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Volume 23, Issue 9, Jim Carnegie, Editor & Publisher

Friday Morning January 13th, 2006

Radio News ®

Another month
of lower inventory
That's a good thing. Harris Nesbitt analyst Lee Westerfield reports that December radio spotloads in the top 10 markets were down 7.7% from a year earlier, keeping upward pressure on rates. December is an important month to look at because Clear Channel's Less is More (LIM) initiative began on December 15, 2004. For all of December 2005, Westerfield found that spotloads on CCU stations were down 19.3%. "In the first half of the month, CCU time was down 23%, inline with recent results. However, in the second half of the month, following the anniversary, time was still down 15%," he noted. Because CCU is still cutting inventories as LIM laps itself, Westerfield says he may have to reduce his Q1 revenue estimates for the radio giant - - so he's going to be looking closely at January data to see if the trend is continuing. The analyst notes that it may have taken a while for LIM to kick in completely. He looked to Philadelphia, where CCU first tested LIM and the ramp-down was complete by mid-December 2004. In Philly the year-over-year inventory decline was 14.1% in the first half of the month and 4.4% in the second. Westerfield also tracks the use of :30 spots, which he sees as crucial for LIM to be a success. :30s represented 17% of December spots, down from 21% the previous month, but he says that's still strong. CCU is leading the way on :30s, but other operators, many of whom aren't pushing the idea, but merely accommodating the wishes of advertisers, are also seeing demand grow slowly for :30s.

NAB sees RIAA threat to HD Radio
NAB President & CEO David Rehr has written to Mitch Bainwol, Chairman & CEO of the Recording Industry Association of America (RIAA), seeking cooperation on a way to address RIAA's concerns about content and copyright protection - - without scrapping everything that's been done to date to roll out HD Radio. Rehr complains that some of the proposals put forth by RIAA would simply be unacceptable to broadcasters. "For instance, RIAA has previously suggested broadly empowering the FCC to mandate that all radio broadcasters encrypt their digital content at the source. This approach is antithetical to the concept of free, over-the-air broadcasting. No US free, over-the-air broadcast service, analog or digital, has ever been required to encrypt its transmissions," the letter said. Rehr said mandatory encryption would likely render obsolete all HD Radio receivers already on the market and set back broadcasters who are broadcasting in HD or preparing to do so. But while NAB is strongly opposed to RIAA's encryption proposal, Rehr said there appear to be other possibilities for a technological fix that would satisfy RIAA's copyright concerns. He's asking that RIAA meet with members of the NAB's Audio Broadcast Flag Taskforce to try to work things out.

Auction No. 62: 6.7M and counting...
So far, 496 bids have been submitted and a just shy of a virtual 6.7M has been committed to the 171 FM CPs up for auction at the FCC. 156 of the permits are in the hands of provisional winners, while 15 are still nominally being held by the Commission. Due to bidding credits held by a number of contestants, the actual hard cash on the table is just shy of 5.6M. The top bids so far have been credited to CPs for Indian Wells CA and Satellite Beach FL, both in at 360K (and both, with credits, worth 234K net). Indian Wells Broadcasting has the inside track on the CA permit, with James B. Benns on top in Florida. The FCC had planned to conduct two rounds of bidding yesterday, but cut off after one, due to technical problems.

DeLay delays attack of the watchdogs
Houston television stations either declined to run watchdog ads attacking Rep. Tom DeLay (R-TX), or tabled them for further consideration, following complaints from the embattled rep's own representatives. However, despite a statement from at least one station, there has been no threat of legal action should the ads be run as requested. The ads are from the Campaign for America's Future and Public Campaign Action Fund, which had plans to spend a quick 115K on ads targeting both DeLay and Ohio rep Bob Ney (R-OH) - - the Ohio campaign is using radio and at least one billboard. A DeLay attorney sent a letter to the stations calling the commercials "...reckless, malicious and false, casting Mr. DeLay in a false light by accusing him of unsubstantiated criminal conduct. Such accusations are actionable." The letter also said, "We demand that you refuse or otherwise cease airing the advertisement, so as to avoid any liability..." David Donnelly of Public Campaign Action Fund countered, "When powerful lawmakers corrupt the political process and get caught, they often try to bully the media to try to prevent them from doing their job. We can't let him win."

RBR observation: Aren't political ads fun? The business of broadcasters is to sell things like toothpaste, which presumably is used by folks from one end of the political spectrum to the other. Controversy of the sort that may split an audience in half is not part of a standard business model. Nor should it be a station's job to routinely verify the content of an ad such this - - which was already sourced to the Associated Press and the Washington Post. When stations start making political ad choices in their role as gatekeeper, they run a real risk of bias or the appearance of bias. If the ads are turned down altogether, there are other risks - - politicians in particular don't like to be turned down for air time, and they are in a position to do something about it. All in all, we think it is better to run everything which is not clearly false or actionably indecent.

...and there's even more DeLay stuff
Tom DeLay's seat in Congress is in the sights of a former Democratic US Representative - - Nick Lampson, one of the ones who lost a seat after the controversial mid-decade Texas redistricting went into effect. In fact, it was part of the effort to do just that that earned DeLay his Texas indictment. But before DeLay gets to that, he'll have to fend off three from his own party in the primaries, according to the Associated Press. One of them - - lawyer Tom Campbell - - has street credibility among local Republican, having worked for candidates and also having served in the administration of President Bush No. 41, where he lawyered for the National Oceanic and Atmospheric Administration. So far his campaign is self-funded and holding under 100K. DeLay's last report showed over 1M in the bank.

RBR observation: Although bruising primaries can be destructive to a candidate, they can also be a bracing preseason run which helps prep a candidate for the general election. However, DeLay certainly does not fall into the category of politician who needs to get a little extra experience. If Campbell can mount any challenge at all (far from a given), he could warm up lines of attack which may be useful to the eventual Democratic challenger. And he could force some early withdrawals from the DeLay warchest. All of which means more money in the bank for the local media community...

If you can't beat 'em, buy 'em
ErinMedia owner Frank Maggio says he's serious about trying to buy Nielsen Media Research if and when VNU is sold off in pieces - - not because he wants to own the ratings company as it stands, but because he wants to change its technology. He'd then switch TV ratings over to ErinMedia's new technology. But he thinks the diary operation at Nielsen might still have a use - - perhaps in radio, where ErinMedia already has a deal pending to acquire Navigauge (7/21/05 RBR #142). ErinMedia already has an antitrust suit pending against Nielsen (6/17/05 TVBR #119), claiming that Nielsen is using monopoly clout to block ErinMedia from launching a competing TV ratings company which would be based on data collected 24/7 from millions of cable TV set-top boxes. Now a second lawsuit has been filed charging Nielsen with false advertising for a trade magazine ad that reads "Thousands of shows...millions of different viewers...Nielsen counts them all." Maggio told RBR/TVBR that's not true, because Nielsen actually has fewer than 10,000 meters in its national sample. "They're saying they do what we can do - - and they can't do," he said. For its part, Nielsen isn't talking. "We have not received a copy of the complaint and at this point cannot comment," was the official company response. (FYI: It is posted on ErinMedia's website.) Maggio wouldn't have to worry about suing Nielsen if he owned Nielsen, so he's trying to raise four billion or so to bid for the ratings company and a couple of related operations if parent VNU is sold to buyout firm, which in turn wants to sell off the pieces. "The value that Nielsen has right now is they have attractive contracts - - essentially that's what the valuation model is built upon," Maggio said.

RBR observation: Even as folks in the radio industry are wringing their hands over whether or not to switch from diaries to Arbitron's Portable People Meters (PPM), we hear lots of TV managers and group heads pressing for Nielsen to get away from Local People Meters and adopt Arbitron's PPM technology ASAP. However, we've yet to hear anyone in the TV or ad business tout ErinMedia's technology as a viable replacement. What we've heard repeatedly is that it's interesting because of the sheer volume of data, but isn't a representative sample and doesn't provide demographic data. Maggio insists that he's already dealt with those issues and just needs to educate the industry. ErinMedia has patents pending for overlays to its set-top data which use reverse mathematics to make its results correspond to the entire TV viewing universe, since not everyone has a set-top digital cable box, with demographic data.

Ad Business Report TM

Lifetime fires back at EchoStar
Radio ads are running in five markets - - - - Houston, Albuquerque, Orlando, Raleigh-Durham, NC and Greenville, SC - - urging Dish Network subscribers to "Take back your Lifetime" and "Switch from Dish." The spots are being run by Lifetime Television, which remains at loggerheads with EchoStar, which removed Lifetime and Lifetime Movie Network from its Dish Network satellite service on New Year's Day (1/3/06 TVBR #1). In retaliation, Lifetime is trying to get its fans to switch to the other major satellite TV provider, DirecTV, or to a local cable system which is carrying Lifetime. In addition to partnering with DirecTV, Lifetime has teamed up with Comcast, Time Warner Cable, Charter, Bright House, USDTV and Verizon's FIOS-TV in various markets to promote the switch away from Dish. "We're still trying to reach a fair and reasonable agreement with Dish. But as long as Lifetime is kept off the air by Dish, we have no choice but to fight back and help women take back their Lifetime," said Betty Cohen, President and CEO of Lifetime Entertainment Services.

Hilton (not Paris) heads to TV
Hilton Hotels is returning to television with its first major campaign for its flagship brand in ten or so years. The animated "Travel should take you places" campaign launches 1/15 on primetime shows including "Desperate Housewives" and C.S.I. The Young & Rubicam-produced spots show simple line animation of individuals and couples enjoying life and feature music from young musicians such as Ben Folds Five. In the line-drawn scenes a businessman throws papers in the air to relax on a hammock, a parent builds a sand castle with a child and a couple watch a sunset. It is Y&R first effort for Hilton. The Hilton brand will double its marketing budget this year with the television, print and online, according to a Reuters story.

Advertising Hall of Fame adds four big names
The American Advertising Federation (AAF) announced the election of four advertising legends to the Advertising Hall of Fame:

-- Robert Johnson, founder, BET, for originating the nation's most recognized and successful African-American cable television company;
-- Donald Keough, retired president & COO, the Coca Cola Company, for shaping the advertising image of one of the world's most iconic companies during his extraordinary tenure at its helm;
-- Henry Luce, co-founder, TIME Magazine; founder of Fortune, Life and Sports Illustrated magazines (1898-1967), receiving the award posthumously for creating many of the country's most enduring and respected publishing titles;
-- Al Neuharth, founder, USA Today & the Freedom Forum; for conceiving of a nationwide newspaper and building the nation's preeminent institution celebrating free speech.

The recipients will be officially inducted into the prestigious Advertising Hall of Fame at an awards luncheon 3/4, at New York's Waldorf-Astoria hotel.

Imagine that! Beer ads in SI's swimsuit issue
Anheuser-Busch is planning seven pages of ads in Sports Illustrated's swimsuit issue and a promotion around the issue and around SI model Molly Sims. The swimsuit edition, due out 2/14, reaches more than 64 million U.S. adults/40 million males. A-B is hosting parties in 50 U.S. cities the day before the issue hits the stands and is sponsoring a contest.

Media Markets & Money TM

Close encounters in NY
Media Services Group broker Robert J. Maccini tells us that the 3.8M acquisition of WDOS-AM/WSRK-FM Oneonta NY by Terry Bond's Double O Radio has come to closure. The seller of the combo, which expands a Double 0 multi-station upstate daisy-chain, was Ultimate Broadcasting Network. Meanwhile, MSG's Bill Whitley also had a completed pass to report - - Lake County Radio's acquisition of KLVQ-AM Athens and KCKL-FM Malakoff, both in Texas, from Cedar Creek Radio Company and Love Radio Company. The price on that one was 550K. The two Texas towns are just west of the western, or Tyler side of the Tyler-Longview Arbitron market.

SBS delays TV closing
Spanish Broadcasting System has extended the deadline for closing the purchase of its first television property, WDLP-TV Key West-Miami (7/14/05 RBR #137), until February 28th. Under the amendment filed with the SEC, SBS is paying an additional 550K for two extensions - - 250K previously and 300K for this extension - - bringing the total price to 37.55 million.

RBR observation: Judging by the comments in SBS' recent conference calls, some of its investors would be most happy if this deal never went to closing at all. They want Raul Alarcon to stay focused on the business he already knows - - radio.

Washington Media Business Report TM

Found a job
Far from terminating her, California Gov. Arnold Schwarzenneger is hiring former FCC Commissioner Rachelle Chong. She will bring her telecommunications background to a new post on the California Public Utilities Commission. She had been operating her own mediation, arbitration and expert witness firm. She served as a Republican member of the FCC from 5/94 until 1/97.

Entertainment Media Business Report TM

Koppel adds radio, print gigs
It's been anything but retirement for Ted Koppel since leaving ABC News. Not only is he producing and hosting long-form shows for Discovery Channel (1/5/06 TVBR #3), he's now signed on as a senior news analyst with National Public Radio and a contributing columnist with the New York Times. NPR said Koppel will contribute analysis and commentary for such programs as "Morning Edition" and "All Things Considered" about 50 times a year. "I have been an unabashed fan of NPR for many years and have stolen untold excellent ideas from its programming. It's time to give something back," Koppel said. No precise schedule for Koppel's writing for the Times was announced. Rather, his column will appear "periodically." His first will appear in the Sunday, January 29th issue.

Radio One adds Black talker in Miami
Radio One, which got its start in radio with legendary Black Talker WOL-AM DC, is adding another in Miami on 50-KW WVCG-AM. WVCG is re-launching 1/30 as ''The People's Station,'' part of Radio One's black news and talk network that's debuting on 10 or so stations (11/1/05 RBR #214). The station will include local morning show, national talk shows through 7 p.m. and inspirational music at night. WVCG currently leases airtime to Spanish-language Christian programming.

Engineering Business Report TM

Delphi, Visteon:
HD Radio is coming in cars
Finally some promising news about OEM HD Radio deployment in cars-beyond the deal with BMW. We know the prototypes have been built, but now we're hearing a firmer timetable. Bill Burton, President/Detroit Radio Advertising Group met with Dr. Robert Schumacher, Delphi's General Director/Advanced Product Development and Business Strategy at the Detroit Auto Show Wednesday (this was press and industry insiders-only week) and got some encouraging news: "I posed the question to him, 'Are you doing anything with HD Radio?' He assured me they we're deeply involved with HD Radio and it's very much a factor. I asked him for more detail after the meeting and he told me the Japanese are the most aggressive about it, but it should be in most new Japanese and American models within a year-and-a-half to two years, closer to two years. Delphi has all the radios designed and can put them in new automobiles right now. HD Radio will be a part of your regular radio in your automobile whether you have XM or not. They're working right now on selling the various brands." Burton adds, "I was thinking about going to the big radio groups and asking them about putting a dollar incentive toward getting these radios in the cars, but that's not necessary now. When I spoke to Visteon, they had the same position - - ready to roll these out as the customer says they want it. And the customer is the automakers."

Transactions

151K WGZS-AM Dothan AL from Tropicana Media LLC (Carlos Pizano) to Victory Broadcasting Co. LLC (John Abbott). 5KO escrow, 146K note. LMA 12/15/05. [File date 12/20/05.]

N/A WPAW-FM Calhoun GA from Lifetalk Broadcasting Association (James Gilley) to Lifetalk Radio Inc. (Don Schneider). Donation. [File date 12/15/05.]

Stock Talk

Things go poorly for Coke
A downgrade of Coca-Cola by Goldman Sachs and of JPMorgan Chase by Piper Jaffray sent the Dow Industrials down 81 points, or 0.7%, to 10,962 - - and carried the rest of the market lower as well.

The Radio Index fell 0.632, or 0.4%, to 180.259. Hardest hit was Salem, down 3.2%. Emmis fell 3.1%. Sirius Satellite Radio rose 1.3% as CEO Mel Karmazin bought a million shares.

Radio Stocks

**Here's how stocks fared on Thursday**
Company	Symbol	Close		Change	Company	Symbol	Close		Change
Arbitron	ARB		39.26	+0.01	Hearst-Argyle	HTV		23.98	-0.02
Beasley	BBGI		13.73	+0.13	Interep	IREP		0.39	unch
CBS CI. B	CBS		25.99	-0.19	Jeff-Pilot	JP		58.47	+0.22
CBS CI. A	CBSa		26.03	-0.24	Journal Comm.	JRN		13.78	-0.21
Citadel	CDL		13.16	-0.02	Radio One, Cl. A	ROIA		10.27	-0.12
Clear Channel	CCU		31.73	+0.12	Radio One, Cl. D	ROIAK		10.36	+0.02
Cox Radio	CXR		13.93	-0.23	Regent	RGCI		4.70	+0.02
Cumulus	CMLS		13.51	+0.28	Saga Commun.	SGA		10.07	-0.11
Disney	DIS		25.64	+0.08	Salem Comm.	SALM		15.97	-0.52
Emmis	EMMS		17.91	-0.58	Sirius Sat. Radio	SIRI		6.20	+0.08
Entercom	ETM		30.25	-0.13	Spanish Bcg.	SBSA		5.40	+0.13
Entravision	EVC		7.06	-0.01	Univision	UVN		31.81	+0.48
Fisher	FSCI		42.10	unch	Westwood One	WON		16.03	-0.12
Gaylord	GET		43.16	-0.83	XM Sat. Radio	XMSR		28.99	-0.53

Bounceback

Send Us Your Opinions We want to
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a photo to [email protected]

Below the Fold

Washington Media Business Report
Ex-commish has a new role
Former FCC Commissioner Rachelle Chong goes to work for Gov. Schwarzenneger...

Media Markets & Money
Close encounters in NY
WDOS-AM/WSRK-FM Oneonta, NY closes...

Entertainment Media
Business Report
Koppel adds radio, print gigs
Ted Koppel signs with NPR and the New York Times...

Radio Media Moves

New boss in LA
Jeff Federman, who was already VP/GM of KCBS-FM (Jack-FM) and Director of Sales for the entire seven-station cluster, has now been named Market Manager for CBS Radio. He'll continue to helm Jack-FM as well, but the DOS job now goes to Dan Weiner, who'll continue as VP/GM of KTWV-FM.

Promotion in NYC
CBS Radio announced that Jennifer Donohue has been named VP/Director of Sales for the company's six-station radio cluster in New York. She will continue to also be General Sales Manager of WNEW-FM.

In from the outfield
The Chicago White Sox and WSCR-AM have announced that former White Sox outfielder Chris Singleton has been hired as color commentator for the club's radio broadcasts. Singleton will join All-Star pitcher and veteran radio broadcaster Ed Farmer, who signed a five-year extension in September. Farmer will assume the play-by-play duties.

Stations for Sale

Atlanta & Charlotte
New AM CPs Available
Daytimers/Great Dial Positions
Call Gordon Rice Associates
(843) 884-3590, or email
[email protected]

Northern NewEng
AM & FM stations. Separate
operations. Gross 450K+-.
Good upside. 850K.
[email protected] or
lv msg @ 781-848-4201

WOLF Call Letters For Sale
WWOF-AM/WWOF-FM
AM-$10,000 FM-$50,000
Both-$54,000
Contact [email protected]

Suburban NYC AM
Time Leased, profitable.
Comes w. 14 acre T/studio
site. 1.6M firm.
[email protected] or
lv msg @ 781-848-4201

Houston 50 kW AM
New transmitter site
& transmitting equipment
John W. Saunders
(713) 789-4222 or e-mail
[email protected]

More News Headlines

Fresno broadcaster dies
The Fresno Bee reports that former air personality Kevin Eddings, a/k/a Kevin Lynn, has died at age 57. He was morning DJ and PD for a decade at KLIP-AM Fresno, "Soul 1220," and was one of the first black personalities in the market to work at mainstream outlets, including KYNO-AM and KMAK-AM

RBR Radar 2005

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

IPG signs for PPM
The Interpublic Group (IPG), which represents more than 30% of all of radio's national spot dollars, has committed to using the ratings provided by the PPM to plan and buy radio once Arbitron deploys its electronic measurement service. However, this does not commit Arbitron to a specific timetable for PPM deployment. Jean Pool, EVP/Director of North American Operations, Universal McCann "Wonderful. It's simply better research. And God only knows we are so far behind Europe and much of the rest of the world in the research product that we value our inventory on."

RBR observation: This is a great vote of confidence from IPG. When more agencies make similar proclamations of intent-to-use, the case should become easier to make with broadcasters - - and Nielsen. Bottom line - - agencies want reliable data to make their clients the most ROI. PPM may not be proven as perfect yet, but it's much, much more accurate than diaries.
01/12/06 RBR #8

NBC looking to
lighten O&O portfolio
TVBR sources confirm that NBC Universal is shopping four of its smaller market O&O stations - - not so much for the 600 million or so that they're expected to bring, but so that NBC can look to buy and build NBC/Telemundo duopolies in growth markets with large Hispanic populations. Birmingham, AL, Columbus, OH, Providence, RI and Raleigh, NC don't fit that profile, so NBC is looking for buyers. UBS is said to be handling the sell-off. News of NBC's plans to sell the four stations

TVBR observation: If you are a buyer in TV, there are plenty of tires to kick on the lot. In the December 2005 issue of Radio & Television Report, we noted that 20 stations had been publicly been put on the auction block by Emmis, Raycom and Nexstar. Since then Raycom has announced one station sale, so these four from NBC put the count at 23. How many more are being shopped more quietly? Here's the NBC shopping list of stations and their stats -
01/12/06 TVBR #8

Could broadcast stocks
Fall double digits this year?
That's the warning to investors from Harris Nesbitt analyst Lee Westerfield, who says new mobile tech and advertising risks create an equity downside of 15-20% in 2006 for broadcast stocks. That's on top of the losses that almost all radio and TV stocks suffered in 2005. Just back from the Consumer Electronics Show in Las Vegas, Westerfield sees threats from mobile broadband and PC-to-TV video convergence. "Announcements at CES foreshadow events ahead in 2006, such as a) deepening web media partnerships between mobile broadband players and the likes of Yahoo! and Google; and b) launch of Microsoft Vista [new operating system] with its media functionality this coming fall," the analysts said in a note to investors. As such, Westerfield is maintaining his "Negative" rating on the broadcasting sector (although he does like the Hispanic specialists). He expects pure-play radio company values to contract from their current multiples of around 11.5 times EBITDA to 10 times and pure-play TV from 10.5 to nine times.

RBR observation: We and a few others have been saying for years that mobile broadband, not satellite radio, is the big threat that terrestrial radio is going to have to deal with. In fact, we don't see how either XM or Sirius will be able to stay in business once mobile broadband becomes widespread. Terrestrial radio broadcasters will have to figure out how to compete with their own broadband offerings, as well as HD Radio, to compete as thousands of Internet audio streams become available to every car driving around in their local market. But realize the Facts - Technology is waiting for no one including the broadcasters and related companies doing business in the media. Traditional means of conducting business have finally have seen closure. Technology waits for no one - Period. Trying to slow it down will only result to self imploding.
01/11/06 RBR #7

Sales Manager
Reno Radio Representatives is seeking candidates. The FM station is one of the markets best rated and the company encourages both women and minorities to apply.
See Radio Careers

TVBR Searching for 2 Pros
To join the best TV business publication in the media B2B today. Searching for one (1) Top flight Editor that does not need direction and one (1) Top Experienced Sales person that knows how to Sell/Market quality and wants to make money. Team work expected. Only the pros need apply as TVBR's expansion is now. Confidentiality honored by TVBR publisher Jim Carnegie (813 909 2986) Email qualifications to [email protected]

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