RBR's Daily Morning Epaper

Volume 23, Issue 74, Jim Carnegie, Editor & Publisher

Friday Morning April 14th, 2006

Radio News ®

Entercom fires back at Spitzer
Entercom Communications has gone on the offensive against the "corporate payola" lawsuit filed by New York Attorney General Eliot Spitzer (3/9/06 RBR #48). The radio company has filed a motion to have the whole case thrown out of court, arguing that Spitzer hasn't alleged anything that's actually illegal. Under the state business law cited in the lawsuit, Entercom's attorneys say, the Attorney General must prove that consumers were harmed by deception. But since nobody has to pay for radio (at least not terrestrial radio), Entercom says there can be no harm. Then Entercom's motion to dismiss goes on to argue that Spitzer has no jurisdiction. Under New York law, it says, compliance with federal law is a "complete defense" against the state's consumer protection statues. Entercom says it fully complied with federal law in disclosing when record airplay was paid for.

RBR observation: Bravo! Someone is finally fighting back at this self-styled national cop who's making the rules up as he goes. As we've demonstrated previously (3/13/06 RBR #50), Spitzer's interpretations of the federal payola law and the FCC's sponsorship identification rule are just plain wrong - - not to mention that he has no authority to enforce them in the first place. Rather than settle as two record labels did - - tens of millions may be chump change to a record giant, but that's real cash to a radio company - - Entercom is pushing right back and calling Spitzer's bluff. The next step that's needed, as we recently noted, is to have one or more radio companies sue Spitzer in federal court to void those record label settlements in the other 49 states. Spitzer has set himself up improperly as a national lawmaker and enforcer. He needs to be taken down a few notches.

Bortnick leaves WW1 for "The Fan"
CBS Radio has named Chuck Bortnick as Vice President and General Manager of Sports/Talk WFAN-AM "The Fan" New York, effective Monday, May 8th. Bortnick has been Chief Operating Officer of Westwood One, which is managed by CBS Radio, since 2002. In his new post, Bortnick will report directly to CBS Radio CEO Joel Hollander. "Chuck has extensive experience on both the station and network level having success at some of the best brands in the business," said Hollander. "I have had a wonderful and exciting 13 year run as a member of the Westwood One and Metro Networks family. I am extremely excited to return to the station side of the radio business and for the challenges that await me at America's most successful sports radio station," said Bortnick. "I look forward to continuing my relationship with Westwood One in my new role," he added.

Tough times for newspaper/broadcast companies
Radio stations aren't the only ones feeling continued softness in ad demand. Two companies who get most of their revenues from newspapers and TV reported their Q1 results yesterday and complained of soft demand. Both have radio stations, but they account for only a tiny portion of total revenues. TV revenues were up at the New York Times Company and newspaper ad revenues were barely in the plus column, so the company hit its Q1 targets. ""Looking ahead, we are focused on improving the margins of our businesses by continuing to enhance existing products and introduce new ones that serve our audiences and advertisers in print, online and through broadcast media," said CEO Janet Robinson. At Tribune Company, TV was down, but had its best quarter in over a year, while newspaper revenues were flat and the company managed to beat The Street's EPS consensus by two cents. Tribune CEO Dennis FitzSimons says "tight cost controls remain in effect" and he's looking for the new CW television network launching this fall to have a positive impact on revenues.

More credit for XM
Its cash burn is still amazing, but XM Satellite Radio will now pay less interest on its debt. The satellite radio company announced a refinancing of its high-rate debt with lower rate debt. It also established a revolving credit facility with a group of lenders. XM has now launched a cash tender for its 14% senior notes due 2009, its 12% senior notes due 2010 and its senior floating rate notes due 2009. New lower rate notes to cash them out are being sold in a private placement.

Legal eagles hold forth: New regulatory fees
The law form of Womble Carlyle Sandridge & Rice PLLC has kindly made available letters written for the benefit of their clients to RBR/TVBR so that you too can benefit. As they are careful to remind all readers, the documents are "...provided for general information purposes only and should not be relied upon as legal advice." We would further advise you not to use them as a basis for prognostication (political, financial or otherwise), active litigation, or the placement of wagers. Today's topic: New regulatory fees.
| Read the report here |

Wall Street Media Business Report TM

Q1 2006 Conference Calls
Down quarter for broadcasting at Tribune
Operating revenues for the Broadcasting and Entertainment division were down 2.5% to 302.5 million at Tribune Company. Broken down, that was a 2% drop for TV to 284.2 million and a 9.1% drop for Radio/Entertainment to 18.3 million. The company said TV revenues were up in New York, while LA and Chicago lagged. Operating cash flow for TV was down 13.5% to 85.7 million. Radio/Entertainment cash flow was negative to the tune of 3.9 million, which was an improvement from negative cash flow of 19.3 million a year earlier, which included a 15 million bucks compensation expense related to a player trade by the Chicago Cubs.

Soft quarter for the New York Times Company
The Gray Lady met Wall Street's expectations in Q1, but that was nothing to get excited about. News Media Group (newspaper/radio/Internet except About.com) crept up 1% to 781 million, with most of the gain coming from online. Operating profits for the division fell 25% to 68.3 million, with expense growth swamping the small increase in revenues. Broadcast Media Group (TV) revenues increased 2% percent to 32 million, all due to the addition of KAUT-TV Oklahoma City. Excluding KAUT, TV revenues decreased 1.9% as declines in automotive advertising and network compensation were only partially offset by higher Olympic advertising. Operating profit for the TV group dropped 22% to 3.1 million. During the company's conference call, one analyst asked whether the time Company might consider selling its TV stations, but CEO Janet Robinson dismissed the idea because of the tax bite.

Ad Business Report TM

Mandel, Russo unimpressed
by HD/HD-2 Radio rollout
In a conversation about the television upfront yesterday with Jon Mandel, Chairman/MediaCom US and Chief Global Buying Officer MediaCom Worldwide, the topic drifted to HD Radio. He's not so sure the latest campaign is going to drive people to the stores: "I think the HD and HD-2 thing is too little, too late. I was in LA earlier this week and heard ads from Tweeter. But other than that, I have never heard anything promoting it; it doesn't really explain what the hell it is, other than no static and no monthly fees. Big $%&@ing deal. Nobody is talking in detail about how I can get all these other formats. What are they, what station is offering what? They're screwing it up."

As Rich Russo, JL Media's SVP/Director of Broadcast Services tells us in the May RBR/TVBR Solutions magazine, HD-2 could have been rolled out a bit better: "HD equals Huge Debacle or Highly Debatable and here's why: It is not ready, so why launch it? The unit is beyond inadequate to say the least and there are numerous flaws with the HD alliance itself. The fact that these sub-channels which on the Boston Acoustics unit I have can't even been tuned in half the time, coupled with the fact they are commercial-free is ridiculous. Radio should not promote anything commercial-free. These channels need to run spots from day one. The launch has dug itself into a hole. The average person doesn't care about fidelity-they care about ease of use and accessibility. Why are they not making this available for $20 each as an upgrade for any existing radio? If this was my baby, I would get some sort of universal converter to pick up the new channels immediately as well as stream these stations. I would also program these stations better by using it as a showcase of radio's best. Since KROQ is regarded as the best and most influential alt rock station in the country, why isn't available as a subchannel in all markets? This is a logical example of how to utilize the other channels. HD needs to get its head out of its ass, ASAP."

RBR observation: As we said on 3/23/06, HD-2 formats need to compete with the format variety of satellite. They should be perceived and promoted as the free, viable alternative to satellite in each market, even if some formats don't "test" well yet. Each market's HD-2 channels need to be absolutely refreshing and unique to get (especially) the younger listeners' attention: Drum & Bass/Electronica; Classic Jazz & Blues; Jam Bands; AAA (CBS Radio will be adding soon on WARW-FM here); Comedy; Indie Rock; Psychedelic Rock; Classic Reggae; Dance Hall Reggae. These should be treated as brand new stations in the market to drive demand-do a co-op'ed local TV campaign. When demand is driven, receivers will be bought. That leads to-you guessed it-ratings and ad dollars. Broadcasters have been given brand new stations-they sound just as good and come in just as well as the main HD signal. Let's treat them that way. You want more share of the ad dollar pie? Give the listeners the variety they've been getting elsewhere and often paying for. Listen to CC Radio's HD-2 formats nationwide. Some are very promising-especially KKRZ-FM Portland's Indie Rock HD-2 format.
| Choose the "Listen to 100's of additional stations" bar |

Jean Pool retiring
from Universal McCann
Jean Pool, EVP/Director of North American Operations Universal and Chairman of Media Policy at the AAAAs, has announced she will retire from the post at the end of the month. She's not closing up shop altogether, though, she will wear the consulting hat afterward. Pool tells RBR/TVBR: "It's just time to go. I'm ready for this, because I want to do what I want to do, not what I have to do. This business has been good to me and I wish everybody great success. My husband is retired, he hates Manhattan. I love Manhattan, but he hates it. I've already got a project - - I'm going to be an expert witness in a case in Seattle, so stuff like that." Pool will be re-locating eventually to one of her favorite places, where she's got a second house - - Harrisville, Michigan, a quaint and curious artist community on the shores of Lake Huron.

Media Markets & Money TM

Willis sells a pair
Bishop Levi Willis is divesting two of his AM stations. WSDT-AM Soddy Daisy, TN and WRAG-AM Carrolton, AL are going to Kingdom Radio of Chattanooga LLC, a new broadcast company headed by Harold Vogt, for 200K.

Funding rises in Phoenix
CCA Inc., d/b/a Communicom, announced closing on eight million in senior debt from MCG Capital Corporation. The funding, arranged by Daniels & Associates, was used to finance Communicom's recent acquisition of KXEG-AM & KXXT-AM Phoenix for 10 million (3/2/06 RBR #43).

KUPA closing in Hawaii
The brokers at Kalil & company have gotten their commission check on the closing of the 650K sale of KUPA-AM Pearl City-Honolulu, HI from Morgan Skinner's Legacy Communications to Broadcasting Corporation of America, managed by Nathan Drage (8/11/05 RBR #157).

Washington Media Business Report TM

Coastal towers allowed to stand
The petition was pending for years before Hurricane Katrina ripped down communications towers all along the Gulf Coast, but an action this week by the FCC will keep broadcasters, cell phone companies and others from having to go through more red tape to rebuild. The FCC denied and dismissed a 2002 petition by the American Bird Conservancy and the Forest Conservation Council that could have delayed building wireless facilities along the Gulf Coast while new environmental reviews were completed. But, in order to get enough votes to approve the action, FCC Chairman Kevin Martin was forced to agree to issue a notice in the near future of proposed rulemaking on the impact of towers on migratory birds. Commissioner Michael Copps dissented in part, noting that the US Fish and Wildlife Service "conservatively estimates that collisions with communications towers kill more than four million birds per year." Commissioner Jonathan Adelstein said he did not "fully embrace" the action, but agreed to vote for it because of Martin's move to have an NPRM on the impact of communications towers on migratory birds.

NAB Day Time Planner

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

EQUIPMENT Les Kutasi, Sales Manager; Stainless, Booth #C2447, 215-631-1313, [email protected] BROKERS Todd Fowler/David Reeder/Gene Ferry, American Media Services, Bellagio, 843-972-2200, [email protected], [email protected], [email protected] Cliff Gardiner, Clifton Gardiner & Company, 303-758-6900, The Wynn Hotel, [email protected] Andy McClure/Dean LeGras, The Exline Company, The Wynn Hotel, 415-479-3484, [email protected] Frank Boyle, Frank Boyle & Co., LLC, Hilton Grand Vacations Villa, 702/765-8300, [email protected] Gordon Rice, Gordon Rice Associates, 843-884-3590, Treasure Island, [email protected] John L. Pierce, John Pierce & Company LLC, Mirage Hotel, 859-647-0101, cell 859-512-3015, [email protected]	Jamie Rasnick, John Pierce & Company LLC, Mirage Hotel, 859-647-0101, cell 513-252-1186, [email protected] Dick Kozacko/George Kimble, Kozacko Media Services, The Wynn Hotel, office 607-733-7138, cell 607-738-1219, [email protected] Elliot Evers/Brian Pryor/ Adam Altsuler/Tim Beach Media Venture Partners, LLC, 415-391-4877, [email protected], [email protected] Larry Patrick/Greg Guy, Susan Patrick Patrick Communications, Bellagio, 410-740-0250, [email protected] Glenn Serafin, Serafin Bros., Aladdin Hotel, office 813-885-6060, cell 813-494-6875, [email protected] LAWYERS Gregg P. Skall Womble Carlyle Sandridge & Rice, PLLC 202-857-4441, Wynn Hotel [email protected]

Ratings & Research

Out-of-home TV viewing growing steadily
According to a new study from The Total TV Audience Monitor (T-TAM) conducted in Fall 2005, 43.7 million persons 18+ (20% of the adult population) watch television in unmeasured, out-of-home locations each week. This unduplicated out-of-home (OOH) audience represents an increase of over one million persons from 2004 and is 20% higher than the 36.3 million measured in 2003. Adult viewers watching TV outside the home average 9.5 hours of OOH viewing per week --an increase from 7.3 in 2004 and 6.5 hours in 2003. The largest segment of the OOH audience comes from college locations. More than 11 million college students are watching OOH and averaging 12.5 hours of OOH TV viewing per week. This is the third study conducted by T-TAM to measure the total TV audience among men and women since the study was syndicated in 2003. According to the study conducted during the four-week period of October 6 to November 2, 2005:
| Read More... |

Transactions

525K WNSI-FM Atmore AL from Southern Media Communications Inc. (Walter Bowen) to Gulf Coast Broadcasting Company Inc. (R. Lee Hagan). Cash at closing. LMA until closing. [File date 3/24/06.]

25K WNSI-AM Mobile AL (Robertsdale AL) from Great American Radio Network Inc. (Walter Bowen) to Gulf Coast Broadcasting Company Inc. (R. Lee Hagan). Cash at closing. Superduopoly with WBCA-AM Bay Minette, coming concurrently from related seller, and WABF-AM Fairlawn AL & WCSN-FM Orange Beach AL. LMA until closing. [File date 3/24/06.]

1 WBCA-FM Mobile AL (Bay Minette AL) from Southern Media Communications Inc. (Walter Bowen) to Gulf Coast Broadcasting Company Inc. (R. Lee Hagan). Cash at closing. Superduopoly with WNSI-AM Robertsdale AL, coming concurrently from related seller, and WABF-AM Fairlawn AL & WCSN-FM Orange Beach AL. LMA until closing. [File date 3/24/06.]

Stock Talk

Retail sales and stocks up
A rise in retail sales gave a small boost to stock prices. The Dow Industrials rose eight points, or 0.1%, to 11,138.

What's good for retailers is good for broadcasters. The Radio Index gained 1.099, or 0.7%, to 158.738. Beasley led the parade, up 4.1%. By the way, Interep rose 15% to 78 cents on the pink sheets, even after indicating that it would reject a 1.10 buyout bid.

Radio Stocks

**Here's how stocks fared on Thursday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		33.00	-0.02	Hearst-Argyle	HTV		23.34	-0.03
Beasley	BBGI		10.63	+0.42	Journal Comm.	JRN		11.83	-0.19
CBS CI. B	CBS		24.85	+0.32	Lincoln Natl.	LNC		56.30	+0.14
CBS CI. A	CBSa		24.88	+0.29	Radio One, Cl. A	ROIA		7.80	+0.18
Citadel	CDL		10.76	+0.14	Radio One, Cl. D	ROIAK		7.78	+0.15
Clear Channel	CCU		28.90	+0.22	Regent	RGCI		4.41	-0.02
Cox Radio	CXR		13.40	-0.03	Saga Commun.	SGA		9.05	-0.01
Cumulus	CMLS		11.26	+0.18	Salem Comm.	SALM		14.67	-0.02
Disney	DIS		27.88	-0.04	Sirius Sat. Radio	SIRI		5.32	+0.12
Emmis	EMMS		14.98	-0.02	Spanish Bcg.	SBSA		5.09	-0.01
Entercom	ETM		27.83	+0.03	Univision	UVN		34.85	+0.17
Entravision	EVC		8.49	-0.03	Westwood One	WON		10.40	+0.07
Fisher	FSCI		42.09	-0.11	XM Sat. Radio	XMSR		23.31	+0.26
Gaylord	GET		43.91	+0.44	-	-	-	-	-

Bounceback

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

I agree with what Bill Pressly and Stan Elgart have said about small market vs. the large markets and ratings (4/11/06 RBR #71). And from working in a small market, I've found that some businesses only buy from people they know, regardless if the advertising works for them or not. But when they finally realize that they're not seeing any results from all the money they spend, they shy away from radio, because as they put it "I tried radio and it didn't work". That's when the ratings would work in any market.

Sylvester Paquin
Advertising Consultant
Clear Channel Radio

Below the Fold

Ad Business Report
Jean Pool retiring
From Universal McCann...

Washington Media Business Report
Coastal towers allowed to stand
Petition was pending for years
before Hurricane Katrina...

Media Markets & Money
Willis sells a pair...
Funding rises in Phoenix...
KUPA closing in Hawaii...

Ratings & Research
Out-of-home TV viewing
Growing steadily according to a new study...

Radio Media Moves

Alice reaches
down under
CBS Radio's KLLC-FM "Alice @ 97.3" San Francisco has hired Peter O'Brien as General Sales Manager. O'Brien was a long-time veteran of San Francisco radio, but spent the last seven years running his own business in Sydney, Australia.

Promotions at Salem
David Santrella, GM of WYLL-AM & WIND-AM Chicago, has been upped to Vice President and General Manager of the Chicago and Milwaukee clusters of Salem Communications. Also, Brian Taylor, GM of Salem Media of Colorado, which includes four Denver stations, has been promoted to Vice President and GM of the cluster.

Musical chairs
in Fayetteville
Christian Listening Network's WCLN-FM Fayetteville, NC has reconfigured its air staff. Syndi Long moves from afternoons to morning drive. Program Director Jim Morgan (aka Jim Cooke) moves from mornings to middays to accommodate his increasing multi-station responsibilities. Music Director Steve Turley then moves from middays to afternoon drive.

More News Headlines

Campbell-Ewald
awarded US Mint
ad contract
The United States Mint has awarded its national advertising contract to Campbell-Ewald following a recent competitive agency review. Campbell-Ewald will immediately begin developing an integrated advertising campaign focused on coin-collecting products such as 50 State Quarters Proof Sets and American Eagle Silver, Gold and Platinum Proof Coins. The agency's contract is for one year with two additional option years. Campbell-Ewald recently opened its Washington, D.C., office and, in addition to its advertising contract with the Mint, is the AOR for the Federal Citizen Information Center, U.S. Navy, U.S. Postal Service and U.S. Postal Inspection Service. It has performed project work for the Centers for Medicare & Medicaid Services (CMS), FAA and NASA. Campbell-Ewald is on the General Services Administration (GSA) Advertising & Integrated Marketing Solutions (AIMS) schedule.

RBR Radar 2006

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

Group offers 1.10
per share for Interep
Interep's long languishing stock price stock shot up to 88 cents at one point after Oaktree Capital Management went public with an offer to buy the company for 1.10 per share, a 439% premium to Tuesday's closing price of 20 cents. But saying it is frustrated by months of negotiations, Oaktree has given Interep's board of directors a deadline of April 21st to act on the 14.3 million bucks offer. Oaktree is Interep's largest bondholder.

RBR observation: Things have been improving (other than its stock price) for Interep since Oaktree first went public with its call for Guild's ouster and a restructuring. Business has improved in the radio rep business and Interep has made its first foray into TV representation with Azteca America Spot Television Sales. But balance sheet issues remain. Interep sold its IPO at 12 bucks a share in December 1999 and the stock traded for a while above 13, but it long ago dropped into penny stock territory. With a stock that's been trading for two bits or less on the pink sheets, Interep's directors are going to be under pressure from shareholders, many of whom are Interep employees, to take the cash.
04/13/06 RBR #73

Interep says no to buyout bid
"We're willing to talk to anybody," says Interep CEO Ralph Guild, but he and the company's board of directors are not accepting the 1.10 per share buyout bid by Oaktree Capital. Guild notes that Interep's 100 million in bonds have been out for more than seven years and the company has never missed a payment - - and that Interep will have no problem making the twice annual payments of five million bucks to Oaktree and other bondholders.
04/13/06 RBR #73

More softness seen in radio
As radio groups prepare to report Q1 results, Goldman Sachs sees no improvement in a soft ad market. He's expecting most groups to hit their Q1 targets, but guide downward for Q2. Rather than improving, analyst Mark Wienkes says it appears that pacings are down in the mid single digits for Q2.

Publisher observation: Ok folks line up and get ready for the real results of 'Less is More' or Follow the Leader to victory or agony of defeat. This could even turn out to be a new TV series for one of the new networks. No more excuses as nothing will fall short of honesty. Maybe between now and the start of the 2nd half of this year someone is going to awake up and start paying attention to the needs of the local market. You ask? What Games? Just remember the entire BS over the last year.
04/12/06 RBR #72

Legal eagles hold forth:
Prohibited product advertising
Questions frequently arise regarding the legality of advertising certain "red flag" products. The products that might be placed in the "red flag" category include alcohol, tobacco, casino gaming and weight-loss plans. This you should print out
04/12/06 RBR #72

Internet overtaking outdoor, radio
Zenith Optimedia Group has revised its global ad spend outlook, predicting now that the Internet will overtake worldwide outdoor ad spending next year, and will catch up with radio in 2008 revised the internet forecasts upwards again as it has continued to exceed expectations. Predict it will attract 6.5% of all advertising in 2008, up from 4.5% in 2005 (and up from the 6.0% we predicted for 2008 back in December). The internet is now firmly established as a mainstream advertising medium in developed markets, and in many developing markets too. Predict again it will overtake outdoor in volume in 2007, even though outdoor is gaining share itself, and that by 2008 it will be catching up with radio too (which will have a 7.9% share, down from 8.5% in 2005)."

RBR observation: Best grab onto something that does not move when you view and print this forecast which RBR strongly Recommends: Now grab and shake yourself loose of anyone or company that is trying to dictate your actions. This is No Time to play Follow the Leader as there is No set leader in our radio business - count on your own abilities to lead and win.
04/11/06 RBR #71

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