RBR's Daily Morning Epaper

Volume 22, Issue 26, Jim Carnegie, Editor & Publisher

Monday Morning February 7th, 2005

Radio News®

Lehman sees satellite threat to radio stocks
Analyst Bill Meyers at Lehman Brothers has reduced his revenue estimates and price targets for most of the radio stocks he covers, saying the growing impact of satellite radio can no longer be ignored. He's expecting total radio revenues to be up only 2% this year - - less than the expected inflation rate. Meyers' near-term outlook adjustments in chart form for individual companies are inside this mornings report.

RBR observation: What no one on Wall Street seems to get is that the deals which Sirius and XM have cut with the automakers are going to turn around and bite them in the butt. That's where their dramatic escalation in churn rates is going to come from in a couple of years. Many people are out there now buying a new car equipped with a satellite radio, not because they have any interest in having a satellite radio, but because they want a particular model in blue - - and the only blue one on the dealer's lot happens to have a satellite radio in the dash. The cost of that receiver and the first year subscription is wrapped up in the price, likely with 0% financing, so it's virtually unnoticed. But once that one-year subscription expires, that car buyer who never really wanted a satellite radio in the first place isn't going to pay a monthly charge to keep it operating. Churn, churn, churn. | More... |

FCC fireworks set for Thursday
The Thursday, 2/10/05 open meeting of the FCC Commissioners has the potential to set off a firestorm, and if nothing happens, that'll be news too. The first item on the agenda is the ultra-controversial issue: "Carriage of Digital Television Signals: Amendments to Part 76 of the Commission's Rules." And that's not all: The Commission plans to consider a MO&O on the dismissed application of Sinclair Broadcast Group to acquire stations licensed to subsidiaries of Cunningham Broadcasting Corporation. The cable carriage issue is incendiary to say the least. Lame duck FCC Chairman Michael Powell signaled that he was looking for allies in support of the cable side of the question, which would require carriage of only one primary stream of programming, whether or not that stream is high-def or not. Broadcasters are looking for full carriage of the same 6 MHz bandwidth they are entitled to under analog rules, which would allow one high-def stream or up to six multicast streams. The FCC has been pelted with opinions as the as the day of decision approaches (see "Hill denizens come down on Ferree side of multicast" below). Of course, the FCC could defer a decision in order to seek further comment. However, many on Capitol Hill are getting itchy for the return of spectrum currently being used to support side-by-side analog/digital broadcast of television, so pressure for a decision on this contentious topic can only increase. Seven other non-broadcast planks are also on the agenda.

If at first you don't succeed...
"The Commission will consider a Memorandum Opinion and Order concerning an Application for Review filed by various licensee subsidiaries of Sinclair Broadcast Group Inc. (SBG) seeking review of a decision by the Media Bureau dismissing applications through which Sinclair sought to acquire television stations from the license subsidiaries of Cunningham Broadcasting Corp." That is how Agenda Item #2 for the 2/10/05 open FCC meeting is described. There are five stations in question. All are currently operated by SBG in LMAs. Here's the lineup (channel listings are analog/DTV): In Baltimore (Nielsen DMA #23): WNUV-TV, Channel 54/40, WB, operated alongside O&O WBFF-TV, Channel 45/46, Fox. In Columbus OH (Nielsen DMA #34): WTTE-TV, Channel 28/36, Fox, operated alongside O&O WSYX-TV, Channel 6/13, ABC. In Dayton OH (Nielsen DMA #56): WRGT-TV, Channel 45/30, Fox, operated alongside O&O WKEF-TV, Channel 22/51, NBC. In Charleston-Huntington WV (Nielsen DMA #62): WVAH-TV, Channel 11/19, Fox, operated alongside O&O WCHS-TV, Channel 8/41, ABC. In Charleston SC (Nielsen DMA #101): WTAT-TV, Channel 24/40, Fox, operated alongside O&O WMMP-TV, Channel 36/35, UPN. SBG spent much of 2004 under attack for activities which during an election year which many said favored the Republican candidates in general and George W. Bush in particular. One watchdog organization, Free Press, has gone so far as to seek denial of license renewals for Sinclair stations precisely because of its relationship with Cunningham. Calls to Sinclair were not returned by deadline.

Hill denizens come down on Ferree side of multicast
Twelve Republican members of Congress, three in the Senate and nine in the House of Representatives, have fired off a letter to Michael Powell urging him to require cable carriage of the full 6 MHz of bandwidth currently used for a station's analog signal, whether the station is broadcasting in high-def or multicasting. And adding to the din was a pair of Democrats who were pushing for, at the very least, a delayed decision.
| More... |

JSA reporting: A legal eagle-eye view
The time is fast approaching when joint sales agreements (JSA) in effect in the radio world must be reported to the FCC, as well as being noted in your public file. (Similar arrangements for television are under consideration.) The communications attorneys at Womble Carlyle Sandridge & Rice, PLLC have put together a quick primer on what you need to do should you be involved in such an arrangement. Here, then, for your complying pleasure, is a look at the new JSA reporting requirement. | More... |

Auction No. 37: 18 down, 270 to go
Assuming that the winning bidders make a final lump sum payment by 2/18/05, or failing that, within the grace period which extends until 3/7/05, 17 applicants will have the FCC's go-ahead to construct the first 18 of 288 station allocations awarded in Auction No. 37. Big Island Broadcasting has two of them, in Haiku and Captain Cook, HI. Other first round approves are Malvern Entertainment (Calico Rock AR), LKCM Radio Group (Munds Park AZ), Airen Broadcasting (McCloud CA), Marcos Rodriguez (Carbondale CO), Wildcat Communications (New Castle CO), Massmedia (Ebro FL), Guam Broadcast Services (Tumon GU), Henson Media (Sturgis KY), Community Radio (Ravenna NE), Horizon Broadcasting Group (Bay City OR), Alexandra Communications (Stanfield OR), Christyahna Broadcasting (Mission SD), Susan Clinton (Byrdstown TN), Sanpete County Broadcasting (Monroe UT), Advance Acquisition (Soldiers Grove WI) and United State CP (Saratoga WY).

RBR Poll
You be the guru! Universal McCann's Bob Coen is forecasting that radio revenues will rise 5% in 2005 - - a projection that, so far, no major radio CEO has been willing to hang his hat on. But you, our readers, are out there in the trenches, so we want to get a forecast from the frontlines of radio.

How will radio revenues finish 2005?
1. Flat or down
2. Up 1-2%
3. Up 3-4%
4. Up 5% or more

Publishers Perspective

Super Bowl XXXIV
Game was good, exciting and some of the commercials - well just so, so. GoDaddy.com was the one that stood out and took the, ah, brass ring with their spot which got more attention on all news channels way before the game kicked off. GoDaddy got its monies worth. Seems the other ad buyers spending 2.5 million a pop had the FCC jitters from last year, as for those who missed our first report 02/02/04 RBR #21 and the rest as they say is history. But the biggie was the half time entertainment when Sir Paul McCartney delivered what he promised, no repeat of Janet Jackson's infamous "wardrobe malfunction" but great Rock'n Roll. Sir Paul's songs delivered what the NAB's radio PSA's hold true: "They were heard First on the Radio,"- still great today and what legends are made from.

Adbiz©

RNC threatens TV stations
to stop running MoveOn.org ad
Replete with a veiled threat, RNC Deputy Counsel Michael Bayes sent a letter to TV station GMs running a MoveOn.org ad attacking President Bush's efforts to change the Social Security system. Excerpts: "' President Bush has repeatedly emphasized that his proposal does not include any cut in current benefits, and MoveOn.org has no right to knowingly and willfully spread false information in a deliberate attempt to mislead the American people,' said Bayes. 'The nonpartisan FactCheck.org recently characterized MoveOn.org's advertisement as 'a false TV ad.' According to the watchdog organization, 'MoveOn.org launched a false TV ad in the districts of several House members, claiming through images and words that President Bush plans to cut Social Security benefits nearly in half...Actually, Bush has said repeatedly he won't propose any cuts for those already retired, or near retirement. What MoveOn.org calls 'Bush's planned Social Security benefit cuts' is actually a plan that would hold starting Social Security benefits steady in purchasing power, rather than allowing them to nearly double over the next 75 years as they are projected to do under the current benefit formula...' wAs an FCC licensee, you have a responsibility to exercise independent editorial judgment to oversee and protect the integrity of the American marketplace of ideas, and to avoid broadcasting deliberate misrepresentations of the facts. Such obligations must be taken seriously and I urge you to decline to broadcast this advertisement. This letter places you on notice that the information contained in the above-cited advertisement is false and misleading. Your station should act responsibly and refrain from airing this advertisement."

Fox dropped Anti-Anheuser spots
from Miller in pre-Super Bowl airing
Fox announced it rejected a handful of 15-second commercials from SABMiller that were scheduled to air in Sunday's Super Bowl pre-game show. The spots took shots at the new low-carb beer, Budweiser Select, which ran in the big game. Budweiser is the exclusive beer advertiser in the game.

New Jersey 101.5 loses advertisers over flap with gov.
The New Jersey Record reports less than a week after acting Governor Richard Codey almost duked it out with a trash-talking New Jersey 101.5 (Millennium Radio Group's WKXW-FM Trenton) DJ, advertisers are calling the provocative radio station on the carpet. Two sources tell the site several major 101.5 advertisers, including Horizon Blue Cross, Public Service Electric and Gas Co. and Flemington Car and Truck Country, are pulling ads to protest disc jockey Craig Carton's on-air jokes about Mary Jo Codey's mental health. | More... |

NAR launches effort urging consumers
to contact a Realtor first
The National Association of Realtors' public awareness campaign kicks off its eighth year this month with new television and radio ads featuring real people talking about their real estate experiences and touting the benefits of working with a Realtor. New this year, the ads encourage consumers to contact a Realtor first when it comes time to buy or sell a home or lease a commercial space. | More... |

March Radio & Television Business Report

2005 Technology Odyssey..
The Changing Landscape
Ipods, DTV, FCC, Technology, People Meters. If you are in Business to Do Business in today's New Environment, Position your Company, Technology, Programming and what you do that Radio and Television executives need to know as budgets are being put into action. The Landscape is Changing Fast - March 2005 report is ahead of the curve as first quarter is closing fast.

Advertising/Marketing Placement - Contact
Jim Carnegie - 813 909 2916
June Barnes - 803 731 5951

Not Receiving The Official Business Media Magazine? Then here is your Last Chance to a Trial - Read. Your order must be place by February 18th.

Media Markets & MoneyTM

Radio One sells notes
Radio One announced Friday that it had sold 200 million bucks worth of 6 3/8% senior subordinated notes, due 2013, at par. The proceeds, along with cash on hand and the company's bank facility, to redeem all of its 310 million outstanding of 6 1/2% convertible preferred securities, called "High Tides."

Price revealed on Long Island
Media Services Group broker Robert J. Maccini has come forward with the final plank in the story of Arlington Capital Partners' acquisition of four FMs on Long Island. They'll get the four-FM cluster assembled by AAA Entertainment for 12M. Arlington Capital has formed a holding companies called Long Island Radio LLC and AAA Sub LLC, which will operate along side its western radio group, Cherry Creek Radio. Arlington also backs the New Vision television group.

Closings from all over
Our phones, faxes and Outlook files have been literally, figuratively and/or virtually ringing off the hook in the past week or so with brokers informing us of closings big and small - - but we've been so busy following newly-announced deals that we haven't gotten to any of them. Just like Congress likes to put out an annual omnibus appropriations bill, we will now present, for your key-handing-over pleasure, an omnibus closings article.
| More... |

Washington Beat

Basic cable rates up 5.4%
The FCC says that the combined rate of increase for getting cable TV has gone up 5.4% for the year ending 1/1/04. The average monthly charge for basic and expanded basic service went up that same 5.4%, from 38.95 to 41.04, while equipment fees jumped 5.9%, from 4.04 to 4.28. The presence of effective competition did seem to put a damper on increases. In those areas where it was deemed present, the increase was held to 3.6%, compared to 5.6% everywhere else. 97% of all cable households are now served by systems with digital service, a number sure to raise eyebrows at hundreds of broadcast television stations which are seeing only their analog signals making it to the wires. 92.3M households subscribe to some form of MVPD. Cable's share of that is 71.6%, with 25.1% going to DBS and 3.3% to "other." Michael Powell touted the benefits to consumers which are being realized by both the digital revolution and the presence of the relatively new satellite services. Democratic Commissioners Michael Copps and Jonathan Adelstein, on the other hand, wanted more in-depth analysis on the divide between competitive and monopolistic areas and the effect on service and pricing.

Programming

WETA-FM DC may drop Classical;
good news for WAMU?
The Washington Post reports WETA-FM DC (90.9) could may drop its classical music and go News-Talk full-time: "Although WETA officials say they have not finalized their plans, the station's management intends to present a proposal to overhaul daily programming to the board of directors this week. The station has called its employees to a mandatory meeting the day after the 2/10 board meeting. If the board approves the changes, the classical music heard on WETA since 1970 would be largely replaced by month's end." DC still has Classical WGMS-FM 103.5 and the powerhouse from Baltimore WBJC-FM 91.5. Dan DeVany, WETA VP/GM tells the Post that his station faces a dilemma. With the audience for classical music in decline, he said, "we have to ask ourselves if we are truly fulfilling our public service mission." WETA-FM already runs news and talk programming during weekday morning and afternoon drive times-often basically a simulcast of fellow DC NPR affiliate WAMU-FM. DCRTV had a very interesting observation, one that would make many listeners in DC happy. WAMU may move to an eclectic format, a la KCRW-FM LA or WDET-FM Detroit. DC Radio currently has the FM format variety of a small market. From DCRTV: "If it went all-news and talk, would WAMU (88.5 FM), which is currently news talk on weekdays, add musical programming? As DCRTV reported in December, that station hired Caryn Mathes as general manager. She comes from WDET, a musically-oriented public radio station in Detroit."

RBR observation: Right now, WAMU has a very limited amount of music, which is mostly Bluegrass. We're not exactly sure why Bluegrass should appeal to DC listeners. Perhaps it calms their nerves after dealing with the city's daily traffic catastrophe. A 1965 roads, highways and interstate system for a 2005 population...unreal!

Monday Morning Makers & Shakers

Transactions: 12/27/04-12/31/04
If you thought you'd seen slow, you ain't seen nothing yet. The year 2004 went out with considerably less than a bang. In fact, as weeks go, it was barely noticeable.

12/27/04-12/31/04	Total
Total Deals	4
AMs	3
FMs	2
TVs	0
Value	803K

| Complete Charts |

Radio Transactions of the Week
EMF gets a couple for about half a mil
| More... |

TV Transactions of the Week
You must be kidding...come back in 2005
| More... |

Transactions

KSMO-TV Kansas City MO from Sinclair Broadcast Group to Meredith Corporation

KRFM-FM/KSNX-FM/KVWM-AM/KVSL-AM Show Low AZ from FFD Holdings I Inc. to Petracom of Hobrook LLC.

KWPT-FM Eureka-Arcata CA (Fortuna CA) from S.T.E.G. Broadcasting LLC to Lost Coast Communications Inc.

| More... |

Stock Talk

Stocks jump on tobacco ruling
A federal court ruling which undercut the government's effort to win billions from big tobacco companies gave a boost to stock prices on Friday - - and a weaker-than-expected jobs report eased fears that the Fed would hike rates faster. The Dow Industrials shot up 123 points, or 1.2%, to 10,716.

Radio stocks, however, missed out. The Radio Index rose 0.824, or 0.4%, to 215.893. Radio One's Class D stock fell 6.2% and Class A 5.9% as it announced a bond sale and redemption of other securities. There were some big gainers, though. Entravision was up 5% and Regent gained 2.7%.

Radio Stocks

**Here's how stocks fared on Friday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		41.88	+0.72	Jeff-Pilot	JP		50.99	+0.33
Beasley	BBGI		16.50	-0.01	Journal Comm.	JRN		16.25	-0.45
Citadel	CDL		13.85	-0.21	Radio One, Cl. A	ROIA		14.47	-0.91
Clear Channel	CCU		33.32	+0.62	Radio One, Cl. D	ROIAK		14.48	-0.96
Cox Radio	CXR		15.15	-0.16	Regent	RGCI		5.26	+0.14
Cumulus	CMLS		13.63	-0.15	Saga Commun.	SGA		16.49	-0.23
Disney	DIS		29.31	+0.51	Salem Comm.	SALM		23.46	-0.71
Emmis	EMMS		17.18	-0.17	Sirius Sat. Radio	SIRI		6.42	+0.10
Entercom	ETM		30.95	-0.47	Spanish Bcg.	SBSA		10.14	+0.04
Entravision	EVC		8.00	+0.38	Univision	UVN		26.27	-0.08
Fisher	FSCI		50.00	unch	Viacom, Cl. A	VIA		38.17	+0.63
Gaylord	GET		40.59	+1.94	Viacom, Cl. B	VIAb		37.78	+0.59
Hearst-Argyle	HTV		25.49	+0.03	Westwood One	WON		24.60	+0.43
Interep	IREP		0.68	unch	XM Sat. Radio	XMSR		32.50	+0.79
International Bcg.	IBCS		0.01	unch	-	-	-	-	-

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Bounceback

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

Appreciation for RBR/TVBR POV...

RBR daily email is my daily MUST READ for media business intelligence and analysis. The first thing I do when I get on the train, is check "more all" on my blackberry to get your entire email. I appreciate your interpretations and recommendations. You're one of the few radio people to attend the Four A's (American Association of Advertising Agencies conference) and the ANA (Association of National Advertisers event). Bravo! Thanks to you and your staff for your impressive work.

Warmest regards,

Pierre Bouvard
President, Portable People Meter
Arbitron Inc.

More on Less is More.

Clear Channel's Less is More goes back to the 60s. Broadcasters reduced commercial load as early as the 60s. (The Hits Keep on Coming) That was followed by fewer commercials prescribed by the Jim Shulke Format (Beautiful Music) in the 70s. Soon after again by the Bonneville (Beautiful Music) syndicated Format. It was Followed by many Program Consultants who prescribed somewhere between 8, 9, 10, 12, minutes or spots per hour, regardless of Format. And by the way, we were selling 30s for 80% of the rate for 60s. This is nothing new, the advertising agency folks have heard of it long ago and Broadcasters have adhered to these commercial limits long ago. I should add, they work! Results are positive. Listeners stay tuned longer. Clear Channel is repeating what Radio did in the 60s. Advertising Agencies should not be surprised. They should be pleased, recall of information rises with fewer commercials.

Ron Kempff
Kempff Communications Company

Upped & Tapped

Skip to Motown beat
Radio One has named Graham "Skip" Dillard as Operations Manager for its three Detroit stations. He will also continue to program two of them, WCHB-AM & WDMK-FM.

Stations For Sale

Saginaw/Bay City/Midland FM
WSAG-FM 104.1 Mhz Class A, Pinconning, Michigan. ARB ranked #130, revenue ranked #97, 23M. Newly on the air. New owned 350' tower. 4,600 watts ERP, new 5KW solid state transmitter, ERI 3 bay antenna. No revenue yet, no sales staff, only minimal personnel. Running oldies format with BSI computer system. New studio facility will be needed for new owner. Minimal studio equipment, with EAS equipment, STL, etc. New construction project, currently
owned by an engineering company. Operating company needed to be brought in to finish project. Priced as "stick" value. Asking $950,000.00.
[email protected]

Phoenix AM Bankruptcy Sale
KFNX 1100, 50,000 Watt AM radio station in Phoenix, AZ, will be sold for the highest and best offer on March 31, 2005 at 10:00 a.m. MST
at the US Bankruptcy Court in Phoenix, AZ. An initial bid of $3.6 million has been received. The sale of the business is "as is/where is". Please go to www.1100kfnx.com for station information, and
call 602-277-1100 x.499 for details.

TVBR - TV News

No progress in retransmission fight
Nexstar met with Cox Communications last week, but there was no progress toward resolving their battle over retransmission consent. Nexstar pulled an NBC affiliate off another Cox cable system in Arkansas, but Cox pulled a rabbit out of its hat and kept Nexstar's stations on a system in Missouri. But Nexstar is digging in for the long haul, and says the MSOs will have a war if that's what they want.

TVBR observation: This may not be getting much national media attention yet, but just wait until next year. If lots of other group owners also insist on retransmission consent payments - - and the buzz we're hearing is that many will - - hundreds (if not thousands) of cable systems from coast-to-coast will be trying to hold onto customers without offering them local news, "CSI," "The Apprentice," "Desperate Housewives," "American Idol," the Super Bowl...and the list goes on. No matter how this turns out, it looks like the sure winners will be DirecTV and EchoStar! Editor's note: Coming up in March magazine of Radio & Television Business Report - Nexstar's CEO Perry Sook speaks out in an exclusive One-On-One interview. Sook spoke openly with TVBR editors during the recent NATPE conference in Las Vegas. Reserve your issue here
| More... |

Last Week's Poll Results

As the NAB Executive committee met last week to discuss the successor for Mr. Fritts and other trades were reporting who that replacement was RBR/TVBR decided to ask the question where they would like the new leadership for the NAB to come from. Well, it appears that broadcasters are just as distrustful of Washington insiders as the rest of the population. With Eddie Fritts preparing to leave after heading the NAB for over two decades, we asked whether his successor should be from DC or elsewhere - - and the vote wasn't even close.

'Should the successor to Fritts come from Inside the Beltway with political clout or Outside the Beltway with fuller knowledge of today's total media business issues?'

1 - Inside the Beltway
- 22.03%

2 - Outside the Beltway
- 77.97%

January Digital
Solutions Magazine

No more political money or more Olympics advertising. In '05 you're going to have to make money the old fashioned way - earn it. Keep up on trends and figuring new ways to earn ad dollars. The need is serious for a business-oriented publication. In radio or television, many of the challenges are the same -each industry can learn from the other.
No fluff. No hype. Just business.

November 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 January Issue of RBR

RBR Radar 2005

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

NAB's Lombardo fights for First Amendment rights
The Media Institute hosted NAB Joint Board Chairman Philip Lombardo, CEO of Citadel Communications Co., who gave a talk on the effect the current indecency climate is having on the broadcasting industry. And he had a big question - - why is it the broadcasting industry, and only the broadcasting industry - - that is so under the gun? Lombardo noted that nearly 8M in fines (and consent decrees) had been tossed at broadcasters, while cable and satellite operators weren't cited for so much as a penny. RBR observation: If you don't have time to read Phil's speech right now, print it out he definitely hits the nail on the head. Now we need Phil to stand tall against the Cable MSO's. People this is Holly xyzT reading. 02/04/05 RBR #25

Analyst says Less is More
is working
After evaluating spot load data for of 200 stations in the top 10 markets, Harris Nesbitt analyst Lee Westerfield says commercial loads were down 13% in January from a baseline of last October and a lot more advertisers are, indeed, using 30-second spots.. The clutter cutting isn't yet pushing rates up and the Spotload reductions by group chart worth a look see. 02/04/05 RBR #25

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