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Welcome to RBR's Daily Epaper
Volume 24, Issue 66, Jim Carnegie, Editor & Publisher
Wednesday Morning April 4th, 2007

Radio News ®

Report blasts Sirius-XM merger
Analysis by The Carmel Group helped convince the FCC to turn thumbs down on a merger of the two satellite TV companies just a few years back, so it is hardly surprising that NAB hired the firm to analyze the proposed satellite radio merger. Sure enough, the report now out says an XM-Sirius merger would result in "less service, less affordability, less diversity and less choice in content and hardware" - exactly the opposite of what Sirius CEO Mel Karmazin has said on Capitol Hill to try to win approval of the deal. If the history of the FCC-rejected DirecTV-EchoStar merger provides any insight, the element of the latest Carmel Group report that may have the most influence on regulators is the very last page - a so-called "ping-pong" chart. It shows how XM and Sirius compete directly with each other, and with no one else, detailing nine instances where one of the satellite radio companies introduced a new device, service or pricing plan and the other came up with its own offer to counter the move. Such competition will cease to exist if the merger is permitted to take place, the analysis concluded. "With all due respect, this proposed merger should not be approved - under any conditions - by the US government," The Carmel Group stated.
| Read the report |


Radio stocks in line with blah quarter
While their television brethren saw stock prices rise in Q1 as new revenues began to flow in from cable retransmission consent payments, radio had no similar event to excite Wall Street traders. Yes, non-spot revenues are growing well, but Internet revenues are growing for all types of media companies, and the bread-and-butter spot business is still sluggish. So, radio stocks were right in line with a lackluster quarter for the overall stock market. The Dow Industrials ended the quarter down 0.9%, while the S&P 500 and Nasdaq Composite were up just a teensy bit. The Radio Index, compiled daily by RBR based on 13 public companies whose primary business is radio, declined 1.6% for the quarter. Of the 28 stocks tracked daily by RBR, 13 were up for the quarter, 14 were down and one, Entercom, ended exactly where it began. The big gainer was a penny stock, Interep. With new CEO David Kennedy taking the helm in February, the radio rep firm gained 70%, although that still brought it to just a penny past a half buck. Another penny stock, Regent, gained nearly 14%. Close behind was Entravision, also up nearly 14%, as it became the largest public company in the fast-growing Hispanic media segment with Univision going private just before the quarter ended.
| Here are the full numbers |

RBR observation: Do the math
It never ceases to amaze us how so many different figures are reported by various media outlets when a big M&A deal is announced. The figure we are seeing most often for the Tribune Company buyout is 8.2 billion. Yes, existing shareholders are to be bought out for 34 bucks a share, which adds up to 8.2 billion - but that is only for the stock. Doesn't the debt count as well? And if the debt doesn't count, isn't Sam Zell buying Tribune for 315 million, since the rest will all be new debt and assumption of old debt? Even the company announcement of the buyout spells out how Citigroup, Merrill Lynch and JP Morgan Chase have committed to provide 11.2 billion in new debt (7 billion in stage one and 4.2 billion in stage two) to pay for the shareholder buyout and refinancing Tribune's bank debt. Yet numerous journalists have read that announcement and still reported that Tribune is being sold for 8.2 billion. Why? Are billions too hard to fathom? Then let us try a simple example. Say I buy a commercial building for one million bucks and take out a 750K mortgage. Then I sell it to you for 500K and assumption of the mortgage. Am I a chump for selling you the building for half what I paid for it? According to most news outlets who have reported the Tribune deal, you got the building for 500K. You know that's not true - the price tag to you was 1.25 million and I made a 250K profit. In fact, the Zell buyout bid for Tribune Company is a bit more than 13.2 billion. The math is not that hard. 8.2 billion for the stock plus about five billion in refinanced or assumed debt. 8.2+5=13.2, then add zeroes and move the decimal point nine spaces to the right.


No criminal charges in water death
After first indicating that no criminal investigation was called for, public outcry forced the Sacramento County District Attorney to launch a full-scale probe into the death of a contestant following an on-air contest at Entercom's KDND-FM Sacramento. Now the DA has concluded that no criminal charges will be filed in connection with the death of Jennifer Strange, 28, who died of water intoxication hours after competing in the contest to see who could drink the most water. "There were no observable indications or symptoms that Jennifer Strange was experiencing a serious medical emergency which would have required station employees to seek or administer medical aid to her," said a statement by District Attorney Jan Scully. Strange's family has a civil suit pending against Entercom and a number of its current and former employees.

Sen. Landrieu booked for Las Vegas
New Orleans radio and TV stations will get another round of well-deserved praise for their emergency efforts as US Sen. Mary Landrieu (D-LA) addresses the NAB2007 convention in Las Vegas. NAB says Landrieu will be speaking at both the Washington Policy & Politics breakfast and the All-Industry Opening Keynote session, both on Monday, April 16th. "Senator Landrieu has been a tireless advocate for her home state and for Gulf Coast broadcasters in the wake of Hurricanes Katrina and Rita," said NAB President and CEO David Rehr. Landrieu is currently the Chairman of the Disaster Recovery Subcommittee of the Senate Homeland Security and Governmental Affairs Committee.


Leverage Your Station's Brand
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Ad Business Report TM

Stagnant radio station revenues in 2006; a brighter '07
The radio industry experienced a second year of less than 1% growth in revenues in 2006, achieving a mere 0.4% increase in station revenues according to the estimates of BIA Financial Network. According to the first edition of BIAfn's quarterly Investing In Radio Market Report, the year closed with 18.1 billion in income, just slightly higher than the 18 billion recorded in 2005. BIAfn predicts the industry's slump will begin to rebound in 2007 with a growth rate of 2.2%. BIAfn also notes in its report that 2006 was the first time in six years that radio transactions returned to volumes above 22 billion (24.9b in 2000 and 22.9b in 2006) and the number of stations nationwide exceeded 1,000 (1,794 in 2000 and 2,100 by the end of 2006). The high level is connected to the announced privatization of Clear Channel but even without that sale it demonstrates overall that the industry is considered a smart investment in the long term.


NAB Daytime Planner
The following will be attending the NAB.
Call or email to make your
appointment in advance.

BANKERS
Brian Eick/Dave Meier/John Weller; Gladstone Capital; Bellagio Hotel;
Brian cell 847-612-3002, Dave cell 847-650-1735, John cell 509-496-3254; brian.eick@gladstonecapital.com, dave.meier@gladstonecapital.com, john.weller@gladstonecapital.com

BROKERS
Todd Fowler/David Reeder; American Media Services; Bellagio Hotel; 843-972-2200; tfowler@ams.fm, dreeder@ams.fm

Brian Cobb/ Denis LeClair /Dan Graves/Jack Higgins; Cobb Corp; Bellagio Hotel; 212-812-5020; katiebetz@cobbcorp.com

Andy McClure/Erick Steinberg, The Exline Company, Bellagio Hotel, office 415-479-3484, cell 415-497-3855, Exline@pacbell.net. ericks@esteinberg.com

Frank Boyle; Frank Boyle & Co.;
Bellagio Hotel;
203-969-2020; cell 203-249-7818; fboylebrkr@aol.com

John L. Pierce/ Jamie Rasnick; John Pierce & Company LLC; office 859-647-0101, John cell 859-512-3015; Jamie cell 513-252-1186, Bellagio Hotel; jpierce@johnpierceco.com; jrasnick@johnpierceco.com

Gordon Rice; Gordon Rice Associates;
843-884-3590; Bellagio Hotel; gordon@gordonriceassociates.com

Dick Kozacko/George Kimble;
Kozacko Media Services; office 607-733-7138; cell 607-738-1219; Bellagio Hotel; rkozacko@stny.rr.com, GeorgeWKimble@aol.com

Media Services Group; Bellagio Hotel; www.mediaservicesgroup.com

Elliot Evers/Greg Widroe/Brian Pryor/Patricia Carberry-Harris;
Media Venture Partners;
415-391-4877; Bellagio Hotel;
pcarberryharris@
mediaventurepartners.com

Brian Byrnes; Paramount Media
Advisors, Inc.; 312-396-4043;
cell 312-933-7559; Bellagio Hotel; bbyrnes@pma@earthlink.net

Glenn Serafin; Serafin Bros., Inc.;
office 813-885-6060; cell 813-494-6875; Aladdin Hotel; gserafin@tampabay.rr.com

Bill Schutz; Schutz & Company; Bellagio Hotel; 757-258-8740, cell 757-880-9251; wbschutz@aol.com

Larry C. Wood; Wood & Company, Inc.; Alexis Park Hotel; Office: 513-528-7373; Cell: 513-225-5100; LCWatCincy@aol.com

Media Business Report TM
ZenithOptimedia releases April
advertising expenditure forecasts

ZenithOptimedia Group's April Advertising Expenditure Forecasts for the U.S. was released yesterday as part of its regular quarterly tracking. Overall for 2007, the majority of Zenith's predictions remain unchanged from their previous forecast. However, downward revisions to their 2007 print forecasts, both magazines and newspapers, have resulted in a lower overall estimate compared to their prior report. They now predict growth of 3.4% for 2007, down from their calculation of 4.1% in December due to less ad spending in print media. For consumer magazines, 2006 finished up with more publications folding or reducing their ratebases as more people and revenue traveled to the Internet. Many of these publications also saw losses as a result from residing in over-saturated categories. Magazines will continue the trend of adjusting their ratebases downward to streamline costs. One big variable in tightening the circulation model is the double-digit paper and postage increase that the publishing industry faces in 2007. More publications will follow Time magazine's lead by offering audience guarantees rather than buying off the traditional ratebase model. Newsstand sales continue to be on the decline to start the year. For 2007, 2008 and 2009 they are projecting growth of 4.6%, 5.0% and 5.5%, respectively.
| Read More... |


Media Markets & Money TM
Davidson buying in North Carolina
After some recent station sales, Davidson Media Group is in buying mode again. It is paying 400K for WFMO-AM Fairmont, NC, a station it already operates under an LMA. Actually, this deal dates back to 2005 when Davidson bought an FM from James Clark's Pro-Media along with the option to add the AM once it got a power upgrade and city of license change approved by the FCC (6/24/05 RBR #124). That is all now approved and WFMO is set to move to Conway, SC, which will put it in the Myrtle Beach market. Broker Mitt Younts of EnVest Media put it all together back in '05.

Armada closes on Great Plains acquisition
As Tommy Thompson officially launches his quest for the White House today, he and his partners in Armada Media are the proud new owners of seven radio stations in Nebraska, Kansas and Colorado. Broker Kalil & Co. reports that the 3.6 million deal announced in November (11/10/06 RBR #220) has been to the closing table. The seller was McCook Radio Group, headed by David and Connie Stout. To the best of our knowledge, neither of them is a candidate for office.


Washington Media Business Report TM
Saved from extinction
If a broadcast station is off the air for 12 continuous months without special permission from the FCC, its license is automatically cancelled. There is seldom any reprieve, but WRSM-AM Sumiton, AL (Birmingham market) is the exception that proves the rule. The station had been the subject of litigation between one living shareholder and the estate of a deceased shareholder. The estate alleged that the living shareholder took the station off the air without notifying the other shareholder. A state court appointed a representative of the estate as "the duly authorized agent" of the licensee, Sumiton Broadcasting Company, and ruled that the other shareholder had "offered no good reason" why the station should not be sold. It was that court order that turned the trick with the FCC. Peter Doyle, Chief of the Audio Division of the FCC's Media Bureau reversed the license cancellation, saying that the case justified the exercise of the Commission's discretion to reinstate a forfeited license. The move will allow Sumiton to sell WRSM to American Trust Corporation, a subsidiary of Hilliard & Co., for 106,501 bucks.


Entertainment Media Business Report TM
Public radio to launch talent search for new host
The Public Radio Exchange (PRX) announced the first-ever Public Radio Talent Quest (www.publicradioquest.com), a nationwide search for the next great host for public radio. Contestants will submit a 2-minute audio demo of talk, entertainment or music programming for their shot at 10,000 and the opportunity to produce a pilot show for public radio. The public will play a crucial role in the decision-making process by voting online for their favorites and helping the panel of expert judges determine the winners. "There is an incredible opportunity for public radio to succeed by becoming more public," said Jake Shapiro, executive director of PRX. "With the Talent Quest, we're inviting anyone and everyone to add their voice, and their vote, into the mix. People have come to expect more interaction with media, and this contest helps them connect through radio and the Web."


Internet Media Business Report TM
Mexico City to be one, giant Wi-Fi hotspot by 2008
AFP reports All of Mexico City will be one free, wireless Internet hotspot by 2008, Mayor Marcelo Ebrard announced Monday. The project "will accelerate the technological development of the city," Ebrard said after signing a contract with the Chinese telecoms and networking giant ZTE. The project began as a hook-up for security cameras around the Mexican capital.


Ratings & Research
Arbitron/Telephia: Mobile audio a significant growth opportunity
In an Arbitron Mobile Audio teleconference yesterday hosted by Wayman Leung, product manager, Telephia and Neal Bonner, business development manager, Arbitron, "Mobile Audio: An Untapped Market" was unveiled. In this study, Arbitron and Telephia explore the evolving market for mobile audio services through understanding consumer usage patterns, attitudes, and preferences. "There is an opportunity for wireless providers, programmers and marketers to develop an advertising model for mobile audio," said Leung. "Most current mobile audio users prefer the ad-supported model over paying a subscription fee. And this group is a very attractive demographic for advertisers to target as it's comprised mainly of affluent, tech-savvy early adopters." "For broadcasters looking to expand their platforms beyond terrestrial radio, mobile audio represents an untapped marketplace that they can exploit in partnership with mobile phone networks," said Bonner. "Radio broadcasters are uniquely positioned to deliver programming for these promising new audio services."
| See the key findings here |


Transactions
100 AM CP Bangor ME (Orono ME) from RAMS IV (Lyle Reynolds) to Brantley Broadcast Associates LLC, a subsidiary of R3 Partners LLC (Paul Reynolds, Joan Reynolds, Lee Reynolds, Lyle Reynolds). Cash. CP is for Class B on 1530 mHz with 50 kw-D, 600 w-N, DA3. [File date 3/12/07.]

100 AM CP Mobile AL (Saraland AL) from RAMS II (Joan Reynolds) to Brantley Broadcast Associates LLC, a subsidiary of R3 Partners LLC (Paul Reynolds, Joan Reynolds, Lee Reynolds, Lyle Reynolds). Cash. Duopoly with WKTT-AM CP Saraland AL. CP is for Class B on 770 mHz with 38 kw-D, 800 w-N, DA2; WKTT CP is for Class B on 1160 kHz with 15 kw-D, 250 w-N, DAN (with application for 430 w-N). [File date 3/12/07.]


Stock Talk
Housing news boosts stocks
A better than expected monthly report on home resales by the National Association of Realtors put Wall Streeters in a buying mood. The Dow Industrials rose 128 points, or 1%, to 12,510.

Radio stocks went along for the ride. The Radio Index gained 2.203, or 1.4%, to 156.981. Entravision rose 4.2%, Fisher advanced 3.4% and Beasley gained 3% as the best performers.


Radio Stocks

Here's how stocks fared on Tuesday

Company Symbol Close Change Company Symbol Close Change

Arbitron

ARB

48.11

+1.03

Hearst-Argyle

HTV

27.42

+0.18

Beasley

BBGI

8.90

+0.26

Journal Comm.

JRN

12.96

-0.04

CBS CI. B CBS

31.10

+0.32

Lincoln Natl.

LNC

68.45

+0.70

CBS CI. A CBSa

31.11

+0.34

Radio One, Cl. A

ROIA

6.48

-0.03

Citadel CDL
9.60 +0.11

Radio One, Cl. D

ROIAK

6.44

-0.05

Clear Channel

CCU

35.54

+0.34

Regent

RGCI

3.11

+0.02

Cox Radio

CXR

13.75

+0.08

Saga Commun.

SGA

9.97

+0.17

Cumulus

CMLS

9.49

+0.17

Salem Comm.

SALM

12.69

+0.07

Disney

DIS

34.92

+0.45

Sirius Sat. Radio

SIRI

3.09

-0.06

Emmis

EMMS

8.94

+0.09

Spanish Bcg.

SBSA

3.96

+0.02

Entercom

ETM

28.16

+0.05

SWMX

SMWX

0.85

unch

Entravision

EVC

9.67

+0.39

Westwood One

WON

6.58

+0.10

Fisher

FSCI

49.28

+1.62

XM Sat. Radio

XMSR

12.14

-0.25


Bounceback

Send Us Your OpinionsWe want to
hear from you.

This is your column, so send your comments and
a photo to radionews@rbr.com


Below the Fold
Media Business Report
ZenithOptimedia Forecast
Released yesterday as part of its regular quarterly tracking...

Ad Business Report
Stagnant radio station revenues
In 2006 but a brighter '07...

Media Markets & Money
Davidson buying in North Carolina
Paying 400K for WFMO-AM Fairmont...

Entertainment Media
Business Report
Public radio
Launching talent search for new host...

Ratings & Research
Arbitron/Telephia Mobile audio
significant growth Opportunity, an Untapped Market unveiled...




Stations for Sale

Syracuse, NY
metro FM: $3.25M

Open to purchase, swap plus cash, or LMA. Confidentiality agreement required. No brokers please.
hightowercommunications
@hotmail.com

888-904-0045

Ski Country FM
NEast, very profitable w. T site.
8.5x trailing CF. Price 950K
Inquiries 781-848-4201
email: salesgroup@beld.net
Web: RadioStationsForSale.net

10 TX, AZ, NC, and GA
FM radio stations at an exceptional value offered for sale. Broker cooperation encouraged. Please visit www.toweritrust.com for complete information including pricing.


Market your Stations For Sale
in our daily epapers.

Contact
June Barnes
jbarnes@rbr.com

Radio Media Moves

Evans moves to ESPN
Dr. Tom Evans has been named vice president, digital and cross media measurement at ESPN. In this newly created position, Evans will supervise research strategy for ESPN digital media, including Internet, mobile, digital audio and video. He'll also focus on research programs to support digital media growth including ad sales, brand and content development. In addition, Evans will guide ESPN's efforts to advance cross media research capabilities including the use of new technologies and innovative research methods. Evans will be based in New York and joins ESPN after nine years as VP/research for ABC Radio.




More News Headlines

Shooting at CNN Center
A woman died after a shooting inside CNN Center in Atlanta that was witnessed by many people, including CNN employees. Atlanta police are calling it a domestic situation. Witnesses said the gunman dragged the woman around, then shot her. He was then shot by a Turner Security guard.


TVBR - TV News

EchoStar and Google partner on automated ad system
Looks like Google has made its first big score in getting its ad system into traditional media: It has entered into a partnership with EchoStar to introduce the an automated system for buying, selling, delivering and measuring television ads on EchoStar Dish Network's 125 national satellite programming networks. DISH has around 13.1 million subscribers. Google will have access to a portion of Dish Network's ad inventory that spans across all channels and dayparts. The agreement is the first of its kind for a national pay-TV provider and Google. This partnership extends Google's current advertising platform to a national TV audience with the aim to deliver more relevant and measurable ads. EchoStar and Google are working together to provide automated online campaign planning, scheduling, delivery and measurement of ads on the Dish Network. We asked Google competitor, SoftWave Media Exchange's COO Bill Figenshu, about the Google-Echostar deal and what it might mean to the electronic ad marketplace in general. Fig said this deal means it's another box. "It's an addressable box placed into the system between the advertiser and the viewer. It sounds like EchoStar is giving up their control to Google. Google is going to be doing their sales. It's closer to what they had in mind for the original concept of radio and television than what they currently have. There's no difference between putting a box in the system before the TV set than putting a box in the system before a radio and television transmitter. For us, we like broadcasters to be in control. Who is in control of the box with advertisers? If it's Google, then that's exactly what we think they're doing on the remnant radio side."

TVBR observation: Google has mentioned they are moving away from the box model for radio. The deal with EchoStar will likely use the existing Dish Network box, which can download new programming from the birds. This may be Google's entree into traditional media. While everything up until now has been piecemeal, remnant inventory, planners and buyers will be able to try the system with larger campaigns using prime inventory. It's still not regular network inventory or access into top TV stations.


RBR Radar 2007
Radio News you won't read any where else. RBR--First, Accurate, and Independently Owned.

Can Sam Zell fix the
newspaper business?

February was a particularly bad month for the US newspaper business. Sam Zell had better hope that is not the start of a trend for an already suffering business to get even worse. The Chicago real estate billionaire thinks he knows how to make money from the so-called "old media" assets currently losing market share to new media. His track record in media, though limited, is good. He made a lot of money for himself and others when he bailed out Jacor Communications and eventually sold it to Clear Channel.

RBR observation: This deal would be a breeze to get FCC approval without the crossownership situations, but we understand why Zell wants to keep the company together. The CW network is building nicely and the cash flow from Tribune's big TV stations in New York, LA and Chicago should help counter the difficulties as their newspaper brethren go through the gut-wrenching phase of waiting for Internet ad growth to get to the point of counterbalancing print declines. But there is already pressure in Washington for the FCC to set an expiration date for Tribune's controversial crossownership waivers, since they were predicated on the expectation that the rule was on the verge of being eliminated anyway - something that hasn't happened and doesn't appear likely to happen in the foreseeable future. We see a real possibility that Zell will be turned down flat for new waivers. What then? Would the deal crater or would Tribune Television be put up for sale? One previous bidder who wanted only the TV group reportedly offered four billion bucks for them. One final note. Since Tribune is planning to sell the Chicago Cubs, why is it keeping WGN-AM Chicago, its only remaining radio station? The station's close ties to the baseball team appear to be the only business reason to keep it in the company - and that justification is going away. No doubt there are radio groups who would step up and bid aggressively for the legendary Chicago station.
(If you missed Tuesday RBR click and review)
04/03/07 RBR #65


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