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Welcome to RBR's Daily Epaper
Volume 24, Issue 200, Jim Carnegie, Editor & Publisher
Friday Morning October 12th, 2007

Radio News ®

Syndication One adds
Rickey Smiley and Yolanda Adams

As we told you Wednesday (10/10/07 RBR #198), Syndication One is not shutting their doors, but adding talent. Syndication One announced it plans to expand its programming beginning with two feature weekday morning shows which include Rickey Smiley and Yolanda Adams. Syndication One is a joint relationship between Radio One and REACH Media. "The Al Sharpton Show, Keeping It Real," will continue with Syndication One. Current radio shows, "The 2 Live Stews" and "The Warren Ballentine Show," will end their run with Syndication One in December. "The Rickey Smiley Morning Show", from Radio One's KBFB Dallas, has already been added on WHHL-FM in St. Louis and WFXA-FM in Augusta. The Yolanda Adams Show" launched on Houston's KROI-FM. "The Yolanda Adams Show" is syndicated to 12 markets, including WPZE-FM Atlanta, WXEZ-FM Norfolk and WPPZ-FM Philadelphia.

Radio's doldrums likely to continue
Wall Street analysts were not surprised by the 1% drop in radio revenues for August (10/11/07 RBR #199), nor are they encouraged by what they see in the advertising marketplace now. At Bank of America, Jonathan Jacoby has lowered his September estimate to down 1% and sees that trend continuing into October and Q4. From checking with his sources in various markets, Jacoby told investors that Q4 is off to a soft start. He sees the biggest earnings risk at Clear Channel and CBS Radio, with the least at Citadel. "From our checks, we are hearing of continued large market weakness at CCU and CBS. Interestingly, we are hearing of some recent strength at Citadel's stations in NYC and LA. Lastly, we believe that Entercom is seeing some positive gains in Boston from the changes made to its sports lineup at WEEI & WRKO," Jacoby wrote.

At CL King, Jim Boyle says early September pacings appear to be weak. "We have not seen enough individual markets' pacings or bookings data for September to gauge if ours and the Street's often reduced expectations are due for another trim. Nevertheless, the markets' pacings so far are noticeably weak, which is not encouraging as the business approaches the start of the holiday advertising season (Halloween-Thanksgiving-December holidays)," he noted. Boyle also says the gap he had previously noted between small to mid markets and large markets has disappeared. And that's bad news for companies outside the large markets, who had been outperforming the big guys. "What dragged the mid-small markets' slightly negative growth back to the big markets' noticeably negative growth in August was the mid-markets [#26 - #75] were down 2.5%, on average. The last four months has seen the average mid-sized market in our sample go from up 2%, to up 0.5% for two months, and now down 2.5% in August," Boyle said.

RBR observation: So far 2007 has produced only three months where radio revenues were up from a year earlier. If Jacoby's predictions come true, the best we will see for the rest of the year is a flat December. That would take the tally for the year to eight down, three up and one flat. Ouch!


NAB calls timeout on XM/Sirius
The National Association of Broadcasters has made no secret of its opposition to the proposed merger of XM and Sirius satellite radio outfits. One of the points about the companies it has been trying to hammer home is their frequent skirting of FCC rules. The FCC has requested documents under the Freedom of Information Act, which it is still waiting for, and it wants time after it gets them for serious review. "Specifically, NAB requests that the Commission formally toll its 180-day 'timeclock' until NAB has a reasonable opportunity to review and supplement the record with certain documents relating to the serious apparent wrongdoing by XM and Sirius 'executive and senior-level employees' regarding the operation of FM modulators/transmitters and/or terrestrial repeaters," read the nine-page filing. "[T]here is a compelling public interest in having these documents considered and evaluated in the context of the merger proceeding." NAB also noted Sirius' admission that "certain Sirius personnel requested manufacturers to produce SIRIUS radios that were not consistent with the FCC's rules."

Sirius responded that "NAB's allegations are unfounded. NAB EVP Dennis Wharton replied, "There is nothing 'unfounded' about NAB's so-called 'allegations.' XM and Sirius have disclosed in public documents that they knowingly and willfully violated interference and terrestrial repeater rules. The central question now is whether XM and Sirius are rewarded for this demonstrable lack of candor with tough penalties or a government-sanctioned monopoly." NAB noted that only four federal legislators have expressed support for the merger, compared to 82 who oppose it.

Waxman says conservative
radio not under scrutiny

American Spectator published a story noting a two-pronged plan among Democrats to exploit the recent remarks of Rush Limbaugh. One is to use his comments as a basis for a fund-raising effort. The other is to investigate Limbaugh and other conservative Talkers with an eye toward exhuming the Fairness Doctrine. However, fingered Rep. Henry Waxman (D-CA) says the latter story simply is not true. Waxman was concerned that the story not only was published, but was picked up by numerous other media outlets and demanded a retraction. "The American Spectator report is completely false and was written without any documentation or attribution," charged Waxman's staff in an item posted on the Committee on Oversight and Government Reform. "There is not now nor has there ever been any investigation of this subject."

RBR observation: One of Waxman's committee colleagues, longshot presidential candidate Dennis Kucinich (D-OH), is chair of the committee's Subcommittee on Domestic Policy. Back in January, he promised to hold hearings on rules restricting broadcast/print cross-ownership, which he thinks should remain strong, and the Fairness Doctrine, which he believes should be reinstated. He said he'd do this despite being aware that this is basically Ed Markey's (D-MA) Subcommittee on Telecommunications and the Internet turf. However, since then we have not heard so much as a peep about actually holding the hearing. Meanwhile, Mike Pence (R-IN) and Greg Walden (R-OR) have been pushing for legislation that would guarantee that the Fairness Doctrine remain in its mausoleum, which would be fine. But in fact, although the idea of reviving it is mentioned from time to time, there has been no serious attempt to re-animate it, and we suspect it would be a difficult sell if there were an attempt, even with Congress under Democratic control. At any rate, the Democrats using Limbaugh to energize their own fundraising understand his true value to their cause.


Wall Street Business Report TM
SWMX looks at sale, other options
SWMX announced that it had amended its loan agreement with BlueCrest Capital Finance. Both the existing three million bucks loan and a new revolver for 3.5 million come due January 31, 2008, so SWMX has breathing space for nearly four months. The online media sales operation announced that it is exploring strategic alternatives, which could be a sale of the company, a partnership or some other arrangement. In the meantime, BlueCrest has agreed to collect interest only on its loans to SWMX, although the rate has increased to 12.84% from the previous 10.84%. BlueCrest also received warrants to purchase 48.75 million shares of SWMX at six cents each, which is above the recent trading price, and its previous warrants were amended to cover 12.5 million shares, also at six cents each.


Ad Business Report TM

Taco Bell giveaway -
only touring bands qualify

Taco Bell says it is "feeding the beat by keeping bands on the road, well fed and rocking their fans across America." The unusual promotion has picked 50 up-and-coming bands to each receive 500 bucks in free Fourthmeals - the late night meal between dinner and breakfast - no strings attached. An eclectic group of bands, found after a national audition, make up this year's roster, hailing from a variety of music hotbeds like New York City, Los Angeles, Chicago, Houston, Boston and Atlanta. Hundreds of bands submitted applications in August to a Taco Bell website and the winners were selected over the past few weeks. Taco Bell looked for up-and-coming indie rock bands with a passion for touring. The bands selected also have a solid fan base, tour history and are on the road this fall. The bands aren't required to promote Taco Bell, but, obviously, the company is hoping that some might mention the fast food joint to their fans.


Media Markets & Money TM
Stephens family strikes again
Before the virtual ink even had a chance to dry on reports of KXOJ Inc.'s move to the northeast from its Oklahoma base, they took the Watertown NY outpost acquired from Regent for 6.25M and turned it into a regional group with another acquisition. This time David Stephens and company are picking up in unrated territory adjacent to both Watertown and Canada. Seller Martz Communications is parting with WMSA-AM Massena, WVLF-FM Norwood, WRCD-FM/WNCQ-FM Canton, WYSX-FM Morristown & WPAC-FM Ogdensburg. KXOJ is parting with 5.25M give or take. As in the Regent/Watertown deal, Dick Foreman of Richard A. Foreman Associates represented the seller and John Pierce of John L. Pierce & Company represented the buyer.

Another GAP filled
in CCU spin-off derby

George Laughlin's GAP Broadcasting is branching out from its mid-country roots, moving into a western deal with Clear Channel that was abandoned Christopher F. Devine's Blue Point Media LLC. And then some -- Laughlin's actually picking up two additional markets not in the original deal. Brokerage firm Kalil & Co. handled the resale. The Devine deal, which was valued at 45.7M, included stations in Billings MT, Bozeman MT, Missoula MT, Shelby MT, Duluth MN-Superior WI, Idaho Falls-Pocatello ID and Twin Falls ID. Clear Channel's FCC merger filing submitted December 2006 listed two AMs and four FMs in Yakima WA and one AM and four FMs in Richland-Kennewick-Pasco WA. GAP picks up an added bonus as well in the form of radio executive Skip Weller. He was in line to run the station under Devine's ownership, and will move with the stations into the GAP lineup.

RBR observation: This is an important transaction for Clear Channel, tying up a seriously dangling loose end as it prepares to go private. The elephant in the room remains, however, the troubled 450M multimarket deal in which Jeff Warshaw is pinch-hitting for Dean Goodman. For Laughlin, it marks his second major buy from Clear Channel and opens up a new piece of territory for his growing group. GAP's other markets include Abilene, Amarillo, Lubbock, Lufkin-Nacogdoches, Odessa-Midland, Tyler-Longview, Victoria and Wichita Falls in Texas, Texarkana on the Texas-Arkansas border, Shreveport and Lake Charles in Louisiana and Lawton in Oklahoma. The price for the expanded transaction was not immediately available.


Washington Business Report TM
DTV-Day on Capitol Hill
Instead of storming the beaches of Normandy, a few lucky regulators will be storming the slopes of Capitol Hill next week. On Thursday, 10/17/07, a branch of the House Commerce Committee will hold yet another hearing on the DTV transition, and the Senate Commerce Committee will suit during the afternoon. The morning session, kicking off at 9:30 AM Eastern, will be held by the Subcommittee on Telecommunications and the Internet, which plans to host the FCC's Kevin Martin, NTIA's John Kneuer and an as yet unnamed representative from the Government Accountability Office. Then at 2:30 PM, the full Senate Commerce Committee gets its chance. No witnesses have yet been revealed, but the agenda item mentions specifically the NTIA's digital-to-analog converter box coupon program -- which probably means a long day for Kneuer. But Martin isn't necessarily off the hook, since the ambiguous phrase "other issues" could well lead to a second appearance for him as well. The Telecommunications subcommittee also has a 10/31/07 hearing on the agenda, which will focus on stakeholders.


Entertainment Business Report TM
Emmis sells RadioNow to Radio One
Two days after Emmis announced it was pulling the plug on WNOU-FM (93.1) because to make it News-Talk WIBC-FM, it is selling the station to Radio One. Radio One will air CHR RadioNow on Smooth Jazz WYJZ-FM (100.9). RadioNow was going to be moved to 93.1 HD-2, so another format will have to be moved there now.

Radio Caracol 1260 AM Launches "La Mañana"
Radio Caracol announced the launch of "La Mañana," a daily morning drive show which includes local news, culture and humor, hosted by the dynamic duo of Jeniffer Saldarriaga and Ivan Van Hernandez. "La Mañana" will air Monday thru Friday from 9am till 11 am, starting October 15th on WSUA 1260 AM.


Internet Business Report TM
CBS buys celeb gossip blog Dotspotter
CBS has bought 10-month-old celebrity gossip blog Dotspotter, for a reported pricetag of 10 million. The rumor was first reported on Valleywag. The site is co-founded by CEO Anthony Soohoo. The plan might be to cross-promote with the CBS TV network, as CBS also launched celebrity news site Showbuzz in June and produces two celeb tabloid shows: The Insider and ET. CBS also recently bought financial video blog Wallstrip and social music site Last.fm.


Music Business Report
Madonna does the math
How would the rumored deal between Madonna and Live Nation, the former Clear Channel Entertainment, work out? Pretty good for "The Material Girl," but it all depends for the company. Both the Wall Street Journal and New York Post - publications soon to become siblings - reported that Madonna is about to sign a 10-year deal with Live Nation for 120 million bucks to cover concert tours, studio albums, merchandise sales and licensing of her name. Madonna still has to deliver one more studio album to Warner Music Group to fulfill the contract with her current label, Warner Bros. Records, but she would then be free to do something else. Instead of the traditional route of signing with the different label, the deal with Live Nation could seek out new distribution avenues or they could simply sign for one of the big record companies to distribute their new independent label. Madonna reportedly gets 17.5 million up front, 50-60 million in advance payments for the albums, 50 million in cash and stock for the right to promote her concert tours, plus the usual 90% take from the concerts take. Licensing revenues would be split 50-50.

RBR observation: She didn't call herself "The Material Girl" for nothing. This sounds like a pretty good deal for Madonna, with no apparent downside. The risk appears to all be with Live Nation. According to record industry sources in the Post article, Live Nation will need to sell 15 million copies of each of the three albums just to break even on that part of the deal. Now, let's see, Madonna has thus far issued 20 albums. How many have sold 15 million or more worldwide? Four.


TVBR TV News
Bye-bye Burbank
"Beautiful downtown Burbank" is losing its most famous corporate resident. NBC Universal announced plans to create a new HD West Coast News Headquarters and Content Center in Universal City and expand Stage One on the Universal lot for the 2009 debut of "The Tonight Show with Conan O'Brien." The LA construction plan was announced yesterday as NBC Universal President and CEO Jeff Zucker, pictured, proclaimed completion of the new NBC News World Headquarters in New York, following six months of construction to create the new HD facility which will move nearly all NBC News and MSNBC programs under one roof. The new Manhattan facility will be fired up on Monday, October 22nd, with the 6:00 am broadcast of MSNBC's "Morning Joe" from Studio 3A. 12 and a half hours later the "NBC Nightly News will Brian Williams" will air from its new home in renovated Studio 3C.

NBC's West Coast transition requires construction of a new building above the Red Line Subway station in Universal City, so no one will be moving in until at least 2011. The new facility will house the NBC News Los Angeles Bureau, KNBC-TV (Ch. 4, NBC), KVEA-TV (Ch. 52, Telemundo) and "Access Hollywood." The new facility is being built with "green" features to reduce energy and water use and NBC Universal notes that being located above the subway station will allow people to reach the building by public transit. NBC Universal will not be entirely vacating its current 34-acre studio lot in Burbank, but some parts will be put up for sale. NBC Uni says it will likely retain part of the facility and lease back others, allowing it to continue to produce shows in Burbank for many years to come.

TVBR observation: And what of the other hot story about NBC circulating yesterday? Yes, the Financial Times report that GE might try to sell NBC Universal after raking in the cash from the 2008 Beijing Olympics did give the stock a boost. But the rumor has been floating around Wall Street for some time and was reported more than a month ago by BusinessWeek. Tune back in next year to see what happens.


Transactions
5.5M KTXZ-AM, KELG-AM & KOKE-AM Austin TX (West Lake, Manor, Pflugerville TX) from BMP Austin License Company LP, a subsidiary of Border Media Partners LLC (Thomas Castro) to Enrico Broadcasting LLC (Jose J. Garcia Jr.). 500K escrow, balance in cash at closing. Existing superduopoly. LMA until closing. [File date 9/27/07.]

1.775M KOLT-AM, KOAQ-AM, KMOR-FM & KOZY-FM Scottsbluff NE (Scottsbluff, Terrytown, Bridgeport, Gering NE) from Tracy Broadcasting Corporation (Michael J. Tracy) to Legacy Communications LLC (Joseph Jay Vavricek). 88,750 escrow, balance in cash at closing. 355,612 allocated to real property. Existing duopoly. [File date 9/26/07.]


Stock Talk
Up, then down
Stock prices rose early Thursday as Wal-Mart raised its profit outlook, but then went into a tailspin after a member of the governing council of the European Central Bank expressed worries about inflation. The Dow Industrials, which had been at an all-time trading high early in the day, ended the session down 64 points at 14,015.

Radio stocks went along for the roller-coaster ride. The Radio Index ended the day down 0.560, or 0.5%, at 124.895. Emmis had the best day, up 5.3%. Citadel rose 4.9%. The worst performer was Saga, down 6.3%. Westwood One fell 3.3%.


Radio Stocks

Here's how stocks fared on Thursday

Company Symbol Close Change Company Symbol Close Change

Arbitron

ARB

45.98

-0.99

Google

GOOG

622.00

-3.39

Beasley

BBGI

7.84

+0.09

Hearst-Argyle

HTV

25.30

-0.17

CBS CI. B CBS

30.12

-0.41

Journal Comm.

JRN

9.80

-0.11

CBS CI. A CBSa

30.11

-0.37

Lincoln Natl.

LNC

68.46

-0.64

Citadel CDL
4.73 +0.22

Radio One, Cl. A

ROIA

3.75

-0.01

Clear Channel

CCU

37.63

+0.08

Radio One, Cl. D

ROIAK

3.79

-0.01

Cox Radio

CXR

13.08

-0.11

Regent

RGCI

2.58

-0.03

Cumulus

CMLS

10.43

-0.07

Saga Commun.

SGA

7.71

-0.52

Debut Bcg.

DBTB

0.80

unch

Salem Comm.

SALM

8.15

+0.03

Disney

DIS

35.01

-0.27

Sirius Sat. Radio

SIRI

3.57

-0.12

Emmis

EMMS

5.55

+0.28

Spanish Bcg.

SBSA

2.63

+0.02

Entercom

ETM

19.79

-0.46

SWMX

SMWX

0.04

+0.01

Entravision

EVC

9.99

-0.20

Westwood One

WON

2.63

-0.09

Fisher

FSCI

49.57

-0.35

XM Sat. Radio

XMSR

15.11

-0.31


Bounceback

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Below the Fold
Ad Business Report
Taco Bell giveaway
Only touring bands qualify an unusual promotion has picked 50 up-and-coming bands...

Media Business Report
Madonna does the math
rumored deal between Madonna & Live Nation, the former Clear Channel Entertainment, work out? Pretty good...

Media Markets & Money
Another GAP
Filled in CCU spin-off derby moving into a western deal with CC that was abandoned...

Internet Business Report
Celeb gossip blog Dotspotter
CBS has bought 10-month-old celebrity gossip blog for 10 million...




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Radio Media Moves

Bester banker
joins Union

Veteran banker Adam Bester, formerly at The Bank of New York, has joined Union Bank of California as manager of its communications and media group. He is based in LA and reports to Sr. VP David Musicant, who heads national banking. Bester is responsible for managing the bank's communications/media business which has provided capital to industries such as cable TV, billboards and new media for more than 20 years. The department serves nearly 50 clients nationwide for a total of 1.4 billion in lending commitments.

Tidwell to Seattle
Entercom announced that Lance Tidwell has been named program director of KKWF-FM "The Wolf" Seattle. Tidwell replaces Rob Walker, who remains with the station as Assitant PD and PM drive host. Tidwell has programmed successful Country stations for over a decade, most recently as PD of Citadel's Country WGKX-FM and Hot AC WKIM-FM Memphis, TN.




More News Headlines

Martin pushes LPFM and DTV leasing
How can the FCC help more small businesses get into the communications field? In an appearance before the House Small Business Committee, FCC Chairman Kevin Martin cited leasing of DTV multicast channels and low power FM stations as opportunities for small businesses. He praised in particular the arrangement that has the Post-Newsweek Stations carrying Latino Alternative TV (LATV) on its DTV multicast channels in Miami, Orlando, Houston and San Antonio. Here, then, is what Martin has to say about LPFM: "The Commission has taken some important steps to provide more opportunity for small businesses in radio with the advent of the Low Power FM Service. Low Power FM provides a lower-cost opportunity for more new voices to get into the local radio market. The Commission currently is considering an Order that would ensure that LPFM stations have reasonable access to limited radio spectrum."

RBR observation: What? Does the Chairman of the FCC not know that no business, large or small, can own an LPFM? They are strictly non-commercial and must be owned by a qualified non-profit organization.

Radiohead freebie spells more trouble for labels
Alternative act Radiohead has been making headlines with its plan to offer its latest collection of tunes as a download from its website. The price? Whatever fans think it is worth, whether that works out to 10 dollars, two dollars or nothing. While observers expect quite a few of the band's fans will take the free option, it believes many of the more conscientious members of its base will contribute to the band. The offering is also a gateway to other products being offered on the website that will carry a substantial price tag. Conventional industry insider wisdom holds that all it will take is for 20% of the downloaders to pony up five dollars to match the one dollar per CD that is usually the artist cut when a major label is involved.

Dennis Miller
to get show on
"Versus" cable net

Versus, a sports cable network, will be also home next month to Dennis Miller. "Sports Unfiltered with Dennis Miller" will air Tuesday nights at 10, starting 11/6, according to the Baltimore Sun. For those who haven't heard much of Miller since he was booted from Monday Night Football, he has a pretty successful Talker via Westwood One Radio Networks.




RBR Radar 2007
Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.

Another analyst likes XM/Sirius
From Citi Investment Research is guestimating a 60% chance that the proposed merger of XM Satellite Radio and Sirius Satellite Radio will get all necessary thumbs pointed up. Citi's Eileen Furukawa said that if it does go though, it could lead to up to 7B in savings for the combined entity.

RBR observation: Nobody doubts that the merger would be good for XM and Sirius. The question is whether it would be good for consumers. Since both companies say they are solvent and that the merger is not a requirement for their continued operation, there is absolutely no reason to abandon the Economics 101 principle of competition between the two, which was a key foundation of their original license grants. Despite all the efforts by various analysts to gauge the likelihood of approval based on the perception of which way the FCC is leaning, the other half of the equation is the DOJ. We have seen absolutely nothing to change our initial view that the approval likelihood is about 10%.
10/11/07 RBR #199

Westwood One
spells out CBS deal
The bottom line is that Westwood One is in a better financial position under the new agreement and CBS Radio stations have strong financial incentives to continue to clear WW1 spots. One analyst raised the question of what would happen if a CBS O&O station just quit clearing WW1 spots? That is, indeed, covered in the new agreement. Not only would WW1 save on its network comp payments, but would also receive liquidated damages if any CBS O&O station fails to clear 75% of the WW1 commercials it is supposed to broadcast for three consecutive months or four out of 12 months. Back to the basic agreement see RBR.

RBR observation: One other interesting aspect is that CBS Radio has the right to veto certain candidates for CEO of WW1 once the new deal goes into effect. Those are the people who served as CEO during the time that CBS Radio managed the company: Mel Karmazin, Joel Hollander, Shane Coppola and Peter Kosann. It will be interesting to see who next fills the chair.
10/10/07 RBR #198


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