RBR's Daily Morning Epaper

2007: The Need for -- Ideas Working Now
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Volume 24, Issue 8, Jim Carnegie, Editor & Publisher

Friday Morning January 12th, 2007

Radio News ®

Listening up in LA & Chicago
But analysis of Arbitron 12+ numbers from the Fall book by Victor Miller and his team of analysts at Bear Stearns shows the good news is far from universal. Radio One suffered a 54% drop in audience share in LA, as KKBT-FM failed in its first attempt to re-launch as an Urban AC (attempt #2 now underway with new calls), while total radio listening rose 1%. The gain in Chicago was also 1%. Univision was a big gainer in both markets - up 19% in LA and an even stronger 29% in Chicago. The Bear Stearns analysts believe the Hispanic radio giant may have benefited from Arbitron implementing language usage as a factor in its diary placement. However, not all Spanish stations were up, so it appears Univision was successful in taking share from others, with SBS down in both markets. While CBS Radio took a hit in New York from the loss of Howard Stern, it got a boost in LA from Emmis exiting the Country format. Although KFRG-FM is outside the market in San Bernardino, it jumped to a 1.1 share in LA as the only Country alternative for former KZLA listeners, at least where its signal can be received. The Bear Stearns analysis notes that a single share point can be worth 10 million bucks in ad revenues in the billion bucks LA radio market. Will CBS be able to monetize those new listeners to "K-Frog?"
| View the LA and Chicago charts |

RBR observation:
Time to end the phony "payola" probe
It looks like the FCC is getting ready to give the allegations of wide-spread "payola" violations in the radio industry by Eliot Spitzer, now Governor of New York, the burial they deserve. According to a report by The Hollywood Reporter, the Commission staff is close to a deal with major radio groups that would have them institute some new measures, while not admitting that anything done in the past was wrong. Indeed, there was nothing to confess to, since we now know that the whole Spitzer crusade was nothing but an attention grabber for his political campaign. The settlement he struck with Entercom just before leaving his former post as New York Attorney General (12/28/06 RBR #250) demonstrated that there was no legal basis for his major complaints of so-called illegal activities. So now the radio groups will agree to a deal which will have them adopt a code of conduct to make sure they are abiding by the FCC rules, which they were already doing anyway, and set aside some airtime to promote independently produced music. That is probably going to be good for the stations, so long as they are not required to play bad or out-of-format indie music. Clear Channel already has a major effort in place to introduce new music and we have never heard of anyone opposed to breaking new artists, something radio has been doing since the 1920s. It is unfortunate that radio stations had to be dragged through the mud by a ruthless politician with no regard for the law.

A sporting proposition at CBS
CBS Corp. has created the CBS Sports Properties Group, designed to utilize all the varied assets of the company to sell the CBS Sports brand, as well as create brand extensions for its corporate clients and sponsors. The CBS Sports Properties Group is an extension of CBS's NCAA Marketing Group. The CBS Sports Properties Group will work with the CBS O&O Television Stations; CSTV; CBS Interactive, including CBS SportsLine.com; and the newly formed r.i.o.t (CBS Radio, Internet, Outdoor and local television). CBS tells us r.i.o.t, formed in 2006, is a group of salespeople at CBS that sell across all of those platforms. One person from each division coordinates on selling programs locally with all of those components. A likely deal would be made with CBS Radio's sports stations, CBS Sportline.com, stations covering the NFL, etc. it's similar to Viacom Plus, but on a local level. Stations in a r.i.o.t deal in NYC could include 1010 WINS, WCBS-TV, their websites and outdoor. Chris Simko, who has served as SVP/Sports Sales and Marketing since 2002, has been named Director of the CBS Sports Properties Group and will retain his title of SVP/Sports Sales and Marketing. Simko will continue to report to John Bogusz, EVP/CBS Sales and Marketing. The announcement was made by Jo Ann Ross, President, CBS Sales. "The creation of CBS Sports Properties will aggregate and organize all of the company's assets to build upon the brand of excellence that has always been associated with CBS Sports," said Ross. "Directly connecting our commercial clients and corporate sponsors with the CBS Sports brand across multiple platforms will lead to strategic, long-term deals benefiting all."

Point-counterpoint
on broadcast violence
Parents Television Council chronicled an increase in TV violence in its study "Dying to Entertain" (1/11/06 RBR #7), and FCC Commissioner Michael Copps quickly added his two cents. He expressed once again his dismay at the "race to the bottom" which appears to be ongoing in the media, and speculated that continued lack of restraint may eventually inspire Congress to step in and enforce it. Copps also said that the FCC has been putting together its own study of violent broadcast content which is two years in the making and may be ready for release soon. Industry watchdog TV Watch countered by citing studies of its own which show that parents do not want any facet of the government meddling in program content. "Activists in Washington who continue their push for increased government regulation of television content refuse to accept the advances in technology that allow parents to enforce the decisions they make about what their children should see on television. They don't want Americans to know that parents have the tools to make informed decisions - and to enforce those decisions - because it would make their approach obsolete," said TV Watch's Jim Dyke. He noted that there are six times more V-chip-equipped television sets - 180M - than there are households with children, which only number 30M. In addition to that, cable companies offer still more ways for parents to control what their children see on TV.

RBR observation: The FCC seemed to have its hands more than full defending its indecency policy v. Fox before the Second Circuit last month. Nobody knows how the judges are going to rule, but most of the unofficial scorecards we saw, including our own, gave Fox a clear victory. Until we find out what happened there, however, holding another content-regulation dance party on top of the First Amendment would seem to be a non-starter.

Ad Business Report TM

Google, CBS and Westwood: behind the curtain
Merrill Lynch broadcast analyst Jessica Reif Cohen and Bank of America's Jonathan Jacoby both noted a bit of surprise that CBS Radio and Google didn't unveil their much-talked about deal at CES, Cohen made a point about being upbeat that the CBS Radio deal would likely be wide-ranging and include both advertising and content components. She reiterated they are likely continuing to negotiate. Cohen estimated that a Google deal to sell 10% of CBS Radio's ad inventory would generate approximately 200 million in revenues and attract new, smaller advertisers.

RBR observation: Another possible reason there was nothing announced on this at CES could be because of ongoing issues we speculate may be going on between Westwood One and CBS Radio over an inventory deal with Google. Remember, Peter Kosann is the CEO of WW1, a public company, and also an employee of CBS Radio. The problem is if CBS Radio, WW1's management company, does a deal with Google, they may be creating a new competitor for WW1 in the marketplace which could put further downside value on its stock. Kosann and the board may be worried about shareholder lawsuits and liabilities. CBS Radio CFO Walter Berger sits on the WW1 board as a representative of Joel Hollander and Les Moonves and CBS owns 18.5% of WW1 common stock. So the answer may be a separate deal with WW1 and Google for inventory, a rumor that keeps coming back to us. Meanwhile, WW1 has a rep agreement with CBS Radio for national inventory until 3/31/09. Meanwhile, we've heard Clear Channel is still working a major deal with Google for inventory. Part of that deal might say Google can't recruit any CC sales folks. Note none of the Google Audio sales reps so far are from CC Radio, we've heard.

NAB and HD Alliance ads in 2007
Radio has promoted its benefits in two different campaigns so far this year. The NAB's "Radio, You Shouldn't Have To Pay" PSA campaign kicked off 2007 with 6,001 radio spots in the markets tracked continuously by Media Monitors, between January 1-7. In fact, Media Monitors reports that the NAB would have ranked in the top ten of their "Spot Ten National" chart this week (http://mediamonitors.com/spotten.asp), had this not been a free campaign. The NAB's campaign ran more spots than the 5,700 spots run by Hallmark (#9 on the chart) and just less than the nearly 6,050 spots aired by RadioShack (#8) in the past week. The tag line on many of the NAB PSA's is "brought to you by 13,000 local radio stations who believe some things were meant to be free," although some stations customize the spot to include their own branding information. The HD Radio Alliance and their paid spots were targeted to holiday shoppers, appearing 6,400 times during the week leading up to Christmas (December 18-24, 2007).

Media Business Report TM

Airport security
becomes ad vehicle
Forbes reports the Transportation Security Administration is selling ads at the bottom of security bins (used to hold laptops, shoes and keys). In return, the companies buy the bins, sorting tables and carts used to move the baggage through the line. So far the ads are only in four airports, but TSA plans to expand the program. The venture is from SecurityPoint Media, which sells bins emblazoned with Rolodex ads. The small company first contacted the TSA in 2002, with a plan to equip security checkpoints with advertiser-labeled gear. Last year, TSA approved the first pilot program in three Tennessee airports. LAX, the Los Angeles International airport, joined in July. So far Rolodex, which targets many of its products at business travelers, is the only advertiser participating in the program, said Forbes. However, each airport can cut its own contract with any advertiser it chooses. Chicago airports plan to submit a proposal to the TSA asking to cut an additional contract covering bins with Clear Channel, their out of home ad provider. O'Hare and at Midway would get 60% of the ad revenues from the bins, while LAX opted to put some of their own ads in the bins instead, for cash, said the story.

Media Markets & Money TM

Wannabe buyers meet with Clear Channel
More than 120 people gathered yesterday at the National Association of Broadcasters (NAB) headquarters to learn how minority and women entrepreneurs can best position themselves to purchase some of the Clear Channel radio and television assets being offered for sale as the company trims its portfolio. The conference, presented by Minority Media & Telecommunications Council (MMTC), sponsored by Clear Channel and hosted by National Association of Broadcasters Education Foundation (NABEF) and NAB, aims to ensure that potential minority and women entrepreneurs have the information and resources necessary to become broadcasters. After hearing about the opportunities available, the potential buyers will get to meet with media brokers, engineers and communications attorneys and tomorrow the three-day conference will conclude with one-on-one meetings with equity firms and lenders. Clear Channel noted that it conducted a similar conference for minority buyers in 2000 when it divested 110 radio stations from the AMFM merger. Clear Channel sold 40 of those stations to minority-owned or controlled companies worth over 1.5 billion. According to MMTC, these sales alone boosted the asset value of minority-owned stations by 26%.

Close encounter in the Midwest
Wilks Broadcast Group has dotted all the t's and crossed all the i's, and is now the proud owner of KFKF-FM, KBEQ-FM, KMXV-FM & KCKC-FM in Kansas City and WLVQ-FM, WHOK-FM & WAZU-FM in Columbus OH. The two-market seven-FM package came from CBS Radio. According to broker Michael Bergner, the transaction weighed in at 138M. The two markets join Fresno, Reno and Lubbock in the Wilks radio portfolio.

Washington Media Business Report TM

FCC open meeting next week
The first open FCC meeting of 2007 will be held Wednesday, 1/17/07 at 9:30 AM. As per usual, there will not be any pressing business on the agenda. Rather, bureau chiefs and other executives within the agency will review their accomplishments during the preceding year and perhaps offer a sneak preview of their planned activities for the rest of 2007. The session will be divided into four panels. Of those execs of primary interest to broadcasters, the Enforcement Bureau chief will be part of Panel Two and the Media Bureau chief will be part of Panel Four.

RBR observation: Think someone will tell us who is going to get the first 325K indecency fine? Naaaaaaaaaaahhhhhhhh...

Entertainment Media Business Report TM

Piolín goes coast-to-coast
Univision Radio announced that its LA-based "Piolín por La Mañana" (Tweety Bird in the Morning), staring Eddie "Piolín" Sotelo is expanding its national syndication to eight more stations, including WZAA-FM New York and WPPN-FM Chicago, putting the show into all of the top three markets on Univision-owned stations. The other new stations are KLNV-FM San Diego, KCOR-AM San Antonio, KBNA-FM El Paso, KJFA-FM Albuquerque, KBGT-AM McAllen, TX, and a one-hour Saturday show on WRTO-FM Miami. In all, Piolín will now air in 24 markets. Univision Radio also announced that Luis Jimenez has been hired away from SBS, where he had the top-rated morning show in New York, and will debut soon in many of Univision's top markets, including Chicago, Dallas, Fresno, San Francisco/San Jose and Los Angeles, but not, for now anyway, New York.

Transactions

2M WKNA-FM Memphis TN (Senatobia MS) from Mid-South Public Communications Foundation (Michael LaBonia) to American Family Association (Donald E. Wildmon). 200K escrow, balance in cash at closing. Noncommercial facility. Seller retains WKNP-FM-TV & CP for Channel 56/DT 10 in Memphis. [File date 12/20/06.]

825K WKNQ-FM Jackson TN (Dyersburg TN) from Mid-South Public Communications Foundation (Michael LaBonia) to Educational Media Foundation (Richard Jenkins). 41,250 escrow, 258,750 cash at closing, 525K note. Noncommercial facility. Seller retains WKNP-FM Jackson TN. [File date 12/20/06.]

Stock Talk

Record high for the Dow
Wall Street decided it really does like lower oil prices after all. As oil prices continued to slide, the Dow Industrials moved up 73 points, or 0.6%, to a record closing highe of 12,515. The Nasdaq Composite hit a six-year high.

Radio stocks also gained. The Radio Index rose 1.435, or 0.9%, to 157.509. Arbitron shot up 5.5% as Bear Sterns analyst Alexia Quadrani upgraded the stock to outperform from peer perform on the first day that the ratings company activated PPM in Philadelphia. Salem rose 2.4%.

Radio Stocks

**Here's how stocks fared on Thursday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		46.85	+2.43	Journal Comm.	JRN		12.88	+0.26
Beasley	BBGI		9.21	-0.09	Lincoln Natl.	LNC		66.18	+0.58
CBS CI. B	CBS		31.20	+0.04	Radio One, Cl. A	ROIA		6.97	+0.07
CBS CI. A	CBSa		31.25	+0.10	Radio One, Cl. D	ROIAK		6.99	+0.08
Citadel	CDL		9.94	+0.21	Regent	RGCI		3.04	+0.16
Clear Channel	CCU		35.81	+0.11	Saga Commun.	SGA		10.06	-0.13
Cox Radio	CXR		15.71	+0.11	Salem Comm.	SALM		11.73	+0.27
Cumulus	CMLS		10.37	+0.12	Sirius Sat. Radio	SIRI		3.90	-0.08
Disney	DIS		34.99	+0.50	Spanish Bcg.	SBSA		4.23	+0.12
Emmis	EMMS		8.62	-0.15	SWMX	SMWX		1.85	-0.10
Entercom	ETM		27.64	+0.38	Univision	UVN		35.74	+0.07
Entravision	EVC		7.82	-0.02	Westwood One	WON		7.20	+0.02
Fisher	FSCI		43.16	+0.86	XM Sat. Radio	XMSR		16.38	-0.27
Hearst-Argyle	HTV		26.05	+0.03	-	-	-	-	-

Bounceback

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Below the Fold

Ad Business Report
Google, CBS & Westwood
Behind the curtain as surprise that nothing has been announced...

Media Business Report
Airport security becomes
Ad vehicle as TSA is selling ads at the bottom of security bins used to hold laptops, shoes and keys...

Media Markets & Money
Wannabe buyers meet
With Clear Channel as more than 120 gathered at the (NAB) HQ to learn how minority & women entrepreneurs can become owners...

Washington Media Business Report
FCC open meeting next week
As per usual, there will not be any pressing business...

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Radio Media Moves

From
politics
to radio
Former Massachusetts House Speaker Thomas Finneran is embarking on a new career in radio, launching in morning drive next month on Entercom's WRKO-AM Boston in the slot (6-10 am) currently occupied by "The Scott Allen Miller Show." Finneran has previously been a substitute host on various talk shows in the Boston area, but this will be his first full-time gig. "When WRKO approached me with this idea more than six months ago, I was immediately intrigued with the possibility," said Finneran. "Tom Finneran has his finger on the pulse of this region. We are confident that he will have a significant impact on WRKO," said Entercom New England VP & Market Manager Julie Kahn.

'GUS gets Zach
Beasley Broadcast Group announced that Zach Taylor has been promoted to Program Director of Augusta's all new 102.7 WGUS-FM, "The Southern Gospel Station." The move comes with the format flip of the former "Oldies 102.7" WGOR-FM. WGUS-AM 1480 will continue to carry the southern gospel format in a simulcast. Taylor was previously Music Director and Assistant PD for Country WKXC-FM in the Beasley August cluster.

Simpson returns
Greater Media announced that veteran personality Bill Simpson is returning to daily duty as 7-midnight host on Smooth Jazz WJJZ-FM Philadelphia. Simpson hasn't been off the air completely in recent years. He owns the Holistic Hands Wellness Center and hosts "Pathways to Health" which airs Sunday mornings on WJJZ.

More News Headlines

Cash wars
precede primaries
The first presidential election in recent memory without an incumbent president or VP has led to crowded early fields in both parties. It is expected that the 2008 election battle will lead to an even bigger campaign purse. But some announced or prospective candidates may be sent to the sidelines early if they can't amass the cash to compete. According to the Reuters, experts are looking for top candidates to pick up 100M toward a run this year, well in advance the first vote, and eventually eclipse the totals raised by George W. Bush (292M) and John Kerry (254M) for the 2004 campaign. Interested parties can no longer give as much as they want to a candidate, but the individual caps will increase to 2.2K-2.3K for the next election cycle, and the collection of smaller donations via the Internet is now a well-blazed trail of which many will take advantage. Still, failure to be competitive when the voting is done with dollars promises to knock many candidates out of contention. One, Sen. Evan Bayh (D-IN), has already dropped out, citing the daunting fundraising gauntlet as a primary reason.

RBR Radar 2006

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

What is wrong with NYC?
You've no doubt heard that New York radio stations have been hard hit by a revenue decline blamed in part on major advertisers experimenting with new media alternatives. But there are also listening changes in play. Analysis of Arbitron Fall 2006 data for New York finds bad news for most, but not all of the publicly traded radio companies, with 12+ listening down 4% from a year earlier. CBS dropped the most, 19%, but much of that is still being attributed to the loss of Howard Stern.
01/11/07 RBR #7

Gannett, McClatchy, Tribune
team for web ads
Newspaper publishers Gannett, McClatchy and Tribune will soon jointly sell display ads on their websites as a network targeting national advertisers with easier buying. The companies will likely to contribute 10% of their online ad space for the venture.

RBR observation: These newspaper giants know they have to do something or it is DOA. The web is great only if you learn how to use it, program it, and then it goes to work for you.
01/11/07 RBR #7

The worst is behind us
Fiscal Q3 radio revenues plunged 9.2% at Emmis (down 9.7% pro forma), with its US stations down 11.5%. CEO Jeff Smulyan told analysts the shortfall was all due to New York and LA, with other markets up. Also, Smulyan on Google and hedge funds "We're not willing to liquidate this company for the benefit of anybody's hedge fund," said Emmis CEO Jeff Smulyan in a rebuff to Frank Martin of Martin Capital Management. Martin is the shareholder who is trying to pressure Smulyan to give up his super voting rights (1/9/06 RBR #5), something the CEO says he will not do. As for Google you need to read RBR.
01/10/07 RBR #6

Hard finding that key person
to fill the important position at your organization? Media HeadHunters is the place that key media firms use to get results. See Media HeadHunters and get results with service--Period.

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