Welcome to RBR's Daily Epaper
Volume 21, Issue 219, Jim Carnegie, Editor & Publisher
Tuesday Morning November 9th, 2004

Radio News®

Viacom/SBS deal may be just the beginning
Having Viacom as a 10% owner of Spanish Broadcasting System, in return for KBAA-FM San Francisco (10/6/04 RBR Daily Epaper #195), may be just the first step in a mutually profitable relationship. At least that's where SBS CEO Raul Alarcon sees things going. He hopes to acquire some more stations as Viacom's Infinity Radio starts divesting some of its non-Top 20 market stations and Alarcon told Wall Street analysts he hopes to be doing "much bigger transactions with them." In answer to an analyst's question, Alarcon said that SBS doesn't have any right of first refusal to any Infinity spin-offs. He says there are going to be gains for both sides in the relationship between SBS and Viacom, beginning with a promotional deal to advertise CBS Television on SBS radio stations and SBS stations on Viacom Outdoor billboards. Alarcon was also excited about having the SBS radio stations pitched along with the Infinity stations by Interep's Infinity Radio Sales, which the SBS CEO hailed as the premier rep firm within Interep. SBS is obviously expecting big things from that effort, since it is paying Infinity 100K per month for the first year and 50K per month thereafter. Alarcon said there will also be in-market cross-selling by the Infinity and SBS sales teams.

Viacom battles Super Bowl fine
Viacom has filed a response to the FCC's notice of apparent liability (NAL) concerning the infamous Super Bowl wardrobe malfunction. It uses a total of 94 pages to dispute the FCC's finding, saying that the FCC, in the first place, failed to make its case in the present instance and that in the final analysis, the FCC's indecency rules are unconstitutionally vague.

RBR observation: Look for this to fall on deaf ears at the FCC. Viacom is laying the groundwork for a battle in the courts. | More... |

FM auction into 9th round
Bidders have pushed the average cost of an FM CP up near 200K in the ninth round, almost double the standing figure posted at the time of our last report, which was made during the 5th round. The Brewster MA/Cape Cod CP remains the hottest property, but it is currently in control of a new bidder. GBH Telecommunications has upped the ante for Brewster to 2.682M, up from 1.5M on Friday. Although GBH ousted Community Radio Inc. (CRI) as the leading bidder for a single property, CRI is still the on top of the standing high bid leader board, with 6.544M on the table for seven stations. College Creek is a distant second in terms of cash, at 3.384M, but has spread that amount over 16 different stations. Cumulus dropped off the leader board but is still the leading contender for four stations, including one in Cheyenne WY. Also of interest, Clear Channel companies are currently on top of only one station, in Chehalis WA.


News Corporation adopts a poison pill
Apparently alarmed by Liberty Media's move to expand its voting stake in News Corporation, Rupert Murdoch is making sure that Liberty's John Malone won't be able to threaten a takeover. News Corporation took action yesterday to adopt a poison pill defense. Should Malone or anyone else acquire a 15% stake in News Corporation without approval from company management, all other shareholders would receive rights to acquire additional shares at half price - - making a takeover prohibitively expensive to pull off.

RBR observation: It doesn't look like John Malone has any takeover designs on News Corporation - - at least not yet. But Rupert Murdoch isn't taking any chances. Of course, his move to protect his kingdom is purely self-serving and doesn't serve his shareholders in the least. What we don't understand is why boards of directors routinely vote for such anti-shareholder measures - - and why government regulators don't move to outlaw such abuses.

"Less is More" is back to basics
That "back to basics" view came from NextMedia Executive Chairman Carl Hirsch, although he didn't mention Clear Channel by name. Citadel Broadcasting's top executives, CEO Farid Suleman and COO Judy Ellis, had also hailed the clutter-cutting move in their conference call. A technical glitch jumbled this story in yesterday's Epaper, so follow the link to read the entire story and hear the audio cuts. | More... |

Burlington buy ushers in new era of oversight
By switching from contour overlaps, the FCC's new rules have changed how radio combinations can be created. While the intent was to cut back on consolidation, that won't always be the case. One example is the proposed purchase of WVAA-AM Burlington, VT by White Northeast Broadcasting Company. (The link for this story didn't work in Monday's Epaper, so follow today's link to read the entire story.)

RBR observation: This must-read story shows how the new Arbitron-market radio cluster rules, supposedly designed to clamp down on further radio ownership consolidation, could in fact lead to more. | More... |


Conference Calls Q3 2004
SBS beats its own guidance
Revenues were up 15% to 41.1 million in Q3 at Spanish Broadcasting System, well above the company's guidance to Wall Street to expect growth in the mid single digits. The strong performance was attributed primarily to double-digit growth at the company's stations in the Miami and New York markets. LA and Chicago were also up, but only in the mid single digits. Adjusted EBITDA was up 36% for the quarter to 16.5 million. CEO Raul Alarcon hailed KLAX-FM for "soaring" ratings in Los Angeles and with the WSKQ-FM New York morning show nipping at Howard Stern's heels, Alarcon is looking forward to Stern taking his show to satellite radio.


Adbiz©

Nortel launches global branding initiative
Delivering on its commitment to become a more marketing-led company, Nortel yesterday unleashed a global branding initiative with sweeping changes based on the theme, "This is the Way. This is Nortel." The campaign has Nortel changing the way it defines itself, moving the discussion from "the network" to what people "do with the network." The effort tells the Nortel story of strength, confidence and security - communications you can count on - to CEOs, CFOs and CIOs, using major business and news media around the world. Also marking a shift, Nortel will advertise on television for the first time since 2001. With creative by The Richards Group, Dallas, Nortel's AOR, the campaign comes with a new theme: "This is the Way. This is Nortel." The TV spot includes shots of a noisy stock exchange floor, high-rise office buildings, and security department switchboard operators, set to a familiar tune sung by a children's chorus. It ends with a voiceover articulating Nortel's global strength: "...this is the way hundreds of millions of people, Fortune 500 companies, and government institutions around the world trust their networks to be reliable and secure." Print advertising takes a direct approach to the same messages, showcasing all of the places Nortel can be found through simple and powerful copy: "This is the way 600 million people move around the planet. You'll find Nortel in every single one of the world's top 20 airlines."

Music Choice adding advertising with new services
The New York Times reports Music Choice announced several new services to deliver music, music videos and original concerts and interview programs to VOD cable systems, Internet sites and cellphones capable of receiving video. MusicChoice is carried in nearly 40 million homes and operates 40 audio music channels offered on many digital cable television services. Music Choice's biggest innovation, though, may be in the way it combines advertising with music videos on the VOD cable offering. It will be the first company to display commercials that are selected for each user based on behavior. Using a special computer installed in each cable headend, the system will track each user's music video choices to deduce demographic information. Different sorts of people, even neighbors, will be shown different commercials. "If we see that you listen to soft rock, and we know what else you picked, we know you are an over-35 female," David Del Beccaro, Music Choice CEO, told the paper. | More... |

Jimmy Smith joins BBDO NY
Award-winning creative director and copywriter, Jimmy Smith has joined BBDO New York as an Executive Creative Director. Smith comes from Wieden + Kennedy where he created TV ads for Nike, including the famed "Freestyle" spot. He was also renowned for his creative contributions extending the Nike brand into non- traditional media. At BBDO, Smith will report to David Lubars, Chairman and Chief Creative Officer of BBDO NA. He will divide his time between New York and LA. "Our goal is to create and deliver the most compelling commercial content in the world," said Lubars. "To do this, we must continue to create great television advertising. We also need to expand our creative excellence across a wider palette. Jimmy is perfect."

More on Allied Domecq's holiday spend
More on Allied Domecq's plans to increase the holiday marketing spending by 20% over the previous year, to support the roll-out of brand campaigns for the holidays. The holiday sales season, from Thanksgiving through New Years, is a critical time for the spirits industry, representing nearly 50% of sales for entire year. | More... |


Media Markets & MoneyTM
Shaw 'nuff, Centennial gets bigger
By the time the dust clears in Roanoke-Lynchburg VA, Allen Shaw's Centennial Broadcasting will have spent just under 9M bucks to build a five station cluster. Its second deal in the market will bring in WLNI-FM and WMNA AM & FM from Gary E. Burns. Broker of record Frank Boyle told RBR that the stations will fit in nicely with Centennial's earlier deal for WZZI-FM/WZZU-FM, and he should know, since he handled both deals. The earlier deal for the two Oldies stations was with Travis Media and was valued at 4.175M dollars (9/8/04 RBR Daily Epaper #175). The current deal, for 4.75M, will add two FM Talkers and an AM Country outlet to the mix.


2005: Year of Local Muscle

Publisher Perspective
I began my broadcasting career in 1967 as an on-air talent, then worked my way up to PD for ABC and then to GM. I liked creating as a PD, so I founded RBR in 1983 and have continued creating for the past 22 years.

We all have to create together to win. "Less is More" is not the total answer - we collectively are the answer. Consider this very intently and start your '05 with a clear focus - with real broadcasters at RBR and TVBR focusing on your issues.

RBR/TVBR is relevant news investigated and written by broadcasters for broadcasters. We know the issues; we know the language; and most of all we know how you feel and what you need to do your job.

If you want the January Debut issue, please register now. It's Free! All orders must be in by Thursday November 18, 2004.



January 2005 Debut!
Radio & Television
Business Report
What Radio & TV both need to overcome in 2005 is the focus of the January Report. If you don't get it then you won't know what lies ahead - so Get It! It's Free!

Respect and success in 2005
Jim Carnegie
Publisher, Editor and Broadcaster

Washington Beat
Pirate power-down plan is no go
A pirate in Beaverton OR, operating on 98.1 mHz, has been hit with the standard 10K fine. The guilty party, David Michael Oaks, put up what was to us a novel defense. He said that every time he was warned to cut it out, he ratcheted down his power. However, he didn't know just how far down he had to go. Apparently, and FCC agent said that "...he could purchase a Part 15 wireless microphone to compare the range of his signal with that of his station." It's government advice on how to be a pirate along the lines of "That one-master is still too big, matey, best try a rowboat." Aaarrrggghhh! Oaks didn't bother with the microphone test. We don't know what the mic would've cost, but we'll bet it's less than 10K.


Programming
Cable net expands into radio
ImagainAsian Television is only a few months old (8/25/04 TVBR Daily Epaper #166), but it's already expanding into a second medium - - radio. "Adding radio into the mix broadens the reach of our multi-media Asian American programming, as we continue to strive toward our goal of providing high-quality entertainment to not only Asian Americans, but all Americans interested in Asian culture," said Michael Hong, CEO of ImaginAsian Entertainment. The company's new radio division is now producing two weekly shows: "ImaginAsian Radio," a variety show which debuted Sunday evening (11/7) on KSQQ-FM San Jose, CA; and "Anil ki Awaaz," a call-in talk show focused on South Asian issues which airs on a number of stations and has been on the air since 1997, but is now an ImaginAsian production.


Ratings & Research
Webcast Metrics debuts new Internet radio ratings
Third party Internet radio audience ratings are once again available to subscribing webcasters and advertisers. Ending a more than six month void of ratings information for the Internet radio industry, Webcast Metrics released a ranker of the top 20 subscribing webcasters, with data collected for October. Webcast Metrics plans to publish regular monthly audience reports and subscribers will have access to additional detailed audience demo info. Since Arbitron closeted its Measurecast surveys last spring, the Internet radio industry has been without "exact data" third party measurement gathered from stations' servers. This data is converted to standard broadcast metrics such as average quarter hour (AQH), cume and total listener hours (TLH) using the same formulas as traditional broadcast ratings providers. | More... |


Transactions
KELO AM & FM, KWSN-AM, KTWB-FM & KRRO-FM Sioux Falls SD from Midcontinent Radio of South Dakota Inc. to Backyard Broadcasting South Dakota LLC.

WSDS-AM Ann Arbor MI (Salem Township MI) from Koch Broadcasting Corporation to Birach Broadcasting Corporation.

| More... |


Stock Talk
Mixed day for stocks
Traders took some profits from recent gains, but another drop in oil prices limited the downside for stocks. The market ended mixed, with the Dow Industrials up four points to 10,391, the S&P 500 down slightly and the Nasdaq Composite up a tiny bit.

Radio stocks were also mixed. The Radio Index was down 1.045, or 0.5%, to 226.085. SBS rose 4.1% on a strong earnings report. The big mover to the down side was Cumulus, off 4.4%.


Radio Stocks

Here's how stocks fared on Monday

Company Symbol Close Change Company Symbol Close Change

Arbitron

ARB

38.51

+0.11

Jeff-Pilot

JP

49.16

-0.01

Beasley

BBGI

17.05

+0.01

Journal Comm.

JRN

16.92

-0.13

Citadel CDL
15.17 -0.15

Radio One, Cl. A

ROIA

13.92

-0.20

Clear Channel

CCU

33.31

-0.15

Radio One, Cl. D

ROIAK

13.87

-0.20

Cox Radio

CXR

15.50

-0.45

Regent

RGCI

5.90

+0.09

Cumulus

CMLS

15.62

-0.72

Saga Commun.

SGA

17.68

+0.40

Disney

DIS

26.04

-0.39

Salem Comm.

SALM

26.64

+0.29

Emmis

EMMS

18.87

-0.22

Sirius Sat. Radio

SIRI

3.94

+0.01

Entercom

ETM

35.05

-0.20

Spanish Bcg.

SBSA

10.56

+0.42

Entravision

EVC

8.18

-0.18

Univision

UVN

29.41

+0.62

Fisher

FSCI

47.97

+0.21

Viacom, Cl. A

VIA

36.82

-0.13

Gaylord

GET

35.50

+1.10

Viacom, Cl. B

VIAb

36.20

-0.29

Hearst-Argyle

HTV

25.88

-0.17

Westwood One

WON

22.48

-0.55

Interep

IREP

0.79

-0.03

XM Sat. Radio

XMSR

33.51

-0.42

International Bcg.

IBCS

0.01

unch

-

-

-

-

-



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Upped & Tapped

Lathrop gets Lufkin
Veteran Director of Sales Johnny Lathrop is moving up at Clear Channel Radio. He's been named VP/Market Manager for the company's four stations in the Lufkin-Nacogdoches, TX market.

GM named for
mystery station
A new company, MoneyRadio Inc. hasn't yet revealed where its new "K-Biz" will show up on the dial in Houston, but it has hired a GM. He is Brent Clanton, formerly PD of KTSA-AM Austin, TX.

Horn joins GE as lender
Laura Horn, formerly with CIBC World Markets, has joined GE Commercial Finance as a Senior Vice President.

Lee hears a Buzz
Entercom has named Laura Lee Program Director of WBZU-FM "The Buzz" Madison, WI. She was previously Assistant PD at WCSX-FM Detroit.


More News Headlines

October Digital
Solutions Magazine

Who Will Sit on the Throne?
The election -What is in it
for Broacasters?

One On One
with PHD's Patrick McNew -
The man that over sees spot
for Chrysler Group.

Engineered For Profit
'05 budgets and capital expenditures, our close up look at who's planning to buy what next year.

October Zinio Solutions Magazine
Read RBR in 2 simple steps:
1.Create a simple account with Zinio and download the Zinio Reader.
2. You can then download the October Issue of RBR




RBR Radar 2004
Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.

Tribune Broadcasting isn't buying the claims of critics
President Pat Mullen feels today's media environment is more robust and competitive than ever. Tribune has been one of the leading advocates for deregulation and now has the most of any company to lose with no final decision on whether the crossownership rule will be scrapped - - and several of its TV stations coming up for renewal in markets where it has daily newspapers (with either temporary waivers or no waiver at all because the newspapers were acquired during the current TV license period). "Scale has become absolutely essential to maintaining competitiveness," Mullen insisted! . "It's a tough environment for media companies." The Tribune Broadcasting chief scoffed at the idea that a few giant companies are tightening their grip on the media landscape. Rather, he noted, the Big Three TV networks have seen their market share go from 92% in 1978 to about a third of that, with cable networks now claiming almost 50% of primetime viewing.
11/08/04 RBR #218

Competitors expect gains
from "Less is More"
Clear Channel's "Less is More" initiative is emerging as a hot topic on the quarterly conference calls of every radio group - - and they're all telling Wall Street that the move is going to give a boost to the entire industry, not just Clear Channel. RBR observation: For a company that used to be vilified by its competitors for being the rate whore that was dragging everyone else down, the "Less is More" initiative has really turned around Clear Channel's image in the radio industry. Now the key is to really make the inventory limits stick and put some rate integrity back into radio. The whole radio industry is watching to see if the notorious sinner has really gotten religion. Although the impact will be less direct, radio's attempt to cut clutter and boost rates should be good news for TV as well, helping to put some upward pressure on rates across the media landscape as TV stations again have more open inventory following the election cycle. Industry leaders are trying every way to make and push the positive of 'Less is More' and for the radio business future we trust it works or these words may be true spoken by WWII! Congressional Medal of Honor Recipient, Major Gregory 'Pappy' Boyington once said, "Just name a hero and I'll prove he's a bum." Take heed as we all have to make this work. 11/05/04 RBR #217

Murdoch eyes new business cable channel and could it mean a format spin into Radio
CNNfn is about to become history, but that doesn't mean that NBC Universal's CNBC is going to have the business news network business all to itself for long. Rupert Murdoch confirmed that he is looking at starting a financial news channel under the Fox brand.
TVBR observation: Hello world hit me over the head and say you did not see this coming. Rupert will push the button and go after that financial opening and will probably be the consistent line up of talent now on Fox News Channel (FNC) that will pull it off. TVBR outlook - Don't stretch the Content or the talent like the Neil Cavuto's too far off of FNC or what you built could crumble. Remember what has happened to radio with various spins on Formats and Voice Tracking. And we put money that there will be a Fox Financial News Radio format form this spin. Called Cross Platforming and Marketing. TV's goal in 2005- Time for Local to Muscle Up. See our January Solutions Magazine - Make sure you receive your copy - get it - Solutions Magazine.
11/05/04 TVBR #217

Rep settlement cost
Citadel 16.4 million in Q3
We now have at least partial price tag for Citadel's contentious jump from Interep to Katz as its national rep 13 months ago, which was finally settled in August. Although it's far short of the 65 million that Interep claimed it was owed, Citadel took a 16.4 million non-cash charge against its Q3 financials because of the settlement. Citadel isn't paying Interep any cash directly - - rather, Katz, which is owned by Clear Channel, has settled Citadel's obligations to Interep and Citadel has entered into a long-term contract with Katz which includes some provision to cover the settlement. Our sources indicate, though, that the 16.4 million is only part of the total settlement, so there's more yet to be learned from SEC filings by the companies involved.
11/05/04 RBR #217

RBR observation: Is there an election indecency factor?
There has been speculation in the press, notably up to and including the Wall Street Journal, that the tenor and enforcement of indecency regulations may hang in the balance, depending on who won the presidency. We now know who won, but we don't know the fallout. But we don't think anything was hanging in the balance at all. Truth told, FCC Commissioner Copps wants a license revocation in his scalp belt. The legislative process has continually saddled anti-indecency measures with excess baggage throughout 2004. That is the only thing which has kept a fine increase up to 500K per egregious offense from becoming the law of the land. Look for Congress to make it the law in 2005, if not sooner in its upcoming lame duck session. 11/05/04 RBR #217


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