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Welcome to RBR's Daily Epaper
Volume 23, Issue 242, Jim Carnegie, Editor & Publisher
Thursday Morning December 14th, 2006

Radio News ®

RBR First
Broadcast lender reorganizing
RBR/TVBR has confirmed that a restructuring took place in the past few days at Wells Fargo Foothill, which is a major lender to radio, TV and other media. Our sources say the biggest change is that the company is shutting down the lending unit that dealt on the low end of the market, loans in the 1-10 million range, and will concentrate on the higher-margin business for larger broadcast loans. That is bad news for smaller operators, since Wells Fargo Foothill had been one of the very few nationwide lenders that would make media loans below 10 million bucks. Despite numerous contacts from RBR/TVBR, there is no official comment from the company yet on the reorganization. Wells Fargo Foothill made a major move to target the 1-10 million media loan market in late 2004 when it acquired Westburg Media Capital.

Tough month for satellite radio
November retail receiver sales dropped 45% for both XM and Sirius according to Wall Street analysts. The soft sales data has the analysts looking at whether to cut their 2006 subscriber estimates yet again. With November sales data from NPD, which tracks all sorts of retail sales, showing unit sales for both satellite radio companies off 45% from a year ago, Morgan Stanley analyst Benjamin Swinburne told clients that his estimates could be at risk, although he still expects subscriber numbers at the end of 2006 to be within the most recent guidance from the companies. Swinburne has projected XM to end the year with 7.9 million subscribers, while the company's range is 7.7-7.9 million. His projection for Sirius is 6.08 million, while the company range is 5.9-6.1 million. After seeing the soft November numbers, Jonathan Jacoby cut his year-end subscriber estimate for XM to 7.7 million from his previous 7.8 million. He is sticking with 6.1 million for Sirius, noting that while it also saw a sales decline in November, it increased its share of the retail market.


FMC, NAB square off
over consolidation

The Future of Music Coalition says, "Radio consolidation has no demonstrated benefits for the public. Nor does it have any demonstrated benefits for the working people of the music and media industries." NAB says, "FMC will make the claim that the 1996 Telecommunications Act has stifled diversity and led to homogenized programming. The facts demonstrate otherwise." FMC says that since 1996, there are fewer radio companies, and the ones that are left are significantly larger, with increased revenue and ratings concentration. The top four have gone from controlling 12% of revenue in 1993 to 50% in 2004, and as of 2005 controlled 48% of all listeners. It says 76% of all commercial programming fits into just 15 formats, that clusters at or near the local cap predominantly use only eight, and that many formats with different names have a playlist overlap of as much as 80%. The report is by FMC Research Director Peter DiCola, who drew on a variety of sources. NAB, using data from BIA Financial Network, counters that new formats categories have actually increased 7.5% since 2001, that markets in all size categories have 22.2% more choice in the same timeframe, and adds that these numbers increase to 16% and 36.4% going back to 1996. The two organizations agree that radio is still a very important medium. FMC says "Radio has great importance for our culture, our economy, and our democracy." NAB notes the medium's "...public service for the 260M people who tune in every week." They differ, of course, in that FMC says that "the public deserves to see it repaired," while NAB says that right now "free local radio has more format diversity than at any time in its rich history." Access to each study is available at each organization website: futureofmusic.org and nab.org (in the Newsroom).

RBR observation: If nothing else, these studies prove that you can find a statistical way to make your point regardless of what your point is, allowing two diametrically opposed groups to present two very different statistical portraits of the same essential reality. Where is the truth? Any comments? That's what our Bounceback department is for (be sure to include a digital photo). Email [email protected].

Hinchey posse queries ownership studies
Rep. Maurice Hinchey (D-NY) and six members of his Future of American Media Caucus (FAM) share concerns with the FCC's Democratic commissioners about the FCC's ten-part study of media ownership issues and they've fired off a letter to FCC Chair Kevin Martin with questions. Commissioners Michael Copps and Jonathan Adelstein both wondered why the studies were announced during the media fog just prior to the Thanksgiving holiday, with scant detail as to their scope and as to how the report's producers were selected. The FAM letter says, "We are certainly pleased to see that the Commission is moving forward with these studies. However, we are concerned about the lack of information that has been released thus far regarding these endeavors." Hinchey's primary concern is that the studies are structured by the FCC in a "...non-neutral manner to advance its goal of media consolidation." Hinchey is joined in his quest by Tammy Baldwin (D-WI), Peter DeFazio (D-OR), Barbara Lee (D-CA), Jim McDermott (D-WA), Louise Slaughter (D-NY) and Lynn Woolsey (D-CA).
| FAM's questions for Martin here |


Is the House playlist Gerry-rigged?
Monday's Nashville FCC media ownership forum spilled into Tuesday on Clear Channel's WSIX-FM, as the wife of Monday testifier and Country legend George Jones phoned in to rejoin the battle with morning host Gerry House, a legend in his own right. According to reports, House was criticizing some of the testimony at the forum, including that of George Jones, who had complained about being ignored by radio. This prompted the call from Nancy Jones. According to Tennesean.com, she said, "You can drive from Nashville to Washington DC and listen to different radio stations, and you're going to hear the same 20 songs they are programmed to play on every station you switch to." She said it wasn't just George Jones who was on the outs with commercial radio, noting that many artists who seem to have no trouble filling concert halls cannot seem to make it onto the air. Nancy Jones blamed Clear Channel specifically, saying they "control everything," a statement House took issue with on factual grounds, but the debate then segued back to playlist selection until Nancy Jones uttered a word she should not have, prompting House to end the exchange. Expressing his own frustration, he later told the Tennessean, "From what I can gather, all I need to do is play older artists more, newer artists more, successful songwriters more and unsuccessful songwriters more. I don't know why I make it so difficult."

Chandlers said to be eying Tribune
Their dissatisfaction with Tribune Company management started the process that led to the current effort to sell the company, but the Chandler family may not cash out. The New York Times reports that the Chandlers are in talks with a consortium to bid for part of the company. The heirs to what was once Times-Mirror are not interested in buying the entire company, the newspaper said, but rather are looking at a way to benefit from their 20% stake in Tribune Company with the lowest possible tax bite. One option reportedly being considered is to have the Chandlers own a 51% stake in a surviving Tribune Company, with private equity partners owning 49%, after the TV assets are spun off from the company. However, the Times says the family would still prefer to have the entire Tribune Company sold, leaving them with cash, not newspapers.


Ad Business Report TM

Google Audio ads voices
available at Voices.com

According to Voices.com, the voice marketplace, Americans new to advertising on the radio are buying radio spots for the first time via Google's Audio Ads beta testing program. Voices.com has positioned their company as the premier source of voices for advertisers who are using the Google Audio Ads platform. Operating as a marketplace for several years, Voices.com has been connecting advertisers with creative professionals, particularly voice talents, to complete their audio projects. Voices.com's service is home to thousands of voice actors from the US, Canada, and abroad.
| Details Here |


Media Markets & Money TM
Pensacola AM gets the word
WZNO-AM is headed for the noncommercial realm. The aptly name duo of Gene and Jeaniene Church and their Divine Word Communications is picking up WZNO-AM from Michael Glinter's 1230-AM Inc. The price tag is 375K cash, with 25K of that allocated to the station's tangible property and 350K to its license and established goodwill. It will be the Church's only station in the market.


Washington Media Business Report TM
FEC clamps down on 527s
One major source of campaign advertising funding in the 2004 election (and to a lesser extent in this year's midterm) may be about to dry up. The Federal Election Commission has nailed three so-called 527 organizations with six-figure fines for behaving like political action committees, but using their 527 tax-code status to avoid the rules that apply to PACs. Swiftboat Veterans and POWs for Truth will pay 299.5K, League of Conservation Voters will pay 180K and MoveOn.org Voter Fund will pay 150K. FEC's outgoing Chairman Michael Toner said, "These unanimous decisions provide important guidance as to when organizations must register and report as political committees. The findings and six-figure penalties we are announcing today send a strong message that the Commission takes these kinds of cases very seriously, and that when an organization fails to file as a political committee, it carries serious legal consequences."

RBR observation: There were numerous cries of foul play when the 527s rose to prominence, but the FEC ducked the issue at the time, explaining that by the time it got though public notice, studies, hearings, etc, etc, the election would be over. That another election has come and gone before there was a ruling is - frankly - no surprise to anyone who watches Washington on a daily basis. However, at least one of these organizations - MoveOn.org - abandoned its 527 status and operated as a PAC this year, subsisting on small donations instead of seeking out rich donors who could provide a huge lump sum. Bottom line" Although on the face of it the ruling would seem to exert a negative impact on total political spending, our guess is that it probably will have no effect at all. It seems that more and more money finds its way into the political process no matter what anyone in Washington does, and there's no reason to believe this action will have a different result.


Entertainment Media Business Report TM
Majic 102.7's Rick Shaw and
Children's Fund help save Christmas

The legendary Majic 102.7 FM Miami Morning Show host Rick Shaw, who also serves as president of the Majic Children's Fund, stepped forward on behalf of the charitable organization to save Christmas for 400 young South Florida cancer patients. When Shaw learned a Grinch had broken into a locked trailer and made off with approximately 500 presents collected by area firefighters, he wrote out a check for 5,000 from the Majic Children's Fund to replace the stolen toys. Firefighters collected donations and toys during the past several weeks and had wrapped all the presents, which were to be handed out to children with cancer during a holiday party in Miami Beach Saturday. Thanks to Shaw and the Majic Children's Fund...and scores of South Floridians who also are donating additional toys and money...the party will go on as planned. "It's all about the children. I don't want any of them to be disappointed," Shaw says. "I believe these youngsters are going through enough already and they deserve a little special attention during this most 'giving' time of year. I feel privileged that we were able to help." The Majic Children's Fund is a non-profit, charitable organization formed in 1988 to help raise awareness, funds and services for South Florida charities that benefit children in need.


Engineering Media Business Report TM
2007 budgets and capital expenditures:
VPs/Engineering discuss

In this yearly RBR feature, we ask top engineers at the radio groups where 2007 budgets and capital expenditures are heading. What's tops on the list for projects and new equipment? This year, we asked the following:

Steve Davis, CC Radio SVP,
Engineering & Capital Management
Milford Smith, VP/Engineering, Greater Media
Wes Davis, Corporate Director of Engineering, NextMedia Group
Martin Stabbert, Citadel Director of Engineering
Tom Ray, Corporate DOE for
Buckley Broadcasting/WOR-AM NY
Glynn Walden, CBS Radio VP/Engineering

Your 2007 cap ex and operating budgets:
What issues are on the table, what projects are you planning?
Steve Davis: We await the FCC's passage of their digital radio rulemaking to clarify the regulations and ease the regulatory burden of deploying HD radio. HD radio and secondary audio services continue to be major focuses for us. Backup equipment and facilities for disaster readiness also figure heavily into our plans. Lots of IT-related initiatives to improve efficiency mean a lot of computer hardware and software including development costs (we continue to develop a lot of software in-house). The NYC studio consolidation is a large project along with other major projects we have in the works including building a new 50 KW AM array in Boston.
| Read More... |


HD Radio 2007
HD Radio at CES
If you're planning to attend this year's Consumer Electronics Show (CES), HD Radio will be showcased at North Hall, Booth #4616. As well, "HD Radio at CES Unveiled," takes place Saturday, January 6 from 4-7 p.m. in the Marco Polo Ballroom in the Sands/The Venetian.

Highlighted will be the past year's progress, such as:
* New Products - HD Radio products are available this holiday season from Accurian (a RadioShack brand), Alpine, Audio Design Associates, Boston Acoustics, Cambridge SoundWorks, Directed Electronics, JVC, Kenwood, Polk, Sangean and Sanyo. 2007 offerings are planned from Day Sequerra, Denon, DICE Electronics, Integra, Niles Audio, Radiosophy, Rotel, Visteon and more. Most of these products and others to be announced at the show will be on display in the iBiquity/HD Radio booth.

* Increased Retail Availability - HD Radio products can now be found at Circuit City (in the top ten markets), RadioShack (2,500 stores nationwide), Tweeter, Fry's Electronics, Crutchfield and Amazon.com, plus hundreds of regional and specialty dealers.
* Falling Prices - At CES 2006, the Boston Acoustics receiver retailed at $499. Today, that unit is 249, and HD Radio receivers for both the car and home are available for as little as 175.

* New Content via Multicasting - HD2 multicast programming is available in 167 markets, featuring a range of formats that include: All Beatles, BBC News, Blues, Christian Hip Hop, Classical, Comedy, Disco, Gospel, Hispanic Oldies, International Hits, Live Rock, Pride Radio, Tejano and Traditional Jazz.

* Automakers Ramping Up - In addition to BMW, which currently offers an HD Radio receiver as an option on their 3, 5, and 7 Series vehicles, there are 9 OEM auto manufacturing companies representing approximately 50 models, currently being shipped, specified, or in design, for release in the next few model years.


Transactions
90M KFJK-FM/KMGV-FM/KMJ-AM/KOQO-FM/KSKS-FM/KWYR-FM & KFPT-AM Fresno CA (Fresno, Clovis CA) from CBS Radio Stations Inc. (Les Moonves), a subsidiary of Viacom to Peak Broadcasting LLC (Todd Lawley et al). 9M escrow, balance in cash at closing. Existing superduopoly. LMA until closing. [File date 11/29/06.]

860K KKNS-AM Albuqerque NM (Corrales NM) from Simmons-Austin LS LLC, a subsidiary of Simmons Media Group Inc. (G. Craig Hanson) to El Camino Communications LLC (Victor Camino). 43K escrow, balance in cash at closing. LMA 1/12/07 @ 3K/month. [File date 11/29/06.]


Stock Talk
A gain, but not much of one
Stock prices were higher, but barely higher on Wednesday, with bad news about oil prices blunting the impact of good news about higher retail sales. The Dow Industrials moved up two points to 12,318 and other indices also inched up.

Radio stocks were a tiny bit lower. The Radio Index slipped 0.494, or 0.3%, to 151.144.

Cumulus had the best day, up 1.6%. Salem had the worst, down 2.3%.


Radio Stocks

Here's how stocks fared on Wednesday

Company Symbol Close Change Company Symbol Close Change

Arbitron

ARB

44.36

-0.03

Hearst-Argyle

HTV

26.02

+0.01

Beasley

BBGI

7.74

-0.13

Journal Comm.

JRN

12.34

+0.06

CBS CI. B CBS

31.39

+0.09

Lincoln Natl.

LNC

63.60

-0.15

CBS CI. A CBSa

31.35

+0.12

Radio One, Cl. A

ROIA

6.65

+0.01

Citadel CDL
9.63 +0.11

Radio One, Cl. D

ROIAK

6.67

+0.01

Clear Channel

CCU

35.38

+0.08

Regent

RGCI

2.98

-0.03

Cox Radio

CXR

16.48

-0.11

Saga Commun.

SGA

9.10

-0.08

Cumulus

CMLS

10.70

+0.17

Salem Comm.

SALM

10.86

-0.25

Disney

DIS

34.45

+0.22

Sirius Sat. Radio

SIRI

3.79

+0.02

Emmis

EMMS

8.09

-0.10

Spanish Bcg.

SBSA

4.26

+0.02

Entercom

ETM

27.68

-0.04

Univision

UVN

35.39

-0.01

Entravision

EVC

7.94

+0.07

Westwood One

WON

6.73

-0.08

Fisher

FSCI

42.15

-0.20

XM Sat. Radio

XMSR

15.15

+0.09

Gaylord

GET

50.39

-0.02

-

-

-

-

-


Bounceback

Send Us Your OpinionsWe want to
hear from you.

This is your column, so send your comments and
a photo to [email protected]




Below the Fold
Ad Business Report
Google Audio ads
Voices available at Voices.com...

Media Markets & Money
Pensacola AM gets the word
WZNO-AM is headed for the noncommercial realm...

Washington Media Business Report
FEC clamps down on 527s
One major source of campaign advertising funding...

HD Radio
HD Radio at CES
Will be showcased at North Hall...

Arbitrends

Arbitron
Market Results
| Bakersfield |
| Detroit |
| Philadelphia |


Stations for Sale

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Radio Media Moves

Donohue knows Jack
CBS Radio has named Jennifer Donohue Vice President/General Manager of WCBS-FM "101.1 Jack FM" New York. She had been Director of Sales for the cluster and General Sales Manager of WNEW-FM.




More News Headlines

Fund to honor
John Jones

Radio One and the Minority Media and Telecommunications Council (MMTC) announced creation of the John W. Jones Legal Education Fund in memory of John Jones, who died this month at age 38 (12/6/06 RBR #236). Jones was General Counsel of Radio One and had previously been the first General Counsel of TV One. Through the Jones Fund, the MMTC will train law students, as well as attorneys beginning their legal careers, in the practice of public interest and civil rights law before the Federal Communications Commission. Those awarded stipends through the Jones Fund will be designated MMTC's "John W. Jones Fellows." The John W. Jones Fellows' work will focus on the advancement of minority entrepreneurship in the nation's media and telecommunications industries.


RBR Radar 2006
Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.

Which medium is the
biggest eLoser?
A recent ZenithOptimedia forecast sees Internet advertising surpassing radio on a worldwide basis by 2009, but radio will only lose 0.4% of its share from 2006 through then. That matches the projection for magazines, and is not as severe as the drop for television. But the biggest loser is projected to be: Newspapers.

RBR observation: One way to look at this is that the Internet is creating revenue. Another way is that it is enjoying the explosive growth that is the norm for a new viable medium, maintaining for a time a pace which is practically impossible for mature media to match. Yet another way to look at it, one preferred by many broadcasters who participate in quarterly conference calls, is that the Internet is benefiting from experimentation right now but is inherently flawed and will not grow at the rate predicted. Regardless of which of these approaches you take, it is clear to most that the most severely challenged medium at this point, any way you fold it, is newspaper. See Media growth charts from ZenithOptimedia here and Print out
12/13/06 RBR #241

US ad spend rose 5.1% through Q3
Advertising spending for the first three quarters of 2006 rose 5.1% over the same period last year, due to ad spending increases across many major media, according to Nielsen Monitor-Plus. Ad spending increased in most reported media, led by the Internet (49.2%), Spanish Language-TV (16.6%) National Newspapers (8.4%) and Spot TV Top 100 Markets (7.4%).

RBR observation: There is a lot more to review as this data on ad spending is the Only pacing stats available since pacing has gone away many years ago and some know the reason why. But for now review and print this data out for your internal marketing comparison.
12/13/06 RBR #241

Arbitron breaks into the 300s
With the announcement that four new measured markets are on their way this spring, ratings giant Arbitron takes its total over the 300 benchmark. There are newbies added to the measurement list.

RBR observation: This is good news for many and trust Arbitron will deliver the marketing necessary to put these radio markets and those stations on the radar screen in 2007. So much attention this year has been dedicated to PPM that many, including RBR, have to get refocused on all of radio and their needs to succeed. Not matter the size of the market or station owner, everyone needs ideas that work in today's competitive environment.

Publisher note: A new year will be here in two weeks so RBR and TVBR brand's 2007 the year to Work Smarter Not Harder. Stay tuned. See the rated markets to be in
12/12/06 RBR #240

VNU begins streamlining
Confirmed that parent company VNU is seeking to cut costs companywide by 10%, but beyond that there is no detail on any cuts to be made at the TV ratings company. Pink slips went out last week at many of the trade publications owned by VNU, which include such US titles as Billboard, The Hollywood Reporter and AdWeek. That job cutting across the VNU print publications was first reported December 1st by Folio magazine, which follows the magazine business. A number of jobs had been previously eliminated when VNU acquired Radio & Records (18.5M) and combined it with the now-defunct Billboard Monitor.

RBR observation: You don't cook the goose that lays your golden eggs, so don't look for a lot of cutbacks at Nielsen Media Research, the most profitable part of VNU. Key is focusing on ones core business and making it manageable to produce a profit.
12/12/06 RBR #240


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