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Welcome to RBR's Daily Epaper
Volume 23, Issue 4, Jim Carnegie, Editor & Publisher
Friday Morning January 6th, 2006

Radio News ®

XM facing Sirius challenge
XM fell just short of its 2005 subscriber goal of six million, but says it's now over the mark. The explanation from the company is that sales through the holidays would have put XM over the target, but some units weren't actually activated until after the New Year began. Thus, the official tally for the end of 2005 was 5,933,000. "XM added a record number of new subscribers in 2005, representing 84% growth over prior year ending subscribers. We have more than six million subscribers today, and we expect to reach more than nine million subscribers by the end of 2006," said CEO Hugh Panero. At Sirius, the numbers spoke for themselves as the #2 satcaster bore down on its larger competitor. Having already announced passing the three million milestone, Sirius said it ended 2005 with 3,316,560 subscribers - - a 190% gain for the year. "Sirius continues to be the fastest growing provider in the category. We are experiencing a strong start to the new year and we expect to end 2006 with over six million subscribers. We also look forward to the rollout of Sirius in an increasing number of automobiles during the year," said CEO Mel Karmazin.

RBR observation: Note that both satellite radio companies are predicting that they'll add about three million subscribers this year. But given their relative positions, that means that Sirius is expecting to have twice the growth rate of XM, just as it did last year. Of course, we at RBR will be watching another metric even more closely. Both companies have also told Wall Street that they'll reach cash flow break even this year. We wait to see if that happens.

Big payoff for Stern
Howard Stern hasn't even hosted his first show on Sirius Satellite Radio - - that comes next week - - but he's already gotten a big payoff. Under the terms of the deal announced in October 2004 (10/7/04 RBR #196), Stern and his agent, Don Buchwald, were to receive 34,375,000 shares of Sirius stock in December 2010, or earlier if at the end of any fiscal year Sirius exceeded agreed upon subscriber targets. That turned out to be a lot sooner, as Sirius surged past the target for the end of 2005. Thus, on January 9th (next Monday), The Bank of New York will transfer those 34 million-plus shares to Stern and Buchwald. Back when the deal was put together they were valued at 110 million bucks in the deal with Sirius. They're now worth nearly 220 million, so it looks like Stern's 500 million bucks, five year deal with Sirius is now worth 610 million - - and he's yet to utter a word via satellite.

FEC trio enters through the back door
Although a vacancy at the FCC was not affected, the Bush administration took advantage of the congressional recess to bypass Senate hearings for 17 appointees, including a trio of new commissioners for the Federal Election Commission - - Robert D. Lenhard of Maryland, Steven T. Walther of Nevada, and Hans Von Spakovsky of Georgia. The FEC is currently in the midst of making court-ordered changes to its rules to bring it into line with the Bipartisan Campaign Reform Act. One of BCRA's key sponsors, John McCain (R-AZ), immediately made his displeasure with the back-door appointments known. He said, "I am troubled to learn that the President has decided to use recess appointments to fill the vacancies at the FEC. Individuals chosen to fill the FEC vacancies at this crucial time should go through the regular confirmation process so the Senate can be assured that they are qualified for the position and committed to carrying out the FEC's important mission to faithfully interpret and enforce the law." Watchdog Democracy 21 went somewhat farther, calling the action "...a gross abuse by President Bush of his recess appointment powers, replacing half the members of the agency without giving the Senate or the public any opportunity to consider their qualifications for the job."

RBR observation: McCain and Democracy 21 have a point. As we understand it, the president's recess appointment powers were originally put in place to make sure that essential positions are filled regardless of whether or not Congress is in session. That would not seem to be the case here. Looking at the tea leaves, we get no reading on whether or not Bush's no-decision on the fifth and final seat at the FCC is good or bad news for Sen. Ted Stevens (R-AK), who's been actively trying to fill the slot with someone of his own choosing.


More on Washington Post's
entry into radio

WTOP General Manager Joel Oxley had a few things to say about the changes to the Bonneville Washington radio lineup. For starters, he's thrilled to have the WTOP flagship on a better signal. "It's a great move for WTOP," he told RBR. "There's not going to be a clock radio or office radio sitting on a desk or a place where you drive that you won't be able to hear it in the whole metro area now--especially flipping it into mono. It makes it makes it all that much stronger." Washington Post Radio will be used to get further into the stories than is generally possible within the constraints of WTOP's news clock. "It launches March 30. It's going to be long-form, in-depth news and analysis and intelligent conversation. We will be having our hosts interview Washington Post editors, columnists and reporters on big news stories of the day. We look to have harder news in the mornings and afternoons. And middays and weekends, we look to do things that are a little more lifestyle-oriented. We are also actively pursuing play-by-play sports for evening programming." Word is already out that Washington Post Radio may soon have a multiyear contract to carry the brand new Washington Nationals baseball team, and franchise sorely lacking in effective radio coverage in its inaugural 2005 season.

Second dance for Post, WTOP
The Washington Post is no stranger to the 1500 kHz version of the station. It first bought a piece of it way back in 1949, took sole possession in 1954 and kicked off All News on the station in 1969. Still, more than a quarter of a century has passed since there was a link between the paper and the radio station - - it was sold in 1978. Bonneville picked the AM up, along with WGMS-FM, in 1997 via a multi-market trade with the Chancellor Media. If the name Chancellor has you scratching your head, it eventually morphed into AMFM Inc., and then - - like so many others - - became a part of Clear Channel.

Ron Kempff dead at 69
Long time radio broadcaster and broker Ron Kempff died on New Year's Eve at the age of 69 of complications from leukemia. Kempff spent 45 years in the radio business, starting in 1965 as an announcer in St. Louis. He ran WGRT Radio in Chicago, and moved from there to a position as Account Executive for WBBM, and then became Manager of the CBS Spot Sales office in Chicago. He ran WHIO radio in Dayton for Cox Broadcasting for 12 years. Kempff then launched his own company which owned and operated five radio stations. After selling them he went into the consulting and brokerage business, where for the past 10 years he headed Kempff Communications. He is survived by his wife Aurelia, five children and four grandchildren. Long time friend John Lauer is handling the estate and Kempff's business dealings.


Ad Business Report TM

MPA campaign goes to Mullen
The Magazine Publishers of America's Magazine Marketing Coalition has chosen Mullen, Wenham, MA, to assume its 40 million campaign promoting the industry. The three-year effort/account which launched in 2005 had been handled by Fallon, NY, but the office was closed last summer. The current "Read On" campaign from Fallon sets to improve magazines' image with advertisers and buyers. New Mullen creative should reportedly appear in the next few months.

RAB and Media Monitors presenting workshop
The RAB will present a free sales training workshop on "Breaking The Daily Habit: Winning New Radio Dollars From Print" in San Francisco 1/19. Sponsored by Media Monitors, this half-day workshop is part of an ongoing free nationwide sales training series that began in 2005. Endorsed by the Northern California Broadcasters Association, this Bay Area workshop is offered free of charge to the first 50 SMs and AEs from Radio Stations in the Bay Area to register.


Media Markets & Money TM
Bustos engineers a Tri-Cities swap
Engineering will definitely be part of the tale when Alexandra Communications trades 97.9 KHTO-FM Milton-Freewater OR to Bustos Media's 101.9 KMMG-FM Weston OR. Both Oregon stations are just across the border from and part of the Tri-Cities WA market - - the three cities are Richland, Pasco and Kennewick. The calls will follow the owners to their new facilities, so in effect KHTO will go to 101.9 and KMMG will head for 97.9. Something else will head to Alexandra - - 900K cash and a non-compete valued at another 50K. Bustos's 97.9 facility is where the engineering comes into play - - it's going to upgrade to Class C1 with 100 kw @ 899' - - it's currently operating on an HAAT 300 feet and change taller but with 80 kw less juice. The deal was brokered by Brett Miller (pictured) of MCH Enterprises, who told RBR, "This is probably most accurately described as a strategic re-alignment that worked well for both parties." Miller noted the call-keeping part of the deal and explained, "Therefore, Bustos will remain in the market with KMMG and Alexandra will remain with KHTO. To that degree, each party is retaining the value of its good will associated with the call letters, and a good promotional opportunity for each." Alexandra's owners Tom and Cheryl Hodgins also get a station closer to their base in Walla Walla on the eastern fringe on the market. Although no total value was released, RBR is estimating a value of around 1.5-2M.


Washington Media Business Report TM
FEC sees debt forgiveness
as illegal donation

Although it involved use of media other than radio, it could come up for radio, so we hereby report that the Conservative Leadership Political Action Committee (CLPAC) and American Target Advertising Inc. (ATA) (along with third parties hired by ATA and otherwise associated individuals) have been hit with fines for campaign funding violations totaling over 100K. Here's how it worked: During the campaign of 2000, CPLAC, with less than 1K cash on hand, hired ATA to raise funds - - ATA used direct mail, telemarketing and the internet for the purpose. ATA would pay itself with results, then pass along the excess to CPLAC, but the agreement was "no risk" for CPLAC. When ATA did 8M worth of work but only brought in 4M in contributions, it was light 4M. FEC said, "The direct mail portion of the program involved 39 mailings, 28 of which - - containing over 10.8 million pieces of mail - - opposed Democratic Presidential and Senatorial candidates." That took the fund-raising campaign into the sphere of electioneering, and when ATA forgave the 4M debt, it became an illegal contribution to CPLAC. And the illegal situation continued from there. "Despite the fact that the fundraising failed to bring in enough money to pay the costs of solicitations, ATA disbursed 465K to CLPAC. CLPAC used these funds to pay for approximately 350K worth of advertising opposing Democratic Presidential and Senatorial candidates."

RBR observation: What this means to you, gentle readers, is that if you allow a cash-strapped candidate or political organization onto your station on an air-now, pay-later basis, you'd best make sure they pay up, to avoid a visit from a friendly FEC official demanding an explanation - - or worse - - a penalty check.


Entertainment Media Business Report TM
Sirius picks up Playboy after XM
Playboy Radio, previously with XM Satellite Radio, is moving to Sirius for an early Q1 launch. Proving again that premium channels don't fly with satellite radio (XM subscribers had to pay a 2-dollar premium per month), XM pulled the channel in 2004. Subscribers wishing to hear Playboy Radio on Sirius will "opt-in" for the channel, either via the phone or Internet. It is offered at no extra cost to subscribers. Playboy Radio will feature new live programming, such as a new morning show that will include segments with Playboy founder Hugh Hefner, live call-in shows and broadcasts from the Playboy Mansion. The new channel will originate from Playboy's Andrita Studio in LA with remotes from the Playboy Mansion.


Hollywood Media Business Report TM
Stewart to host Oscars
Comedy Central "Daily Show" host Jon Stewart has been tapped to host the 78th Annual Academy Awards, which will air live Sunday, March 5th on ABC Television. The choice is seen as yet another attempt by the Academy of Motion Pictures Arts and Sciences to draw younger viewers to the show - - which Chris Rock did to some extent last year, although some of his comments upset delicate Hollywood egos. As the sarcastic host of a fake news show, Stewart was typically sarcastic in his comments. "As a performer, I'm truly honored to be hosting the show. Although, as an avid watcher of the Oscars, I can't help but be a little disappointed with the choice. It appears to be another sad attempt to smoke out Billy Crystal," he said.

SAG Award nominees announced
Gay cowboy drama "Brokeback Mountain" got the most movie nominations, four, and HBO and resurgent ABC tied for the most TV nominations, 11 each, as nominees were announced yesterday for the 12th Annual Screen Actors Guild Awards. The winners will be announced Sunday, January 29th in a live telecast airing simultaneously on TNT and TBS. Actress turned diplomat Shirley Temple Black will be honored with SAG's Life Achievement Award.
| Here's the list |


Internet Media Business Report TM
Salem expands web presence
Execs at Christian radio group Salem have said they'd be looking for opportunities to expand the company's presence on the Internet with acquisitions which are already on par with its religious programming base, and less than a week into the new year they've made good on the statement. Church professional employment site ChurchStaffing.com will join a portfolio which already includes ChristianJobs.com, Salem's operation which matches job seekers with Christian-friendly companies and organizations. Salem web exec Rick Killingsworth said, "ChurchStaffing.com is a full-featured website focusing on employment within the Church community. It is an excellent addition to our growing portfolio of sites serving faith-based and family-friendly consumers and businesses. The website's revenues have been growing in excess of 25% each year with more than 800 current job listings and 9,000 active resumes."


Engineering Business Report TM
iBiquity unveils HD converter box
iBiquity Digital, at the Consumer Electronics Show, unveiled a reference design blueprint for an HD Radio tuner box that could instantly turn a "satellite-ready" receiver into an HD Radio enabled unit. The tuner box would be installed in the dash and be compatible with more than 200 existing receivers from both OEM and aftermarket manufacturers such as Pioneer and Sony. The best part about the tuner box is that it would allow drivers to receive HD Radio signals without having to remove their car's existing receivers and sound systems. The HD Radio tuner box is part of an emerging category of new products designed to expand the features of an existing car radio. Similar products have also been developed by DICE Electronics and Kenwood. "With more than 7 out of every 10 Americans able to receive HD Radio broadcasts and the leading radio broadcast groups launching a nationwide promotional and new programming campaign, we want to ensure that consumers have many options for experiencing the great sound quality and increased content offerings made possible with HD Radio technology," said Jeff Jury, chief operating officer, iBiquity Digital. "The universal HD Radio tuner box will provide consumers with an easy way to enjoy digital HD Radio programming while still using their existing car receivers and sound systems. We think this solution will be a strong addition to the list of HD Radio home and car receivers currently on the market."

Sirius launches new in-home receiver
Sirius Satellite Radio announced at the Consumer Electronics Show in Las Vegas that it is introducing a new satellite radio receiver designed to interface with multiple radios, audio systems and home theater systems. The new "SiriusConnect" Home tuner makes it possible to easily add Sirius' service to Sirius-ready home systems manufactured by companies such as Eton, and Thomson, under the RCA and GE brands. Measuring 4x3 inches, the compact unit can sit flat or be wall mounted and provides a one-cable connection to a Sirius-ready home receiver or system. The unit also has RCA analog and optical digital outputs. MSRP is 49.99.


TVBR - TV News
It's Terre Out for
"Book of Daniel"

A pair of Nexstar NBC affiliates will not be showing the premiere of "The Book of Daniel" tonight. Protests spurred by religious watchdog American Family Association may have greased the wheels for pre-emptions in Little Rock AR and Terre Haute IN. Here's how AFA described the show in an email blast to its base: "The main character is Daniel Webster, a drug-addicted Episcopal priest whose wife depends heavily on her mid-day martinis. Webster regularly sees and talks with a very unconventional white-robed, bearded Jesus. The Webster family is rounded out by a 23-year-old homosexual Republican son, a 16-year-old daughter who is a drug dealer, and a 16-year-old adopted son who is having sex with the bishop's daughter. At the office, his lesbian secretary is sleeping with his sister-in-law." It called for readers to protest directly to their local NBC outlet and to get as many of their friends and family to do the same. Nexstar, which owns a total of 10 NBC affiliates, is not pulling the show companywide, but leaving the decision to each local manager. NBC claims the show is not anti-religious.

TVBR observation: AFA doesn't have to like the show, nor do its members have to watch it. We agree with the approach of the Salt Lake City NBC affiliate, KSL-TV, owned by the Mormon Church's Bonneville International. According to the Hollywood Reporter, it's going to run the show and let the viewers decide. That's what channels are for. At the end of the day, AFA will have to figure out if its protest damaged the show, or if it simply gave it some free promotion. And if it is indeed a really bad show, at the end of the day, airing it may do more to aid AFA's cause than suppressing it could ever do. No matter how noble your motives, when you play with free speech, you play with a sword that cuts both ways.


Transactions
925K KSSB-FM Calipatria CA from Philip J. Plank to Lazer Broadcasting Corp. (Alfredo Plascencia). 125K deposit, 125K option payment, 675K note. [File date 12/12/05.]

100K KPCO-AM Quincy CA from Educational Media Foundation (Richard Jenkins) to Tom F. Huth. 10K cash at closing, 90K note. Seller and buyer each agree further to pay 5K apiece to brokerage Exline Company at closing. LMA 7/1/05. [File date 12/12/05.]


Stock Talk
Not a bad day on Wall Street
Stocks weren't up a lot on Thursday, but a gain is a gain and the general tone of the market has been positive this first week of 2006. The Dow Industrials rose two points to 10,882.

The Radio Index gained 0.436, or 0.2%, to 184.337. After not getting to use the phrase "year-to-date high" even once in 2005, this is the second time this week that the Radio Index has set a 2006 year-to-date high. There were no really big gainers. Disney was up 1.8% and Cumulus 1.7%.


Radio Stocks

Here's how stocks fared on Thursday

Company Symbol Close Change Company Symbol Close Change

Arbitron

ARB

38.38

-0.09

Hearst-Argyle

HTV

24.15

+0.02

Beasley

BBGI

13.47

-0.03

Interep

IREP

0.37

+0.01

CBS CI. B CBS

26.36

+0.36

Jeff-Pilot

JP

57.77

-0.04

CBS CI. A CBSa

26.40

+0.35

Journal Comm.

JRN

14.05

unch

Citadel CDL
13.43 -0.07

Radio One, Cl. A

ROIA

10.56

+0.11

Clear Channel

CCU

32.22

+0.21

Radio One, Cl. D

ROIAK

10.54

+0.08

Cox Radio

CXR

14.21

-0.05

Regent

RGCI

4.75

-0.02

Cumulus

CMLS

13.06

+0.22

Saga Commun.

SGA

10.89

+0.02

Disney

DIS

24.41

+0.42

Salem Comm.

SALM

17.83

+0.13

Emmis

EMMS

20.55

-0.01

Sirius Sat. Radio

SIRI

6.39

+0.03

Entercom

ETM

30.46

+0.28

Spanish Bcg.

SBSA

5.26

unch

Entravision

EVC

7.12

+0.01

Univision

UVN

30.55

+0.16

Fisher

FSCI

42.03

+0.03

Westwood One

WON

16.30

-0.01

Gaylord

GET

44.18

-0.78

XM Sat. Radio

XMSR

27.29

-0.55



Bounceback

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Below the Fold

Internet Media Business Report
Salem expands web presence
Said they'd be looking and they find ChurchStaffing.com...

Entertainment Media
Business Report

Sirius picks up Playboy after XM
Proving again that premium channels don't fly...

Washington Media Business Report
FEC sees debt forgiveness
As illegal donation...

Media Markets & Money
Bustos engineers
A Tri-Cities swap...


Stations for Sale

NEast CapCity FM
Suburban FM, strong revenue history-less than 8.5x BCF - 2M.
[email protected] or
781-848-4201


Radio Media Moves

Bartel upped
to MD

He may have only one name, but Bartel knows music and has been named Music Director of Clear Channel's WKTU-FM New York He's been with the station since 2004.

Pastor to Sporting News
Shawn Pastor has been named Senior Vice President Business Development, Sporting News, based on the East Coast. He'd spent the last ten years at Westwood One, most recently as Senior Vice President of Affiliate Sales and Sports Business Development.

Mancow adds
Kovacs as producer

Brian Kovacs, former PD for Chicago's News/Talk WIND-AM, has signed on with TRN-FM as Network Producer for Mancow's Morning Madhouse. As PD, Imaging Director and On-Air Personality for various FMs, Kovacs' background spans the spectrum of Classic Rock and AC to Christian Contemporary programming. And, as PD for WIND, Kovacs launched the station onto the airwaves in 2004 with TRN-FM affiliated network's products heading their AM Talk line-up.

Grimes is
"Going Home"

Ross Grimes, formerly of WQFL/WGSL Rockford, IL, has relocated to Christian Family Radio's WGNV-FM Wausau-Stevens Point, WI as afternoon host of "The Going Home Show."

CCRS/Seattle
taps new VP/Sales

Michelle Griffith-Olivera has joined Clear Channel Radio Sales (CCRS) in Seattle as Vice President of Sales. She was most recently employed at Interep as VP/Director of Sales since 2002.

Christal Radio ups two
Kelli Park and Susan Hegmann Thompson were each promoted to Vice President/Sales in Dallas. Park began her career at Christal Radio in Dallas, joining the firm in 1994 as a Sales Assistant. In 1995, she was promoted to AE and in 1998 to Senior AE. Hegmann Thompson joined Christal Radio in 1994 as an Account Executive and was promoted to Senior AE in 1998. Previously, she had been employed at Torbet Radio as an AE.


January RBR/TVBR Digital Magazine

2006 - Time Waits
For No One!
Exclusive on Clutter
What have we done???
Ms Jean Pool, EVP/Director of North American Operations for Universal McCann and Chairman of the Media Policy at the AAAAs outlines and truly kicks all in gear - "Just why is it we're hell bent on irritating the very people that we are trying to sell our products and services to? Clutter is the death of the media." - page 12 Solutions Magazine


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RBR Radar 2005
Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.

How much growth in 2006?
Not much
After her previous comments that there is no light at the end of the tunnel for radio it's not surprising that Wachovia Securities isn't looking for a lot of growth in 2006. Forecast for radio revenues to rise 2.3%. Only one percentage point (100 basis points) is attributable to growth in core business, with the remainder split between Clear Channel - - 80 basis points as it laps a full year of LIM comps - - and political, good for 50 basis points. As for that core growth, it is coming from "slight increases in advertising rates" - - but that assumes stable inventory levels. That could fall if stations lard up on inventory, but might rise if spot loads are cut further.

RBR observation: 2.3% ain't great, but it's a lot better than the flat showing that radio is almost certain to post for 2005 when the final month is tallied. And we have to admit that 2.3% is a lot more realistic than the 4% growth that Universal McCann's Bob Coen is forecasting for radio in 2006. Remember back when we were discussing when radio would get back to "normal" growth of around 7% a year? Anyone want to place a bet on what year that's going to happen? Be prepared for a hard year and stay with RBR as we will be by your side every inch of this long walk.
01/05/06 RBR #3

2005: A year best forgotten
If you made money on TV stocks in 2005, you must be one heck of an investment guru. Only five of the 35 stocks that TVBR tracks daily were up for the year. It appears that the best way for a TV company to boost its stock in 2005 was to sell itself. Liberty Corporation has a deal pending to sell the entire company to Raycom for nearly a billion bucks. And Emmis Communications rose because it spent much of the year selling off its TV assets, with a couple of deals yet to be announced, choosing to focus on the radio business. The year's biggest winner was McGraw-Hill, driven by its educational and financial data businesses, rather than its small TV station group. All in all, we're sure most CEOs of public TV companies would like to forget about 2005.The rest is history.
01/04/06 TVBR #2

'05 - Tough year for radio stocks













Wall Street traders beat up on radio stocks in 2005 - - and not without justification. Clear Channel went through some major restructuring in 2005. RBR's Radio Index began falling in January and never looked back. By the time the year was over, our index of 15 companies whose main business is radio had fallen 21.1%. The year's worst performers were Spanish Broadcasting System, which plunged 51.6% as investors punished the radio company severely for announcing plans to enter TV as well, and Interep, a penny stock which dropped 52% in the face of a terrible year for national sales and some prominent client defections.
01/04/06 RBR #2

2005: The year of penny stocks
No, we're not saying that 2005 was a year to make a killing playing the penny stock market. We have no idea whether it was or not. What we do know is that three public TV companies who began the year in the reputable part of the stock market, where stocks of five bucks or more per share can be readily traded and even bought on margin, are ending the year in penny stock hell - - being traded by the market's scavengers.

RBR observation: How many group heads have we heard from this year who'd been bitten by the Wall Street bug a few years back, but didn't get their IPO preparations together in time? They're breathing a sigh of relief that they didn't get caught up in the rat race of having to answer to The Street's expectations quarter after quarter - - and seeing their stock price fall for reasons beyond their control. Now it's the guys who did make it through the IPO window who are trying to figure out how to go private - - and that ain't easy in the current market.
12/28/05 RBR #251

'06 No light at the end of the tunnel
RAB's report that radio revenues were flat in November was no surprise, but the issue now is figuring out when things will get better. Wachovia Securities analyst Marci Ryvicker is looking for that light at the end of the tunnel, but she doesn't see it yet.
12/29/05 RBR #252


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