RBR's Daily Morning Epaper

Volume 22, Issue 87, Jim Carnegie, Editor & Publisher

Tuesday Morning May 3rd, 2005

Radio News®

Beasley sees high multiples for Susquehanna stations
The radio properties that Susquehanna Media has put on the auction block are attractive, to be sure. But it doesn't look like George Beasley will be in the final round of bidding for them. Asked about the move by Susquehanna's founding family to cash out, Beasley said it now appears that there will be a lot more merger and acquisition activity in radio in 2005 than in recent years. But he indicated that the projected multiples for Susquehanna's big market stations (presumably San Francisco, Dallas-Ft. Worth, Houston and Atlanta) will be sky high - - making it unlikely that publicly traded companies like Beasley Broadcast Group will be able to justify paying the price. Rather than public buyers, he sees companies with private equity backing emerging as the winning bidders. As for the medium market properties (Cincinnati, Kansas City and Indianapolis), Beasley said even there he's expecting the stations to bring cash flow multiples of 15-18 times.

Here's George Beasley's response to a question about Susquehanna from Wachovia Securities analyst Jim Boyle.

RBR observation: Beasley has not a single market in common with Susquehanna, so he wouldn't have an opportunity to fill out an existing cluster. Some other public groups do have holes to fill in those big markets - - notably Infinity, which is likely to be an aggressive bidder in Atlanta and Houston, even in the face of huge multiples. We also wouldn't rule out a public company still emerging as the winning bidder for the whole package, since a stock-swap deal with a public company can reduce the tax consequences for the Susquehanna folks. We've previously noted that both Cox Radio and Entercom would have relatively few spin-offs to worry about from such a deal.

MMTC homes in on Auction No. 62
You might say that the Minority Media & Telecommunications Council was less than thrilled with Auction No. 37 results. It noted that minorities did not do as well as hoped during that auction. Further noting that the top three winners were experienced broadcast executives who nonetheless qualified for bidding credits, it wrote, "Congress did not intend to deprive the US Treasury of revenue in order to make these gentlemen rich(er). Instead, Congress expressly sought...to promote broadcast ownership by 'businesses owned by members of minority groups and women.'" It hopes to remedy this situation in time for FM Auction No. 62, and has offered a nine-point plan to encourage better minority/female success. MMTC suggests things like maximizing the use of race-based criteria within that allowable by law, look for and eliminate unintentional barriers to minority participation, tighten the eligibility requirements for bidding credits, aggressive minority outreach by the FCC, and others.

1. Sleep 2. Work 3. Watch TV
Americans sleep, on average, 8.6 hours a day. After that, the most time-consuming activity is work, at 7.6 hours on average. Then comes TV, which receives an average of over two and a half hours of time consumed, commanding third place in an average day, and over half of the 5.1 hours the average person devotes to sports/leisure activities. The numbers, based on some 21K interviews conducted in 2003, come from the American Time Use Survey, conducted by the Census Bureau at the behest of the Bureau of Labor Statistics. The TV numbers held regardless of the sex of the respondent. Age, however, is a factor. Watching TV and reading time increase with age, replacing socializing and participation in sports that take a greater share of time in the younger demos.

RBR observation: Unfortunately, time spent with TV can only increase so much, while the number of channels competing for that time has been increasing exponentially since the time since this late Boomer was a child with three networks, two indies and one PBS station in the town. Radio has one great advantage - - it isn't turned on in most homes as much as TV, but it is on much more often at work, and it travels everywhere - - and does its best work during that very transit.

Watchdog confab in the offing
The National Conference for Media Reform is set to sit in St. Louis in a less than two weeks - - it's set for run from 5/13/05 through 5/15/05. Democratic FCC Commissioners Michael Copps and Jonathan Adelstein are signed on for the event, which will also have Rep Diane Watson (D-CA), David Brock (Media Matters for America), Al Franken (Air America), frequent Washington testifier Mark Cooper (Consumer Federation of America), equally frequent Washington testifier Gene Kimmelman (Consumers Union), ex-FCC Commissioner Gloria Tristani and many other members in good standing of the watchdog kennel. A highlight will surely be unveiling of the first inductee into the Big Media Hall of Shame. Contenders are Sinclair's David Smith, Fox/News Corp. honcho Rupert Murdoch, Clear Channel's Lowry Mays, ex-FCC chair Michael Powell and Pennsylvania Gov. Ed Rendell.

Time Warner employee data missing
If you're a current or former employee of Time Warner and its various media divisions, someone out there has your payroll and personal information. According to the company, a container of its computer back-up tapes was lost by an outside data storage firm during shipment to one of that firm's storage facilities. The missing tapes contained data from Time Warner, including personal information on current and former employees. The tapes did not include personal data on Time Warner customers, it said. The US Secret Service is now involved in an active investigation of the tape disappearance. "To date, the investigation has not found any evidence that the tapes or their contents have been accessed or misused," Time Warner said. "We take the security of our employees' personal information extremely seriously and we deeply regret that this incident occurred. While we have no evidence to suggest the information on the tapes has been accessed or misused, we are providing current and former employees with resources to monitor their credit reports while our investigation continues. We are working closely and aggressively with law enforcement and the outside data storage firm to get to the bottom of this matter," said Larry Cockell, Time Warner's Senior Vice President and Chief Security Officer.

First winners announced for
NPR burger bucks fellowships
NPR has chosen the first three recipients of its new Kroc Fellowship Program, a year-long intensive training program designed to attract "the best of the best" to the public radio news system, according to Kevin Klose, President and CEO of NPR. The Fellowship Program is one of the initiatives made possible by a 2003 bequest of more than 200 million to NPR from Joan Kroc, pictured, widow of McDonald's Corporation founder Ray Kroc, and focused on strengthening the NPR News Division. The first three winners are Douglas Hopper of Indianapolis, Maria Ma of New York City and Roseanne Pereira of Ft. Lauderdale, FL. The three winners will rotate through various units at NPR in the News and Online Divisions, working with experienced producers, editors and reporters. Additionally, each will have a two-month assignment at an NPR Member station. Upon completion of the Fellowship, NPR will help the participants pursue career opportunities at either NPR or one of its hundreds of Member stations.
| Read more about the three recipients |

Conference Calls Q1 2005

Q1 was huge for Beasley
Beasley Broadcast Group blew away its own upbeat guidance as Q1 came in far better than anyone had expected. Net revenues shot up 10% to 28.6 million. In the company's quarterly conference call, CFO Caroline Beasley said about half of that gain came in one market - - Philadelphia, were revenues were up 43%. Also strong were Las Vegas and Ft. Myers, FL. While revenues were up, station operating income (SOI) was dwon 7% to 6.6 million. However, 1.4 million of the operating expense increase was a one-time charge for a management shake-up in Philly, when former market manager Dave Donahue was replaced by Lynn Broder at WRDU-FM and Natalie Conner at WXTU-FM (3/9/05 RBR #48). Absent that special charge, Caroline Beasley said SOI would have been up 13%. Co-COO Bruce Beasley said hot categories for the quarter included auto, retail, TV & movies and health & education. On a month-by-month basis, Caroline Beasley said January was up 8%, February slacked off a bit to a 3% gain and March surged 17% to bring the quarter in at plus 10%. April was "a little below March," she said, around 6%. For Q2, Beasley is now projecting that revenues will be up 5%, with a big chunk of that growth coming at its Philadelphia stations.

Adbiz©

KFI-AM LA responds
with its own billboards
After receiving thousands of angry listener letters and E-mails - KFI AM LA responded to Liberman's Spanish language station, KRCA-TV'S (Ch. 62, Ind.) controversial billboard campaign (5/2/05 TVBR #86). Neil Saavedra, KFI marketing man, tells RBR/TVBR they have billboards placed in the San Fernando Valley in LA and on the other side of the Hollywood Hills closer to downtown, often near the TV 62 billboards. They also did live cut-ins from reporters placed near the billboards, where legal immigrant groups are present, showing their support for the KFI campaign. "We got a huge number of responses. Our listeners spoke. We heard and we responded."

E-Loan launches branding campaign
E-Loan announced the launch of its new advertising and branding campaign, and unveiled the company's new tag, "E-Loan. Radically Simple." The campaign, via Merkley + Partners NY, was inspired by E-Loan's pro-consumer values and the revolutionary ways in which the company continues to improve the consumer lending experience. The integrated effort is designed to strike a chord with consumers who are fed up with the lending industry's confusing and misleading sales tactics. The Radically Simple campaign will appear on local and national cable television, radio, online, and outdoor billboards, and at select music and community events. The spots portray individuals in everyday situations who are frustrated by the failure of traditional lenders to provide simple, open, honest and value- oriented loans and services. By using words like "honesty," "fairness" and "respect," the ads make the case that lenders have lost sight of consumers. One spot opens on an individual holding a placard with the words "Honk. If you don't like getting ripped off." while another focuses on a sign hanging from a half-finished construction project that says, "Clap. If you deserve respect."

Subway taps teen promotions agency
In an effort to expand its brand, Subway has hired Alloy Marketing and Promotions (AMP) to execute a promotional campaign targeting Teens. "Noting the rising, influential purchasing power of Teens in the United States, we understand how an increase in Teen-traffic could positively benefit our brand," said Chris Carroll, SVP/Marketing the Subway Franchisee Advertising Fund Trust "We evaluated several promotion agencies and chose AMP not only because they have a proven expertise in marketing to Teens, but they can communicate to them in an authentic voice that really resonates." Through its parent company, Alloy Media + Marketing, AMP taps into a database of over 27 million youth consumers and proprietary media vehicles that include leading Teen websites and catalogs; Alloy, Delias and CCS, in-school media in over 8,000 schools nationwide, a national school newspaper network and direct email programs.

Lachlan Murdoch named Media Person of the Year
News Corp Deputy COO Lachlan Murdoch has been named Media Person of the Year by the Cannes International Advertising Festival. Cannes Festival CEO Terry Savage noted Murdoch's roles in overseeing publisher HarperCollins, News America Marketing, and chairmanship of News Limited, publisher of The Australian. Savage also highlighted Murdoch's stewardship of The NY Post as its publisher. "During his tenure, daily circulation [of The Post] has increased by over 40 per cent and the paper has become the seventh largest in the United States," Savage said. Murdoch was cited for being an example of the new generation of media entrepreneurs with vision, drive and commitment. Previous honorees include Viacom founder Sumner Redstone, AOL Time Warner CEO Gerald Levin and Italian media magnate and Prime Minister Silvio Berlusconi.

Radio & Television Business Report Magazine

June Magazine
'05 Clock is Ticking -
Heading for Closure

National Sales:
EDI - Electronic Delivered Invoicing
Special Analysis:
Public now Go Private
Media, Markets & Money:
Shakers & Makers in the
Public Market

Reserve your Ad Marketing Space today. Advertising space is limited, contact:
June Barnes jbarnes@rbr.com ----- or ----- Jim Carnegie jcarnegie@rbr.com

Media Markets & MoneyTM

The good, the Babb and the ugly?
Davidson Media Group has not let any bluegrass, or any other kind of grass, grow under its feet in Nashville before doubling AMs there. It is contracting to acquire WMDB from Babb Broadcasting, right on the heels of its deal to buy WNSG from Mortenson (4/21/05 RBR #79). Babb will get 1.6M for its 880 kHz AM, according to broker John Pierce, who handled both this and the Mortenson deal. The earlier deal went for 2.7M, bringing Davidson's total investment in the market up to 4.3M.

Norsan getting to know Monroe
Terry Greenwood of TAG Media Consulting tells us that he and broker Stan Raymond have engineered a deal which will send a Monroe NC AM station from Geddings & Phillips Broadcasting to Norsan Consulting and Management. Norberto Sanchez, who is Chairman/CEO of the buyer, will spend 1.15M for the station. Monroe is just southeast of Charlotte, not far from the South Carolina border.

Washington Beat

PA paper takes FCC to task over VNRs
The Williamsport Sun-Gazette says the FCC overstepped its bounds in requiring that news organizations identify the source of VNRs aired during broadcast news programming. It says the FCC's jurisdiction is "tenuous at best," likening it to the Department of Transportation regulating newspaper stories because the papers are delivered via roads. "But more worrisome than technical legalities," the editorial continues, "is the ease with which the FCC cast aside First Amendment freedom of the press, in favor of political expediency in the midst of an only-in-the-Beltway controversy involving 'video news releases' provided to broadcast stations by third party sources, including government agencies." The paper observes that "News organizations that rely too heavily on canned information provided by public relations offices soon enough pay a market price in lost audiences."

RBR observation: We agree with that last point (at least we hope that it's true), but think the Sun-Gazette has missed something here. As we understand the law in place right now, commercial speech is not as free as that of an independent citizen's speech, and that same citizen has a right to know where material designed to influence opinion is coming from, whether it's to buy a given product or support a government program or political position. You can argue about the propriety of the FCC's involvement, but if you think it shouldn't be involved, you'd have to change the law - - as we understand it, the FCC does have a role in this issue.

Programming

Sirius gets its podcast on
We told you so (4/28 RBR #84) - - "We assume XM and Sirius will copycat this move by traditional radio as well." And Sirius already has, to a degree - - Infinity's podcast station (KYCY-AM San Francisco - - KYOU Radio). Sirius is launching a show later this month that will feature a daily selection of the increasingly popular do-it-yourself audio programs. The four hour weekday program, Adam Curry's PodShow, debuts on 5/13. Curry is the former MTV personality who helped create the technological tools that allow podcasting to work. Programming will feature highlights and insights from the world of podcasting and will introduce listeners to a completely new range of talent and artists from around the world, including the best new, undiscovered music. The show will be broadcast on channel 148, a talk-radio station that does carry commercials, unlike Sirius' all-music channels.

Ratings & Research

Project Apollo a go for end of year
Arbitron and VNU announced that they have agreed to deploy a demonstration of the "Project Apollo" national marketing research service by the end of this year. The pilot project, using Arbitron's Portable People Meter, will include more than 6,000 households nationwide. "This agreement reflects the continuing progress that our two companies have been making since October 2004 toward developing and deploying an innovative national marketing research service based on a portfolio of technologies and other resources from multiple companies. We are looking to this pilot to demonstrate to advertisers the superior return on media investments that Project Apollo would make possible," said Susan Whiting, who is both President and CEO of Nielsen Media Research and Executive Vice President of VNU's Media Measurement & Information Group. "Beginning in January 2006, the Project Apollo pilot panel will provide advertisers what they have been asking our two companies for: a means to magnify the effectiveness of their marketing efforts as well as a way to quantify the improved return on investment that Project Apollo can make possible. Through the pilot panel, marketers will be able to see that the behavioral-based marketing targets Project Apollo can devise would be substantially different and yield better decisions than what they are using today," said Arbitron President and CEO Steve Morris.

RBR observation: Arbitron and VNU/Nielsen are emphasizing that the use of PPM for Project Apollo will be very different from any use of the technology for radio and/or TV ratings. Nevertheless, it is significant for broadcasters to see the companies working together. | Here's more on how the pilot project will work. |

Transactions

900K KHLP-AM Omaha NE-Council Bluff IA (Omaha NE) from Journal Broadcast Corporation (Douglas G. Keil et al) to Pennsylvania Media Associates Inc., a subsidiary of Salem Comunications Corp. (Stuart W. Epperson, Edward G. Atsinger III). Cash. Duopoly with KGBI-FM, KCRO-AM. [File date 4/6/05.]

10K WLOG-FM Markleysburg PA from Lighthouse Christian Academy (John A. Kelly) to Edgewater Broadcasting Inc. (Clark Parrish, Diana Atkin, Earl Williamson). 1K advance, balance in cash at closing. Station is non-commercial. It is currently silent on an STA that expires 4/31/05. [File date 4/5/05.]

Stock Talk

A day of caution
Traders are waiting to see what the Fed has to say today, along with another expected quarter-point rate hike, so they were cautious about making commitments yesterday. The Dow Industrials rose 59 points, or 0.6%, to 10,251.

The Radio Index got a boost from Beasley's strong Q1 results. Our index gained 3.301, or 1.6%, to 204.241. Beasley shot up 8.4%, but Regent was up the same amount, 8.4%, on analyst's upgrade.

Radio Stocks

**Here's how stocks fared on Monday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		42.80	+0.48	Jeff-Pilot	JP		50.14	-0.07
Beasley	BBGI		17.09	+1.33	Journal Comm.	JRN		15.40	unch
Citadel	CDL		12.55	-0.02	Radio One, Cl. A	ROIA		13.03	+0.01
Clear Channel	CCU		31.55	-0.39	Radio One, Cl. D	ROIAK		13.09	+0.02
Cox Radio	CXR		15.80	+0.08	Regent	RGCI		5.77	+0.45
Cumulus	CMLS		13.26	+0.28	Saga Commun.	SGA		14.50	-0.21
Disney	DIS		26.33	-0.07	Salem Comm.	SALM		19.95	+0.73
Emmis	EMMS		15.74	+0.31	Sirius Sat. Radio	SIRI		4.99	+0.23
Entercom	ETM		31.87	-0.36	Spanish Bcg.	SBSA		8.45	+0.10
Entravision	EVC		7.85	-0.02	Univision	UVN		26.61	+0.32
Fisher	FSCI		48.00	-0.04	Viacom, Cl. A	VIA		35.15	+0.37
Gaylord	GET		40.99	+0.99	Viacom, Cl. B	VIAb		34.95	+0.33
Hearst-Argyle	HTV		25.03	-0.07	Westwood One	WON		18.49	+0.19
Interep	IREP		0.56	-0.02	XM Sat. Radio	XMSR		27.65	-0.09
International Bcg.	IBCS		0.01	unch	-	-	-	-	-

Bounceback

Send Us Your Opinions We want to
hear from you.
This is your column, so send your comments to radionews@rbr.com

Rich Russo tells it like it is.
(4/5/05 RBR #67)

People don't like to go through the whole process of making choices. They want to do it once (or at least very infrequently) and be done with it. Jack programmers should keep in mind that listeners tune in an average of 3 radio stations per week (gross cume divided by population). They make those choices from maybe 100 radio stations available to them. Then the listener depends on the station to make the song selections from that point forward. If the program director is not doing his/her work and just letting every type of music be played, the listener will eventually discern that and go to another station. I suspect the same thing will eventually occur with people who own iPods. They will eventually get bored of the shuffle and select certain songs to be played. But eventually they will grow bored of those songs, find that it's tedious to select a new group of songs, and either:

1. Turn to regular radio where the program director is doing his/her job, or
2. Select some sort of mix offered by iPod that's periodically updated.

Problem with the latter option is that no one knows when the iPod listener will want to "flip" channels - and he/she will have to go through the whole "choices" process again. Plus, I believe people listen to music stations for more than the music. It's the personalities, current events, advertised sales and services and local information that glues a listener to a station. I don't think iPod can do that.

Mike Levine
Director Affiliate Relations
Matrix Media Inc Radio Networks
Chicago, IL

Arbitrends

Upped & Tapped

Triad ups Leonard
Interim manager Robert Leonard has been named Market Manager of Triad Broadcasting's seven-station cluster in Savannah, GA and Hilton Head, SC.

Dial-Global ups Steinhauer
Dial Communications-Global Media has promoted Vice President, Research/Operations Charles Steinhauer, to the position SVP/Research/Operations, effective immediately. In his new position Steinhauer will continue to be responsible for all research data and initiatives, RADAR compliance and verification, affidavit systems and new technology implementation.

TVBR - TV News

Moonves wants retransmission cash
Little noticed in the quarterly conference call by Viacom was a declaration by Co-COO/President Les Moonves that the coming split into two companies will change the ballgame for retransmission consent. Since his company will no longer have MTV Networks' expansion needs as a bargaining consideration for negotiations with the cable MSOs, he expects to get something else - - cash payments. No longer will it be Perry Sook at Nexstar standing alone in smaller markets to do battle with the MSOs - - CBS will be demanding payment in the nation's largest markets. "As we go forward, post split, we think in the next three to five years it could be worth tens of mission of dollars for the CBS network," Moonves said of the potential retransmission payments. He noted that Viacom recently completed an all-encompassing retransmission deal with Comcast where a portion of the cash compensation was allocated to CBS (apparently the folks at Viacom were already preparing to split the company). Asked by an analyst whether the CBS O&Os would turn over some advertising inventory to the cable systems under a paid retransmission system, Moonves said he has no plans to do so.

TVBR observation: This could make CBS the 800-pound gorilla that forces the MSOs to come to the negotiating table and finally agree to pay for the most popular programming that they sell to their subscribers - - broadcast network television. It's one thing for Cox Communications and Cable One to lose subscribers in the Joplin, MO, Shreveport, LA, San Angelo and Abilene, TX markets and hope they'll be able to outlast Perry Sook. It will be quite another thing for cable systems to have the channels occupied by CBS and UPN O&Os (plus Viacom's independent giant KCAL-TV Los Angeles) go dark in the nation's largest and most lucrative markets.

RBR Radar 2005

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

Publishers Perspective
Network TV's Big Problem:
No Passion
Ever wonder why the network programming gurus dump programming as well as your affiliate compensation? No passion or respect for programming content, or a commitment to find that right time slot. NBC is most likely will pull the plug on a great TV program entitled 'American Dreams' which is one of the few programstoday that is meant for a cross platform for CHR and Oldies radio. NBC you missed the boat. Now, ABC you have an opportunity staring you in the face if you have the passion and commitment to re-build your TV network and local radio can be your White Knight.
Two quick reasons to have AD:
If you were a teenager in the early '60s, you looked forward to watching American Bandstand. If you are too young to remember the '60s, but are curious about the styles and the conflicts, the "transistor radios" that everyone carried around, the round-screen black and white TVs, all those are very authentic in this TV series. It's a time machine. It's a great show. ABC Pick it Up - - Build from it - - because it is all American.
05/02/05 RBR #86

Wall Street welcomes
Clear Channel breakup
After the initial excitement over the moves we reported in a special bulletin, the stock eased back and ended the day down slightly. The only big damper on the excitement was a warning by Moody's Investors Service that it may downgrade Clear Channel's band ratings because of the restructuring. Since the rating is now the lowest level investment grade, any downgrade would move Clear Channel's 7.5 billion in debt to junk bond status. TVBR observation: What went wrong? In the first place, Clear Channel overpaid for SFX Entertainment. It wasn't worth 4.4 billion in 2000, as quite a few people outside San Antonio said when the blockbuster transaction was announced. Oh well, not the first time that Bob Sillerman got the better of someone at the negotiating table. Here's what Moody's had to say. 05/02/05 RBR #86

CCU's Less is More taking its toll
The final result was even worse. Radio revenues came in 7% below Q1 of 2004 at 773.6 million. LIM that focuses on convincing advertisers to use :30s and :15s instead of the traditional 60-second spots is also taking hold. Asked for specific categories, the use of :30s is widespread, named automotive and telecommunications in particular. Noted that Verizon recently began running its first-ever :30s. Big box retailer Home Depot is also using :30s. RBR observation: While CC Radio is still facing a negative number for Q2 anyway you look at it, the gap is narrowing a bit from Q1. What analysts wanted to know was where is the end of the tunnel? 05/02/05 RBR #86

Mel the salesman raises
the bar at Sirius
Projecting that Sirius will add 1.6 million subscribers this year, total to 2.7 million. Zen Master expects not just to make Sirius profitable, but to make it a very profitable. Research by Sirius, the biggest impediment is not the monthly subscription cost, but the cost of receivers. So, Sirius is launching a new 50-buck rebate program. RBR observation: Mel is a great salesman and it's always fun to hear him make his pitch, even if we remain skeptical of the long-term viability of the satellite pay radio business. It was interesting to note that Sirius has found that its ad-supported talk and sports programming (plus Howard Stern on the horizon) is increasingly driving its subscriber growth. No wonder they brought in a new CEO who knows how to drive ad sales! Sirius is also reporting a lower churn rate than XM a monthly rate of 1.3% for Q1, which it claims is its lowest churn rate ever. 04/29/05 RBR #85

LSM-Suburban Chicago
NextMedia - Joliet, IL looking for a LSM who will keep the momentum going and build on it. Four station cluster has grown significantly if you can do the job, fit into a strong team come join us.

Details see Radio Careers

For Confidential Placement Contact: Cathy Carnegie, VP, cjcarnegie@mediaheadhunters.com

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