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Welcome to RBR's Daily Epaper
Volume 25, Issue 52, Jim Carnegie, Editor & Publisher
Friday Morning March 14th, 2008
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Radio News ®

www.google.com

Moody's may downgrade
Radio One
1.3 billion bucks of debt at Radio One is under review by Moody's Investors Service. Given the state of the economy and the company's own difficulties, you've probably guessed that the review is aimed at a possible downgrade of Radio One's credit ratings. "The review is prompted by Radio One's continued weak operating performance in the fourth quarter of 2007 due to the overall radio market decline, combined with the company's underperformance relative to its markets. The company's EBITDA and credit metrics were weaker than expected and the covenant compliance margin remains extremely tight," Moody's said in a statement. "The review will focus on the company's operating strategy, earnings prospects and ability to reduce debt to EBITDA leverage to approximately 6.0 times over the intermediate term. The review will also assess the company's ability to maintain or build a healthy cushion of compliance (through an amendment or otherwise) vis-a-vis the covenants and have access to adequate liquidity under its senior secured credit agreement," the ratings agency said. Radio One, the largest Urban-focused broadcasting company, owns 54 radio stations in 17 markets and is a major partner in the TV One cable television network.

RBR observation: Radio One CEO Al Liggins tried to be upbeat in his conference call last month (2/22/08 RBR #37). Heck, how could 2008 be any worst than 2007 was for his company, particularly in Los Angeles? It looks like 2008 is going to be a rough ride for the US economy, though, and for advertising supported businesses in particular. Some on Wall Street would like to see Liggins get more aggressive about selling stations to de-lever. But then, there's quite a bit of inventory on the market now, so pricing is under pressure. Just what is a full-coverage LA stick worth these days?

AP reorganizes business units
Long-time Sr. VP of Global Broadcast Jim Williams, pictured, is retiring next month as the Associated Press consolidates management of its newspaper, broadcast and new media business units. The creation of a unified sales and marketing department will put all of AP's business lines under Tom Brettingen in the newly created role of Senior Vice President and Chief Revenue Officer for AP. Brettingen, who had been Sr. VP in charge of the Global Newspaper Markets department, will now oversee all sales and marketing operations worldwide. Under the restructuring, Brettingen's new department will include: Jane Seagrave, currently VP of AP Digital, who becomes Sr. VP for Global Product Development; Sue Cross, currently VP of US newspapers online, who becomes Sr. VP of Global New Media and US Print and Broadcast Markets; and Joy Jones, currently VP, Global Business Operations, who becomes VP of Marketing Operations. Eric Braun, VP of AP Television News; Ian Cameron, VP of AP Images, AP's commercial photo division; and the regional directors of Global Newspaper Markets also will report to Brettingen. "Markets are converging. Audiences and revenues are shifting. AP needs to manage the change, and consolidating business units will improve our ability to do that," said President and CEO Tom Curley as he announced the reorganization.

RBR observation: Jim Williams has been running the broadcast operation at the AP for so long that he was the boss when our RBR/TVBR Executive Editor Jack Messmer was working at the AP's Broadcast News Center in Washington, DC. We'll not mention just how long ago that was. We wish Jim well in whatever he decides to do next.

www.ptpoctopus.com

GAO/FCC disagree over complaint processing
The Government Accountability Office says the FCC complaint handling process is busted -- the Commission may very well process 95% of the complaints received, but it is said to do a poor job of resolution tracking and enforcement. The FCC responded that it recognized and addressed some of the problems GAO points out several years ago, and the GAO doesn't know it because it is relying on data that is several years old. Ed Markey (D-MA) jumped right on the case, noting GAO's finding that over 100K complaints flow in, but only about 10% are properly investigated. "Without an effective FCC enforcement program, consumers are left out in the cold," he said. "Unfortunately, solely relying upon FCC enforcement for consumer protection is utterly unreasonable in light of the GAO's findings.

The FCC was immediately ready with a response. It said GAO was using four-year-old data. In that time, it says it has implemented procedures to clear the backlog of complaints which at one point numbered 113K, and with that cleared, is better able to keep up with the flow as it comes in. The FCC's defense ran over 100 pages. Looking at the period between 1/1/03 and 12/31/06, it took 3.4K enforcement actions resulting in 65.7M in fines forfeitures and consent decree payments; and has added 43M to that total in 2007 alone. The perception that complaints are not acted upon can be explained in part by the fact that in the case of 71% of them, the target of the complaint was found to be in compliance with FCC rules and regulations.

RBR observation: We have been following FCC actions on license challenges lately. It is amazing how often these complaints involve things that simply aren't under the FCC's jurisdiction. Hey, my radio station changed its format! Yes, that is something to complain about, but that doesn't make it an actionable complaint. Our biggest complaint is what we see as the FCC's current attempt to rewrite the rules on fleeting indecency on the fly. Will the Supremes weigh in on this one? Stay tuned.

E&C subcommittee digs into the FCC
Generally, Ed Markey's Energy and Commerce Subcommittee on Telecommunications and the Internet handles FCC matters, but this time it is the Subcommittee on Oversight and Investigations that wants every document, phone log, travel log, email and what have you, from each commissioner, top exec and bureau chief. It's all part of the probe into FCC operations promised by Chairs John Dingell (D-MI) and Bart Stupak (D-MI), pictured, several months back. But before labeling this a partisan project, note that Ranking Members Joe Barton (R-TX) and John Shimkus (R-IL) are signed on to it as well. The request deepens the ongoing probe, which is "investigating allegations from current and former FCC employees and other sources, which we have reason to believe are credible," the quartet said in a letter to Martin. "These allegations relate to management practices that may adversely affect the Commission's ability both to discharge effectively its statutory duties and to guard against waste, fraud and abuse."

RBR observation: We have watched Chairman Martin take extraordinary steps to provide transparency over the past year or two. That's not to say there isn't room for improvement. Do special interests have too much access to the Commission?
| Read more here |

www.goviero.com


Wall Street Business Report TM
Westwood One has its ducks in a row
So says Bear Stearns analyst Chris Ensley, who says the company's emphasis is now on operations, following the successful split from CBS Radio management, while retaining contractual rights to clearances on CBS stations. After hearing the first quarterly conference call by new CEO Tom Beusse, Ensley told clients he is maintaining his estimate that WW1 will post 2008 EBITDA of 80 million bucks. That assumes flat revenues and 5% expense growth. The analyst notes that the revenue line could grow with better clearance by CBS Radio, but he also notes that WW1's outlook could prove difficult given the weak economy and radio ad climate in Q1.
| Read more from Ensley |

Lenders give Cumulus buyout thumbs up
Cumulus Media said in an SEC filing that members of its lending group holding more than 50% of its debt have given their consents to amend the company's existing credit agreement. The consents will permit Cumulus to go ahead with its pending going private buyout of public shareholders by CEO Lew Dickey, his family and an affiliate of Merrill Lynch Global Private Equity. The transaction still needs shareholder and FCC approval.


Intelligence Brief
Dealing with tight credit; Part II
It is no secret that credit is tight, but panelists in the 3rd Annual RBR/TVBR Financial Roundtable said they are still doing deals. So, if your broadcasting company is looking for money, be sure to read the conversation to find out what you need to be doing to get financing in this tough environment. As the discussion continued, the panelists turned to HD Radio, the TV writers' strike impact, public companies going private and other front burner issues for broadcasters.

This year our panelists were: Jim Downey, Manager, Pacific Media Capital LLC; Jeff Kilrea, Co-President, CapitalSource Finance; and Bruce Levy, Managing Director, Media and Communications Investment Banking, Wachovia Securities Inc. They were questioned by Jack Messmer, Executive Editor, RBR/TVBR, and Mark Fratrik, Vice President, BIA Financial Network.

| Today, Part II of the RBR/TVBR Financial Roundtable |

www.snlcenter.com

HD Radio 2008
KABC-AM announces multicasting
initiative on sister KLOS-FM

Citadel Broadcasting's KABC-AM LA announces it will offer listeners an opportunity to hear original programming on multiple platforms; while Dodger baseball is heard on KABC, talk radio fans will be able to hear regular KABC talk programming simultaneously online at kabc.com and on sister KLOS-FM HD3. Throughout the preseason and regular season, Dodger games (including pre and post game shows) will broadcast LIVE on 790 KABC, while those wanting to continue listening to their favorite talk show hosts will have the option of listening to their favorite 790 KABC programs LIVE on kabc.com or on sister-station KLOS-FM HD Channel 3.


Ad Business Report TM

Sarah Fay: What will the media agency look like in five-ten years?
Sarah Fay, Carat USA CEO and Isobar US CEO spoke at a AAAAs panel last week in Orlando: "It's 10 Years Later: Have Agencies Survived Digital Convergence?" Before her panel, RBR/TVBR got a chance to sit down with Sarah and ask not only that all-important question, but a few others as well. Remember, Sarah was named Carat USA CEO last summer (7/30/07 RBR #147) and spearheaded the Carat USA-Carat Fusion reorganization.

How has Carat improved after the merger
with Carat and Carat Fusion last summer?
So we are eight months into the merger of Carat USA and Carat Fusion, which is now just Carat. Transition is a journey and we've made significant progress. The merger has a new management team, so the organization has gone through a pretty significant amount of change.
| Read more here |

Peter Smyth: Posting = Accountability
In Greater Media CEO Peter Smyth's monthly online column, "The Corner Office," he chimed in on the big news from the recent RAB in Atlanta: We need posting. Here are a few excerpts from Smyth's column: "I've recently been involved in discussions with the Radio Advertising Bureau and other industry leaders on the issue of posting. The short definition of posting is a comparison of what advertising was ordered and promised against the actual delivery of advertising and audience."
| Read more here |

www.dial-global.com

Media Markets & Money TM
Magnum hikes one to Johnson
Al Johnson, listed as #1 on the depth chart of the NFL Arizona Cardinals at the center slot of the offensive line, is soon going to also be #1 on the executive depth chart at WSRG-FM Sturgeon Bay WI. The station is about 25 miles up the Door Peninsula from Green Bay. Johnson is a native of nearby Brussels WI. Magnum is a veteran regional radio owner who has exhibited political aspirations, which have as yet gone unrequited by voters in his district. "I've always been fascinated by radio and it's been a goal of mine to own a station in my hometown and give back to the community," said Johnson. "With the gracious support of Dave Magnum...this dream is now becoming a reality." According to documents filed with the FCC, Johnson's first station will set him back 712.5K.

Armada commodore takes a coffee break
Armada Media Corp. Chairman Jim Coursolle has decided to step down to go into the coffee business with his daughter in Chicago. That would be a considerably larger market than the type targeted by the relatively youthful radio group with the well-seasoned veteran staff. Armada will continue to focus on strong local service in small markets with people like Terry Shockley, Chris Bernier and John Lynch, who helped start the group along with former Wisconsin governor and Republican presidential candidate Tommy Thompson. Coursolle says he wishes the company nothing but success -- no doubt because he remains a major shareholder.


Washington Business Report TM
FCC March meeting
touches on: Guess what?

Did you think it might have something to do with DTV? Then, as Don Rickles might say, you win a cookie! Otherwise, even though Washington seems rife with various and sundry broadcast regulatory issues, the six plank Open Meeting agenda steers completely clear of them all. The meeting is on the scheduled for Wednesday, 3/19/08 at 9:30 AM Eastern. The first five items involve various wireline and wireless issues, then we get -- well, let's just let the FCC describe its DTV doings: "Carriage of Digital Television Broadcast Signals: Amendment to Part 76 of the Commission's Rules; Implementation of the Satellite Home Viewer Improvement Act of 1999; Local Broadcast Signal Carriage Issues and Retransmission Consent Issues; WHDT-DT, Channel 59, Stuart, Florida, Application for Review (CS Docket No. 00-96)." WHDT-DT, for the record, is the first all-digital license approved by the FCC, and via translators, covers much of southern Florida, reaching from the Atlantic-kissed West Palm/Ft. Pierce/Miami area all the way to Naples on the Gulf side of the state. According to Wikipedia, it is notable for setting precedents regarding digital must-carry rules.

Commerce Committee teeing up FTC
The FCC isn't the only government agency getting regular grillings on Capitol Hill. The Federal Trade Commission, which occasionally gets into broadcast issues, particularly when they pertain to advertising, is booked for the Senate Commerce Committe on 4/8/08. All five commissioners are on the guest list/menu, but one of them will either be excused or will be making a farewell appearance. Chair Deborah Platt Majoras (R) has announced her intention to exit the agency. Her target date was earlier reported as late March.

www.boortz.com

Ratings & Research
Consumers continue spending on essentials
Concerned about the slowing economy, consumers held back on spending in February. According to the National Retail Federation, retail industry sales for February (which exclude automobiles, gas stations, and restaurants) rose 6.3% unadjusted over last year and were flat from January. February retail sales released by the Commerce Department show total retail sales (which include non-general merchandise categories such as autos, gasoline stations and restaurants) decreased 0.6 % seasonally adjusted from the previous month and increased 6.8% unadjusted YOY. Consumers were watching their purse strings as sales at electronic and appliance stores decreased 0.4% seasonally adjusted from last month and increased a modest 4.4% unadjusted from last year. Furniture and home furnishings stores sales also decreased 0.4% seasonally adjusted from January and decreased 0.3% unadjusted from last year.


Transactions
50K KTUG-FM CP Hudson WY from White Park Broadcasting Inc. (Steven A. Silberberg) to Kona Coast Radio LLC (Victor A. Michael Jr.). Cash. CP is for Class C3 on 105.1 MHz with 25 kw @ 292'. [File date 2/12/08.]


Stock Talk
Stocks end higher
A nervous day of trading ended on the up side after an S&P report said big write downs from the subprime mess may be ending. The Dow Industrials rose 36 points, or 0.3%, to 12,146.

Radio stocks were higher. The RBR Radio Index climbed 1.270, or 1.6%, to 82.194. Much of that was due to Cumulus, which jumped 27.6% after the company said its lenders had given a go-ahead to the company's pending effort to go private. Westwood One gained 4.4%.

www.bcfm.com


Radio Stocks

Here's how stocks fared on Thursday

Company Symbol Close Change Company Symbol Close Change

Arbitron*

ARB

43.85

+0.34

Google

GOOG

443.01

+2.83

Beasley*

BBGI

5.02

+0.07

Hearst-Argyle

HTV

21.66

+0.26

CBS CI. B CBS

21.99

-0.08

Journal Comm.

JRN

6.92

+0.09

CBS CI. A CBSa

21.99

-0.07

Lincoln Natl.

LNC

49.80

+0.06

Citadel* CDL
1.65 -0.21

Radio One, Cl. A

ROIA

1.21

+0.01

Clear Channel*

CCU

34.99

-1.20

Radio One, Cl. D*

ROIAK

1.23

+0.02

Cox Radio*

CXR

11.85

+0.43

Regent*

RGCI

1.09

-0.04

Cumulus*

CMLS

6.25

+1.35

Saga Commun.*

SGA

5.51

-0.05

Debut Bcg.

DBTB

1.02

unch

Salem Comm.*

SALM

3.38

unch

Disney

DIS

31.27

-0.14

Sirius Sat. Radio

SIRI

2.84

-0.04

Emmis*

EMMS

3.07

-0.09

Spanish Bcg.*

SBSA

1.81

+0.01

Entercom*

ETM

10.54

+0.33

Westwood One*

WON

1.92

+0.09

Entravision

EVC

6.20

+0.06

XM Sat. Radio

XMSR

11.54

unch

Fisher

FSCI

29.99

-0.10

-

-

-

-

-

*Component of the RBR Radio Index


Bounceback

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Below the Fold
Wall Street Business Report
Lenders give Cumulus
Buyout thumbs up, in an SEC filing group holding more than 50% of its debt have given...

Friday Intel Brief
Dealing with tight credit;
Part II, It is no secret that credit is tight, but our panelists said they are still doing deals...

Media Markets & Money
Magnum hikes one to
Al Johnson, listed as #1 on the depth chart of the NFL AZ Cardinals, soon to also be #1 on...

Aramada commodore
Takes a coffee breakm Chairman Jim Coursolle has decided to step down...

Dload - Powering Interactive Marketing


www.patcomm.com

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the Hot List on...

Radio Media Moves

Mouse ears for Riley
Michael Riley has been named Sr. Vice President and General Manager, Radio Disney, succeeding Jill Casagrande, who left the company last month to relocate to her hometown, Cincinnati. Riley comes to Disney from 10 years at Turner Broadcasting System, where he worked across multiple European markets on both entertainment and news brands.

Interactive hire
Spanish Broadcasting System announced the appointment of Isidro Gonzalez to Director of Sales of SBS Interactive and Integrated Marketing, reflecting the company's ongoing commitment to delivering expanded interactive and cross-platform advertising opportunities. For the past three years, Gonzalez has served as President of Sales for CMT-NewsProNet, where he was responsible for broadcast, Internet and mobile platform revenue lines.


www.eastlanratings.com

More News Headlines

Moonves: CBS upfront will be for all media
CBS's traditional upfront presentation in May will showcase the entire CBS Corp., not just the broadcast primetime lineup, CEO Les Moonves said this week at the annual Bear Stearns Media Conference in Palm Beach: "We're going to sell advertising. We're going to sell outdoor. We're going to sell radio in all its forms. We're going to sell television stations, syndication, network. And we're going to sell the fall schedule."

AOL to acquire Bebo
AOL announced it will pay 850 million in cash to buy social media network Bebo, which has total global membership of more than 40 million. Bebo is one of the largest social networks in Britain, and is ranked number one in Ireland and New Zealand and number three in the U.S, according to AOL. Bebo has 100 employees operating in offices in the U.K., San Francisco and Austin. Bebo president Joanna Shields will continue to run the company, reporting to AOL President Ron Grant. In January 2008, Bebo had 22.4 million unique visitors worldwide with visitors averaging more than 3 hours and 30 minutes on the site during the month. In February 2008, Bebo had 4.8 million unique U.S. visitors with visitors averaging 1 hour and 40 minutes on the site during the month. In January 2008, 60% of Bebo's traffic came from Europe, followed by North America with 22%, and Asia-Pacific with 16%. In January 2008, there were 11.4 million unique visitors from the UK to Bebo, representing the largest proportion of the site's worldwide traffic.


RBR Radar 2008
Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.

Alarcon takes dissident in stride
Past quarterly conference calls at Spanish Broadcasting System have included some testy exchanges between CEO Raul Alarcon and investors who don't agree with some of his management decisions, but Wednesday's call had none of that, despite the recent letter by an activist hedge fund, Discovery Group, demanding changes at the company

RBR observation: No, there was no reference to the mysterious media giant "XYZ" that Discovery Group says is interested in buying SBS for double the current stock price. Raul Alarcon has taken heat from investors before, particularly for launching Mega TV, so, while Discovery Group's tactics may have been a shock to company CEOs elsewhere, the hedge fund may not find Alarcon easily cowed.
03/13/08 RBR #51

Moonves rules out more station sales
Speaking at the McGraw-Hill Media summit in New York, CBS Corporation CEO Les Moonves said he has no plans to sell anymore of the company's radio or TV stations, at least not until prices go up. He is, however, on the prowl for acquisitions in content and new media.

TVBR observation: Everything is for sale if the price is right and or the facility does not fit the portfolio. As for new media, not new, but we get what Moonves is saying. Digital is the key to unlocking the growth doors.
03/13/08 TVBR #51

Westwood One to add staff
and programming
New Westwood One CEO Tom Beusse told analysts in his first quarterly conference call that the cost-cutting days are over at the company and he will now be making "necessary hires." He vowed to fill positions at Westwood One with "best in class talent - and when I say best in class, I mean across all media."
03/13/08 RBR #51

T.H. Lee betting on broadcasting
Director Richard J. Bressler said that the way to read his company's proposed acquisition and privatization of Clear Channel was as a positive bet on the bright future of broadcasting in the digital era.
03/12/08 TVBR #50

Broadcasters changing
views on PPM
Steve Morris told the Bear Stearns 21st Annual Media Conference that delaying Portable People Meter deployment was the right thing to do, not because there was any problem with the data, but because the company needed the "belief factor" to be there - for clients to have confidence in the ratings being generated. Morris noted the vocal support from CBS Radio CEO Dan Mason for moving ahead with PPM and said that Radio One, which had previously been negative about PPM, has "swung around" and is actively using PPM data in Houston "and are celebrating their success."
03/12/08 RBR #50


RBR Classifieds

Account Executives
WDCW-TV, Washington's CW has two immediate openings. First, for entry-level AE and Second, need an experienced New Business local AE. Highly motivated self-starters who have the ambition to be successful apply. Winning attitude is important. Requirements include ability to develop long-term relationships and have strong closing skills. Must be well-organized and possess excellent presentation skills. EOE Where to apply see TV Careers

Hard finding that key person
to fill the important position at your organization? RBR Classifieds, Results with Service. Contact April McLynn at [email protected]

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