RBR's Daily Morning Epaper

8 Weeks Left to maximize your inventory in '06. Help your staff hit year end budget.
Encourage them to Sign Up today for a Trial RBR Read.
Trial Subscription Sign Up

Volume 23, Issue 220, Jim Carnegie, Editor & Publisher

Friday Morning November 10th, 2006

Radio News ®

Dismal days continue for Westwood One
Radio station groups have been telling Wall Street of a pickup in advertising demand for Q4, but Westwood One CEO Peter Kosann says he isn't seeing that for his company's business, which is network radio and the regional/local business of Metro Networks. While Kosann says the ongoing move by advertisers to shorter length spots will be good for WW1 in the long run, the short-term impact is a glut of short-length inventory, where 10-second spots used to be pretty much the exclusive domain of traffic reports. To combat the increased competition from local stations, Kosann said Metro Networks will emphasize premium pricing for its imbedded live read spots. Beginning in January, Metro Networks will be offering four choices to advertisers, rather than a single broad reach. In addition to offering market-wide reach, Metro will also offer focused buys for male listeners, females and business leaders. The new initiatives are spelled out on www.metronetworks2007.com. Kosann says Metro Networks is also working to expand its business by putting product on client stations' websites and extending the traffic business beyond broadcasting to other outlets, such as the Internet and portable devices. After reporting a 15.3% revenue decline in Q3, CFO Andrew Zaref said Q4 is pacing down 15% for both the network business and Metro Networks. Kosann told analysts he is not satisfied with how sales are going and said he is bullish on long-term prospects, but offered no word on when a turnaround might begin.

Webb win in VA gives Democrats both houses
The last piece of the Senate puzzle is in place, following Sen. George Allen's (R-VA) concession to Democratic challenger Jim Webb. Allen waited for results from a poll canvas which failed to put a significant dent in Webb's tiny 7K vote. Allen is a member of the influential Committee on Commerce, Science and Transportation, which gets first crack at the vast majority of broadcast issues on the Hill. Earlier, another committee member involved in a close race conceded defeat: Conrad Burns (R-MT) acknowledged a victory for his Democratic challenger Jon Tester. The upshot is to take control of the Senate away from the Republicans. Although the Democrats and Republicans each have 49 senators, two independents, former Democrat Joe Lieberman (I-CT) and Bernie Sanders (I-VT) are expected to caucus with the Democratic Party and put them over the top with a total of 51 seats. Commerce Committee Chairman Ted Stevens (R-AK) will slide over and make room for Dan Inouye (D-HI) as chair of the committee. As for who will return to the committee and who will be added, new committee assignments are not usually announced until the next Congress comes into session.

RBR observation: When Stevens took control of the Committee from John McCain (R-AZ) and Inouye moved up to Ranking Member on the retirement of Fritz Hollings (D-SC), Stevens extended Inouye the courtesy of referring to him as co-chairman. The good news for broadcasters is that many of the related issues which come up on the Hill do not necessarily cut across traditional party lines. Stevens and Inouye share some of the deep-seated concerns known only to residents of the two states beyond the bounds of the Lower 48, and have a long history of working together. The bad news for broadcasters, of course, is that many of the related issues which come up on the Hill do not necessarily cut across traditional party lines.

PTC sees troubling loophole
in decency ruling
The FCC's recent decision to take two of four instances of alleged indecency out of hot water on court remand sparked a protest from decency watchdog Parents Television Council. It says that letting the CBS Early Show off the hook on a news exemption "...creates a loophole big enough to drive a truck through." PTC President L. Brent Bozell noted that the segment on the Early Show edition that sparked the controversy - it featured a version of the s-bomb - was not strictly a news segment. It was an interview with a cast member of a reality program carried on the same network about another cast member. It was not a case of a live mic or camera inadvertently picking up objectionable material while on location covering a newsworthy event. "Even more ominous is the creation of a provision for the networks themselves to determine what fits this 'news' definition," he continued. "Virtually any programming could be called a 'news' program. With the networks left to their own devices and already arguing in court for an unfettered 'right' to air profanity at any time of day, this means that the American people will be subjected to 'f-bombs' and other raunchy, inappropriate language on any program a network chooses to call a 'news' show." Bozell said the other situation, tossed because a complaint received referring to a specific station came from out of the station's viewing area, was problematic, since he knows for a fact that at least 96 complaints about the incident went to all five commissioners.

RBR observation: Bozell has a point. The FCC just finished reaffirming that The Tonight Show, like The Daily Show, Politically Incorrect, Imus in the Morning and the Howard Stern Show all qualify as news programs when it comes to interpreting political equal time rules, so there's no reason we can think of not to extend the concept to the indecency arena. However, we still would have found all of these incidents non-actionable on fleeting and non-repetitive usage grounds.

Bear Stearns sees
stalled ownership dereg
Victor Miller and other experts discussed the implications of the change in control on Capitol Hill. What they see is what we've seen: That the court-stalled FCC attempt to relax media ownership rules is now in more jeopardy than ever (and it already was not moving along with any rapidity or certainty). Any changes attempted by FCC Chairman Kevin Martin were sure to come under fire from certain members of Congress, led by Byron Dorgan (D-ND) in the Senate and Maurice Hinchey (D-NY) in the House. Dorgan has been able to enlist Republicans at least partially to his cause, making further dereg a tricky proposition even if Dorgan remained a member of the minority. Now that Dorgan and Hinchey both have majority status, and given the continued potential for crossover Republican support, and change attempted by Martin can probably expect to come under swift congressional review. Bear Stearns analysts think Martin may try to get at least some measure of regulatory relief in place, particularly regarding his pet project of freeing up newspaper/broadcast combinations, or perhaps a measure to television multiple ownership in the very largest markets, but in general, the Wall Street analysts are anything but bullish on the prospects for any major movement on the ownership rule relaxation front.

NAB board pushes for HD action
Hundreds of radio stations are transmitting in HD and receivers are now being rolled out to consumers. But still the FCC has not completed its rulemaking for digital radio. After discussing the status of HD at their meeting this week in Washington, the NAB Radio Board unanimously adopted this resolution proposed by board member Bruce Goldsen, President & GM, WKHM-AM & FM and WIBM-AM Jackson, MI: "Whereas, over the air radio stations are currently broadcasting in digital HD Radio; and whereas, the Federal Communications Commission has had a Further Notice of Proposed Rulemaking pending for over 31 months; and whereas, radio broadcasters daily serve the needs of their communities, including the provision of lifeline services during life threatening emergencies; therefore be it resolved, the Radio Board of Directors of the National Association of Broadcasters hereby urges the Commission to act expeditiously to finalize service rules for digital AM and FM radio." The timing of this week's meeting had the NAB Radio and TV Boards in the nation's capitol as election results produced a changing of the guard. NAB had prepared for some shift to the Democratic side, with its political action committee increasing contributions to that party's candidates this year. Rep. Joe Crowley (D-NY), co-chair of the New Democratic Coalition, was invited to address the Joint Board to discuss the election impact.

Wall Street Media Business Report TM

Q3 Conference Calls
Double digit declines
continue for WW1
Q3 brought no relief to the downturn that has plagued Westwood One throughout this year. Revenues plunged 15.3% to 114.3 million, with weakness in both the network radio business and the Metro Networks regional/local business. Cost-cutting reduced operating expenses 7.1%. But on the bottom line, net income fell by nearly half to 10.5 million, or 12 cents per share, versus 20.1 million or 22 cents per share a year ago. In addition to reporting its Q3 results, WW1 announced that it has established a Strategic Review Committee composed of independent directors to look at enhancing shareholder value. That does not mean that the company is for sale. Rather, the independent directors will be focusing first and foremost on modifying and extending WW1's various agreements with CBS Radio. The two are closely tied together, since CBS is a major shareholder of WW1, manages WW1 under one of the contracts and provides a major outlet for WW1 programming and advertising via its station group. The main agreements with CBS are set to expire March 31, 2009. WW1 said it would have no further comment on the talks until it produces something requiring public disclosure under SEC rules and company officials refused to take any analyst questions on the CBS negotiations.

RBR observation: The relationship that exists between Westwood and CBS is very complicated. CBS has a management contract with Westwood that was grandfathered and implemented back when Mel Karmazin became the overseer of Westwood-Unistar in 1993. The reason that was established was the investors wanted Mel in there and the relationship with Infinity. It became very lucrative and the investors made a ton of money. The problem that exists now is there is an inherent conflict of interest. The original contract that Infinity had with WW1 is still in place, but controlled by CBS. Westwood One, a public company, is run by CEO Peter Kosann (a CBS Radio employee) and CFO Andrew Zaref (a Westwood One employee). They're bringing in an objective team to evaluate this situation. Afterall, the CBS Radio contract is Westwood One's most valuable asset, and as noted above, will expire end of Q1 2009.

Fiscal Q4 Conference Call
Happy days at Disney;
radio closing in early '07
CEO Bob Iger reported that Disney wrapped up its fiscal year in fine style, exceeding analysts' expectations for fiscal Q4 (July-September). The Media Networks division was the main driver, with revenues up 10% to 3.7 billion, but cable significantly outperformed broadcasting despite the ratings success of ABC Television. Cable networks revenues were up 16% to 2.2 billion and operating income rose 22% to 854 million. Meanwhile, broadcasting revenues rose only 1% to 1.5 billion and operating income plunged 40% to 29 million. That was blamed on costs associated with new Disney-branded mobile phone services and a write-down associated with the ESPN/Radio Disney stations that Disney will keep once ABC Radio is sold to Citadel. That deal is now expected to close in the first half of the new fiscal year, said CFO Tom Staggs, who indicated that there had been some negotiations over changes that Citadel had needed to obtain financing, but implied that there were no barriers to the deal going forward. Staggs doesn't like to give detailed forward guidance, but he said the company expects to see continued profitability growth in the media networks division, led by ESPN and ABC Television. Disney doesn't provide specific numbers for its O&O TV stations, but Staggs reported that revenues were up in the low single digits for fiscal Q4 and are pacing up double digits, fueled by political spending, in the current fiscal Q1 (October-December). Somewhere buried in the fiscal Q4 numbers for broadcasting was ABC Radio, but no more. In this new fiscal year the radio operation will be treated as a discontinued operation and will, in effect, no longer exist.

Ad Business Report TM

Chrysler, Sirius to produce three TV
The Chrysler Group is showcasing three of its new vehicles in a new co-branded TV ad campaign that highlights the benefits of Sirius Satellite Radio in Chrysler, Jeep and Dodge vehicles. The trio of 30-second spots features the 2007 Chrysler Aspen, the 2007 Dodge Nitro and, in the ad for the 2007 Jeep Wrangler Unlimited, skateboard legend Tony Hawk. The ads debut on network and cable today.
| See details on the ads here |

Google may wait until CCU is bought
We're still hearing no radio group has yet to sign an inventory deal with Google, although the rumors are rampant. They've talked to Mark Mays, Joel Hollander, Farid Suleman, Peter Smyth, Les Moonves, etc...We've heard they may buy Clear Channel to guarantee they'll get their inventory. Now it looks like Google won't upset the apple cart with all of the CCU bidders because they could attach themselves to the losing bid. What they may do is wait until someone wins and then approach that company to take some kind of minority stake - if that's their plan.

Media Markets & Money TM

Hey good lookin', whatsyagot McCookin'
Armada Media Corporation has filed to add more radio stations to its growing portfolio, following its pattern of making acquisitions beyond the bounds of Arbitron-rated territory. This time, it's getting McCook Radio Group, owned by David and Connie Stout. According to brokerage firm of record Kalil & Company, the price will be 3.6M. Armada, chaired by former Wisconsin governor Tommy Thompson and featuring an executive lineup filled with radio veterans led by CEO James Coursolle, has already picked up properties in South Dakota, Wisconsin and Michigan. It will add three more states to the list. In Nebraska, it will get KBRL-AM, KRKU-FM & KICX-FM in McCook and KADL-FM in Imperial. In Colorado, it's buying KSTH-FM Holyoke and KJBL-FM Julesburg. And finally, in Kansas, it gets KFNF-FM Oberlin. With closing on this agreement, the Stouts will exit the ranks of radio owners.

Washington Media Business Report TM

A legal eagle eye view of
FCC's indecency decision
Our good friends at Womble Carlyle Sandridge & Rice have passed along their thoughts on the FCC's two and two decision on a quartet of remanded indecency findings. None had monetary punishments attached, and now two are off the hook. WCS&R attorney Peter Gutmann notes that the FCC has provided a little more color to its thinking. However, we still think the rules of the road are murky and indecipherable. But the fact remains that somebody, sometime is likely to get hit with the first 325K fine as approved by Congress, and there will be no relief from the incoming Democratic majority since members of both parties were tripping over one another to support the increase. So we advise you to read this and anything else that sheds light on the topic with care. As usual, the attorneys at WCS&R warn you not to use this piece as a basis for investment, wagering nor active litigation. In other words, it is an opinion, not legal advice.
| Legal musings here |

Internet Media Business Report TM

MTV Networks and Nexon announce gaming partnership
MTV Networks and international game publisher Nexon have announced a broad based strategic partnership to create a new premium user experience for MTVN'S Neopets, one of the largest youth communities on the internet, and includes MTVN's marketing of the launch of Nexon's casual MMOG game titles in North America via its portfolio of television and online brands. Two of the first titles to be marketed under the alliance will be "Maple Story" and "Kart Rider" which are already enjoyed by 50 million and 80 million players around the world, respectively. Nexon and Neopets will partner to create a new user experience for MTVN's Neopets in North America and territories throughout Asia and Europe. This new service will enhance the current Neopets world, known as Neopia, by providing users the ability to purchase premium level virtual items for customization and personalization, in addition to those currently available on the site. Nexon will also provide marketing and promotional support in Asia across its games portal for the new Neopets services. MTVN will also become a strategic partner for the launch of Nexon's first three games to be distributed in North America. Marketing campaigns will be run across a portfolio of MTVN television and online brands including MTV, MTV2, MTV U, Comedy Central, Nickelodeon, The-N, Neopets.com, Shockwave.com, Addictinggames.com, Gametrailers.com and XFire. The partnership will include Nexon's "Maple Story," "Audition" and "Kart Rider" titles. The partnership will also present opportunities for Nexon to create and develop MTV Networks' branded items within their games.

TVBR TV News

LIN eyes Clear Channel TV
Should the pending LBO of Clear Channel Communications result in its TV group being put up for sale, LIN Television CEO Vince Sadusky tells analysts he would be a willing bidder. However, he notes that it would be difficult for LIN to make such a large acquisition. These two companies are not strangers. Hicks, Muse, Tate & Furst is a huge shareholder of LIN and was, until 2005, a major shareholder of Clear Channel as well. "We've looked at those Clear Channel Television stations many times over the last decade. We are interested in them. We know the portfolio very well and we do think that there is an excellent opportunity there," Sadusky said in his conference call Q&A with analysts. "However, having said that, we would need a pretty significant equity infusion in order for us to even consider pursuing something that large," he added. LIN has lately been working on improving its balance sheet and has a deal pending to sell its TV operations in Puerto Rico.

TVBR observation: There is quite a bit of TV station inventory on the market. We are waiting to see the buyer or buyers emerge for the New York Times TV group and Emmis still has its last two stations to divest. Buyer interest, though, remains strong, with plenty of equity funds competing with group owners for good properties that come on the market. Depending who emerges the winner from the Clear Channel bidding - and initial bids are said to be due today (or maybe Monday) - getting out of TV, which is a small part of the company, is certainly an option that the next owner of Clear Channel will look at.

Transactions

824,984 FM CP Bakersfield CA (McFarland CA). 66.66% of JAB Broadcasting LLC from Behzad Norbehesht (50% to 0%) and Javier Orosco (50% to 33.34%) to Sara Venegas (0% to 33.33%) and Elizabeth Plascencia (0% to 33.33%). Cash. Station valued at 1,237,600. CP is for Class A on 104.3 MHx with 6 kw @ 327'. [File date 10/24/06.]

N/A KTOY-FM and KFYX-FM, KOMC-AM/KTFS-FM & KBYB-FM Texarkana AR-TX (Texarkana AR, Texarkana TX, Hope AR). 50% of Jo-AL Broadcasting Inc/ARKLATEX LLC from Sunbelt Media Inc. (William N. Cate) to Malvern Entertainment Corp. (Scott Gray) and DTJ Inc. (Donald T. Jack). Sudbury Affiliates (Harold L. Subury) retains 50%. 250K note plus unspecified debt transfer. Existing superduopoly. [File date 10/24/06.]

Stock Talk

Westwood One shares nosedive
Radio stocks were mostly lower after Westwood One projected another quarter of soft ad sales. Higher oil prices sent the overall market lower. The Dow Industrials fell 73 points, or 0.6%, to 12,103.

Westwood One shares plunged 16.9% on the dismal projection. That played a big role in sending the Radio Index down 3.682, or 2.4%, to 152.145. Saga fell 3.9% and Cumulus dropped 3.4%.

Radio Stocks

**Here's how stocks fared on Thursday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		42.69	-0.86	Hearst-Argyle	HTV		25.54	-0.16
Beasley	BBGI		7.03	+0.10	Journal Comm.	JRN		11.46	-0.24
CBS CI. B	CBS		29.79	+0.19	Lincoln Natl.	LNC		64.45	-0.48
CBS CI. A	CBSa		29.76	+0.20	Radio One, Cl. A	ROIA		6.99	-0.18
Citadel	CDL		10.53	+0.02	Radio One, Cl. D	ROIAK		7.00	-0.15
Clear Channel	CCU		34.67	-0.22	Regent	RGCI		3.60	-0.03
Cox Radio	CXR		17.00	-0.41	Saga Commun.	SGA		8.59	-0.35
Cumulus	CMLS		11.06	-0.39	Salem Comm.	SALM		11.50	unch
Disney	DIS		33.58	+0.48	Sirius Sat. Radio	SIRI		4.29	+0.17
Emmis	EMMS		12.82	-0.12	Spanish Bcg.	SBSA		4.17	-0.20
Entercom	ETM		29.21	+0.04	Univision	UVN		35.15	+0.02
Entravision	EVC		7.17	+0.01	Westwood One	WON		6.98	-1.42
Fisher	FSCI		42.01	-0.85	XM Sat. Radio	XMSR		13.62	-0.03
Gaylord	GET		47.87	-1.06	-	-	-	-	-

Bounceback

Send Us Your Opinions We want to
hear from you.
This is your column, so send your comments and
a photo to [email protected]

On the issue of birds and towers, we built a new 500-foot tower in Wyoming almost three years ago after having to negotiate for months with the U. S. Fish & Wildlife Service. The Service required us to install bird warning devices on the guy wires of our structure. This added nearly 20,000 in costs for the tower. As a small market operator, that was a significant cost over-run. After all of this time, we have never found one dead bird at the site, despite being told by government officials that hundreds of predator birds would be attracted to the lights on the towers. We are right in a north-south flyway but no dead birds, so I think that estimates of millions or even thousands of dead birds due to towers is wrong and a waste of resources for broadcasters building new towers.

Larry Patrick
Legend Communications

Below the Fold

Ad Business Report
Chrysler, Sirius to
produce three TV ads
Carmaker spotlights satellite radio in co-branded ads.

Media, Markets & Money
Armada sails again
This time, it's getting McCook Radio Group.

Washington Media Business Report
Decoding the FCC
Lawyers take a crack at explaining the latest indecency decisions.

Internet Media Business Report
Playing games with MTV Networks
MTV Networks and international game publisher Nexon team up.

More News Headlines

"60 Minutes" correspondent Ed Bradley dies of leukemia
CBS News announced that veteran "60 Minutes" correspondent Ed Bradley has died of leukemia. He was 65. The TV network broke into daytime programming on Thursday for a special report by Katie Couric, who described Bradley as "intelligent, smooth, cool, a great reporter." Fellow "60 Minutes" correspondent Mike Wallace hailed his long-time colleague as "a reporter's reporter" in an interview with CBS News Radio. Bradley won numerous awards, including 19 Emmys, two duPonts, a Peabody and an Overseas Press Club Award, over the course of a radio and TV news career that began in 1963 at WDAS radio in Philadelphia. He was honored with a Lifetime Achievement Award from the National Association of Black Journalists. Bradley had been at WCBS-AM New York just prior to his move to TV in 1971, joining the CBS News Bureau in Paris as a stringer. He was soon off to cover the Vietnam War and at one point was wounded in Cambodia. He also had a stint as White House Correspondent for the network and hosted various news programs in his long career at CBS. He became a correspondent for "60 Minutes" some 26 years ago.

Lincoln National
boosts dividend
Insurance giant Lincoln National Corporation, which owns the Lincoln Financial Media radio and TV groups, announced that its board of directors has increased its quarterly dividend by one and a half cents to 39.5 cents per share. The higher dividend will be paid February first to shareholders of record on January 10th.

October RBR/TVBR
Digital Magazine

In October's RBR/TVBR Solutions Magazine:
* Our Executive Comment series continues, asking television execs what the medium needs to address for success in 2007.
* The network radio upfront special continues, taking a look at new and unconventional ideas, shorter spot units and more.
* We go OneonOne with The Weather Channel's SVP/Cable Ad Sales Liz Janneman.
* We ask TV GMs and Program Directors what's working in syndication and network programming.
* Ronning-Lipset's Andy Lipset says, "It's a great day to be in radio"
* We review Q2 trading and deals for Television and Radio.

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
October Issue of RBR/TVBR

RBR Radar 2006

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

We have no deal with Google
While the Wall Street Journal reported that Google had signed deals with Emmis and Greater Media, Greater Media CEO Peter Smyth says they have no group-wide deal for his inventory. Smyth tells RBR Google wants their excess inventory: "But what's remnant? If we do our job properly and kind of reinvent our selling process ourselves, what do we need that for? What are you bringing to the table that makes the unique selling proposition different? What you're trying to do is get a piece of our inventory. And I'm glad that we waited and saw what this was all about - in them hiring local sales departments, etc.

RBR observation: Seems odd that Google would talk up their dMarc deals as if they were larger, Google Audio deals with more inventory. Seems WSJ bought it hook, line and sinker. Last, we totally agree with Smyth, do not overlook hiring away local radio sales people. Bad move, as it reminds some in the radio business of Cable hiring away radio sales to do a job locally. RBR recommends to read the total report in
11/09/06 RBR #219

Less is more, all right - more clutter
Cox Radio President/CEO Bob Neil took the occasion of the company's Q3 2006 performance conference to reiterate his skepticism toward shorter radio spots. He said he has no problem with shorter spots, including 0:30s and 0:15s, if that's what the customer wants. But he emphasized that Less is More was not devised in response to customer demand. "It was created by a radio company to meet specific needs that it had."
11/09/06 RBR #219

FCC reaffirms anti-F-word decision
Cher and Nicole Richie took the occasion of the Billboard Music Awards to drop an f-bomb (Richie added an s-bomb for good measure), and on court remand, the FCC upheld its finding that they both were examples of broadcast indecency. However, an s-bomb on a news program was excused, and numerous episodes of ABC's "NYPD Blue" were let off the hook on procedural grounds.
11/08/06 RBR #218

Research Director
TVB (Television Bureau of Advertising) New York City Experience in media sales research/market research. Knowledge of: Nielsen NTI & NSI, TNS, Polk, Scarborough, MRI, Excel/PowerPoint. EOE
See TV Careers

Account Executive
KUVN TV 23 Univision Dallas looking for a bright and dynamic advertising executive. Must have Bachelor's deg. in Marketing or related field and at least 3 years of experience in electronic sales. EOE.
See TV Careers

Account Executive
KSTR TV 49 TeleFutura Dallas Join a fast growing sales force. Ideal executive will have Bachelor's degree in Marketing/related field and or at least 1 year's experience in advertising electronic sales. Spanish-English is preferred, but not req. EOE.
See TV Careers

Manager/Sales Manager
Palm Beaches newest signal AM 960. Strong sales, promotional, and community service skills essential.
See Radio Careers

Program Director
WCJK-FM/Nashville, candidates will have experience, proven track record, solid leadership skills, a true flair for creativity, oh yeah, a JACK attitude. EOE.
See Radio Careers

Hard finding that key person
to fill the important position at your organization? Media HeadHunters is the place that key media firms use to get results. See Media HeadHunters and get results with service--Period.

Other Links

State Associations

Contact Us

Help Desk

__FIRST__ __SECOND__ :
Having problems with our epapers?
Please send Questions/Concerns to:
[email protected]

If you wish to remove your name completely from our database use this link __UNSUB__

RBR Epaper -- 108 annual
or just 9 a month