Radio News ®

New way for Clear Channel to Entertain clients
Clear Channel has opened up a new in-house shop that is designed to help clients break through clutter, and could leverage them through much of the media portfolio held by the wide-ranging media giant. The offering starts with venues and events. What is being called "branded entertainment" allows a client to become associated with a concert, a sporting event, or a broadcast program, with add-on features which carry the sponsorship well beyond the actual performance. For example, DVDs and/or CDs of the event extend the value almost indefinitely. Rebroadcast on Clear Channel's ubiquitous portfolio of radio and television stations is also part of the offering. Deals can be put together with pricetags from the low $100Ks to just under $10M. The division is called Clear Channel Entertainment Properties. RBR observation: We can see it now. They'll be putting on a summer stock production of "Romeo and Juliet" at a Clear Channel venue somewhere, and Juliet will be saying, "Wherefore art thou, Romeo?" and that Verizon guy will wander under the balcony going "Can you hear me now?" followed by Romeo showing up with a cell phone strapped onto his tights. DVD available at the gate.

Dave Magnum running for
Congress in Wisconsin
It's an uphill battle against an incumbent, but another broadcaster is making a stab at becoming a member of the US House of Representatives. After saying last month that he was interested in running (4/13/04 RBR Daily Epaper #72), Dave Magnum has made it official that he will seek the Republican nomination in Wisconsin's 2nd District, centered in Madison. "As a candidate for Congress, I bring the perspective of being a small business owner who with my late wife, Lynn, built a group of broadcast stations from scratch as well as being the dad of my two boys. In other words, someone who understands what people are up against in their everyday lives at home and work," Magnum said in announcing his political bid. Magnum Broadcasting owns eight radio stations and one television station in the La Crosse, Green Bay and Madison, WI markets. Rep. Greg Walden (R-OR) is the only broadcast station owner currently serving in Congress, although Sen. Conrad Burns (R-MT) used to own stations and a state radio farm network. If he wins the GOP nomination, Magnum will be running against three-term incumbent Rep. Tammy Baldwin (D-WI), who won with 66% of the vote two years ago.

How do you sell against cable?
The subject came up in yesterday's Nexstar Broadcasting conference call, with a Wall Street analyst asking whether cable is making inroads into broadcasters' local ad turf. Nexstar CEO Perry Sook said his company faces organized local selling efforts from cable in 75% of its markets and is taking the competition seriously. His company has developed specific material to show the so-called "cheap spots" on cable really cost more per viewer than on its broadcast TV stations. Editor's note: This is a long audio cut, but well worth a listen - - for radio sales people, as well as TV.

Small deal financing is rare,
but we found some! Part 3 of 5
So far this series has focused on deals in the millions. But, of course, some small stations available to first time buyers cost less than that, although they still need to find financing. For really small deals, financing is available from Broadcast Capital, better known as BroadCap, but only for minority-owned companies. CEO John Oxendine told us he is hoping to recapitalize BroadCap with $25 million, plus leverage from the US Small Business Administration. "So hopefully I'll have a $75M fund going by the end of the summer," he said. | Full Story |

What's up, docket? ABC, Trib try to see through seal
When Jack Ryan's divorce court records were sealed in 2000 and 2001, he wasn't running for the US Senate. Now that he is, argue a pair of broadcast companies with strong Chicago operations, these documents are a matter of public concern. Associated Press reports that ABC (WLS-TV-AM) and Tribune (WGN-TV-AM) want the records made public, although they acknowledge that certain facts may be kept confidential to protect the nine-year-old son of Ryan and his ex, actress Jeri Ryan. Both Ryans have been attempting to keep the seal intact. Some think that the contents of the file may be damaging to Ryan's campaign. The Ryans think that protecting the child is the most important thing. The next deadline in the case, a report from a retired judge acting as a referee to the presiding judge, could be about three weeks away.

Measuring the Media Moguls

Emmis Communications:
Jeff Smulyan, Chairman and CEO

2003 stock performance: +29.86
2003 CEO pay: +66.43%

Having gone without a bonus in 2002, Emmis CEO Jeff Smulyan saw his compensation jump 66.43% in 2003, more than double the 29.86% increase in share price for the company's shareholders. Other top execs, who likewise got no bonuses in '02, also saw their paychecks rise by similar margins. | Full Story |

Adbiz ©

WPP scores HSBC
Global banking and financial services company HSBC Group (originally dubbed Hongkong and Shanghai Banking Corporation) has chosen WPP's J. Walter Thompson, MindShare and Maximise and 141 to handle its $600M marketing account. WPP was chosen after a review that included Interpublic and Omnicom as well. JWT will lead creative efforts, reportedly with assistance from sister agency Red Cell.

Sprint launching
$100M campaign
Sprint announced it will spend more than $100M on a wireless ad effort, "Fair & Flexible," which will use print, TV and online for two-three months. The campaign is aimed at explaining Sprint's new rate plan. The rate plan gives subscribers flexible minutes each month by allowing the user to purchase additional buckets of minutes as needed. Sprint PCS Fair & Flexible is a wireless phone plan designed to automatically adjust to a customer's month-to-month actual minutes usage rather than a set amount of minutes. The ads, created by Publicis & Hal Riney San Francisco used a group of students filmed like a documentary. In the first TV spot, "Red Ball," breaking today, a teacher explains to the students that before they play with the ball, they will have to first tell her how many minutes they will use the ball every month for the next two years. The camera then cuts to the bewildered children trying to calculate the minutes in their head.

Media, Markets & Money tm

Big deal in Little Falls
Roughly $2.3M is changing hands, along with an intact three-station duopoly, in Little Falls MN. The stations include one AM, KLTF, along with KFML-FM and WYRQ-FM. The seller is Jack Hansen. If you add up all of the contract elements, he'll eventually wind up with $2,320,275. There's a $120KK escrow deposit, a $480K cash payment at closing, a $158,925 non-compete, a $11,350 consulting agreement, a $1.51M promissory note and a $40K contract for deed. The buyers, Rod and Christina Rae Grams, wind up with three stations in Little Falls, a town almost dead center in the middle of the state about halfway between Brainerd (to the north) and St. Cloud (to the south).

VSS introducing new mezzanine fund
RBR hears that Veronis Suhler Stevenson (VSS) is raising money for a new mezzanine lending fund aimed at media companies and is already talking to would-be borrowers. At least one radio company and one newspaper company are said to already have deals in the works. Although VSS has put together previous venture capital funds, this is its first aimed at the mezzanine market - - targeting loans to mid-sized companies without VSS affiliates taking an equity position. The loans are generally fixed rate and run 6-9 years, with amounts from $10 million (perhaps a little lower) to $75 million. The mezzanine strip is typically going to be 1-2 times cash flow, adding leverage to the 5-6 times generally available from senior lenders in broadcasting. The new fund is being managed by George Cole and Errol Antzis at VSS in New York.

Washington Beat

Engineering

Move over, Dick Tracy - - Wrist TV is here
Well, it's almost here. NHJ USA is coming out with "VTV-101," a fully-operational broadcast television receiver which can be worn like a watch. It picks up channels up to 62, and comes with stereo headphones which function as an antenna. Retail is expected to be "around $199.99" (that's some exercise in price-rounding), and they should be coming on the market any day now. Initial availability is from the Hammacher Schlemmer catalogue house. RBR observation: Hey, why not pack an inflatable chair and a packet of fizzies - - the world can be you living room! Personally, we can't wait until our leading imbeciles start trying to watch these things while they're driving.

Transactions

$301,000 TV CP Omaha NE. 100% of Lincoln Broadcasting LLC from World Investments Inc. (William E. Conley) to CFM Communications LLC (Carol F. Miller). Cash. CFM is paying Pappas $1K to take over its option to acquire CP, which is for Channel 51 with an expiration date of 6/27/06. Pappas will run station in an LMA with buyer after closing, with a new option to purchase. [File date 4/5/04.]

$140,000 KXAA-FM CP Cle Elum WA from Michael F. & Bridget T. Andler to Wheeler Broadcasting Inc. (Verl D. Wheeler, Deanna D. Wheeler, Mark Wheeler, Nilufer Wheeler, Tonya D. Baker, Scott B. Baker). $55K for option to purchase, $85 maximum investment from Wheeler to construct station. LMA until closing. CP is for 93.7 mHz. [File date 4/5/04.]

Stock Talk

Radio Stocks