic advertising at all." All of the brand messaging was done by the on-air talent and was all designed around providing fun and added value to the consumer - so it was show up for a Snapple Concert and get in with five bottle caps. Today the temperature goes over 90 - look for free Snapple at specific locations around the city. Things like that whereby the messaging would be looked at as not what one would think of as traditional commercials. We'll have the full interview in September's RBR/TVBR Solutions magazine - along with how to brandcast your station 365 days a year.

Media Business Report TM

Changes at VNU
Former Reed Elsevier executive Robert Krakoff, who most recently had been running his own consulting firm, has been brought in to head up VNU Business Media USA following VNU's buyout by a consortium of equity firms. The new job as President and CEO puts him in charge of such titles as The Hollywood Reporter, Adweek, Mediaweek, Brandweek, Billboard and recently acquired Radio & Records (R&R). Krakoff succeeds Michael Marchesano, who has been moved to the newly created position of Exec. VP and Chief Transformation Officer, responsible for leading VNU's Project Forward business transformation program. VNU also announced several other appointments to the Project Forward leadership team: Greg Anderson, executive vice president and chief human resources officer of VNU, has been named to lead the Human Resources transformation initiative; David Berger, senior vice president and corporate controller of VNU, has been named to lead the Finance transformation initiative; Mary Gendron, formerly senior vice president and chief technology officer of ACNielsen US, has been named to the new position of senior vice president - IT Infrastructure Shared Services for VNU, to lead the IT transformation initiative; Peter Gersky, formerly vice president and North American treasurer for VNU, has been named to the new position of senior vice president, Global Procurement for VNU, responsible for the global purchasing initiative; and Karen LaPak, vice president of Corporate Real Estate Services for VNU, has been named to lead the global real estate and facilities management initiative. Meanwhile, the pink slips went out Monday following the acquisition of R&R by VNU, which merged it with Billboard Radio Monitor. 17 people were let go from R&R and nine from the Monitor side as the operations were combined, with Publisher Erica Farber continuing to run the new R&R.

Media Markets & Money TM

Close encounter in Las Vegas
Beasley Broadcast Group now officially has an AM station add to its trio of FMs in Las Vegas. According to brokerage firm Kalil & Co., the 22M acquisition of KDWN-AM from Claire Benezra-Reis is closed. Beasley paid about 17M for the stations assets and another 5M for 27 acres of land in Henderson NV. "In addition to building our presence in the fast growing Las Vegas market, KDWN is the only station in Las Vegas that boasts a 50,000 kilowatt signal," said Chairman/CEO George G. Beasley. "As such, KDWN can reach more listeners than any other station in the market and represents an outstanding platform for talk radio programming." It joins KYCE-FM, KKLZ-FM & KSTJ-FM in the local cluster.

Washington Media Business Report TM

FCC clears way for emergency broadcasts
Providers of video programming, including broadcast, cable and satellite, may be fined for broadcasting emergency information, but not close captioning it for the benefit of hearing-impaired viewers. Fearful that a station may choose to steer clear of providing such information when it cannot get close captioning resources in place quickly, the FCC has clarified its rules. "...during an emergency situation, we will not hold against a video programmer any de minimis or reasonable failure to caption emergency information so long as critical emergency information is provided by some other method of visual presentation." Good faith is the key. Programmers must assess their ability to get such resources on short notice and make good faith efforts to get the resources in place within a reasonable period of time. Fact sheets detailing closed captioning, and the access to emergency information rules, are available at the FCC website.

Transactions

150K KZZN-AM Littlefield TX from Paul Beane to Profit Programming of Northern Texas (Monte L. Spearman). 7.5K escrow, balance in cash at closing. LMA until closing. [File date 7/17/06.]

17K WLSC-AM Myrtle Beach SC (Loris SC). 50% of J.A.R.C. Broadcasting Inc. from Roberta J. Ward (33.3% to 0%) and Andrew C. Poulas (16.7% to 0%) to Chris Poulas (16.7% to 51%) and Jerry Dale Jenrette (16.67% to 49%). Cash, 14K to Ward, 3K to Poulas. [File date 7/17/06.]

Stock Talk

Even the Fed can't lift stocks
Wall Street yawned as the Fed finally delivered the news that had been anticipated anxiously for so long - an end to rate hikes. Fears remain that the Fed could still resume rate hikes, before going the other way. The Dow Industrials fell 46 points, or 0.4%, to 11,174.

Enthusiasm about Q2 results and Q3 guidance from Clear Channel faded and early gains turned to a closing bell loss of 1.9%, with most other radio stocks also lower. The Radio Index was down 0.861, or 0.7%, to a year-to-date low of 132.267. Salem fell 5% and SBS dropped 4% as the worst performers.

Radio Stocks

**Here's how stocks fared on Tuesday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		35.65	-0.14	Hearst-Argyle	HTV		21.00	-0.01
Beasley	BBGI		6.87	+0.24	Journal Comm.	JRN		10.43	-0.06
CBS CI. B	CBS		26.25	+0.10	Lincoln Natl.	LNC		56.64	-0.19
CBS CI. A	CBSa		26.26	+0.10	Radio One, Cl. A	ROIA		5.97	-0.12
Citadel	CDL		8.71	+0.48	Radio One, Cl. D	ROIAK		5.95	-0.19
Clear Channel	CCU		28.00	-0.54	Regent	RGCI		4.11	+0.03
Cox Radio	CXR		14.38	-0.12	Saga Commun.	SGA		7.36	+0.13
Cumulus	CMLS		8.79	-0.10	Salem Comm.	SALM		11.42	-0.60
Disney	DIS		28.98	-0.41	Sirius Sat. Radio	SIRI		3.87	+0.06
Emmis	EMMS		11.34	-0.39	Spanish Bcg.	SBSA		4.34	-0.18
Entercom	ETM		23.13	+0.35	Univision	UVN		33.44	unch
Entravision	EVC		7.08	-0.28	Westwood One	WON		6.47	+0.03
Fisher	FSCI		38.98	-0.95	XM Sat. Radio	XMSR		11.24	-0.25
Gaylord	GET		38.95	+0.15	-	-	-	-	-

Bounceback

Send Us Your Opinions We want to
hear from you.
This is your column, so send your comments and
a photo to radionews@rbr.com

(The following was inspired by the articles about Cox's Robert Neil and Entercom's David Field, not to criticize their positions, but responding to an industry wide opinion that what we think matters regarding Less is More)

It's not surprising that we radio executives think that we are in control of spot advertising. Yes, we can air 18 minutes or 10 minutes of commercial air time per hour, but the listener is in control. It is what they hear. They push the radio buttons. Long commercials don't get the recall that a :30 or :10 get. No matter what we think about length, the truth is in the results not Arbitron versus commercials per hour. Most people just don't hear commercials that are in clusters. That's because they tune out early, either physically by changing stations, or mentally by rejecting yet even more messages being thrown at them. If radio is going to be effective in advertising, it seems that we have to play ball with what research is telling us. Clear Channel gets credit for "Less is More," but duh, it makes sense. They were just the first to put legs on it. If radio is going to survive in this 3,000 messages a day filled world, we have to cut back on the commercials that we run per hour, create entertaining commercials, drop long clusters and stop having "commercial free" hours. Just by bragging on that we are convincing listeners that "advertising is bad." If we can (in radio) convince folks with promotional messages, what are we promoting with the latter. I have not seen any conclusive evidence that such promotions build any additional ratings. Good, short, creative commercials can attract an audience. Less is more, get over it. My suggestion is take advantage of it. Set spot break limits, and get back to creativity. Then people will listen, and our advertising will get results, and maybe more people will listen the station too. Duh. We need to stop whining, certainly stop thinking that we are in control (instead of the listeners), and get on what we do best, entertaining. That's my thought and I am st-st-sticking to it.

Jon Bosworth
45 years in radio, and radio management.

Below the Fold

Wall Street Media Business Report
Clear Channel outperforms
On the top line, Underperforms on the bottom line...
Saga up, but down quarter ahead
Hasn't been giving Wall Street specific forward guidance, but...
Cumulus sees slightly better
Q3 is pacing ahead 1%, despite a July decline...

Media Business Report
Changes at VNU
Need a score card to keep Track of who is who...

Management Business Report
Art of the Interview:
Hiring the Best, people drop clues up to you to pick them up...

Ad Business Report
Network radio + new media buys
Changing their names lately from radio to audio...

Media Markets & Money
Close encounter in Las Vegas
Beasley Broadcast Group now officially has an AM to go with its trio of FMs...

Stations for Sale

CD Border 25kw FM
Profitable competitive op.
Small/dual market FM with huge upside for turnaround operator.
595K 781-848-4201 or salesgroup@beld.net

Radio Media Moves

Promotion in DC
Salem Communications announced that Tom Moyer has been named station manager of Salem's Washington, DC Christian Teaching and Talk stations, WAVA-AM & FM. He had been General Sales Manager of the stations since 1992.

More News Headlines

Directors exit
Interep board
Interep reported to the SEC that on August 7th its board of directors accepted the resignations of Terence Bate and Arnold Sheiffer from the board. According to the filing: "Bate and Sheiffer resigned at the request of management as part of our efforts to reduce administrative costs. As part of this cost reduction program, in February 2006 we terminated our registration under the Securities Exchange Act of 1934. Following the de-registration, our need for outside directors is not as great as it was previously, and we have, accordingly, reduced the number of outside directors from five to three with these resignations."

Bayliss scholarships awarded
14 college and graduate-level scholarships have been announced by the board of directors of the John Bayliss Broadcast Foundation for the 2006-2007 academic year. Each student will receive a 5K Bayliss Radio Scholarship for studies to become radio professionals. Past and present scholarship recipients will be introduced at the annual Bayliss Radio Roast to be held March 22, 2007 in New York.
| 2006-2007 scholarship recipients |

July RBR/TVBR
Digital Magazine

Take a look at what's in the July RBR/TVBR Solutions Magazine:
July is our annual sports media and marketing issue. This year, Basketball News Services' lead NBA analyst and Five-Star Basketball Report host Steve Kyler provides opinions on what works and what doesn't work in sports radio; AND1 Brand Marketing Manager Taylor Duffy talks about marketing and branding his company's basketball shoes; Emmis Sports Marketing's David Barnett talks about making money off of sports programming; and Entercom's WEEI Boston Director of Programming and Operations Jason Wolfe writes about how he's helped build WEEI into such a powerhouse.

Read RBR/TVBR in 2 simple steps:
1.Create a simple account with Zinio and download the Zinio Reader.
2. You can then download the
July Issue of RBR/TVBR

RBR Radar 2006

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

Earnings rolling fast but
Not keeping pace
Radio stocks may be taking a beating as second quarter reports not showing radio in a good light. Citadel is planning to make some divestitures when it completes its pending acquisition of ABC Radio from Disney. Salem Communications is projecting Q3 2006 revenue of 57.9M-58.4M, compared to 53M during the same period in 2005. SBS is talking like a buyer instead of seller. Emmis' stock takes a nosedive trading volume shot up to about seven times normal as traders bailed out of Emmis stock. Radio One President/CEO Al Liggins told the story yesterday of why Q2's revenues were down 4%. Salem breezes past benchmark. Revenues up slightly for Regent. Fisher turns to profit. Complete details
08/08/06 RBR #153

Talk Radio Network
Seeking professionals in three areas to join our TRN team. First: Executive Producer on topical subjects, Second: Board Operator with 2 years experience with Telos call-screening software and Third: Staff Engineer that can take initiative. This is a fast paced high pressure environment, must be able to think and act professionally in emergency situations. EOE. For complete details all three positions
See Radio Careers

General Manager
Saga Communications, a top of the line radio and media company really has a rare opening at Rock 102 and Lazer 99.3. Saga carefully reviews all GM applicants but this opportunity necessitates being extra picky. Considering only GM's with a documented reputation for effective leadership and management to oversee these facilities that are accustomed to high standards at all levels. Excellent facilities, benefits and quality of living in Springfield, MA. Saga a top of the line company committed to excellence in media today. EOE.
See Radio Careers

Director of Sales
Needed for radio cluster in Mid-Atlantic region. 5 years plus experience as DOS a must, with successful track record. Must be able to develop sales talent into a winning team. Excellent benefits & compensation plan.
See Radio Careers

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